U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB


(Mark One)
          [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    For Fiscal Year Ended: December 31, 2006

                                       or

        [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

       For the transition period from _______________ To__________________



                       Commission file number 333-105008

                              CALIBER ENERGY, INC.
                 (Name of small business issuer in its charter)

                 Delaware                            87-0700927
      State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization              Identification No.)


          9595 Wilshire Boulevard #900 Beverly Hills, California 90212
               (Address of principal executive offices) (zip code)


                    Issuer's telephone number: (310) 300-4064


--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report.)



Securities registered under Section 12(b) of the Act: NONE Securities registered
under Section 12(g) of the Act:

                         Common Stock Par Value $0.0001
                                (Title of class)


<PAGE>

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No

         Check if there is no disclosure of delinquent  filers  pursuant to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]

         At March 26, 2007,  the aggregate  market value of all shares of voting
stock held by  non-affiliates  was approximately  $713,885.  In determining this
figure  Registrant has assumed that all  director's  and executive  officers are
affiliates.  This  assumption  shall  not be  deemed  conclusive  for any  other
purpose.  The number of shares  outstanding  of each  class of the  Registrant's
common stock, as of December 31, 2006, was as follows: 36,565,164 common shares,
$.0001 par value per share.

Total revenues for fiscal year ended December 31, 2006: $0

At  December  31,  2006 the  number of shares of common  stock  outstanding  was
36,565,164.

Transitional Small Business Disclosure Format (check one): Yes  ; No X

Indicate by check mark whether the  registrant is a shell company (as defined by
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]




























<PAGE>





4

5

                                TABLE OF CONTENTS

ITEM NUMBER AND CAPTION
                                                                           PAGE
PART I

Item 1.     Description of Business                                           1

Item 2.     Description of Property                                           5

Item 3.     Legal Proceedings                                                 5

Item 4.     Submission of Matters to a Vote of Security Holders               5


PART II

Item 5.     Market for Common Equity and Related Stockholder Matters          5

Item 6.     Management's Discussion and Analysis or Plan of Operations        7

Item 7.     Financial Statements                                             10

Item 8.     Changes in and Disagreements With Accountants on Accounting and  10
            Financial Disclosure

Item 8A     Controls and Procedures                                          10

PART III

Item 9.     Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act                11

Item 10.   Executive Compensation                                            12

Item 11.   Security Ownership of Certain Beneficial Owners and Management    13

Item 12.   Certain Relationships and Related Transactions                    14

Item 13.   Exhibits and Reports on Form 8-K                                  15

Item 14.   Principal Accountant Fees & Services                              15




<PAGE>

                                     PART I


                         ITEM 1 DESCRIPTION OF BUSINESS


         Caliber Energy, Inc. (the Company),  an exploration state company,  was
incorporated on November 6, 2002 in the State of Delaware as Twin Ventures, Ltd.
On June 18, 2004,  the Company's name was changed to Rincon  Resources,  Inc. On
March 14, 2005, the Company  changed its name to Caliber Energy Inc. The Company
is headquartered in Beverly Hills, California.

         The Company is an  exploration  state  mining and mineral  company.  On
November  21, 2002 the Company  became  actively  engaged in  acquiring  mineral
properties,  raising  capital,  and  exploring  and  developing  properties  for
production.  The Company has not conducted any significant  mining operations or
mining  activities from inception;  accordingly,  the Company is deemed to be in
the exploration state.

         On November 21, 2002,  the Company  acquired  mineral claims (the "Ritz
Claims")  located in the  Lillooet  Lake Region of Southwest  British  Columbia,
Canada.  The property  consists of twenty unpatented two post mineral claims and
one unpatented four post mineral claim  representing  forty units that have been
staked and recorded in the Lillooet mining  division.  For purposes of recording
the Ritz Claims the Company acquired New Heights Capital Corporation (a Canadian
corporation)  and  transferred the claims the subsidiary in exchange for 100% of
the subsidiary's outstanding stock. These claims have since lapsed

         On July 26, 2004,  the Company  executed an agreement  and made the 1st
statutory  payment  of  $55,000  to  acquire a 75%  interest  in the Tudor  Gold
Property.  The Tudor  Gold  Property  is  located  in  eastern  Ontario,  Canada
approximately 100 miles northeast of Toronto. The property lies within Tudor and
Grimsthorpe Townships. The property consists of twenty-two contiguous unpatented
mining claims containing sixty units covering approximately 2,965 acres of land.
The Company in 2004 launched a comprehensive, property wide, surface exploration
program.  The  results  of  the  surface  work  were  encouraging  however,  not
outstanding as to allow the Company to raise the required capital.  Although the
Company intended to follow-up with drill testing of the mineralized zones of the
property, this program was not funded.

         After careful  consideration as to the results of the Tudor Project and
the  gereral  gold  market in general,  management  on March 2, 2005  decided to
change direction from gold exploration into the energy sector.  With the current
near record  prices for most energy  commodities,  management  is of the opinion
that in order to increase  shareholder  value,  the Company  would  benefit from
energy  projects that have a low risk, high rate of return and could provide the
Company cash flow under time frames that are more favorable than metals.

         The Company name change and CUSIP number more  adequately  reflect that
move into the energy sector. Projects in oil & gas and coal are now the focus of


                                       1
<PAGE>

the  Company.  Oil and gas  projects in  California  and Canada as well as three
advanced coal projects of  outstanding  merit in Eastern  Europe and Canada were
reviewed and two acquisitions were made, these being the Bolloque Oil Project in
Alberta, Canada and the new coal project in the Yakutia region of eastern Russia
that includes large  undeveloped  resources of high demand  metallurgical  grade
coal. By providing project financing, equipment and technology, the Company will
be granted a portion of revenue from sales contracts  already in place to supply
metallurgical grade coal to existing buyers in the Far East.

INDUSTRY OVERVIEW

CANADA

         According  to  Alberta  Energy  &  Utilities  Board  Report  "ALBERTA'S
RESERVES 2002 &  SUPPLY/OUTLOOK  2003-2012":  The Western  Canadian  province of
Alberta holds  tremendous  potential for oil and gas production and is ranked as
the ninth  largest oil  producer and third  largest  natural gas producer in the
world.  Additionally,  Alberta's  oil sands  contain the largest  crude  bitumen
resource  in the world,  consisting  of  approximately  315  billion  barrels of
potentially  recoverable  crude.  Alberta's 2002 production from all sources was
1.54 million  barrels/day  and is forecast to reach 2.7 million  barrels/day  by
2012.  Additionally,  Alberta's remaining established reserves of natural gas at
the end of 2003 stood at 42 Tcf. To-date,  much of Alberta's gas development has
centered  on shallow  gas within  southeastern  Alberta,  where over half of the
province's  gas-producing  wells are located but only sixteen percent of natural
gas is currently produced.

COAL

As the demand  for  electricity  continues  to grow here in North  America,  and
around the world, coal continues to make low-cost electricity possible. Low-cost
electricity is primarily a factor of fuel prices,  and coal is and will continue
to be  the  least  expensive  option  for  generating  electricity.  Electricity
consumption  in the United States is projected to grow 44 percent by 2020.  Coal
has enabled America's electric utilities to keep up with this increasing demand.
The use of coal for  generating  electricity  has nearly  tripled in the last 30
years. Coal will remain the largest single source of electricity--accounting for
51 percent of power generation in 2025.  Energy demand continues to pressure the
US to seek out alternative  sources and new technologies as political  struggles
in the Middle East  continue to raise  concern  over oil  supplies.  With Energy
consumption  and  demand  continually  increasing,  the  coal-based  electricity
industry has a strong commitment to the environment and to producing electricity
that is increasingly clean.

EMPLOYEES

         As of the date of this Report,  we do not have any employees other than
our directors and officers.



                                       2
<PAGE>

         We have  executed  a  Consulting  Agreement  with our  Chief  Executive
Officer,  Graeme  Scott  whereby  he will  provide  us with  general  management
consulting  services for a monthly  retainer of $5,000.  This  agreement  can be
cancelled by either party with a month's notice of termination.

         On March 10, 2005 we  executed a  consulting  agreement  with our Chief
Financial  Officer and  Director,  David Naylor  whereby he will provide us with
general financial and administrative  consulting services for a monthly retainer
of $2,500.

RISK FACTORS

         In  addition  to the other  information  in this  current  report,  the
following factors should be carefully  considered in evaluating our business and
prospects:

UNSUCCESSFUL OPERATING HISTORY

         We have a limited  operating  history upon which an  evaluation  of our
future  prospects can be made. We have entered into the business of  evaluation,
acquisition,  exploration,  and development of Gold mining prospects. We will be
reviewing  additional  business  acquisition  opportunities in this field if and
when they become available.  We do not have any operating history in the Oil and
Gas  acquisition,   exploration  and  development  industry  and  can  not  give
assurances  that we will be successful in securing  revenues from results of any
future Oil and Gas exploration and development activities.

         Even  though we have  partially  completed  subscriptions  to an Equity
Financing  and  secured  loans  from a  director  of the  Company,  there  is no
guarantee  that we will be able to raise the additional  financing  necessary to
develop our business plan or acquire new business assets.

IF WE DO NOT OBTAIN  ADDITIONAL  FINANCING,  WE WILL NOT BE ABLE TO ACQUIRE  ANY
ASSETS

         As of  December  31,  2006,  we had  insufficient  funds  to  meet  our
obligations in connection to the mining  exploration and  development  interests
that we purchased.  In order to meet these obligations or acquire any additional
business  interest,  we will have to raise funds  necessary  to meet our present
Business  obligations or to finance new operations.  If we are not able to raise
the funds  necessary to fund our business  objectives,  we may have to delay the
implementation of any future business plan.

         We have  arrangements  for  limited  financing  and we can  provide  no
assurance that we will be able to obtain the additional  required financing when
needed.  Obtaining  additional financing will be subject to a number of factors,
including:

o                  Market conditions;
o                  Investor acceptance of potential business assets; and
o                  Investor sentiment.



                                       3
<PAGE>

         These  factors may make the timing,  amount,  terms and  conditions  of
additional financing unattractive or unavailable to us. If we are not successful
in achieving  financing in the amount necessary to meet our present  obligations
in connection with the mining  interests that we acquired or business  interests
that we may acquire, implementation of our business plan may fail or be delayed.

IF WE ARE UNABLE TO  GENERATE  SIGNIFICANT  REVENUES  FROM OUR  OPERATIONS,  OUR
BUSINESS WILL FAIL.

         If we are unable to generate  significant  revenues from any operations
resulting from our Mining exploration and development activities or any business
interest we acquire,  we will not be able to achieve  profitability  or continue
operations.

BECAUSE  THE  TRADING  MARKET  FOR  OUR  SHARES  IS  SPECULATIVE  AND  VOLATILE,
SHAREHOLDERS MAY NOT BE ABLE TO SELL THEIR SHARES.

         Our shares of common  stock are quoted for trading on the OTC  Bulletin
Board and have been trading through the facilities of that quotation system. Due
to the volatile and speculative  nature of our trading market,  we cannot assure
you that you will be able to sell your shares for a reasonable price.

OUR SECURITIES MAY BE SUBJECT TO PENNY STOCK REGULATION.

         If the trading market for our securities remains volatile and the price
of our common shares  remains below $5.00 per share,  then we will be subject to
"penny stock"  regulation.  "Penny stock" rules impose additional sales practice
requirements  on  broker-dealers  who sell such securities to persons other than
established  customers and accredited  investors (generally those with assets in
excess of $1,000,000 or annual income  exceeding  $200,000 or $300,000  together
with a spouse).  For transactions covered by these rules, the broker-dealer must
make a special suitability determination for the purchase of such securities and
have received the purchaser's  written  consent to the transaction  prior to the
purchase.  Additionally,  for any  transaction  involving a penny stock,  unless
exempt,  the  rules  require  the  delivery,  prior  to  the  transaction,  of a
disclosure  schedule  prescribed by the  Commission  relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered  representative  and current quotations for the
securities.  Finally,  monthly  statements must be sent disclosing  recent price
information  on the limited  market in penny  stocks.  Consequently,  the "penny
stock" rules may restrict  the ability of  broker-dealers  to sell our shares of
common stock. The market price of our shares would likely suffer as a result.

FORWARD-LOOKING STATEMENTS

         This Annual Report  contains  forward-looking  statements  that involve
risks and uncertainties. We use words such as anticipate, believe, plan, expect,
future,   intend  and  similar  expressions  to  identify  such  forward-looking
statements.  You should  not place too much  reliance  on these  forward-looking
statements.  Our actual results are most likely to differ  materially from those
anticipated in these forward-looking  statements for many reasons, including the
risks faced by us described in the Risk  Factors  section and  elsewhere in this
Report.


                                       4
<PAGE>

                         ITEM 2 DESCRIPTION OF PROPERTY

         Our executive offices are located at 9595 Wilshire  Boulevard Suite 900
Beverly Hills, California 90212. Our officers provide principal executive office
space and telephone service free of charge. The costs associated with the use of
the telephone and mailing address were deemed by management to be immaterial.


                            ITEM 3 LEGAL PROCEEDINGS

         There are no legal proceedings pending or threatened against us.


                       ITEM 4 SUBMISSIONS OF MATTERS TO A
                            VOTE OF SECURITY HOLDERS

         On December 15, 2006, the Board of Directors of Caliber  Energy,  Inc.,
held a special  meeting of stockholders to approve a 1 for 5 reverse stock split
for our issued and outstanding  shares of common stock.  The reverse stock split
was approved.



                                     PART II

                       ITEM 5 MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         The stock is traded on the Pink Sheets with the symbol CLBN.PK.

         Our shares of common stock have been quoted for trading on the National
Association  of Securities  Dealers' OTC Bulletin  Board since July 1, 2004. The
OTC Bulletin Board is a network of security  dealers who buy and sell stock. The
following  table  sets  forth the range of high and low bid  quotations  for the
common stock during each calendar quarter  beginning January 1, 2005 to December
31, 2006.



                                       5
<PAGE>

------------------------------------ ----------- ---------- -- -----------
                      2005                         HIGH           LOW
------------------------------------ ----------- ---------- -- -----------
January 1, 2005 to March 31, 2005                  0.36           0.09
------------------------------------ ----------- ---------- -- -----------
April 1, 2005 to June 30, 2005                     0.25           0.18
------------------------------------ ----------- ---------- -- -----------
July 1, 2005 to September 30, 2005                 0.11           0.04
------------------------------------ ----------- ---------- -- -----------
October 1, 2005 to December 31, 2005               0.04           0.01
------------------------------------ ----------- ---------- -- -----------

------------------------------------ ----------- ---------- -- -----------
                      2006                         HIGH           LOW
------------------------------------ ----------- ---------- -- -----------
January 1, 2006 to March 31, 2006        *         0.00           0.00
------------------------------------ ----------- ---------- -- -----------
April 1, 2006 to June 30, 2006           *         0.00           0.00
------------------------------------ ----------- ---------- -- -----------
July 1, 2006 to September 30, 2006       *         0.00           0.00
------------------------------------ ----------- ---------- -- -----------
October 1, 2006 to December 31, 2006     *         0.00           0.00
------------------------------------ ----------- ---------- -- -----------

* There were no trading  activities  of shares in our common  stock  during this
period.

         The above  quotations  are taken  from  information  provided  by Yahoo
Finance and reflect  inter-dealer prices,  without retail mark-up,  mark-down or
commission and may not represent actual transactions.

DIVIDENDS

         There are no  restrictions in our articles of  incorporation  or bylaws
that prevent us from declaring dividends. The Nevada Revised Statutes,  however,
do  prohibit us from  declaring  dividends  where,  after  giving  effect to the
distribution of the dividend:

1.       we would not be able to pay our debts as they  become  due in the usual
         course of business; or

2.       our total  assets  would be less than the sum of our total  liabilities
         plus  the  amount  that  would be  needed  to  satisfy  the  rights  of
         shareholders who have  preferential  rights superior to those receiving
         the distribution.

         We have not declared any  dividends,  and we do not plan to declare any
dividends in the foreseeable future.



                                       6
<PAGE>


Recent Sales of Unregistered Securities

         The following table lists the sale of  unregistered  securities in 2006
(post stock split) by the conversion of debt and accrued wages into common stock
of the company.

<TABLE>
<CAPTION>
-------------------------------------------- ---------------------- --------------------- -----------------------
                 CREDITOR                           AMOUNT              DATE OF DEBT              SHARES
            (NAME AND ADDRESS)
-------------------------------------------- ---------------------- --------------------- -----------------------
<S>                                          <C>                    <C>                   <C>
 PROJECTION CAPITAL LTD., TORTOLA, B.V.I.         $493,367.83          JUNE 10, 2005            16,445,594
-------------------------------------------- ---------------------- --------------------- -----------------------
                LOUVICOURT,                       $158,217.00           OCT 10, 2004            5,273,900
             TORONTO, ONTARIO
-------------------------------------------- ---------------------- --------------------- -----------------------
               GRAEME SCOTT,                      $35,000.00            JUNE 1, 2006            1,166,670
             TORONTO, ONTARIO
-------------------------------------------- ---------------------- --------------------- -----------------------
             ROBERT MCINTOSH,                     $30,000.00            JUNE 1, 2006            1,000,000
         BEVERLY HILS, CALIFORNIA
-------------------------------------------- ---------------------- --------------------- -----------------------
              VICTOR PERKELL,                      $4,800.00            JUNE 1, 2006             160,000
             TORONTO, ONTARIO
-------------------------------------------- ---------------------- --------------------- -----------------------

-------------------------------------------- ---------------------- --------------------- -----------------------
                  TOTALS                          $721,384.83                                   24,046,164
-------------------------------------------- ---------------------- --------------------- -----------------------
</TABLE>

                 ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR
                               PLAN OF OPERATIONS


THE FOLLOWING  DISCUSSION AND ANALYSIS  SHOULD BE READ IN  CONJUNCTION  WITH OUR
FINANCIAL STATEMENTS, INCLUDED HEREWITH. THIS DISCUSSION SHOULD NOT BE CONSTRUED
TO IMPLY THAT THE RESULTS  DISCUSSED HEREIN WILL  NECESSARILY  CONTINUE INTO THE
FUTURE, OR THAT ANY CONCLUSION  REACHED HEREIN WILL NECESSARILY BE INDICATIVE OF
ACTUAL OPERATING RESULTS IN THE FUTURE. SUCH DISCUSSION REPRESENTS ONLY THE BEST
PRESENT ASSESSMENT OF OUR MANAGEMENT.

         On March  16th,  2006 the  Company  began  negotiations  with a private
Company to  participate in oil and gas  exploration  in Kansas.  The oil and gas
boom returned to Kansas in 2005. Its impact on the state economy  depends on how
long it lasts.  Kansas oil and gas  production  was worth $4.7  billion in 2005,
according to  estimates by the Kansas  Geological  Survey at the  University  of
Kansas.

         The total value of oil  produced in the state in 2005 was  estimated at
about  $1.8  billion,  up from about $500  million in 2004.  The total  value of
natural gas  production was more than $2.8 billion in 2005, up from $2.2 billion
the previous  year.  Natural gas  production in 2005 is estimated at 380 billion
cubic  feet,  down  about 20  billion  cubic feet from the  previous  year.  The
statewide peak was 990 billion cubic feet in 1970.



                                       7
<PAGE>

         Caliber  will join  other  partners  that have  acquired  participation
rights  in a large  data  base  that  includes  a  geophysical  survey  covering
approximately  one million acres,  located in central Kansas,  covering parts of
Ellsworth,  Salina,  McPherson,  Reno, Harvey,  Kingman,  and Sedgwick counties.
Total  cumulative oil  production  through 1999 from these counties is more than
978 million  barrels of oil. The  geophysical  survey  utilized RAM  technology,
owned by Paramount  Energy  Corp.,  which is a geophysical  methodology  used to
highlight oil and gas deposits. Unlike 2-D and 3-D seismic methods, which gather
information  based upon  artificially  induced sonic  responses  recorded at the
surface,  RAM technology  identifies "unique bright spots" using its proprietary
software to process certain aspects of the earth's magnetic field data.

         Data is collected by a low flying  aircraft  equipped with  specialized
equipment  and  then  analyzed  by RAM  software.  These  "unique  bright  spot"
anomalies  can be  correlated  to  near-surface  alterations  caused by the slow
geochemical  processes  that  occur  over  both  oil and gas  deposits.  The RAM
technology is an indirect hydrocarbon indicator independent of structure so it a
good tool in areas where  seismic is not.  Since RAM data is  collected  from an
aircraft, large acreage surveys can be acquired many times faster and many times
less  costly  than   traditional   seismic.   That  makes  RAM  an  ideal  first
reconnaissance  tool.  Several  identified RAM anomalies  interpreted within the
survey area are believed to have hydrocarbon  potential over  multi-sections  of
lands that have never been  tested  with a drill  bit.  Most  nearby  production
within this region of the Central Kansas  Platform  produces from  Mississippian
age and older limestone rocks above the Arbuckle dolomite formation. Some of the
accumulations  of hydrocarbons  are  stratagraphically  trapped and unrelated to
structure and therefore not easily  identifiable  by  traditional  seismic.  The
magnetic survey and  interpretation of the region is of excellent  quality.  Oil
wells will be drilled to test the most promising  prospects to the deepest known
petroleum  formation,  the Arbuckle,  generally  less than 4000' in depth in the
Central Kansas  Platform.  Drilling costs have been estimated to be in the order
of $200,000 for a cased and completed well.

         The Central Kansas  Platform  covered by the survey and  interpretation
contains some of the most prolific  production  from shallow depths in that part
of the country.  There are many  established oil fields within the boundaries of
the survey area. The survey  indicates  "bright spots" that could be hydrocarbon
accumulations  not  yet  discovered  by  traditional   seismic  or  other  older
exploration technologies.  Multiple prospects are expected to be generated after
more extensive field tests. When formalized,  Caliber will join partners who are
proceeding  to further  evaluate  the most  prospective  oil and gas targets for
drilling utilizing  complimentary  geochemical and geophysical  methodologies in
their field testing. The operator will then recommend leases for acquisition and
the exploration program will commence.

         Caliber will join other  Companies  which are Silver  Star,  with a 20%
working interest,  Fidelis Energy,  Inc. which has a 25% working  interest,  and
Cascade Energy, Inc. which also has a 25% working interest.  The private company
will be  carried  through  the  drilling  and  completion  of the  first two (2)
exploratory  wells. The 70% working interest partners will pay 100% of the costs
of drilling and completing the initial two wells.  Subsequent to those first two
wells,  all  participants  in the play will  contribute on a straight up working
interest basis.



                                       8
<PAGE>

         On June 16, 2006 the Data Sharing  Agreement  between  Caliber,  Silver
Star,  Fidelis,  Cascade and the private company was cancelled.  Caliber will no
longer have any interest to participate in the oil exploration in Kansas.

REVERSE STOCK SPLIT

         On June 15, 2006, the Board of Directors  voted in favor of the reverse
stock split and directed that the reverse stock split be completed. The Board of
Directors also placed the  ratification of the reverse stock split on the agenda
for  consideration by stockholders at the special meeting to be held on December
15, 2006. The Board of Directors believes that the per share price of our common
stock  justified  the 1:5 reverse  stock split and that it would not  negatively
impact the  marketability  of the existing  shares or our  potential  ability to
raise capital.  The Board of Directors further believed that the increase in the
number of shares of common stock  outstanding  as a  consequence  of the reverse
stock split would ultimately  encourage  greater interest in our common stock by
the financial community and investing public.  Accordingly,  we believe that our
company  and our  stockholders  will  realize  benefits  over time and suffer no
long-term negative consequences as a result of the reverse split.

         As a result of the  reverse  stock  split,  the  number  of issued  and
outstanding  shares of our common stock  decreased  from  182,825,805  shares to
36,565,164 shares,  based upon the total number of issued and outstanding shares
of common  stock as of the record  date on October 27,  2006 and  decreased  our
total  number  of  authorized   shares  of  common  stock  from  500,000,000  to
100,000,000.  Please  note  that  the  reverse  stock  split  did not  change  a
stockholder's proportionate equity interest in our company.

         As an additional  result of the reverse stock split, our stated capital
decreased  from  $18,283 to $3,657 on the  effective  date of the reverse  stock
split.  Our stated  capital  consists of the  aggregate  number of our shares of
common  stock  outstanding  from  time-to-time,  multiplied  by the par value of
$0.0001 of the common stock.


LIQUIDITY AND CAPITAL RESOURCES
         The Company  requires  working capital  principally to fund its current
operations.  There are no  commitments  from banks or other lending  sources for
lines of credit or similar short-term borrowing.  From time to time in the past,
required short-term borrowing have been obtained from a principal shareholder or
other related entities.
         The Company's business plan requires  substantial funding from a public
or  private  offering  of  its  common  stock  in  connection  with  a  business
acquisition,  for which the Company has no  commitments.  The Company intends to
actively pursue other financing or funding opportunities.






                                       9
<PAGE>

                           ITEM 7 FINANCIAL STATEMENTS



         The  financial  statements  of the Company and  supplementary  data are
included beginning  immediately preceding the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.


              ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

         None.

                        ITEM 8A. CONTROLS AND PROCEDURES


         The Company's Chief Executive  Officer and Chief Financial  Officer are
responsible for establishing and maintaining  disclosure controls and procedures
for the Company.

         (a) Evaluation of Disclosure Controls and Procedures

         As of the end of the period covered by this report, the Company carried
         out an evaluation,  under the supervision and with the participation of
         the Company's  management,  including the Company's  President,  of the
         effectiveness  of the design and operation of the Company's  disclosure
         controls and  procedures  pursuant to Rule 13a-15 under the  Securities
         Exchange Act of 1934, as amended (the "Exchange  Act").  Based upon the
         evaluation,  the Company's  President  concluded that, as of the end of
         the period,  the  Company's  disclosure  controls and  procedures  were
         effective in timely  alerting him to material  information  relating to
         the Company  required  to be  included in the reports  that the Company
         files and submits pursuant to the Exchange Act.

         (b) Changes in Internal Controls

         Based  on his  evaluation  as of  December  31,  2006,  there  were  no
         significant  changes in the Company's  internal controls over financial
         reporting  or in any other  areas that could  significantly  affect the
         Company's  internal controls  subsequent to the date of his most recent
         evaluation, including any corrective actions with regard to significant
         deficiencies and material weaknesses.









                                       10
<PAGE>

                                    PART III

               ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
                CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF
                                THE EXCHANGE ACT

EXECUTIVE OFFICERS AND DIRECTORS

         The  following  table sets forth the name,  age,  and  position of each
executive officer and director of the
Company:
DIRECTOR'S NAME    AGE    POSITION WITH COMPANY

Graeme Scott        44    President, Chief Executive Officer, Director

David Naylor        43    Secretary/Treasurer, Chief Financial Officer, Director

Victor Perkell      43    Director

         Set forth below is a brief  description  of the background and business
experience  of each of our  executive  officer and  directors  for the past five
years.

PRESIDENT,  MR.  GRAEME  SCOTT -- A  professional  geologist  with over 20 years
experience in the mineral  science and mining  industry.  During this time,  Mr.
Scott has conducted and managed mineral exploration and development projects for
precious and base metals,  diamonds,  and  industrial  minerals  throughout  the
Americas.

SECRETARY & TREASURER  MR.  DAVID  NAYLOR -- A Certified  Management  Accountant
(CMA) with over fifteen years of  experience.  From 1989 to 2000, he was devoted
in assisting and leading a large media  publishing  company  through a period of
change. Subsequently from January 2000 to December 2000, he held the position of
Chief  Financial  Officer and Secretary  Treasurer for an enterprise  technology
sector company.  From January 2001to  November 2003 he was the Business  Manager
for a Non-Profit  Society and a Commodity  Tax Auditor for the British  Columbia
Government.  Mr. Naylor was appointed  Secretary & Treasurer effective March 10,
2005.

OTHER DIRECTORS  INCLUDE MR. VICTOR L. PERKELL,  L.L.B. who has been a member of
the bar since 1993 when he practiced as a sole  practitioner  and later  founded
the partnership of  Bedford-Jones  & Perkell in Toronto.  An attorney in several
high-profile cases with a commercial practice,  he retired from private practice
in the late  1990s to consult  and  manage  various  business  interests  in the
Toronto area.


                                       11
<PAGE>

TERM OF OFFICE

         Our  Directors  are  appointed for a one-year term to hold office until
the next annual general meeting of our shareholders or until removed from office
in  accordance  with our bylaws.  Our  officers  are  appointed  by our board of
directors and hold office until removed by the board.

SIGNIFICANT EMPLOYEES

         We have no employees  other than the officers and  directors  described
above.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section  16(a) of the Exchange Act,  requires the  Company's  officers,
directors and persons who  beneficially  own more than ten percent of the Common
Stock to file reports of securities ownership and changes in such ownership with
the Securities and Exchange Commission. Officers, directors and greater than ten
percent  beneficial  owners  also  are  required  by  rules  promulgated  by the
Securities  and  Exchange  Commission  to furnish the Company with copies of all
Section 16(a) forms they file.

AUDIT COMMITTEE FINANCIAL EXPERT

         The  Company's  board of  directors  does not have an "audit  committee
financial   expert,"  within  the  meaning  of  such  phrase  under   applicable
regulations  of the  Securities  and Exchange  Commission,  serving on its audit
committee.  The  board of  directors  believes  that all  members  of its  audit
committee are financially literate and experienced in business matters, and that
one or more  members of the audit  committee  are  capable of (I)  understanding
generally accepted accounting principles ("GAAP") and financial statements, (ii)
assessing the general  application  of GAAP  principles  in connection  with our
accounting for estimates,  accruals and reserves, (iii) analyzing and evaluating
our  financial   statements,   (iv)  understanding  our  internal  controls  and
procedures  for  financial  reporting;  and (v)  understanding  audit  committee
functions,  all of which are attributes of an audit committee  financial expert.
However,  the board of directors  believes that there is not any audit committee
member who has obtained these attributes through the experience specified in the
SEC's definition of "audit committee financial expert." Further, like many small
companies,  it is difficult  for the Company to attract and retain board members
who qualify as "audit  committee  financial  experts," and competition for these
individuals is significant.  The board believes that its current audit committee
is able to  fulfill  its  role  under  SEC  regulations  despite  not  having  a
designated "audit committee financial expert."

                         ITEM 10 EXECUTIVE COMPENSATION

SUMMARY COMPENSATION

         The  table  below  summarizes  all  compensation  due to our  executive
officers  that has been accrued by the Company as of December 31, 2006. No other
compensation has been paid to our executive officers.



                                       12
<PAGE>

<TABLE>
<CAPTION>
----------------- ------- ---------- -------- --------- --------- ---------- ------------- --------- ---------
      Name         Year    Salary     Bonus    Stock     Option     Non-      Change in      All      Total
      and                    ($)       ($)     Awards    Awards    Equity      Pension      Other      ($)
   Principal                                    ($)       ($)     Incentive   Value and    Compen-
    Position                                                        Plan      Nonquali-     sation
                                              (S8
                                               stock)              Compen-       fied        ($)
                                                                   sation      Deferred
                                                                     ($)      Compensa-
                                                                                 tion
                                                                               Earnings
                                                                                 ($)
      (a)          (b)        (C)        (d)      (e)       (f)        (g)         (h)         (i)       (j)
----------------- ------- ---------- -------- --------- --------- ---------- ------------- --------- ---------
<S>               <C>     <C>        <C>      <C>       <C>       <C>        <C>           <C>       <C>
Graeme Scott        2006     60,000                            0          0             0         0    60,000
President, CEO      2005  60,000                                                                       60,000
& Director          2004  43,674                                                                       43,674

----------------- ------- ---------- -------- --------- --------- ---------- ------------- --------- ---------
David Naylor        2006     30,000                            0          0             0         0    30,000
Chief Financial     2005  30,000                                                                       30,000
Officer &
Director            2004                                                                                    0
----------------- ------- ---------- -------- --------- --------- ---------- ------------- --------- ---------
</TABLE>

<TABLE>
<CAPTION>
----------------- ---------- --------- --------- -------------- --------------- -------------- ---------
      Name          Fees      Stock     Option    Non-Equity      Change in       All other     Total
                                    Incentive
                   Earned     Awards    Awards       Plan          Pension      Compensation     ($)
                     or        ($)       ($)     Compensation     Value and          ($)
                   Paid in                            ($)        Nonqualified
                             (S8
                    Cash      Stock)                               Deferred
                     ($)                                         Compensation
                                                                   Earnings
      (a)            (b)        (C)        (d)          (e)            (f)             (g)         (h)
----------------- ---------- --------- --------- -------------- --------------- -------------- ---------
<S>               <C>        <C>       <C>       <C>            <C>             <C>            <C>
Victor Perkell        4,800                                                                       4,800
----------------- ---------- --------- --------- -------------- --------------- -------------- ---------
</TABLE>


                 ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                                 AND MANAGEMENT

PRINCIPAL SHAREHOLDERS

         The table  below sets forth  information  as to each  person  owning of
record (or who was known by the Company to own beneficially) more than 5% of the
36,565,161  outstanding  shares of common stock at December 31, 2006. This table
also  includes  information  as to the ownership of the common shares by each of
the directors and executive officers of the Company, as well as by the directors
and executive officers as a group. Except as otherwise indicated, all shares are
owned  directly,  and the  persons  named in the  table  have  sole  voting  and
investment power with respect to shares shown as beneficially owned by them.





                                       13
<PAGE>

<TABLE>
<CAPTION>
                  NAME AND ADDRESS               AMOUNT & NATURE            PERCENT
TITLE OF CLASS    OF BENEFICIAL OWNER            OF BENEFICIAL OWNER        OF CLASS

<S>               <C>                            <C>                         <C>
Common Stock      Graeme Scott                   5,166,667 shares            14.13%
                  24 Ternhill Crescent           President/CEO
                  Toronto, Ontario               Director
                  M3C 2E5


Common Stock      Victor Perkell                    360,000 shares             .98%
                  2788 Bathurst Street
                  Toronto, Ontario
                  M6B 3A3

Common Stock      Robert McIntosh                 2,400,000 shares            6.56%
                  #606 1414 Barclay St.
                  Vancouver, British Columbia
                  V6G 1J4

Common Stock      Projection Capital             16,445,594 shares           44.98%
                  Tortola, B.V.I.

Common Stock      Louvicourt                      5,273,900 shares           14.42%
                  Toronto, Ontario

COMMON STOCK      ALL EXECUTIVE OFFICERS AND      5,526,667 SHARES           15.11%
                  DIRECTORS AS A GROUP
</TABLE>



             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         Pursuant to consulting  agreements  dated June 1, 2004 and revisions in
2005 the Company agreed to pay $5,000 per month to the President and director of
the Company,  $2,500 per month to the CFO and director and $400 per month to the
Director not having an officer's position.






                                       14
<PAGE>


                   ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K


      (a) The following documents are filed as part of this report.

1.     FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                                                                                <C>
Report of Robison, Hill & Co., Independent Certified Public Accountants.............F-1
Balance Sheets
  December 31, 2006, and 2005.......................................................F-3
Statements of Operations
  For the Years Ended December 31, 2006 and 2005 And for the  Cumulative  Period
  from November 6, 2002 (inception)
  To December 31, 2006..............................................................F-4
Statement of Stockholders' Equity
  From November 6, 2002 (inception) to December 31, 2006............................F-5
Statements of Cash Flows
  For the Years Ended December 31, 2006 and 2005 And for the  Cumulative  Period
  from November 6, 2002 (inception)
  To December 31, 2006 .............................................................F-9
Notes to Financial Statements.......................................................F-11
</TABLE>

2.     EXHIBITS

31.1     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.
31.2     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.
32.1     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.
32.2     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.


                  ITEM 14. PRINCIPAL ACCOUNTANT FEES & SERVICES

         The following table summarizes the fees billed to us by Robison, Hill &
Company for professional  services rendered for the year ended December 31, 2006
and 2005.

         --------------------------- ----------- ----------- --
                  Service               2006        2005
         --------------------------- ----------- ----------- --
         Audit Fees                   $14,485     $13,380
         Audit-Related Fees              -           -
         Tax Fees                       $250        $200
         All Other Fees                  -            -
         --------------------------- ----------- ----------- --
         Total                        $14,735     $13,580
         --------------------------- ----------- ----------- --

AUDIT FEES.  Consists of fees billed for professional  services rendered for the
audits  of  our  consolidated  financial  statements,  reviews  of  our  interim
consolidated  financial  statements  included  in  quarterly  reports,  services
performed in connection  with filings with the Securities & Exchange  Commission
and related  comfort  letters and other  services that are normally  provided by
Robison,  Hill & Company in connection with statutory and regulatory  filings or
engagements.



                                       15
<PAGE>

TAX FEES. Consists of fees billed for professional  services for tax compliance,
tax  advice  and tax  planning.  These  services  include  assistance  regarding
federal,  state and local tax compliance  and  consultation  in connection  with
various transactions and acquisitions.

Audit  Committee  Pre-Approval of Audit and  Permissible  Non-Audit  Services of
Independent Auditors

The Audit Committee is to pre-approve all audit and non-audit  services provided
by  the  independent  auditors.  These  services  may  include  audit  services,
audit-related  services,  tax services  and other  services as allowed by law or
regulation.  Pre-approval  is  generally  provided  for up to one  year  and any
pre-approval  is detailed as to the  particular  service or category of services
and is generally  subject to a specifically  approved  amount.  The  independent
auditors  and  management  are  required  to  periodically  report  to the Audit
Committee regarding the extent of services provided by the independent  auditors
in accordance  with this  pre-approval  and the fees incurred to date. The Audit
Committee may also pre-approve particular services on a case-by-case basis.

The  Audit  Committee  pre-approved  100%  of the  Company's  2005  audit  fees,
audit-related  fees,  tax fees,  and all other fees to the  extent the  services
occurred  after May 6, 2003,  the effective  date of the Securities and Exchange
Commission's final pre-approval rules.










<PAGE>

                              CALIBER ENERGY, INC.
                         (AN EXPLORATION STATE COMPANY)

                                       -:-

                          INDEPENDENT AUDITOR'S REPORT

                           DECEMBER 31, 2006 AND 2005




<PAGE>






                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                  Page
<S>                                                                               <C>
Independent Auditor's Report......................................................F-1

Balance Sheets
   December 31, 2006 and 2005.....................................................F-3

Statements of Operations
   For the Years Ended December 31, 2006 and 2005 And for the Cumulative  Period
   from November 6, 2002 (inception)
   To December 31, 2006...........................................................F-4

Statement of Stockholders' Equity
   From November 6, 2002 (inception) to December 31, 2006 ........................F-5

Statements of Cash Flows
   For the Years Ended December 31, 2006 and 2005 And for the Cumulative  Period
   from November 6, 2002 (inception)
   To December 31, 2006...........................................................F-9

Notes to the Financial Statements.................................................F-11
</TABLE>





















<PAGE>










                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Shareholders
Caliber Energy, Inc.
(An Exploration State Company)

         We have audited the accompanying  balance sheet of Caliber Energy, Inc.
(an exploration state company) as of December 31, 2006 and 2005, and the related
statements  of operations  and cash flows for the years ended  December 31, 2006
and 2005,  and the  statement  of  stockholders'  equity  from  November 6, 2002
(inception)  to  December  31,  2006.   These   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

         We conducted our audits in accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the financial position of Caliber Energy, Inc.
(an exploration state company) as of December 31, 2006 and 2005, and the results
of its  operations  and its cash flows for the years ended December 31, 2006 and
2005,  and  the  statement  of  stockholders'   equity  from  November  6,  2002
(inception)  to  December  31, 2006 in  conformity  with  accounting  principles
generally accepted in the United States of America.







                                      F - 1

<PAGE>



         The accompanying  financial statements have been prepared assuming that
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.




                                                    /s/ Robison, Hill & Co
                                                    ----------------------------
                                                    Certified Public Accountants
Salt Lake City, Utah
February 26, 2007




                                      F - 2

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                          December 31,
ASSETS                                                                               2006               2005
                                                                              ------------------  -----------------
Current Assets
<S>                                                                           <C>                 <C>
  Cash                                                                        $            5,788  $               -
   Prepaid expenses                                                                        1,005              3,425
   Receivable from Oil & Gas Properties                                                        -             40,998
   Interest Receivable                                                                         -                993
   Notes Receivable                                                                            -             40,512
                                                                              ------------------  -----------------
     Total Current Assets                                                                  6,793             85,928
                                                                              ------------------  -----------------

     Total Assets                                                             $            6,793  $          85,928
                                                                              ==================  =================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable                                                            $           39,881  $         197,924
  Accrued liabilities & short term contract payable                                       36,599             52,756
  Accrued interest                                                                             -             20,334
                                                                              ------------------  -----------------
     Total Current Liabilities                                                            76,480            271,014
                                                                              ------------------  -----------------

Long-Term Liabilities
   Contract payable - the "Ritz Claim"                                                    15,000             15,000
   Convertible Debentures                                                                      -            463,453
                                                                              ------------------  -----------------
     Total Long-Term Liabilities                                                          15,000            478,453
                                                                              ------------------  -----------------

      Total Liabilities                                                                   91,480            749,467
                                                                              ------------------  -----------------

Stockholders' Equity
   Preferred stock, $.0001 par value, authorized 10,000,000
     shares, -0- issued                                                                        -                  -
   Common stock, $.0001 par value, authorized 500,000,000
     shares, 36,565,164 shares issued at December 31, 2006 and
     12,519,000 shares issued at December 31, 2005                                         3,657              1,252
   Stock to be issued                                                                          2                  2
   Additional paid-in capital                                                          1,310,491            591,511
   Deficit accumulated during development stage                                       (1,398,837)        (1,256,304)
                                                                              ------------------  -----------------

     Total Stockholders' Equity                                                          (84,687)          (663,539)
                                                                              ------------------  -----------------

     Total Liabilities and Stockholders' Equity                               $            6,793  $          85,928
                                                                              ==================  =================
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F - 3

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                                     Deficit
                                                                                                   Accumulated
                                                                                                      Since
                                                                                                   November 6,
                                                                                                       2002
                                                                  For the Year Ended               Inception of
                                                                     December 31,                  Development
                                                               2006                2005               Stage
                                                        ------------------  ------------------  ------------------
<S>                                                     <C>                 <C>                 <C>
Revenue                                                 $                -  $                -  $                -
                                                        ------------------  ------------------  ------------------

Expenses
  Consulting                                                         9,000              36,000              71,000
  Officers Compensation                                             94,800              94,800             256,505
  General and Administrative                                        29,362              38,704             206,342
   Investor Relations                                                    -              60,000              60,000
  General Exploration                                                    -              12,095             334,763
                                                        ------------------  ------------------  ------------------
     Total Expenses                                                133,162             241,599             928,610
                                                        ------------------  ------------------  ------------------

Other Income ( Expense)
   Interest Income                                                     210                 993               1,203
   Interest Expense                                                 (9,581)           (460,190)           (471,430)
                                                        ------------------  ------------------  ------------------

     Total Other Income (Expense)                                   (9,371)           (459,197)           (470,227)
                                                        ------------------  ------------------  ------------------

Net Income (Loss)                                       $         (142,533) $         (700,796) $       (1,398,837)
                                                        ==================  ==================  ==================

Income (Loss) per Common Share                          $           (0.01)  $           (0.05)
                                                        ==================  ==================

Weighted Average Shares Outstanding                             25,694,974          14,079,343
                                                        ==================  ==================
</TABLE>







   The accompanying notes are an integral part of these financial statements.

                                      F - 4

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM NOVEMBER 6, 2002 (INCEPTION) TO DECEMBER 31, 2006


<TABLE>
<CAPTION>
                                                                                                                     Deficit
                                                                                                                   Accumulated
                                                                                                                       From
                                                                                                                   November 6,
                                                                                   Common         Paid in              2002
                                                                                   Shares       Capital in         Inception of
                                                   Common Stock                     to be        Excess of         Development
                                      --------------------------------------
                                            Shares              Amount             Issued        Par Value            Stage
                                      ------------------  ------------------  ------------   -----------------  ------------------

<S>                                   <C>                 <C>                 <C>            <C>                <C>
November 6, 2002 - Inception                           -  $                -  $          -   $               -  $                -

December 2002 - Common stock
   issued for cash at $.005 per share          3,200,000                 320             -              15,680                   -

Common stock issued for services
   at $.003 per share                         24,000,000               2,400             -              99,600                   -

Net Income (Loss)                                      -                   -             -                   -            (145,920)
                                      ------------------  ------------------  ------------   -----------------  ------------------

Balance at December 31, 2002                  27,200,000               2,720             -             115,280            (145,920)

July 23, 2004 - 10:1 stock split             244,800,000              24,480             -             (24,480)                  -

June 26, 2006 - 5:1 reverse
   stock split                              (217,600,000)            (21,760)            -              21,760                   -
                                      ------------------  ------------------  ------------   -----------------  ------------------

Restated Balance at
   December 31, 2002                          54,400,000               5,440             -             112,560            (145,920)
</TABLE>




                                       F-5
<PAGE>

                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM NOVEMBER 6, 2002 (INCEPTION) TO DECEMBER 31, 2006
                                   (continued)

<TABLE>
<CAPTION>
                                                                                                                    Deficit
                                                                                                                  Accumulated
                                                                                                                      From
                                                                                                                  November 6,
                                                                                 Common          Paid in              2002
                                                                                 Shares        Capital in         Inception of
                                                 Common Stock                     to be         Excess of         Development
                                    --------------------------------------
                                          Shares              Amount             Issued         Par Value            Stage
                                    ------------------  ------------------  -------------   -----------------  ------------------
<S>                                 <C>                 <C>                 <C>             <C>                <C>
March 2003 - Common stock
   issued for cash at $.25 per share           114,000  $               11  $           -   $          14,239  $                -

Net Income (Loss)                                    -                   -              -                   -              (7,879)
                                    ------------------  ------------------  -------------   -----------------  ------------------

Balance at December 31, 2003                54,514,000               5,451              -             126,799            (153,799)

April 2004 - Shares returned to
   treasury and canceled                   (36,000,000)             (3,600)             -               3,600                   -

July 2004 - 100,000 shares to be
   issued as part of Property Option
   Agreement at $.19 per share                       -                   -              2              18,998                   -

Net Income (Loss)                                    -                   -              -                   -            (401,709)
                                    ------------------  ------------------  -------------   -----------------  ------------------

Balance at December 31, 2004                18,514,000               1,851              2             149,397            (555,508)
</TABLE>




                                      F - 6

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM NOVEMBER 6, 2002 (INCEPTION) TO DECEMBER 31, 2006
                                   (continued)


<TABLE>
<CAPTION>
                                                                                                                    Deficit
                                                                                                                  Accumulated
                                                                                                                      From
                                                                                                                  November 6,
                                                                             Common              Paid in              2002
                                                                             Shares            Capital in         Inception of
                                             Common Stock                     to be             Excess of         Development
                                --------------------------------------
                                      Shares              Amount             Issued             Par Value            Stage
                                ------------------  ------------------  -----------------   -----------------  ------------------
<S>                             <C>                 <C>                 <C>                 <C>                <C>
March 2005 - Convertible debt
   issued - interest expense
   recognized on beneficial
   conversion                   $                -  $                -  $               -   $         383,610  $                -

April 2005 - Shares returned to
  treasury and canceled                 (5,995,000)               (599)                 -                 599                   -

June 2005 - Convertible debt
   issued - interest expense
   recognized on beneficial
   conversion                                    -                   -                  -              57,905                   -

Net Income (Loss)                                -                   -                  -                   -            (700,796)
                                ------------------  ------------------  -----------------   -----------------  ------------------

Balance at December 31, 2005            12,519,000               1,252                  2             591,511          (1,256,304)
</TABLE>


                                                       F - 7

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM NOVEMBER 6, 2002 (INCEPTION) TO DECEMBER 31, 2006
                                   (continued)


<TABLE>
<CAPTION>
                                                                                                                      Deficit
                                                                                                                    Accumulated
                                                                                                                        From
                                                                                                                    November 6,
                                                                                  Common           Paid in              2002
                                                                                  Shares         Capital in         Inception of
                                                  Common Stock                     to be          Excess of         Development
                                     --------------------------------------
                                           Shares              Amount             Issued          Par Value            Stage
                                     ------------------  ------------------  --------------   -----------------  ------------------
<S>                                  <C>                 <C>                 <C>              <C>                <C>
June 2006 - Shares issued for
   convertible debt, accrued interest
   and accrued expenses                      24,046,164  $            2,405  $            -   $         718,980  $                -

Net Income (Loss)                                     -                   -               -                   -            (142,533)
                                     ------------------  ------------------  --------------   -----------------  ------------------
Balance December 31, 2006                    36,565,164  $            3,657  $            2   $       1,310,491  $       (1,398,837)
                                     ==================  ==================  ==============   =================  ==================
</TABLE>










   The accompanying notes are an integral part of these financial statements.

                                      F - 8

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                      Deficit
                                                                                                    Accumulated
                                                                                                       Since
                                                                                                    November 6,
                                                                                                        2002
                                                                   For the Year Ended               Inception of
                                                                      December 31,                  Development
                                                                2006                2005               Stage
                                                          -----------------  ------------------  ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S>                                                       <C>                <C>                 <C>
Net Loss                                                  $        (142,533) $         (700,796) $       (1,398,837)
Adjustments used to reconcile net loss to net
  cash provided by (used in) operating activities:
   Depreciation and Amortization                                          -                   -                 744
   Common stock issued for liabilities                              257,932                                 257,932
   Stock compensation                                                     -                   -             102,000
   Interest expense from beneficial conversion                            -             441,515             441,515
   Common stock to be issued for mineral rights                           -                   -              19,000
   Mineral rights expensed                                                -                   -              16,000
(Increase) decrease in prepaid expenses                               2,420              (3,425)             (1,005)
(Increase) decrease in receivables                                   40,998             (40,998)                  -
(Increase) decrease in interest receivable                              993                (993)                  -
Increase (decrease) in accrued interest                             (20,334)             18,675                   -
Increase (decrease) in accounts payable                            (158,043)              8,857              39,881
Increase (decrease) in accrued liabilities                          (16,157)            (44,974)             36,599
Increase (decrease) in contracts payable                                  -                   -              15,000
                                                          -----------------  ------------------  ------------------
Net cash used in operating activities                               (34,724)           (322,139)           (471,171)
                                                          -----------------  ------------------  ------------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
Cash paid for website design                                              -                   -                (744)
Cash paid for mineral rights                                              -                   -             (16,000)
                                                          -----------------  ------------------  ------------------
Net cash used by investing activities                                     -                   -             (16,744)
                                                          -----------------  ------------------  ------------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from convertible debentures                                      -             361,923             361,923
Proceeds from loans                                                       -                   -              78,695
Proceeds from shareholder loan                                            -                   -              22,835
Proceeds from repayment of loans receivable                          40,512                   -              40,512
Loans to related parties                                                  -             (40,512)            (40,512)
Proceeds on sale of common stock                                          -                   -              30,250
                                                          -----------------  ------------------  ------------------
Net Cash Provided by Financing  Activities                           40,512             321,411             493,703
                                                          -----------------  ------------------  ------------------
</TABLE>




                                       F - 9
<PAGE>

                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)


<TABLE>
<CAPTION>
                                                                                                      Deficit
                                                                                                    Accumulated
                                                                                                       Since
                                                                                                    November 6,
                                                                                                        2002
                                                                   For the Year Ended               Inception of
                                                                      December 31,                  Development
                                                                2006                2005               Stage
                                                          -----------------  ------------------  ------------------
<S>                                                       <C>                <C>                 <C>
Net Increase (Decrease) in
   Cash  and Cash Equivalents                             $           5,788  $             (728) $            5,788
Cash and Cash Equivalents at
   Beginning of the Period                                                -                 728                   -
                                                          -----------------  ------------------  ------------------
Cash and Cash Equivalents at
   End of the Period                                      $           5,788  $                   $            5,788
                                                          =================  ==================  ==================

SUPPLEMENTAL DISCLOSURE OF CASH
  FLOW INFORMATION:
Interest                                                  $               -  $                -  $                -
Income Taxes                                              $               -  $                -  $                -
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:

         During the quarter ended June 30, 2006,  convertible  debt of $463,453,
accrued  interest of $29,915,  accounts payable of $158,217 and accrued expenses
of $69,800 were converted into 24,046,164 shares of common stock.













   The accompanying notes are an integral part of these financial statements.

                                     F - 10

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN

         This summary of accounting  policies for Caliber Energy is presented to
assist in understanding the Company's  consolidated  financial  statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

         The accompanying  consolidated  financial statements have been prepared
on the basis of accounting  principles  applicable to a "going  concern",  which
assume that the Company  will  continue in  operation  for at least one year and
will be able to realize its assets and discharge its  liabilities  in the normal
course of operations.

         Several conditions and events cast doubt about the Company's ability to
continue as a "going concern".  The Company is an exploration state company, and
has incurred net losses of $142,533 for the year ended December 31, 2006, losses
of $700,796 for the year ended December 31, 2005, and losses of $1,398,837 since
inception.  The Company has not realized  economic  production  from its mineral
properties as of December 31, 2006. These factors raise  substantial doubt about
the Company's  ability to continue as a going concern.  Management  continues to
actively  seek  additional  sources  of  capital  to  fund  current  and  future
operations.  There  is no  assurance  that the  Company  will be  successful  in
continuing  to  raise  additional  capital,   establishing  probable  or  proven
reserves,  or determining if the mineral  properties can be mined  economically.
These financial statements do not include any adjustments that might result from
the outcome of these uncertainties.

Organization and Basis of Presentation

         Caliber Energy, Inc. (the Company),  an exploration state company,  was
incorporated on November 6, 2002 in the State of Delaware as Twin Ventures, Ltd.
On June 18,  2004,  the Company  changed the name to Rincon  Resources,  Inc. On
March 14, 2005, the Company changed its name to Caliber Energy, Inc.

Nature of Operations

         The Company is an  exploration  state oil and gas company.  The Company
also has  interests in mining and mineral  properties.  On November 21, 2002 the
Company  became  actively  engaged  in  acquiring  mineral  properties,  raising
capital, and preparing properties for production.

         The  Company  did  not  have  any  significant   mining  operations  or
activities  from  inception;  accordingly,  the  Company  is deemed to be in the
exploration  state.  For purposes of recording the Company's  mineral  claims in
Canada,  the  Company  acquired  New  Heights  Capital  Corporation  (a Canadian
corporation)  and transferred the claims listed in the following  paragraph into
the subsidiary in exchange for 100% of the subsidiary's outstanding stock.


                                     F - 11

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN (continued)

         On November 21, 2002,  the Company  acquired  mineral claims (the "Ritz
Claims")  located in the  Lillooet  Lake Region of Southwest  British  Columbia,
Canada.  The property  consists of twenty unpatented two post mineral claims and
one unpatented four post mineral claim  representing  forty units that have been
staked and  recorded  in the  Lillooet  mining  division.  The  Company  has not
commenced  economic  production and is therefore  still  considered to be in the
exploration stage.

         On July 26, 2004,  the Company  executed an agreement  and made the 1st
statutory  payment  of  $55,000  to  acquire a 75%  interest  in the Tudor  Gold
Property.  The Tudor  Gold  Property  is  located  in  eastern  Ontario,  Canada
approximately 100 miles northeast of Toronto. The property lies within Tudor and
Grimsthorpe Townships. The property consists of twenty-two contiguous unpatented
mining claims containing sixty units covering approximately 2,965 acres of land.
The  Company  intends  to  launch  a  comprehensive,   property  wide,   surface
exploration  program  immediately.  The Company  intends to follow-up with drill
testing of the  mineralized  zones of the  property.  The data  derived from the
drill  testing of the various  zones  should  enable the Company to identify and
assess gold bearing structures to ultimately establish the size and grade of the
gold resource.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

         The consolidated  financial statements for the years ended December 31,
2006 and 2005 include the accounts of Caliber  Energy,  Inc. and its  subsidiary
New Heights Capital Corporation. New Heights Capital Corporation was acquired by
the Company on April 22, 2003.

         The  results  of  subsidiaries  acquired  or sold  during  the year are
consolidated  from their effective dates of acquisition  through their effective
dates of disposition.

         All  significant  intercompany  balances  and  transactions  have  been
eliminated.

Revenue and Cost Recognition

         The  Company  uses  the  accrual  basis  of  accounting  for  financial
statement  reporting.  Revenues and expenses are  recognized in accordance  with
Generally  Accepted  Accounting  Principles  for the  industry.  Certain  period
expenses are recorded when obligations are incurred.





                                     F - 12

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

         The  preparation  of  the  financial   statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the reported amount of assets and  liabilities,  and
disclosure of contingent  liabilities  at the date of the financial  statements,
and the reported  amount of revenues and expenses  during the reporting  period.
Actual results could differ from those results.

Accounts Receivable, Deposits, Accounts Payable and Accrued Expenses

         Accounts  receivable have historically been immaterial and therefore no
allowance  for  doubtful  accounts  has  been   established.   Normal  operating
refundable  Company  deposits are listed as Other Assets.  Accounts  payable and
accrued  expenses  consist of trade  payables  created from the normal course of
business.

Mineral Properties and Mining Equipment

         Mineral  properties  and  mining  equipment  include  land  and  mining
equipment  carried  at cost.  Mining  equipment  including  mill  facilities  is
depreciated using the  straight-line  method over estimated useful lives of 5 to
15 years,  or the  units-of-production  method  based on  estimated  tons of ore
reserves  if the  equipment  is located at a producing  property  with a shorter
economic life. Mining equipment not in service is not depreciated.

         During  1997,  the  Securities  and  Exchange  Commission  (SEC)  staff
reconsidered  existing accounting  practices for mineral  expenditures by United
States junior mining companies. They now interpret generally accepted accounting
policy for junior mining companies to permit  capitalization  of acquisition and
exploration  costs only after  persuasive  engineering  evidence  is obtained to
support  recoverability  of these costs  (ideally upon  determination  of proven
and/or  probable  reserves  based upon dense  drilling  samples and  feasibility
studies by a recognized independent engineer). Although the Company has obtained
samples,  and an  independent  engineer  has deemed the  properties  may contain
platinum  group metals,  management  has chosen to follow the more  conservative
method of  accounting  by  expensing  all mineral  costs,  for which there is no
feasibility study.









                                     F - 13

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Land Options

         As  noted  above,  since  the  Company  interprets  generally  accepted
accounting  policies to permit  capitalization  of acquisition  costs  including
leases and land  options  only after  persuasive  engineering  evidence has been
obtained to support recoverability of these costs, these costs will be expensed.

Reclamation and Environmental Costs

         Reclamation  costs and  related  accruals  are  based on the  Company's
interpretation of environmental and regulatory  requirements.  Minimum standards
for mine  reclamation have been  established by various  governmental  agencies.
Reclamation,  site  restoration,  and closure costs for each  producing mine are
accrued over the life of the mine using the units-of-production  method. Ongoing
reclamation activities are expensed in the period incurred.

Oil and Gas Properties

         The Company  follows the full cost method of accounting for its oil and
gas  operations  whereby all costs related to the  acquisition  of petroleum and
natural  gas  interests  are  capitalized.  Such  costs  include  land and lease
acquisition  costs,   annual  carrying  charges  of  non-producing   properties,
geological and geophysical costs, costs of drilling and equipping productive and
non- productive  wells, and direct  exploration  salaries and related  benefits.
Proceeds from the disposal of oil and gas properties are recorded as a reduction
of the related  capitalized  costs without  recognition of a gain or loss unless
the  disposal  would  result in a change of 20 percent or more in the  depletion
rate. The Company operates in one cost center, being Canada. To date the Company
has not established any proven recoverable reserves on its properties.

         Depletion and depreciation of the capitalized  costs are computed using
the unit-of-production  method based on the estimated proven reserves of oil and
gas determined by independent consultants.










                                     F - 14

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


         Estimated future removal and site  restoration  costs are provided over
the life of proven reserves on a unit-of-production  basis. Costs, which include
the  cost of  production  equipment  removal  and  environmental  clean-up,  are
estimated  each  period  by  management  based on  current  regulations,  costs,
technology and industry  standards.  The charge is included in the provision for
depletion and depreciation and the actual  restoration  expenditures are charged
to the accumulated provision amounts as incurred.

         The Company applies a ceiling test to capitalized  costs to ensure that
such costs do not exceed estimated future net revenues from production of proven
reserves  at year end market  prices  less  future  production,  administrative,
financing,  site  restoration,  and  income  tax costs plus the lower of cost or
estimated  market  value  of  unproved  properties.  If  capitalized  costs  are
determined to exceed  estimated  future net  revenues,  a write-down of carrying
value is charged to depletion in the period.

Income  Taxes

         The Company  accounts for income taxes using the liability method which
requires  recognition  of deferred tax  liabilities  and assets for the expected
future tax  consequences  of events  that have been  included  in the  financial
statements or tax returns.  Deferred tax assets and  liabilities  are determined
based on the difference between the financial statements and tax basis of assets
and  liabilities  using  enacted  tax rates in effect  for the year in which the
differences are expected to reverse.

         The  Company's  management  determines  if  a  valuation  allowance  is
necessary to reduce any tax benefits when the available benefits are more likely
than not to expire before they can be used.

Cash  and  Cash  Equivalents, and Credit Risk

         For purposes of reporting  cash flows,  the Company  considers all cash
accounts  with  maturities  of 90 days or less  and  which  are not  subject  to
withdrawal  restrictions  or  penalties,  as cash  and cash  equivalents  in the
accompanying balance sheet.

         The portion of deposits in a  financial  institution  that  insures its
deposits  with the FDIC up to $100,000  per  depositor in excess of such insured
amounts are not subject to insurance and represent a credit risk to the Company.





                                     F - 15

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock  Based  Compensation

         Effective  January 1, 2006, the company  adopted the provisions of SFAS
No. 123(R).  SFAS No. 123(R) requires employee equity awards to be accounted for
under the fair value method.  Accordingly,  share-based compensation is measured
at grant date,  based on the fair value of the award.  Prior to January 1, 2006,
the company accounted for awards granted to employees under its equity incentive
plans under the intrinsic value method prescribed by Accounting Principles Board
(APB) Opinion No. 25,  "Accounting  for Stock Issued to Employees" (APB 25), and
related  interpretations,  and  provided  the  required  pro  forma  disclosures
prescribed by SFAS No. 123, "Accounting for Stock-Based  Compensation" (SFAS No.
123), as amended.  No stock  options were granted to employees  during the years
ended December 30, 2006 or 2005 and  accordingly,  no  compensation  expense was
recognized  under APB No. 25 for the years ended  December 31, 2006 or 2005.  In
addition,  no compensation expense is required to be recognized under provisions
of SFAS No. 123(R) with respect to employees.

         Under the modified  prospective method of adoption for SFAS No. 123(R),
the  compensation  cost  recognized by the company  beginning on January 1, 2006
includes (a) compensation cost for all equity incentive awards granted prior to,
but not yet vested as of January 1,  2006,  based on the  grant-date  fair value
estimated in  accordance  with the original  provisions of SFAS No. 123, and (b)
compensation cost for all equity incentive awards granted  subsequent to January
1, 2006,  based on the grant-date  fair value  estimated in accordance  with the
provisions of SFAS No. 123(R).  The company uses the  straight-line  attribution
method to recognize  share-based  compensation  costs over the service period of
the award.  Upon  exercise,  cancellation,  forfeiture,  or  expiration of stock
options,  or upon vesting or forfeiture of restricted stock units,  deferred tax
assets for options and  restricted  stock units with multiple  vesting dates are
eliminated  for each vesting  period on a first-in,  first-out  basis as if each
vesting  period was a  separate  award.  To  calculate  the excess tax  benefits
available  for  use in  offsetting  future  tax  shortfalls  as of the  date  of
implementation, the company followed the alternative transition method discussed
in FASB Staff Position No. 123(R)-3.

Foreign Currency Translation and Transactions

         The  Company's  functional  currency  is the  US  dollar.  No  material
translations or transactions have occurred. Upon the occurrence of such material
transactions  or the need for  translation  adjustments,  the Company will adopt
Financial  Accounting  Standard  No. 52 and other  methods  in  conformity  with
Generally Accepted Accounting Principles.




                                     F - 16

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings Per Share

         Basic  earnings per common share were  computed by dividing net loss by
the weighted  average  number of shares of common stock  outstanding  during the
year. There are no dilutive outstanding common stock equivalents at December 31,
2006 and 2005.

Fair Value of Financial Instruments

         The carrying value of the Company's  financial  instruments,  including
accounts  payable  and  accrued  liabilities  at  December  31,  2006  and  2005
approximates  their fair values due to the short-term  nature of these financial
instruments.

NOTE 3 - EXPLORATION STATE COMPANY/ GOING CONCERN

         The Company has not begun principal  operations and as is common with a
company  in the  exploration  state,  the  Company  has  had  recurring  losses.
Continuation  of the Company as a going concern is dependent  upon obtaining the
additional  working capital  necessary to be successful in its planned activity,
and the  management of the Company has  developed a strategy,  which it believes
will accomplish this objective  through  additional equity funding and long term
financing, which will enable the Company to operate for the coming year.

NOTE 4  -  AFFILIATES  AND  RELATED  PARTIES

         Significant  relationships with (1) companies affiliated through common
ownership and/or management, and (2) other related parties are as follows:

         On July 26th,  2004, the Company  executed an agreement with Louvicourt
Gold Mines Inc.  and made a first  payment of  $55,000.00  (US) to acquire a 75%
interest and the rights to explore a series of gold occurrences  situated on the
Tudor Gold  Property.  The  President  of  Louvicourt  Gold Mines Inc. is Fenton
Scott,  a related party and father of Graeme F. Scott,  the President and CEO of
the Company.  Additionally,  Graeme F. Scott was a past  director of  Louvicourt
Gold Mines, Inc. See Note 8 for a description of this Project.

         During October 2004,  the Company  received a loan from a related party
for $19,590 for exploration  costs associated with the Tudor Gold Property.  The
loan is due on demand with interest accrued at 5% annually.  In March 2005, this
loan was converted to convertible debentures (see Note 11).

                                     F - 17

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 4  -  AFFILIATES  AND  RELATED  PARTIES (continued)

         During December 2004, the Company received a loan from a shareholder of
$3,245 for payment of accounts payable.  The loan is due on demand with interest
accrued at 5% annually.  In March 2005,  this loan was converted to  convertible
debentures (see Note 11).

         During  the  year  ended  December  31,  2005,  the  Company  made  two
short-term loans totaling $40,512 to two affiliated  companies.  The loans carry
an interest  rate of 6% per annum.  In February  2006,  both of these loans were
repaid.

NOTE 5 - NOTES PAYABLE

         In  July  2004,  the  Company   received  a  loan  of  $58,000  from  a
third-party.  The loan is due July 14,  2005 with  interest at 5%  annually.  In
March 2005, this loan was converted to convertible debentures (see Note 11).

         In  December  2004,  the  Company  received  a loan of  $20,695  from a
third-party.  The loan is due on demand with  interest at 5% annually.  In March
2005, this loan was converted to convertible debentures (see Note 11).

NOTE 6 -  INCOME  TAXES

         As of December 31,  2006,  the Company had a net  operating  loss carry
forward for income tax reporting purposes of approximately  $957,324 that may be
offset against  future  taxable income through 2026.  Current tax laws limit the
amount of loss  available  to be offset  against  future  taxable  income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the  carry-forwards  will expire unused.  Accordingly,  the potential tax
benefits of the loss  carry-forwards are offset by a valuation  allowance of the
same amount.


                                2006                2005
Net Operating Losses     $         143,599   $         122,219
Valuation Allowance               (143,599)           (122,219)
                         ------------------  ------------------
                         $               -   $               -
                         ==================  ==================




                                     F - 18

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 6 -  INCOME  TAXES (continued)

         The provision for income taxes differs from the amount  computed  using
the federal US statutory income tax rate as follows:


                                                     2006            2005
Provision (Benefit) at US Statutory Rate      $          21,380   $      38,892
Increase (Decrease) in Valuation Allowance              (21,380)        (38,892)
                                              ------------------  --------------
                                              $               -   $           -
                                              ==================  ==============

         The Company  evaluates its valuation  allowance  requirements  based on
projected future operations.  When  circumstances  change and causes a change in
management's  judgment  about the  recoverability  of deferred  tax assets,  the
impact of the change on the valuation is reflected in current income.

NOTE 7 - LONG-TERM DEBT

         On November 21, 2002,  the Company  entered into an agreement  with Mr.
Garth Barton for the purchase of mining property,  the "Ritz Claim",  located in
the Lillooet Lake Region of Southwest British Columbia, Canada. The "Ritz Claim"
is title to forty  (40)  mineral  claim  units  that are  unpatented.  The total
purchase  price of the  claim is  $33,500  due per  terms of the  contract  with
advance  royalties of $25,000 to be paid annually  commencing 36 months from the
date of  signature  of the  agreement.  The  property  is  subject  to a royalty
agreement.

         The  contract  payment  schedule  calls  for  $13,500  to be paid  upon
delivery of a summary  geological  report and  transfer of property  title.  The
$13,500 was paid per the contract.  On February 28, 2003 a payment of $2,500 was
made per contract schedule.  Twelve months from the date of title  registration,
$2,500 becomes due with another $2,500 due twenty four months from such date. No
later than thirty six months from the date of  signature  on the  contract,  the
balance of payment is due for a total purchase price of $33,500. At December 31,
2006 and  2005,  the  amount  due on this  contract  was  $15,000  and  $15,000,
respectively.

NOTE 8 -  SHAREHOLDERS'  EQUITY

Preferred Stock

         The Company has authorized ten million (10,000,000) shares of preferred
stock with a par value of $.0001, none of which have been issued.



                                     F - 19

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 8 -  SHAREHOLDERS'  EQUITY (continued)

Common Stock

         The Company has authorized five hundred million (500,000,000) shares of
common stock with a par value of $.0001.

         On April 8, 2004,  36,000,000  shares were returned to the treasury and
canceled.

         On April 6, 2005, 5,995,000 shares of common stock were returned to the
treasury and canceled.

         During the quarter ended June 30, 2006,  convertible  debt of $463,453,
accrued  interest of $29,915,  accounts payable of $158,217 and accrued expenses
of $69,800 were converted into 24,046,164 shares of common stock.

         On July 23, 2004,  the Company did a 10 to 1 forward stock split of its
issued  and  outstanding  shares  of  common  stock  from  9,257,000  shares  to
92,570,000  shares.  On June 26,  2006,  the Company did a 5 to 1 reverse  stock
split of its  issued and  outstanding  shares of common  stock from  182,825,805
shares to 36,565,164  shares.  All references to common stock have been adjusted
to reflect the stock splits.

Common Stock Subscribed and Issued for Cash

         During  December,  2002, the Company  undertook an offering exempt from
registration  pursuant to Section  4(2) of the  Securities  Act of 1933 to raise
$16,000 in the issuance of  6,400,000  shares of common stock for the purpose of
the acquisition and exploration of mining properties.  The Company's  management
considers this offering to be exempt under the Securities Act of 1933.

         During  March 2003,  the  Company  undertook  a  Regulation  D Rule 506
private  placement  offering to raise $14,250 for the issuance of 114,000 shares
of common stock for the purpose of mineral exploration. The Company's management
considers this offering to be exempt under the Securities Act of 1933.

Common Stock to be Issued

         On July 26, 2004, the Company entered into a property option  agreement
with Louvicourt Gold Mines,  Inc. As part of this agreement,  the Company was to
issue 20,000 shares of common stock upon the execution of the  agreement.  As of
December 31, 2005, the Company had expensed $19,000 in exploration costs related
to the 20,000 shares of common stock due upon  execution of the  agreement.  The
shares were valued at $.19 per share and as of December 31,  2006,  had not been
issued.

                                     F - 20

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 9 - MINERAL RIGHTS

         On November 21, 2002,  the Company  entered into an agreement  with Mr.
Garth Barton for the purchase of mining property,  the "Ritz Claim",  located in
the Lillooet Lake Region of Southwest British Columbia, Canada. The "Ritz Claim"
is title to forty  (40)  mineral  claim  units  that are  unpatented.  The total
purchase  price of the  claim is  $33,500  due per  terms of the  contract  with
advance  royalties of $25,000 to be paid annually  commencing 36 months from the
date of signature of the  agreement.  Failure to pay the advance  royalties will
cause a reversion of the property  within 10 days of such failure.  The property
is subject to a 2 1/2% Net Smelter Royalty (NSR) and a 7 1/2% Gross Rock Royalty
(GRR).  1 1/2% of the NSR can be acquired for $1.0 million within 12 months from
the  commencement of commercial  production.  Mr. Barton is required to keep the
claims in good  standing for at least 18 months from the date of the  agreement.
In addition,  Mr.  Barton will provide  geological  consulting  services for the
claims and will  maintain the claims in good  standing for a period of 36 months
with fees advanced by the Company prior to the anniversary  dates from signature
of the  agreement.  Said fees are to be deducted from the total cost.  All costs
related to this claim have been expensed in accordance  with Generally  Accepted
Accounting Principals for the industry.

         On April 22, 2003, the Company  acquired the  outstanding  common share
(one common  share) of New Heights  Capital  Corporation,  an inactive  Canadian
corporation, for the purpose of recording the Company's Canadian "Ritz Claim" in
a Canadian  corporation  as required.  The "Ritz Claim" was  transferred  to the
subsidiary in exchange for the subsidiary's  outstanding  common share of stock.
New Heights  Capital  Corporation is a wholly owned  Canadian  subsidiary of the
Company.

         On July 26, 2004,  the Company  executed a Property  Option  Agreements
with Louvicourt Gold Mines,  Inc.  ("Louvicourt")  (see Note 3) to acquire a 75%
interest in the Tudor Gold  Property.  The Company  agreed to make the following
cash and share option payments to Louvicourt:

1.       $55,000 upon the full execution of the Agreement.
2.       $55,000 on or before one year from the date of full  execution  of this
         Agreement.
3.       20,000  shares of common stock upon full  execution of this  Agreement,
         and
4.       40,000  shares of common  stock on or before  one year from the date of
         full execution of this Agreement.








                                     F - 21

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 9 - MINERAL RIGHTS (continued)

         The Company also agreed to fund work programs on the mineral  claims by
advancing exploration funds to Louvicourt on the following basis:

         1.       by no later  than July 31,  2004,  the  Company  will  advance
                  Exploration Funds of $150,000
         2.       by no later than one year from the signing of this  Agreement,
                  the  Company  will  advance  additional  Exploration  Funds of
                  $350,000;
         3.       by no later than two years from the signing of this Agreement,
                  the  Company  will  advance  additional  Exploration  Funds of
                  $250,000; and
         4.       by no later than 4 years from the  signing of this  Agreement,
                  the  Company  will  advance  additional  Exploration  Funds of
                  $1,250,000.

         Provided  the Company has made the option  payments  and  advanced  the
exploration  funds required for work programs  costing a total of $750,000,  the
Company  shall have  earned an  immediately  vested 50%  interest in the mineral
claims.  Provided  the Company has made the option  payments  and  advanced  the
exploration funds required for work programs costing a total of $1,250,000,  the
Company shall have earned an immediately  vested  additional 25% interest in the
mineral  claims,  bringing the Company's total interest in the mineral claims to
75%.

         As of December 31, 2006 the Company had paid  Louvicourt a cash payment
of $55,000 as part of this  agreement.  The $55,000 was expensed in 2004 as part
of exploration  costs.  The Company has accrued $150,000 in accounts payable for
the  exploration  funds due on July 31, 2004. This $150,000 was expensed in 2004
as part of exploration  costs.  The Company also expensed $19,000 in exploration
costs in 2004 related to the 20,000 shares of common stock due upon execution of
the  agreement.  The shares were valued at $.19 per share and as of December 31,
2006, had not been issued.

         The Tudor Gold Property is located in Tudor and  Grimsthorpe  Townships
in the  Madoc-  Bancroft  region of the  Providence  of  Ontario  and is located
approximately 100 miles northeast of Toronto,  Canada.  The property consists of
twenty-two  contiguous  unpatented mining claims containing sixty units covering
approximately   2,965  acres  of  land.   The   Company   intends  to  launch  a
comprehensive,  property wide, surface  exploration  program  immediately.  Once
further funding is acquired and the agreement can be fully executed, the Company
intends  to  follow-up  with  drill  testing  of the  mineralized  zones  of the
property.  The data derived from the drill  testing of the various  zones should
enable the Company to identify and assess gold bearing  structures to ultimately
establish the size and grade of the gold resource.





                                     F - 22

<PAGE>



                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 10 -  COMMITMENTS  AND  CONTINGENCIES

         As of December  31,  2006,  all  activities  of the  Company  have been
conducted by  corporate  officers  from either their homes or business  offices.
Currently,  there are no  outstanding  debts owed by the  company for the use of
these facilities and there are no commitments for future use of the facilities.

         The  Company's  "Ritz  Claims" will revert back to the seller within no
less  than a 10 day  period  if the  Company  fails to make the  $25,000  annual
advance  royalty  payments per the sales contract  commencing 36 months from the
date of the contract.

         On June 1, 2004, the Company  entered into a consulting  agreement with
Mr. Robert  McIntosh.  Mr. McIntosh will provide  geological and  administrative
services to the Company for $3,000 per month. This agreement was cancelled as of
March 31, 2006.

         Pursuant  to  consulting  agreements  dated June 1, 2004,  the  Company
agreed to pay $2,500 per month to the CFO and director of the Company and $5,000
per month to the President and director of the Company. Pursuant to a consulting
agreement  dated April 23, 2004,  the Company  agreed to pay $400 per month to a
director.

         Management  is not aware of any  contingent  matters  that could have a
material  adverse  effect  on the  Company's  financial  condition,  results  of
operations, or liquidity.

NOTE 11 - CONVERTIBLE DEBENTURES

         On March 9, 2005, the Company executed three Convertible Debentures for
up to $870,000. The notes are due and payable in full on or before March 9, 2006
and carry an interest rate of 5% per annum.  The notes are  convertible,  at the
discretion  of the  holder,  into  shares of common  stock of the  Company  at a
conversion price of $.10 per share.

         On March 9, 2005, the Company sold $383,610 of convertible  debentures.
On that date the fair market value of the stock was $.20.  Since the fair market
value of the stock was greater than the  conversion  price of $.10,  the Company
has recognized interest expense of $383,610.

         On June 1, 2005, the Company sold $50,000 of convertible debentures. On
that date the fair  market  value of the stock was $.18.  Since the fair  market
value of the stock was greater than the  conversion  price of $.10,  the Company
has recognized interest expense of $40,000.

         On June 10, 2005, the Company sold $29,842 of  convertible  debentures.
On that date the fair value of the stock was $.16.  Since the fair market  value
of the stock was  greater  than the  conversion  price of $.10,  the Company has
recognized interest expense of $17,905.

                                     F - 23

<PAGE>


                              CALIBER ENERGY, INC.
                         (An Exploration State Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

NOTE 11 - CONVERTIBLE DEBENTURES (continued)

         The Company had received  approximately  $463,453 from the  convertible
debentures.  In June 2006,  the  convertible  debentures of $463,453 and accrued
interest of $29,915 was converted common stock.

NOTE 12 - OIL AND GAS PROPERTIES

         On March 28, 2005,  the Company  entered into an agreement  with Salida
Capital,  Inc.  (Salida)  whereby  the  Company  will be  entitled to 49% of the
benefits and interests earned by Salida, pursuant to an agreement between Salida
and Vega  Resources,  Ltd.  (Vega),  on  certain  lands  known  as the  Bolloque
Prospect,  located in the  Province  of  Alberta.  To earn the  interest  in the
Bolloque  Prospect,  the Company shall be required to assume the  obligations of
Salida  pursuant to Salida's  agreement  with Vega,  including the drilling of a
test well, and the drilling of two additional  option wells.  If all three wells
are not drilled and completed,  or capped and abandoned, as the case may be, the
Company  will earn no interest in the Bolloque  Prospect.  During the year ended
December 31, 2005, the Company paid $40,998 towards the drilling of wells. These
costs had been capitalized.  However, the Company was unable to advance the full
funds for the Test-Well,  and was in default pursuant to the original agreement.
On August 26, 2005,  the Company and Salida  agreed that Salida would  reimburse
the Company the full amount of its investment in the Test-Well. In consideration
for the  advancement of funds paid,  Salida will grant the Company a 10% carried
interest in the section of lands earned by Salida  under the Vega  Participation
Agreement by virtue of the  completion of the  Test-Well.  At December 31, 2005,
the capitalized  cost of the investment in oil and gas properties of $40,998 has
been  reclassified as a receivable.  On March 3, 2006, the Company received this
payment from Salida.





                                     F - 24

<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of section 13 or 15(d) of the Securities  Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                             CALIBER ENERGY, INC.

Dated: March 30, 2007        By  /S/     Graeme Scott
                             --------------------------------
                             Graeme Scott
                             President, CEO and Director
                             (Principal Executive Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 30th day of March 2007.

Signatures                   Title

/S/     Graeme Scott
Graeme Scott
President, CEO and Director
(Principal Executive Officer)

/S/     David Naylor
David Naylor
Treasurer, CFO and Director
(Principal Financial Officer)

/S/
Victor Perkell
Director













                                       17
<PAGE>