UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                  For the fiscal year ended December 31, 2004

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

                  For the transition period from         to
                                                 -------    --------

                              Commission  file  number  000-50229

                            FALCON NATURAL GAS CORP.
                            ------------------------
                 (Name of small business issuer in its charter)

          Nevada                                      98-0403897
-----------------------               ------------------------------------
(State of organization)               (I.R.S. Employer Identification No.)

Westchase Center, 2500 City West Boulevard, Suite 300, Houston, Texas 77042
---------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number (713) 267-2240

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

Securities registered under Section 12(g) of the Exchange Act:

                    COMMON STOCK, $.00001 PAR VALUE PER SHARE

Check  whether  the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter periods 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 in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will be contained, to
the  best  of  the  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.  [ ]

<PAGE>

The issuer's revenues for its most recent fiscal year were $0.

The  aggregate  market value of the issuer's voting and non-voting common equity
held by non-affiliates computed by reference to the average bid and ask price of
such  common  equity  as  of  February  28, 2005, was approximately $27,161,450.

At April 7, 2005, there were 62,262,000 shares of the Issuer's common stock
outstanding.

Documents Incorporated by Reference: NONE

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

                                        2
<PAGE>

                                TABLE OF CONTENTS

ITEM 1.     DESCRIPTION OF BUSINESS                                            4
ITEM 2.     DESCRIPTION OF PROPERTY                                           11
ITEM 3.     LEGAL PROCEEDINGS                                                 12
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               13
ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS          13
ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION         18
ITEM 7.     FINANCIAL STATEMENTS                                              33
ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE.                             34
ITEM 8A.    CONTROLS AND PROCEDURES.                                          34
ITEM 8B.    OTHER INFORMATION.                                                34
ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.               35
ITEM 10.    EXECUTIVE COMPENSATION.                                           40
ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                     41
ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                    41
ITEM 13.    EXHIBITS                                                          43
ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.                           44
SIGNATURES                                                                    45

                                        3
<PAGE>

                                     PART I

ITEM 1.     DESCRIPTION OF BUSINESS

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

     This  section  and  other  parts  of  this  report  contain forward-looking
statements  that are, by their nature, subject to risks and uncertainties. These
forward-looking  statements  include, without limitation, statements relating to
our  company's  operations,  economic performance, financial condition, growth,
investments, and operation plans. Any such statements that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the  generality  of  the foregoing, words such as "believe", "expect", "intend",
"anticipate",  "may",  "should", "expects", "plans", "anticipates", "estimates",
"predicts",  "potential",  "continue",  "projects"  or  the  negative  or  other
variations  or  comparable  terminology  or  derivatives  thereof  denote
forward-looking  statements.  These statements are only predictions and by their
nature involve substantial risks and uncertainties, many of which are beyond our
control.  Thus,  actual results may differ materially from those expressed in or
implied  by  such  forward-looking  statements.  Factors that could cause actual
results to differ materially include, but are not limited to, those discussed in
"Item  6.  Management's Discussion and Analysis or Plan of Operation," under the
heading  "Risk  Factors." Although we believe that the expectations reflected in
the  forward-looking  statements  are  reasonable,  we  cannot  guarantee future
results,  levels  of  activity,  performance  or  achievements.  We are under no
obligation  to  publicly update any of the forward-looking statements to reflect
events  or  circumstances  after the date hereof or to reflect the occurrence of
unanticipated  events.

BUSINESS  DEVELOPMENT  AND  RECENT  EVENTS

     Falcon  Natural  Gas  Corp.  (the  "Company") was incorporated in Nevada as
Countryside  Review  Inc.  ("Countryside")  on  December  7, 2001. The Company's
business  plan  was  to develop an on-line equestrian lifestyle magazine for the
amateur  rider  and  horse  owner  by  filling  the  gap  between horse care and
lifestyle  considerations.  The Company planned to sell advertising space on the
magazine's  web-site.  The  Company  did  not  generate  any  revenue  from this
business.  Other  than  maintenance of a website, the Company's current officers
and  directors are unaware of any past business operations regarding the on-line
magazine.  The  Company  changed its name from Countryside Review Inc. to Falcon
Natural  Gas Corp. effective April 12, 2004, in contemplation of the acquisition
of  Falcon  Natural  Gas Corporation ("Falcon") which did not occur until May 6,
2004,  as discussed below. As a result of the acquisition of Falcon, the Company
came  under  the  management  of  Massimiliano Pozzoni who was not familiar with
on-line  publishing.  Mr.  Pozzoni,  whose  experience  is  in  the  oil and gas
industry,  changed  the  Company's business focus. The Company is now engaged in
natural  gas  exploration  activities  in  St.  Mary Parish, Louisiana and Starr
County,  Texas.

                                        4
<PAGE>

     On  March  22,  2004,  Massimiliano  Pozzoni,  currently  a Director of the
Company  and the Company's Vice President of Business Development, Secretary and
Treasurer,  acquired  an  aggregate  of 20,000,000 shares of common stock of the
Company  in  exchange  for  $500,000 pursuant to three Stock Purchase Agreements
with  the  following  former  directors and officers of the Company: Doug Berry,
Bernadette  Berry  and  Lisa  Zumpano.  On  the  next  day, Mr. Pozzoni returned
5,000,000  shares  of  the  common  stock to the Company in contemplation of the
acquisition  of  Falcon.  Pursuant  to  an  action  by  the  Company's  board of
directors,  the  shares  that  were  returned  by  Mr. Pozzoni were subsequently
cancelled,  returned  to treasury and then retired and restored to the status of
authorized  and  unissued.  As  a result of these transactions, Mr. Pozzoni, who
owned  15,000,000  shares  (or 33.3%) of common stock of the Company immediately
thereafter,  exercised  significant  influence  over  the  Company.

     On  April  12,  2004,  the Company completed a 5:1 forward stock split (the
"Forward  Split")  of its issued and outstanding common stock. The effect of the
Forward  Split  has been retroactively reflected in this report unless otherwise
stated.

     On  May  6,  2004,  the Company acquired 100% of the issued and outstanding
shares of Falcon in exchange for 20,900,000 shares of the Company's common stock
(the  "Exchange"  or  the  "Acquisition").  Mr. Pozzoni, who owned approximately
22.8%  of,  and  continued  to  exercise  significant influence over the Company
immediately  after  the  Acquisition,  became  the  Company's  sole  Director,
President,  Secretary  and  Treasurer.  Mr.  Pozzoni  was  also serving in these
capacities for Falcon at the time of the Acquisition. The Exchange was accounted
for  as  a  reverse  merger  and recapitalization whereby the operating company,
Falcon,  is  the  continuing  entity  for  all  accounting  purposes.

     The Company is a holding company for Falcon. The business operations of the
Company  discussed  herein  were  conducted  by  Falcon unless otherwise stated.
Except  as  expressly  indicated  or  unless the context otherwise requires, the
"Company,"  "we,"  "our,"  or  "us"  means  Falcon  Natural  Gas Corp., a Nevada
corporation,  and  its  subsidiary.

     Prior  to the Exchange, Falcon acquired from Argyle Energy, Inc. ("Argyle")
oil  and gas leases that entitle Falcon to a 100% working interest and a 70% net
revenue  interest  in  five  tracts  of  land  consisting  of  an  aggregate  of
approximately  800  acres  located  in  Starr  County,  Texas (the "Starr County
Property").  We filed the assignment agreement for these leases as an exhibit to
our  Form  10-QSB filed with the SEC on August 23, 2004. These leases are in the
process  of  being  transferred to Falcon. To acquire this interest, Falcon paid
$63,000  cash  and  issued  900,000  shares  of Falcon's common stock to Argyle.
Argyle  subsequently  exchanged  the  shares for 900,000 shares of the Company's
common  stock  valued  of  $225,000  (or $0.25 per share) in connection with the
Acquisition. The Starr County Property is in close proximity to the Bob West gas
field  located  in the Southeastern part of the State of Texas. The Company paid
$640,000 to Argyle for a 100% working interest and a 70% net revenue interest in
additional  oil  and gas leases covering approximately 3,600 additional acres of
land  as part of the Starr County Property. As of the filing of this report, the
Company  has  not  executed  assignment  agreements  with Argyle to transfer the
interests  in the additional acres. The Company hopes to execute such assignment
agreements  in  the  near  future,  of  which  there  can  be  no  assurance.

                                        5
<PAGE>

     Prior  to  the Exchange, Falcon entered into a Letter Agreement with Argyle
to  acquire  various  oil,  gas  and  mineral leases located in St. Mary Parish,
Louisiana  and,  contemporaneously  therewith,  paid  $204,655  to  Argyle  in
consideration  for  Argyle  presenting  geological ideas and concepts to Falcon.
Argyle  had  contracted  for  options  to  acquire  such  leases  which  covered
approximately  7,442  acres  of  land in St. Mary Parish, Louisiana. The options
were  subject to landowner royalties and overriding royalties equal to 30%, such
that  the  net  revenue  interest  attributable  to any working interest in such
leases  would  be  70%. The Letter Agreement provided that Falcon would make two
(2)  additional payments of $404,235 and $454,235 to Argyle in order that Argyle
could  exercise  its  options, acquire leases covering approximately 4,100 gross
acres  of land in St. Mary Parish, Louisiana, and assign a 100% working interest
in  such  leases to Falcon. As of December 31, 2004, the additional payments had
been  made  to  Argyle. However, as of the filing of this report, Falcon has not
executed  assignment  agreements  to  transfer  the  interests.  Falcon hopes to
execute  such assignment agreements in the near future, of which there can be no
assurance.  For  purposes of this report, the Company refers to the 100% working
interest and the 70% net revenue interest in oil, gas and mineral leases that it
will  receive  from  Argyle  covering  the  acreage  of land located in St. Mary
Parish,  Louisiana  as  the  "Wyandotte  Property". The Company issued 2,500,000
restricted  shares of the Company's common stock to Davos Petroleum AG ("Davos")
for  Davos'  services  in  structuring the transaction with Argyle regarding the
Wyandotte  Property.  In  February  2005,  Falcon  successfully  bid $21,924 and
acquired an oil and gas lease from the State of Louisiana covering approximately
84  additional  acres  of  land  as  part  of  the  Wyandotte  Property.

     The  Starr  County  Property  and  the  Wyandotte Property are collectively
referred  to  as  the  "Leased  Property."

     Changes  in  Management  During  2004
     -------------------------------------

     In  connection  with the Acquisition, Mr. Pozzoni became the Company's sole
Director,  President,  Secretary  and Treasurer. On June 1, 2004, Alan Aitchison
took  over  as  President, Secretary and Treasurer and also became a Director of
the  Company  and the Company's Chief Executive Officer. Mr. Pozzoni transferred
10,000,000  shares  of  common  stock  to  Mr. Aitchison as an incentive for Mr.
Aitchison  to accept these positions and with the expectation that Mr. Aitchison
would  provide the Company with substantial services in these capacities over an
extended period of time. On October 25, 2004, Alan Aitchison resigned from these
positions  for personal reasons and to pursue international opportunities in the
oil  and  gas  industry. Although Mr. Aitchison never entered into an employment
agreement  with  the  Company,  he  received  the 10,000,000 shares based on Mr.
Pozzoni's  expectations.  Mr.  Aitchison  only  served  the Company for five (5)
months.  Accordingly,  it  was  not  equitable  for him to retain all 10,000,000
shares.  In  consideration of the Company accepting Mr. Aitchison's resignation,
Mr.  Aitchison  returned  9,000,000  of  the  10,000,000 shares of common stock.
Pursuant  to an action by the Company's board of directors, the shares that were
returned  by Mr. Aitchison were subsequently cancelled, returned to treasury and
then  retired  and  restored  to  the  status  of  authorized  and unissued. Mr.
Aitchison  currently serves as a member of the Company's advisory board, but has
not  received any additional compensation from the Company for such services. As
a  result  of  the  transfer  of  shares  to  Mr.  Aitchison  and the subsequent
cancellation  of shares, Mr. Pozzoni who owns 5,000,000 shares (or 8.03%) of the
Company's  issued  and  outstanding  common  stock  is  the  Company's  largest
shareholder  as  of  April  7,  2005.

                                        6
<PAGE>

     On  October  27,  2004,  the Company's board of directors appointed Fred B.
Zaziski  as  President, Chief Executive Officer and Director and reappointed Mr.
Pozzoni  as  Secretary and Treasurer. Mr. Zaziski and the Company entered into a
one-year,  renewable  employment  agreement pursuant to which Mr. Zaziski serves
the  Company  in  the  capacities  to  which  he  was  appointed. The employment
agreement  provides  for  annual  compensation  of $132,000. Rather than issuing
shares  of  the  Company's  common  stock  to  Mr.  Zaziski when he accepted his
positions,  the  employment agreement also provides for additional consideration
of  1,000,000  restricted  shares at the end of each of the twelve-month periods
(up  to  an  aggregate  of  5,000,000  restricted  shares) immediately following
October  27, 2004, for which Mr. Zaziski is employed by the Company. The details
of  this employment agreement are included, below, under the heading "Employment
Agreements"  in  "Item  9.  Directors, Executive Officers, Promoters and Control
Persons;  Compliance  with  Section  16(a)  of  the  Exchange  Act."

PRINCIPAL  PRODUCTS  AND  SERVICES

     The  Company  is  in the exploration stage and does not currently offer any
products  or  services for sale. If, after exploration and drilling, the Company
determines  that  there  are  commercial quantities of natural gas on the Leased
Property,  the  Company  plans  to  produce  the  natural gas and sell it at the
wellhead.

     As  discussed  throughout  this  report,  the  Company  needs  to  raise  a
significant amount of money to pay for drilling, and if the Company cannot raise
the  money or find a drilling partner that can raise the money, the Company will
not  be able to drill and its business will fail.  Furthermore, the discovery of
natural  gas  and  the  ability  to  produce it in commercial quantities is very
speculative.  Even assuming that the Company obtains the necessary financing for
drilling,  if the Company does not discover and produce commercial quantities of
natural gas, it will not have any products or services to offer and its business
could  fail.

COMPETITIVE  BUSINESS  CONDITIONS  AFFECTING  THE  COMPANY

     The  natural gas industry is very competitive, particularly with respect to
the  acquisition  of  drilling  rigs  and  natural gas exploration services from
independent  contractors  in  the  Company's case.  Natural gas prices are at a
10-year  high.  The  price  of  natural  gas is affected by continuous shifts in
supply  and demand.  Natural gas is becoming the preferred source of energy over
fossil  fuels because it is an environmentally friendlier source of energy.  The
demand  for  natural  gas  is  increasing  and  whether  or not their will be an
adequate  supply  is  very  uncertain.  Numerous  well-established companies are
focusing  significant  resources  on  exploration; however, the Company does not
expect  that  the  price  of  natural  gas  will drop in the near future.  These
Companies  may  be  able  to  compete more effectively than the Company.  Due to
these  factors,  the Company expects competition to intensify in the natural gas
industry  in  general  and  for the acquisition of drilling rigs and natural gas
exploration  services  from  independent  contractors.

                                        7
<PAGE>

     In  an  effort  to  achieve  operating  efficiency,  the  Company relies on
independent contractors to assist in conducting its operations. For example, the
Company  has  relied  on  various  independent contractors to provide technical,
geological,  geophysical  and  financial  reports  on  the  Leased Property. The
Company  engaged  Stokes  &  Spiehler  ("Stokes"),  a petroleum engineering  and
consulting  firm, to  provide engineering support in preparation for drilling on
the  DB3  Prospect,  discussed  below under the heading "Wyandotte Property"  in
"Item  2.  Description  of Property." Because of the current high energy prices,
lead  times  necessary  to  acquire drilling rigs or the services of independent
contractors  in  the  industry are high.  The  Company  is  negotiating with  an
independent  contractor  to  be  the  operator  and  conduct drilling on the DB3
Prospect.  However,  as the competition in the natural gas industry intensifies,
it  will  be harder for the Company to obtain a drilling rig or the services  of
independent contractors to conduct its operations. As a result, the Company  may
not  be  able  to  compete  successfully and competitive pressures may adversely
affect  the  Company's  business, results of operations and financial condition.

PATENTS,  TRADEMARKS  &  LICENSES

     The Company does not own any patents, trademarks, copyrights or other forms
of  intellectual  property.  The  Company  is  currently  defending  a trademark
infringement  lawsuit  regarding  the  use of the term "Falcon Natural Gas" as a
corporate  name  and service mark in connection with the promotion, advertising,
offer,  and  sale  of  services.  The  Company  is also defending a lawsuit that
includes  an  allegation  of  unauthorized  misuse  of  the names "Halliburton,"
Halliburton Company," and "a Halliburton Company." The lawsuits are discussed in
more  detail  in  "Item  3.  Legal  Proceedings."

NEED  FOR  GOVERNMENTAL  APPROVAL  AND  THE  EFFECTS  OF  REGULATIONS

     The  Company  will be subject to various laws and regulations of the United
States,  the  State  of  Texas, the State of Louisiana and the municipalities in
which  it  operates  that  govern the exploration, development and production of
natural  gas.  The  Company  is in the process of determining the nature, extent
and  effects  of  such  laws  and  regulations.  The  Texas  Railroad Commission
determines  all  procedures and regulations that concern oil and gas exploration
and  production  activities in the State of Texas. The same role is fulfilled in
Louisiana  by  the  Louisiana Department of Natural Resources.  The Company will
have  to  abide  and  follow  the  procedures established by the above entities.

RESEARCH  &  DEVELOPMENT  OVER  THE  PAST  TWO  YEARS

     Falcon  has  not  performed any research and development since inception on
March  1, 2004.  The Company has spent approximately an aggregate of $150,000 on
geological  and  economical evaluations of the Leased Property.  The Company has
not  examined  the  title  to  the  Leased  Property.

EMPLOYEES

     The  Company  has  two  (2)  employees  consisting  of Fred B. Zaziski, our
President  and  Chief  Executive  Officer,  and  Massimiliano  Pozzoni, our Vice
President  of Business Development, Secretary, Treasurer and Principal Financial
Officer.  Mr.  Zaziski  and  Mr.  Pozzoni are employed on a full-time basis. Mr.
Pozzoni  is  also the Chief Executive Officer and a Director of Gulf Coast Oil &
Gas  Inc.  ("Gulf  Coast"),  formerly Otish Mountain Diamond Company, a publicly
traded  company in the U.S. Mr. Pozzoni works over forty (40) hours per week for
the  Company  and  approximately  five  (5)  hours  per  week  for  Gulf  Coast.

                                        8
<PAGE>

     The  Company intends to use several independent contractors on an as-needed
basis  to  conduct  its  operating  activities. Messrs. Zaziski and Pozzoni will
select and hire these independent contractors and manage and evaluate their work
performance.  The  Company  has  used various independent contractors to provide
technical, geological, geophysical and financial reports on the Leased Property.
The  Company  engaged  Stokes  to provide engineering support in preparation for
drilling  on  the  DB3  Prospect. The Company is negotiating with an independent
contractor  to  be  the  operator  and  conduct  drilling  on  the DB3 Prospect.

     There are no collective bargaining contracts covering any of our employees.
We  believe  our relationship with our employees is satisfactory. We believe our
relationship  with  our  independent  contractors is also satisfactory; however,
Landmark  filed  a  lawsuit  against  us,  as  discussed below in "Item 3. Legal
Proceedings."

SERVICE  CONTRACTS

     On  June  14,  2004,  the Company entered into a one-year contract with CCG
Investor  Relations  ("CCG")  for  investor relations services. The terms of the
contract include a retainer of $5,000 per month plus any out-of-pocket expenses,
and  50,000  restricted  shares  of  the  Company's  common  stock.

     On  August  2,  2004,  the  Company  entered into the Letter Agreement with
Argyle  regarding  the  Wyandotte  Property,  the details of which are discussed
above  under  the  heading  "Business  Development  and  Recent  Events."

     On August 2, 2004, the Company entered into a business consultant agreement
with  Search4.Com,  Inc.  The  Company  paid  $15,000 to the consultant for work
performed  in  accordance  with  the  agreement.  Pursuant to the agreement, the
consultant  was  to  schedule  a  Road  Show  for  the  Company  with  financial
professionals.  In  addition,  the  Company agreed to pay the consultant 7.5% in
cash  and  10%  in  warrants for any financing monies raised by the Company from
individuals or firms that the Company might have met through the Road Show.  The
agreement  was  terminated  in  October  2004 without any financing monies being
raised  by  the  consultant.  The  contract  will  not  be  extended.

     On  August  9,  2004,  the  Company  entered  into an agreement with Source
Capital  Group,  Inc.  ("Source  Capital")  for financial advisory services. The
agreement extended though January 1, 2005, and thereafter has been automatically
renewed  on a month-to-month basis. The agreement may be cancelled in writing by
either  party. The terms of the agreement include compensation of 2% cash and 2%
warrants  on all monies raised other than money raised overseas and payment of a
retainer in the amount of $5,000. Source Capital was instrumental in the raising
of funds related to Cornell Capital Partners, LP (discussed below) and new terms
related  to  the  agreement  were  renegotiated.  Under  the  new  terms  of the
agreement,  Source  Capital  received  7%  (or  $70,000)  of  the  $1,000,000 of
financing  provided  to  the  Company  by  Cornell  Capital  Partners,  LP.

                                        9
<PAGE>

     On  November 24, 2004, the Company entered into an unsecured loan agreement
with  Blue  Mint  Exploration in the amount of $140,000 for a term of six months
terminating  May  25, 2005.  The loan bears interest at 12% per annum to be paid
at  the  maturity  of  the  loan  agreement.

     The  Company  receives  technical,  geological,  geophysical, financial and
other  advice  regarding  the  Company's natural gas exploration operations from
various  independent contractors. The Company uses these independent contractors
on  an  as-needed  basis  and  has  not  entered into formal contracts for their
services.

FINANCING  PROVIDED  BY  CORNELL  CAPITAL  PARTNERS,  LP

     During  2004, the Company entered into a financing transaction with Cornell
Capital  Partners,  LP  ("Cornell"),  pursuant to which Cornell has provided the
Company  with  $1,000,000  of  financing in exchange for convertible debentures.
Pending the effectiveness of a registration statement covering the resale of the
Company's  shares  of  common  stock  issuable  to Cornell under the convertible
debentures  and a Standby Equity Distribution Agreement (the "SEDA") and certain
other  limitations, Cornell is obligated to provide the Company with $10 million
of  additional  financing.  The  Company  filed  such  registration statement on
February  11,  2005;  however,  after receiving comments from the Securities and
Exchange  Commission  (the  "Commission") concerning the structure of the equity
and  debt  financing,  on  March  24,  2005,  we filed a request to withdraw the
registration  statement  with  the Commission. The Company and Cornell intend to
restructure  the current equity and debt financing transaction in the short term
to  address  the Commission's concerns. The Company needs the additional capital
from  Cornell  or  another  source  to  begin  drilling  on the DB3 Prospect. As
discussed  throughout  this  report, if the Company is unable to restructure its
arrangement  with  Cornell  or  otherwise  obtain  financing under the SEDA, the
Company's business could fail. The Company will report the material terms of any
restructuring  in  a  Form  8-K  filed with the Commission. Certain terms of the
original  financing  are  set  forth  in  the  paragraphs  below.

     On  November  19,  2004,  the  Company  entered  into  a SEDA with Cornell.
Pursuant  to  the SEDA, the Company may, at its discretion, periodically sell to
Cornell  shares of common stock for a total purchase price of up to $10 million;
however,  the Company cannot receive any funds under the SEDA until such time as
the  Company  has  registered  the  resale  of  shares  of common stock that are
issuable  to  Cornell thereunder. For each share of common stock purchased under
the  SEDA,  Cornell  will  pay  the  Company  100% of the lowest volume weighted
average  price  of  the Company's common stock as quoted by Bloomberg, LP on the
over-the-counter Bulletin Board or other principal market on which the Company's
common stock is traded for the 5 days immediately following the notice date. The
number of shares purchased by Cornell for each advance is determined by dividing
the amount of each advance by the purchase price for the shares of common stock.
The  effectiveness  of the sale of the shares under the SEDA is conditioned upon
us  registering the shares of common stock with the Commission and obtaining all
necessary  permits  or qualifying for exemptions under applicable state law. The
amount  of  each advance is subject to a maximum advance amount of $750,000, and
the  aggregate  amount  of  monthly advances is limited to $1,000,000 per month.
Cornell  will  retain  5%  of  each advance under the SEDA. In addition, Cornell
received  a  one-time  commitment  fee  in  the  form  of  392,000 shares of the
Company's  common stock. Sloan Securities Corporation ("Sloan"), an unaffiliated
registered  broker-dealer,  received  8,000 shares of the Company's common stock
for  its  services  as  the  placement  agent.  There  are  substantial risks to
investors  in  the Company as a result of the issuance of shares of common stock
under the SEDA, which include, but are not limited to the following: dilution of
shareholders;  a  significant  decline  in  the  Company's  stock price; and the
potential  inability  of  the  Company  to  draw  sufficient  funds when needed.

                                       10
<PAGE>

     On  November  19, 2004, the Company also entered into a Securities Purchase
Agreement  with  Cornell. Pursuant to the Securities Purchase Agreement, Cornell
purchased  $1,000,000  of  convertible  debentures  from  the  Company,  which
$1,000,000  was disbursed as follows: (i) $500,000 on November 22, 2004 and (ii)
the  remaining  $500,000 on February 11, 2005. The debentures are secured by the
assets  of  the Company. The debentures have a two-year term and accrue interest
at  5%  per year. The debentures are convertible at the holder's option any time
up  to  maturity  at  a  conversion  price equal to the lower of (i) 120% of the
closing  bid price of the common stock on the date of the debentures or (ii) 80%
of  the  lowest  closing bid price of the common stock for the five trading days
immediately preceding the conversion date. Cornell received 10% (or $100,000) of
the gross proceeds of the convertible debentures, paid directly from escrow upon
each  disbursement  described  above. Source Capital received 7% (or $70,000) of
the  gross  proceeds  of  the  convertible  debentures.

ITEM 2.     DESCRIPTION OF PROPERTY

Corporate  Headquarters
-----------------------

     The  Company  leases  approximately 250 square feet of office space for its
corporate  headquarters  in Houston, Texas pursuant to a one (1) year lease that
was renewed in April 2005.  The Company pays between $1,200 and $1,500 per month
depending  on  the  costs  of  variable  services  such as postage, shipping and
telephone  usage.

Wyandotte  Property -
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                  For the fiscal year ended December 31, 2004

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

                  For the transition period from         to
                                                 -------    --------

                              Commission  file  number  000-50229

                            FALCON NATURAL GAS CORP.
                            ------------------------
                 (Name of small business issuer in its charter)

          Nevada                                      98-0403897
-----------------------               ------------------------------------
(State of organization)               (I.R.S. Employer Identification No.)

Westchase Center, 2500 City West Boulevard, Suite 300, Houston, Texas 77042
---------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number (713) 267-2240

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

Securities registered under Section 12(g) of the Exchange Act:

                    COMMON STOCK, $.00001 PAR VALUE PER SHARE

Check  whether  the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter periods 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 in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will be contained, to
the  best  of  the  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.  [ ]

<PAGE>

The issuer's revenues for its most recent fiscal year were $0.

The  aggregate  market value of the issuer's voting and non-voting common equity
held by non-affiliates computed by reference to the average bid and ask price of
such  common  equity  as  of  February  28, 2005, was approximately $27,161,450.

At April 7, 2005, there were 62,262,000 shares of the Issuer's common stock
outstanding.

Documents Incorporated by Reference: NONE

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

                                        2
<PAGE>

                                TABLE OF CONTENTS

ITEM 1.     DESCRIPTION OF BUSINESS                                            4
ITEM 2.     DESCRIPTION OF PROPERTY                                           11
ITEM 3.     LEGAL PROCEEDINGS                                                 12
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               13
ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS          13
ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION         18
ITEM 7.     FINANCIAL STATEMENTS                                              33
ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE.                             34
ITEM 8A.    CONTROLS AND PROCEDURES.                                          34
ITEM 8B.    OTHER INFORMATION.                                                34
ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.               35
ITEM 10.    EXECUTIVE COMPENSATION.                                           40
ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                     41
ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                    41
ITEM 13.    EXHIBITS                                                          43
ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES.                           44
SIGNATURES                                                                    45

                                        3
<PAGE>

                                     PART I

ITEM 1.     DESCRIPTION OF BUSINESS

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

     This  section  and  other  parts  of  this  report  contain forward-looking
statements  that are, by their nature, subject to risks and uncertainties. These
forward-looking  statements  include, without limitation, statements relating to
our  company's  operations,  economic performance, financial condition, growth,
investments, and operation plans. Any such statements that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the  generality  of  the foregoing, words such as "believe", "expect", "intend",
"anticipate",  "may",  "should", "expects", "plans", "anticipates", "estimates",
"predicts",  "potential",  "continue",  "projects"  or  the  negative  or  other
variations  or  comparable  terminology  or  derivatives  thereof  denote
forward-looking  statements.  These statements are only predictions and by their
nature involve substantial risks and uncertainties, many of which are beyond our
control.  Thus,  actual results may differ materially from those expressed in or
implied  by  such  forward-looking  statements.  Factors that could cause actual
results to differ materially include, but are not limited to, those discussed in
"Item  6.  Management's Discussion and Analysis or Plan of Operation," under the
heading  "Risk  Factors." Although we believe that the expectations reflected in
the  forward-looking  statements  are  reasonable,  we  cannot  guarantee future
results,  levels  of  activity,  performance  or  achievements.  We are under no
obligation  to  publicly update any of the forward-looking statements to reflect
events  or  circumstances  after the date hereof or to reflect the occurrence of
unanticipated  events.

BUSINESS  DEVELOPMENT  AND  RECENT  EVENTS

     Falcon  Natural  Gas  Corp.  (the  "Company") was incorporated in Nevada as
Countryside  Review  Inc.  ("Countryside")  on  December  7, 2001. The Company's
business  plan  was  to develop an on-line equestrian lifestyle magazine for the
amateur  rider  and  horse  owner  by  filling  the  gap  between horse care and
lifestyle  considerations.  The Company planned to sell advertising space on the
magazine's  web-site.  The  Company  did  not  generate  any  revenue  from this
business.  Other  than  maintenance of a website, the Company's current officers
and  directors are unaware of any past business operations regarding the on-line
magazine.  The  Company  changed its name from Countryside Review Inc. to Falcon
Natural  Gas Corp. effective April 12, 2004, in contemplation of the acquisition
of  Falcon  Natural  Gas Corporation ("Falcon") which did not occur until May 6,
2004,  as discussed below. As a result of the acquisition of Falcon, the Company
came  under  the  management  of  Massimiliano Pozzoni who was not familiar with
on-line  publishing.  Mr.  Pozzoni,  whose  experience  is  in  the  oil and gas
industry,  changed  the  Company's business focus. The Company is now engaged in
natural  gas  exploration  activities  in  St.  Mary Parish, Louisiana and Starr
County,  Texas.

                                        4
<PAGE>

     On  March  22,  2004,  Massimiliano  Pozzoni,  currently  a Director of the
Company  and the Company's Vice President of Business Development, Secretary and
Treasurer,  acquired  an  aggregate  of 20,000,000 shares of common stock of the
Company  in  exchange  for  $500,000 pursuant to three Stock Purchase Agreements
with  the  following  former  directors and officers of the Company: Doug Berry,
Bernadette  Berry  and  Lisa  Zumpano.  On  the  next  day, Mr. Pozzoni returned
5,000,000  shares  of  the  common  stock to the Company in contemplation of the
acquisition  of  Falcon.  Pursuant  to  an  action  by  the  Company's  board of
directors,  the  shares  that  were  returned  by  Mr. Pozzoni were subsequently
cancelled,  returned  to treasury and then retired and restored to the status of
authorized  and  unissued.  As  a result of these transactions, Mr. Pozzoni, who
owned  15,000,000  shares  (or 33.3%) of common stock of the Company immediately
thereafter,  exercised  significant  influence  over  the  Company.

     On  April  12,  2004,  the Company completed a 5:1 forward stock split (the
"Forward  Split")  of its issued and outstanding common stock. The effect of the
Forward  Split  has been retroactively reflected in this report unless otherwise
stated.

     On  May  6,  2004,  the Company acquired 100% of the issued and outstanding
shares of Falcon in exchange for 20,900,000 shares of the Company's common stock
(the  "Exchange"  or  the  "Acquisition").  Mr. Pozzoni, who owned approximately
22.8%  of,  and  continued  to  exercise  significant influence over the Company
immediately  after  the  Acquisition,  became  the  Company's  sole  Director,
President,  Secretary  and  Treasurer.  Mr.  Pozzoni  was  also serving in these
capacities for Falcon at the time of the Acquisition. The Exchange was accounted
for  as  a  reverse  merger  and recapitalization whereby the operating company,
Falcon,  is  the  continuing  entity  for  all  accounting  purposes.

     The Company is a holding company for Falcon. The business operations of the
Company  discussed  herein  were  conducted  by  Falcon unless otherwise stated.
Except  as  expressly  indicated  or  unless the context otherwise requires, the
"Company,"  "we,"  "our,"  or  "us"  means  Falcon  Natural  Gas Corp., a Nevada
corporation,  and  its  subsidiary.

     Prior  to the Exchange, Falcon acquired from Argyle Energy, Inc. ("Argyle")
oil  and gas leases that entitle Falcon to a 100% working interest and a 70% net
revenue  interest  in  five  tracts  of  land  consisting  of  an  aggregate  of
approximately  800  acres  located  in  Starr  County,  Texas (the "Starr County
Property").  We filed the assignment agreement for these leases as an exhibit to
our  Form  10-QSB filed with the SEC on August 23, 2004. These leases are in the
process  of  being  transferred to Falcon. To acquire this interest, Falcon paid
$63,000  cash  and  issued  900,000  shares  of Falcon's common stock to Argyle.
Argyle  subsequently  exchanged  the  shares for 900,000 shares of the Company's
common  stock  valued  of  $225,000  (or $0.25 per share) in connection with the
Acquisition. The Starr County Property is in close proximity to the Bob West gas
field  located  in the Southeastern part of the State of Texas. The Company paid
$640,000 to Argyle for a 100% working interest and a 70% net revenue interest in
additional  oil  and gas leases covering approximately 3,600 additional acres of
land  as part of the Starr County Property. As of the filing of this report, the
Company  has  not  executed  assignment  agreements  with Argyle to transfer the
interests  in the additional acres. The Company hopes to execute such assignment
agreements  in  the  near  future,  of  which  there  can  be  no  assurance.

                                        5
<PAGE>

     Prior  to  the Exchange, Falcon entered into a Letter Agreement with Argyle
to  acquire  various  oil,  gas  and  mineral leases located in St. Mary Parish,
Louisiana  and,  contemporaneously  therewith,  paid  $204,655  to  Argyle  in
consideration  for  Argyle  presenting  geological ideas and concepts to Falcon.
Argyle  had  contracted  for  options  to  acquire  such  leases  which  covered
approximately  7,442  acres  of  land in St. Mary Parish, Louisiana. The options
were  subject to landowner royalties and overriding royalties equal to 30%, such
that  the  net  revenue  interest  attributable  to any working interest in such
leases  would  be  70%. The Letter Agreement provided that Falcon would make two
(2)  additional payments of $404,235 and $454,235 to Argyle in order that Argyle
could  exercise  its  options, acquire leases covering approximately 4,100 gross
acres  of land in St. Mary Parish, Louisiana, and assign a 100% working interest
in  such  leases to Falcon. As of December 31, 2004, the additional payments had
been  made  to  Argyle. However, as of the filing of this report, Falcon has not
executed  assignment  agreements  to  transfer  the  interests.  Falcon hopes to
execute  such assignment agreements in the near future, of which there can be no
assurance.  For  purposes of this report, the Company refers to the 100% working
interest and the 70% net revenue interest in oil, gas and mineral leases that it
will  receive  from  Argyle  covering  the  acreage  of land located in St. Mary
Parish,  Louisiana  as  the  "Wyandotte  Property". The Company issued 2,500,000
restricted  shares of the Company's common stock to Davos Petroleum AG ("Davos")
for  Davos'  services  in  structuring the transaction with Argyle regarding the
Wyandotte  Property.  In  February  2005,  Falcon  successfully  bid $21,924 and
acquired an oil and gas lease from the State of Louisiana covering approximately
84  additional  acres  of  land  as  part  of  the  Wyandotte  Property.

     The  Starr  County  Property  and  the  Wyandotte Property are collectively
referred  to  as  the  "Leased  Property."

     Changes  in  Management  During  2004
     -------------------------------------

     In  connection  with the Acquisition, Mr. Pozzoni became the Company's sole
Director,  President,  Secretary  and Treasurer. On June 1, 2004, Alan Aitchison
took  over  as  President, Secretary and Treasurer and also became a Director of
the  Company  and the Company's Chief Executive Officer. Mr. Pozzoni transferred
10,000,000  shares  of  common  stock  to  Mr. Aitchison as an incentive for Mr.
Aitchison  to accept these positions and with the expectation that Mr. Aitchison
would  provide the Company with substantial services in these capacities over an
extended period of time. On October 25, 2004, Alan Aitchison resigned from these
positions  for personal reasons and to pursue international opportunities in the
oil  and  gas  industry. Although Mr. Aitchison never entered into an employment
agreement  with  the  Company,  he  received  the 10,000,000 shares based on Mr.
Pozzoni's  expectations.  Mr.  Aitchison  only  served  the Company for five (5)
months.  Accordingly,  it  was  not  equitable  for him to retain all 10,000,000
shares.  In  consideration of the Company accepting Mr. Aitchison's resignation,
Mr.  Aitchison  returned  9,000,000  of  the  10,000,000 shares of common stock.
Pursuant  to an action by the Company's board of directors, the shares that were
returned  by Mr. Aitchison were subsequently cancelled, returned to treasury and
then  retired  and  restored  to  the  status  of  authorized  and unissued. Mr.
Aitchison  currently serves as a member of the Company's advisory board, but has
not  received any additional compensation from the Company for such services. As
a  result  of  the  transfer  of  shares  to  Mr.  Aitchison  and the subsequent
cancellation  of shares, Mr. Pozzoni who owns 5,000,000 shares (or 8.03%) of the
Company's  issued  and  outstanding  common  stock  is  the  Company's  largest
shareholder  as  of  April  7,  2005.

                                        6
<PAGE>

     On  October  27,  2004,  the Company's board of directors appointed Fred B.
Zaziski  as  President, Chief Executive Officer and Director and reappointed Mr.
Pozzoni  as  Secretary and Treasurer. Mr. Zaziski and the Company entered into a
one-year,  renewable  employment  agreement pursuant to which Mr. Zaziski serves
the  Company  in  the  capacities  to  which  he  was  appointed. The employment
agreement  provides  for  annual  compensation  of $132,000. Rather than issuing
shares  of  the  Company's  common  stock  to  Mr.  Zaziski when he accepted his
positions,  the  employment agreement also provides for additional consideration
of  1,000,000  restricted  shares at the end of each of the twelve-month periods
(up  to  an  aggregate  of  5,000,000  restricted  shares) immediately following
October  27, 2004, for which Mr. Zaziski is employed by the Company. The details
of  this employment agreement are included, below, under the heading "Employment
Agreements"  in  "Item  9.  Directors, Executive Officers, Promoters and Control
Persons;  Compliance  with  Section  16(a)  of  the  Exchange  Act."

PRINCIPAL  PRODUCTS  AND  SERVICES

     The  Company  is  in the exploration stage and does not currently offer any
products  or  services for sale. If, after exploration and drilling, the Company
determines  that  there  are  commercial quantities of natural gas on the Leased
Property,  the  Company  plans  to  produce  the  natural gas and sell it at the
wellhead.

     As  discussed  throughout  this  report,  the  Company  needs  to  raise  a
significant amount of money to pay for drilling, and if the Company cannot raise
the  money or find a drilling partner that can raise the money, the Company will
not  be able to drill and its business will fail.  Furthermore, the discovery of
natural  gas  and  the  ability  to  produce it in commercial quantities is very
speculative.  Even assuming that the Company obtains the necessary financing for
drilling,  if the Company does not discover and produce commercial quantities of
natural gas, it will not have any products or services to offer and its business
could  fail.

COMPETITIVE  BUSINESS  CONDITIONS  AFFECTING  THE  COMPANY

     The  natural gas industry is very competitive, particularly with respect to
the  acquisition  of  drilling  rigs  and  natural gas exploration services from
independent  contractors  in  the  Company's case.  Natural gas prices are at a
10-year  high.  The  price  of  natural  gas is affected by continuous shifts in
supply  and demand.  Natural gas is becoming the preferred source of energy over
fossil  fuels because it is an environmentally friendlier source of energy.  The
demand  for  natural  gas  is  increasing  and  whether  or not their will be an
adequate  supply  is  very  uncertain.  Numerous  well-established companies are
focusing  significant  resources  on  exploration; however, the Company does not
expect  that  the  price  of  natural  gas  will drop in the near future.  These
Companies  may  be  able  to  compete more effectively than the Company.  Due to
these  factors,  the Company expects competition to intensify in the natural gas
industry  in  general  and  for the acquisition of drilling rigs and natural gas
exploration  services  from  independent  contractors.

                                        7
<PAGE>

     In  an  effort  to  achieve  operating  efficiency,  the  Company relies on
independent contractors to assist in conducting its operations. For example, the
Company  has  relied  on  various  independent contractors to provide technical,
geological,  geophysical  and  financial  reports  on  the  Leased Property. The
Company  engaged  Stokes  &  Spiehler  ("Stokes"),  a petroleum engineering  and
consulting  firm, to  provide engineering support in preparation for drilling on
the  DB3  Prospect,  discussed  below under the heading "Wyandotte Property"  in
"Item  2.  Description  of Property." Because of the current high energy prices,
lead  times  necessary  to  acquire drilling rigs or the services of independent
contractors  in  the  industry are high.  The  Company  is  negotiating with  an
independent  contractor  to  be  the  operator  and  conduct drilling on the DB3
Prospect.  However,  as the competition in the natural gas industry intensifies,
it  will  be harder for the Company to obtain a drilling rig or the services  of
independent contractors to conduct its operations. As a result, the Company  may
not  be  able  to  compete  successfully and competitive pressures may adversely
affect  the  Company's  business, results of operations and financial condition.

PATENTS,  TRADEMARKS  &  LICENSES

     The Company does not own any patents, trademarks, copyrights or other forms
of  intellectual  property.  The  Company  is  currently  defending  a trademark
infringement  lawsuit  regarding  the  use of the term "Falcon Natural Gas" as a
corporate  name  and service mark in connection with the promotion, advertising,
offer,  and  sale  of  services.  The  Company  is also defending a lawsuit that
includes  an  allegation  of  unauthorized  misuse  of  the names "Halliburton,"
Halliburton Company," and "a Halliburton Company." The lawsuits are discussed in
more  detail  in  "Item  3.  Legal  Proceedings."

NEED  FOR  GOVERNMENTAL  APPROVAL  AND  THE  EFFECTS  OF  REGULATIONS

     The  Company  will be subject to various laws and regulations of the United
States,  the  State  of  Texas, the State of Louisiana and the municipalities in
which  it  operates  that  govern the exploration, development and production of
natural  gas.  The  Company  is in the process of determining the nature, extent
and  effects  of  such  laws  and  regulations.  The  Texas  Railroad Commission
determines  all  procedures and regulations that concern oil and gas exploration
and  production  activities in the State of Texas. The same role is fulfilled in
Louisiana  by  the  Louisiana Department of Natural Resources.  The Company will
have  to  abide  and  follow  the  procedures established by the above entities.

RESEARCH  &  DEVELOPMENT  OVER  THE  PAST  TWO  YEARS

     Falcon  has  not  performed any research and development since inception on
March  1, 2004.  The Company has spent approximately an aggregate of $150,000 on
geological  and  economical evaluations of the Leased Property.  The Company has
not  examined  the  title  to  the  Leased  Property.

EMPLOYEES

     The  Company  has  two  (2)  employees  consisting  of Fred B. Zaziski, our
President  and  Chief  Executive  Officer,  and  Massimiliano  Pozzoni, our Vice
President  of Business Development, Secretary, Treasurer and Principal Financial
Officer.  Mr.  Zaziski  and  Mr.  Pozzoni are employed on a full-time basis. Mr.
Pozzoni  is  also the Chief Executive Officer and a Director of Gulf Coast Oil &
Gas  Inc.  ("Gulf  Coast"),  formerly Otish Mountain Diamond Company, a publicly
traded  company in the U.S. Mr. Pozzoni works over forty (40) hours per week for
the  Company  and  approximately  five  (5)  hours  per  week  for  Gulf  Coast.

                                        8
<PAGE>

     The  Company intends to use several independent contractors on an as-needed
basis  to  conduct  its  operating  activities. Messrs. Zaziski and Pozzoni will
select and hire these independent contractors and manage and evaluate their work
performance.  The  Company  has  used various independent contractors to provide
technical, geological, geophysical and financial reports on the Leased Property.
The  Company  engaged  Stokes  to provide engineering support in preparation for
drilling  on  the  DB3  Prospect. The Company is negotiating with an independent
contractor  to  be  the  operator  and  conduct  drilling  on  the DB3 Prospect.

     There are no collective bargaining contracts covering any of our employees.
We  believe  our relationship with our employees is satisfactory. We believe our
relationship  with  our  independent  contractors is also satisfactory; however,
Landmark  filed  a  lawsuit  against  us,  as  discussed below in "Item 3. Legal
Proceedings."

SERVICE  CONTRACTS

     On  June  14,  2004,  the Company entered into a one-year contract with CCG
Investor  Relations  ("CCG")  for  investor relations services. The terms of the
contract include a retainer of $5,000 per month plus any out-of-pocket expenses,
and  50,000  restricted  shares  of  the  Company's  common  stock.

     On  August  2,  2004,  the  Company  entered into the Letter Agreement with
Argyle  regarding  the  Wyandotte  Property,  the details of which are discussed
above  under  the  heading  "Business  Development  and  Recent  Events."

     On August 2, 2004, the Company entered into a business consultant agreement
with  Search4.Com,  Inc.  The  Company  paid  $15,000 to the consultant for work
performed  in  accordance  with  the  agreement.  Pursuant to the agreement, the
consultant  was  to  schedule  a  Road  Show  for  the  Company  with  financial
professionals.  In  addition,  the  Company agreed to pay the consultant 7.5% in
cash  and  10%  in  warrants for any financing monies raised by the Company from
individuals or firms that the Company might have met through the Road Show.  The
agreement  was  terminated  in  October  2004 without any financing monies being
raised  by  the  consultant.  The  contract  will  not  be  extended.

     On  August  9,  2004,  the  Company  entered  into an agreement with Source
Capital  Group,  Inc.  ("Source  Capital")  for financial advisory services. The
agreement extended though January 1, 2005, and thereafter has been automatically
renewed  on a month-to-month basis. The agreement may be cancelled in writing by
either  party. The terms of the agreement include compensation of 2% cash and 2%
warrants  on all monies raised other than money raised overseas and payment of a
retainer in the amount of $5,000. Source Capital was instrumental in the raising
of funds related to Cornell Capital Partners, LP (discussed below) and new terms
related  to  the  agreement  were  renegotiated.  Under  the  new  terms  of the
agreement,  Source  Capital  received  7%  (or  $70,000)  of  the  $1,000,000 of
financing  provided  to  the  Company  by  Cornell  Capital  Partners,  LP.

                                        9
<PAGE>

     On  November 24, 2004, the Company entered into an unsecured loan agreement
with  Blue  Mint  Exploration in the amount of $140,000 for a term of six months
terminating  May  25, 2005.  The loan bears interest at 12% per annum to be paid
at  the  maturity  of  the  loan  agreement.

     The  Company  receives  technical,  geological,  geophysical, financial and
other  advice  regarding  the  Company's natural gas exploration operations from
various  independent contractors. The Company uses these independent contractors
on  an  as-needed  basis  and  has  not  entered into formal contracts for their
services.

FINANCING  PROVIDED  BY  CORNELL  CAPITAL  PARTNERS,  LP

     During  2004, the Company entered into a financing transaction with Cornell
Capital  Partners,  LP  ("Cornell"),  pursuant to which Cornell has provided the
Company  with  $1,000,000  of  financing in exchange for convertible debentures.
Pending the effectiveness of a registration statement covering the resale of the
Company's  shares  of  common  stock  issuable  to Cornell under the convertible
debentures  and a Standby Equity Distribution Agreement (the "SEDA") and certain
other  limitations, Cornell is obligated to provide the Company with $10 million
of  additional  financing.  The  Company  filed  such  registration statement on
February  11,  2005;  however,  after receiving comments from the Securities and
Exchange  Commission  (the  "Commission") concerning the structure of the equity
and  debt  financing,  on  March  24,  2005,  we filed a request to withdraw the
registration  statement  with  the Commission. The Company and Cornell intend to
restructure  the current equity and debt financing transaction in the short term
to  address  the Commission's concerns. The Company needs the additional capital
from  Cornell  or  another  source  to  begin  drilling  on the DB3 Prospect. As
discussed  throughout  this  report, if the Company is unable to restructure its
arrangement  with  Cornell  or  otherwise  obtain  financing under the SEDA, the
Company's business could fail. The Company will report the material terms of any
restructuring  in  a  Form  8-K  filed with the Commission. Certain terms of the
original  financing  are  set  forth  in  the  paragraphs  below.

     On  November  19,  2004,  the  Company  entered  into  a SEDA with Cornell.
Pursuant  to  the SEDA, the Company may, at its discretion, periodically sell to
Cornell  shares of common stock for a total purchase price of up to $10 million;
however,  the Company cannot receive any funds under the SEDA until such time as
the  Company  has  registered  the  resale  of  shares  of common stock that are
issuable  to  Cornell thereunder. For each share of common stock purchased under
the  SEDA,  Cornell  will  pay  the  Company  100% of the lowest volume weighted
average  price  of  the Company's common stock as quoted by Bloomberg, LP on the
over-the-counter Bulletin Board or other principal market on which the Company's
common stock is traded for the 5 days immediately following the notice date. The
number of shares purchased by Cornell for each advance is determined by dividing
the amount of each advance by the purchase price for the shares of common stock.
The  effectiveness  of the sale of the shares under the SEDA is conditioned upon
us  registering the shares of common stock with the Commission and obtaining all
necessary  permits  or qualifying for exemptions under applicable state law. The
amount  of  each advance is subject to a maximum advance amount of $750,000, and
the  aggregate  amount  of  monthly advances is limited to $1,000,000 per month.
Cornell  will  retain  5%  of  each advance under the SEDA. In addition, Cornell
received  a  one-time  commitment  fee  in  the  form  of  392,000 shares of the
Company's  common stock. Sloan Securities Corporation ("Sloan"), an unaffiliated
registered  broker-dealer,  received  8,000 shares of the Company's common stock
for  its  services  as  the  placement  agent.  There  are  substantial risks to
investors  in  the Company as a result of the issuance of shares of common stock
under the SEDA, which include, but are not limited to the following: dilution of
shareholders;  a  significant  decline  in  the  Company's  stock price; and the
potential  inability  of  the  Company  to  draw  sufficient  funds when needed.

                                       10
<PAGE>

     On  November  19, 2004, the Company also entered into a Securities Purchase
Agreement  with  Cornell. Pursuant to the Securities Purchase Agreement, Cornell
purchased  $1,000,000  of  convertible  debentures  from  the  Company,  which
$1,000,000  was disbursed as follows: (i) $500,000 on November 22, 2004 and (ii)
the  remaining  $500,000 on February 11, 2005. The debentures are secured by the
assets  of  the Company. The debentures have a two-year term and accrue interest
at  5%  per year. The debentures are convertible at the holder's option any time
up  to  maturity  at  a  conversion  price equal to the lower of (i) 120% of the
closing  bid price of the common stock on the date of the debentures or (ii) 80%
of  the  lowest  closing bid price of the common stock for the five trading days
immediately preceding the conversion date. Cornell received 10% (or $100,000) of
the gross proceeds of the convertible debentures, paid directly from escrow upon
each  disbursement  described  above. Source Capital received 7% (or $70,000) of
the  gross  proceeds  of  the  convertible  debentures.

ITEM 2.     DESCRIPTION OF PROPERTY

Corporate  Headquarters
-----------------------

     The  Company  leases  approximately 250 square feet of office space for its
corporate  headquarters  in Houston, Texas pursuant to a one (1) year lease that
was renewed in April 2005.  The Company pays between $1,200 and $1,500 per month
depending  on  the  costs  of  variable  services  such as postage, shipping and
telephone  usage.

Wyandotte  Property - Certain Assignment Agreements Pending
-----------------------------------------------------------

     We  entered into a Letter Agreement with Argyle to acquire various oil, gas
and mineral leases located in St. Mary Parish, Louisiana, and, contemporaneously
therewith,  paid  $204,655  to  Argyle  in  consideration  for Argyle presenting
geological  ideas  and  concepts  to  us.  Argyle  had contracted for options to
acquire  such  leases  which  covered approximately 7,442 acres of land St. Mary
Parish,  Louisiana.  The  options  were  subject  to  landowner  royalties  and
overriding  royalties  equal  to  30%,  such  that  the  net  revenue  interest
attributable  to  any  working  interest in such leases would be 70%. The Letter
Agreement  provided  that  we would make two (2) additional payments of $404,235
and  $454,235 to Argyle in order that Argyle could exercise its options, acquire
leases  covering  approximately  4,100  gross  acres of land in St. Mary Parish,
Louisiana, and assign a 100% working interest in such leases to us. We have made
the  additional payments to Argyle. However, as of the filing of this report, we
have  not  executed  assignment agreements to transfer the interests. We hope to
execute  such assignment agreements in the near future, of which there can be no
assurance.  We  issued  2,500,000 restricted shares of our common stock to Davos
for  Davos'  services  in  putting  together  the deal with Argyle regarding the
Wyandotte  Property.  In February 2005, we successfully bid $21,924 and acquired
from  the  State  of Louisiana a lease for oil and gas covering approximately 84
additional  acres  of  land  as  part  of  the Wyandotte Property. The Wyandotte
Property  consists of three prospects which we refer to as DB3, Criss A and Marg
3.  We  obtained  the  services  of an independent contractor to complete three-
dimensional  geophysical  seismic  studies on the Wyandotte Property. We are not
aware  of  any production on the Wyandotte Property in the last three (3) years.
There  are  currently no productive wells or proven reserves on the acreage. All
of  the  land  is undeveloped. We have not commenced any drilling on the land at
present  and  will  not  do so until we raise significant additional capital. We
have  not  examined  the  title  to  the  Wyandotte  Property.

                                       11
<PAGE>

Starr Country Property - Certain Assignment Agreements Pending
--------------------------------------------------------------

     We  are  in the process of trying to acquire from Argyle oil and gas leases
that  entitle  us  to  a 100% working interest and a 70% net revenue interest an
aggregate  of  approximately 4,400 gross acres and approximately 2,900 net acres
of  land  located  in Starr County, Texas. The Starr County Property is in close
proximity  to  the  Bob  West  gas field located in the Southeastern part of the
State  of  Texas. We paid $63,000 and issued 900,000 restricted shares of common
stock  valued  at $225,000 to Argyle for an interest in approximately 800 of the
acres.  We  filed the assignment agreement for these leases as an exhibit to our
Form  10-QSB  filed  with  the  SEC  on August 23, 2004. These leases are in the
process  of  being transferred from Argyle to us. We paid $640,000 to Argyle for
an  interest  in the remaining acreage. As of the filing of this report, we have
not  executed assignment agreements with Argyle to transfer the interests in the
remaining  acreage.  We  hope  to execute such assignment agreements in the near
future,  of  which  there  can  be  no assurance. We obtained the services of an
independent  contractor  complete  two-dimensional  geophysical  studies  of the
acreage.  We are not aware of any production on the Starr County Property in the
last three (3) years. There are currently no productive wells or proven reserves
on  the  acreage.  All  of  the  land  is undeveloped. We have not commenced any
drilling  on the land at present and do not have any current plans for drilling.
We  have  not  examined  the  title  to  the  Starr  County  Property.

The  Company  believes  that its property is suitable for the Company's current
and  projected  needs.

ITEM 3.     LEGAL PROCEEDINGS

     On October 8, 2004, Landmark Graphics Corporation, Halliburton Company, and
Halliburton  Energy  Services,  Inc.  (collectively  "Landmark") filed a lawsuit
against  Falcon  Natural  Gas  Corporation in the 125th District Court of Harris
County,  Texas.  The  case  is styled Landmark Graphics Corporation, Halliburton
                                      ------------------------------------------
Company,  and  Halliburton  Energy  Services,  Inc.  v.  Falcon  Natural  Gas
  ---------------------------------------------------------------------------
Corporation,  Cause  Number, 2004-56842.  The Company issued a press release and
-----------
posted  on  the  Company's website a report prepared by Landmark (the "Report"),
which  Landmark claims was in violation of an agreement between Landmark and the
Company.  The  Company  issued a corrective press release and removed the Report
from  its  website. Landmark claims that Falcon Natural Gas Corporation breached
its  agreement  with  Landmark  by  engaging  MS  Corporate Communications d/b/a
Michael  Williams  Market  Movers  ("Market Movers") to create and distribute an
advertisement (the "Advertisement") that quotes from and paraphrases portions of
the  Report  and  repeatedly  refers to the Report as a report of "Halliburton,"
"Halliburton  Company," and "a Halliburton Company." Landmark is claiming breach
of  contract  and  injury  to its business reputation and trade names and marks.
Landmark  is  seeking  unspecified  damages,  reasonable  attorneys' fees, court
costs,  and  injunctive relief. The Company has generally denied the allegations
of  Landmark.  Landmark has agreed that if, after discovery, it finds that there
is no basis for a claim that the Company had knowledge of, or was involved with,
the  commissioning  or  financing  of  the  Advertisement, Landmark will dismiss
Falcon  Natural  Gas  Corporation  from  the  lawsuit.  Landmark has scheduled a
hearing in May 2005, in New York for purposes of obtaining discovery from Market
Movers.

                                       12
<PAGE>

     On  November  3,  2004, Falcon Gas Storage Company, Inc. ("Falcon Gas"), an
unaffiliated  company  with  its  principal place of business in Houston, Texas,
filed  a  lawsuit  against  the  Company  in  the  United States District Court,
Southern  District  of  Texas,  Houston  Division. The case is styled Falcon Gas
                                                                      ----------
Storage Company, Inc. v. Falcon Natural Gas Corp., Case Number H-04-4231. Falcon
   ---------------------------------------------------------------------
Gas  is  alleging trademark infringement and unfair competition arising from the
Company's  use  of the term "Falcon Natural Gas" as a corporate name and service
mark  in connection with the promotion, advertising, offer, and sale of services
which  Falcon  Gas  claims  are substantially similar to the services offered by
Falcon  Gas.  Falcon  Gas  alleges that it is a leading developer of market-area
high-deliverability,  multi-cycle  natural gas storage facilities. Falcon Gas is
seeking  injunctive  relief  as  well as unspecified damages and payments to the
Company of profits, gains, and advantages resulting from the alleged activities,
reasonable attorneys' fees, and court costs. The Company is currently seeking to
enter  into a settlement agreement with Falcon Gas which would result in neither
company paying monetary damages.

     In  the  ordinary  course  of our business, we may from time to time become
subject to routine litigation or administrative proceedings which are incidental
to  our  business.

     The  Company  is not aware of any proceeding to which any of its directors,
officers,  affiliates  or  security holders is a party adverse to the Company or
has  a  material  interest  adverse  to  the  Company.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     We  did  not  submit  any  matters to a vote of security holders during the
fourth  quarter  of  2004.

                                    PART II

ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

                                       13
<PAGE>

     "Bid"  and  "asked"  offers  for  our  common  stock  are  listed  on  the
Over-The-Counter Bulletin Board (the "OTCBB"). The trading symbol for our common
stock was "CSRW" and was changed to "FNGC" in connection with the Company's name
change  that  took  effect  on April 12, 2004. The common stock began trading in
November  2003.

     The  following  table  sets  forth  the  high  and  low  bid prices for the
Company's  common  stock for the periods indicated as reported on the OTCBB. The
quotations  reflect  inter-dealer  prices,  without retail mark-up, mark-down or
commission  and  may  not  represent  actual  transactions.

2004                                          HIGH BID     LOW BID
                                              --------     -------
First Quarter                                    $1.27       $0.10
Second Quarter (1)                               $2.70       $0.40
Third Quarter                                    $2.02       $1.22
Fourth Quarter                                   $1.50       $0.63

2003                                          HIGH BID     LOW BID
                                              --------     -------
November 6, 2003 - December 31, 2003
(First Available)                                $0.10       $0.01

(1)  All  quotations  after April 11, 2004, reflect a 5 to 1 forward stock split
     on  April  12,  2004.

     As of February 28, 2005, the Company had 48 holders of record of the common
stock.  The  number  of holders of the common stock includes nominees of various
depository  trust  accounts  for  an  undeterminable  number  of  individual
stockholders.

PENNY STOCK

     The  Company's  common  stock  is  considered a "penny stock" as defined in
certain rules under the Securities Exchange Act of 1934 (the "Exchange Act"). In
general,  a security which is not quoted on NASDAQ or has a market price of less
than  $5 per share where the issuer does not have in excess of $2,000,000 in net
tangible  assets  is  considered  a  penny  stock.  The  Commission's Rule 15g-9
regarding  penny  stocks  imposes  additional  sales  practice  requirements  on
broker-dealers  who  sell  such  securities  to  persons  other than established
customers  and  accredited investors (generally persons with net worth in excess
of  $1,000,000  or  an annual income exceeding $200,000 or $300,000 jointly with
their  spouse).  For  transactions  covered by the rules, the broker-dealer must
make  a  special  suitability  determination  for  the purchaser and receive the
purchaser's  written  agreement  to the transaction prior to the sale. Thus, the
rules  affect the ability of broker-dealers to sell our common stock should they
wish  to  do so because of the adverse effect that the rules have upon liquidity
of  penny  stocks.  Unless  the transaction is exempt under the rules, under the
Securities  Enforcement  Remedies  and  Penny  Stock  Reform  Act  of  1990,
broker-dealers  effecting  customer transactions in penny stocks are required to
provide  their customers with (i) a risk disclosure document; (ii) disclosure of
current  bid  and ask quotations if any; (iii) disclosure of the compensation of
the  broker-dealer  and its sales personnel in the transaction; and (iv) monthly
account  statements  showing  the  market  value of each penny stock held in the
customer's  account.  In  addition,  various  state  securities  laws  impose
restrictions  on  transferring  "penny  stocks".

                                       14
<PAGE>

DIVIDEND  POLICY

     We  have not declared or paid dividends on our common stock in the last two
fiscal  years.  We do not anticipate paying dividends on our common stock in the
foreseeable  future.  We intend to reinvest in our business operations any funds
that  could  be  used  to  pay  dividends.

RECENT SALES OF UNREGISTERED SECURITIES

     The  Company has issued the following securities without registration under
the  Securities  Act  of 1933 (the "Act" or the "Securities Act") during the
period  covered  by  this  report:

     On  May  14,  2004, the Company issued 20,900,000 shares of common stock to
the  Falcon  shareholders  pursuant  to  the  Exchange  whereby  Falcon became a
wholly-owned subsidiary of the Company. The Exchange was one-for-one. Falcon had
issued  an  aggregate  of  20,000,000  shares  as  follows:  1)  an aggregate of
8,250,000  shares  to five individuals for general business consulting services;
2)  an  aggregate  of  8,800,000  shares to four individuals and two entities as
finders'  fees;  and 3) an aggregate of 2,950,000 shares to an individual and an
entity  for  financial  consulting services. In accounting for the Exchange, the
20,000,000  shares were valued at $0.001 per share (or an aggregate of $20,000).
Falcon had also issued 900,000 shares to Argyle as part of the consideration for
the Starr County Property. The 900,000 shares were valued at $0.25 per share (or
an  aggregate  of  $225,000). The Company claims the exemption from registration
afforded  by  Rule  506  of  Regulation  D  under  the  Act.

     On  June  14,  2004, the Company issued 50,000 shares of common stock to an
unrelated  entity  valued  at  $1.25  per share as part of an investor relations
contract.  The Company claims an exemption from registration afforded by Section
4(2)  of the Act since the foregoing issuance did not involve a public offering,
the recipient had access to information that would be included in a registration
statement,  took  the  shares for investment and not resale and the Company took
appropriate  measures  to  restrict  transfer.

     On  July  23,  2004,  the  Company issued for cash 632,000 shares of common
stock  to  an  unrelated entity valued at $1.00 per share, less expenses of $60,
for  a  net  of  $631,940.  The  Company  claims  an exemption from registration
afforded by Section 4(2) of the Act since the foregoing issuance did not involve
a  public  offering,  the  recipient  had  access  to  information that would be
included  in  a  registration  statement, took the shares for investment and not
resale  and  the  Company  took  appropriate  measures to restrict transfer. The
Company  also  claims an exemption from registration afforded by Regulation S of
the  Act.

     On  August  2, 2004, the Company issued 2,500,000 shares of common stock to
an  unrelated  entity  valued  at  $1.42  per share for services that the entity
provided  in  putting  together  the  Company's  deal  with Argyle regarding the
Wyandotte  Property.  The Company claims an exemption from registration afforded
by Section 4(2) of the Act since the foregoing issuance did not involve a public
offering,  the  recipient  had access to information that would be included in a
registration  statement,  took  the shares for investment and not resale and the
Company  took  appropriate  measures  to  restrict  transfer.

                                       15
<PAGE>

     On  August  27, 2004, the Company issued 100,000 shares valued at $1.32 per
share  to an individual for his participation on the advisory board. The Company
claims  an exemption from registration afforded by Section 4(2) of the Act since
the  foregoing  issuance  did  not  involve a public offering, the recipient had
access  to  information that would be included in a registration statement, took
the  shares  for  investment  and  not  resale  and the Company took appropriate
measures  to  restrict  transfer.

     On September 7, 2004, the Company issued 100,000 shares valued at $1.34 per
share  to an individual for his participation on the advisory board. The Company
claims  an exemption from registration afforded by Section 4(2) of the Act since
the  foregoing  issuance  did  not  involve a public offering, the recipient had
access  to  information that would be included in a registration statement, took
the  shares  for  investment  and  not  resale  and the Company took appropriate
measures  to  restrict  transfer.

     On  October  8, 2004, the Company sold 1,500,000 shares of its common stock
to  a  foreign private investment group for approximately $0.93 per share, which
shares  were  issued  on  January  3, 2005. The Company received $1,400,000 less
expenses  of  $12, for a net of $1,399,988. The Company claims an exemption from
registration  afforded  by  Section 4(2) of the Act since the foregoing issuance
did  not involve a public offering, the recipient had access to information that
would  be  included  in a registration statement, took the shares for investment
and  not  resale and the Company took appropriate measures to restrict transfer.
The  Company also claims an exemption from registration afforded by Regulation S
under  the  Securities  Act.

     In  November 2004, the Company issued 392,000 shares of its common stock to
Cornell  as a one-time commitment for entering into the SEDA and 8,000 shares of
its  common stock to Sloan for its services as the placement agent in connection
with  the  SEDA.  The  shares  were valued at $1.25 per share or an aggregate of
$500,000.  The Company claims an exemption from registration afforded by Section
4(2)  of  the  Securities  Act  since  the foregoing issuances did not involve a
public  offering,  the  recipients took the shares for investment and not resale
and  the  Company  took  appropriate  measures  to  restrict  transfer.

     Pursuant  to the Securities Purchase Agreement entered into on November 19,
2004,  Cornell  was obligated to purchase $1,000,000 of convertible compensation
debentures.  The $1,000,000 was disbursed as follows: (i) $500,000 was purchased
on November 22, 2004 and (ii) the remaining $500,000 was disbursed on January 27
2005.  The  debentures  are  convertible  at  the holder's option any time up to
maturity at a conversion price equal to the lower of (i) 120% of the closing bid
price  of  the  common  stock  on  the date of the debentures or (ii) 80% of the
lowest  closing  bid  price  of  the  common  stock  for  the  five trading days
immediately  preceding  the  conversion  date.  At  maturity, the debentures are
convertible at the holder's option any time up to maturity at a conversion price
equal  to  the lower of (i) 120% of the closing bid price of the common stock on
the  date  of  the debentures or (ii) 80% of the lowest closing bid price of the
common  stock  for  the  five  trading days immediately preceding the conversion
date.

                                       16
<PAGE>

CANCELLATION  OF  SHARES

     In  October,  2004,  the  Company  rescinded  9,000,000 shares held by Alan
Aitchison,  a  former  Director  of  the  Company and the Company's former Chief
Executive Officer, President, Secretary and Treasurer. The shares were rescinded
pursuant to Mr. Aitchison's resignation from his positions with the Company. Mr.
Aitchison  and  the Company  entered  into  an  agreement  to  rescind  the
shares  in  October  2004.  The rescinded shares were valued at par because they
were  part  of  the  recapitalization.

                                       17
<PAGE>

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The  following  discussion  contains certain statements that may constitute
forward-looking  statements.  Any  statements  that  refer  to  expectations,
projections  or  other  characterization  of future events or circumstances, and
especially  those  which  include variations of the words "believes," "intends,"
"estimates,"  "anticipates,"  "expects," "plans," or similar words or variations
thereof, are likely to be forward-looking statements, and as such, are likely to
concern  matters involving risk, uncertainty, unpredictability and other factors
that  could  materially and adversely affect the outcome or results indicated by
or  inferred  from  the  statements themselves. Therefore, the reader is advised
that the following discussion should be considered in light of the discussion of
risks  and  other  factors  contained  in this report and in the Company's other
filings  with  the  Securities  and  Exchange Commission, and that no statements
contained in the following discussion or in this report should be construed as a
guarantee  or  assurance  of  future  performance  or  future  results.

OVERVIEW

     Falcon  Natural  Gas Corp. was incorporated in Nevada as Countryside Review
Inc.  ("Countryside")  on  December 7, 2001. Our business plan was to develop an
on-line  equestrian  lifestyle magazine for the amateur rider and horse owner by
filling  the  gap between horse care and lifestyle considerations. We planned to
sell  advertising  space on the magazine's web-site. Other than maintenance of a
website,  our  current  officers  and directors are unaware of any past business
operations  regarding the on-line magazine. We did not generate any revenue from
the  on-line  publishing  business  and  has since discontinued such operations.

     On  May  6,  2004,  Countryside acquired 100% of the issued and outstanding
shares  of  Falcon in a reverse merger transaction, as discussed above under the
heading  "Business  Development and Recent Events" in the section entitled "Item
1.  Description  of  Business."  The  Company  changed its name from Countryside
Review  Inc.  to  Falcon  Natural  Gas  Corp.  effective  April  12,  2004,  in
contemplation  of  the  acquisition of Falcon. As a result of the acquisition of
Falcon,  the  Company  came under the management of Massimiliano Pozzoni who was
not  familiar  with  on-line publishing. Mr. Pozzoni, whose experience is in the
oil and gas industry rather than on-line publishing, changed our business focus.
We  are  now  engaged  in natural gas exploration activities in St. Mary Parish,
Louisiana  and  Starr County, Texas. The Company is in its exploration stage, as
it  has  not  generated  any  revenues  from its planned natural gas exploration
operations.

     Falcon  Natural  Gas  Corp.  is  a holding company for Falcon. Our business
operations  discussed  herein  are  conducted by Falcon unless otherwise stated.
Except  as  expressly  indicated  or  unless the context otherwise requires, the
"Company,"  "we,"  "our,"  or  "us"  means  Falcon  Natural  Gas Corp., a Nevada
corporation,  and  its  subsidiary.

                                       18
<PAGE>

CRITICAL ACCOUNTING POLICIES

     Our  discussion  and  analysis  of  our  financial condition and results of
operations  is  based  upon  our  audited  financial statements, which have been
prepared  in  accordance  with  accounting  principals generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,  and  related  disclosure  of any contingent assets and
liabilities.  On  an  on-going  basis,  we  evaluate  our estimates. We base our
estimates  on  various  assumptions  that  we believe to be reasonable under the
circumstances,  the  results  of which form the basis for making judgments about
carrying  values  of  assets  and liabilities that are not readily apparent from
other  sources.  Actual  results may differ from these estimates under different
assumptions  or  conditions.

     We  believe  the  following  critical  accounting  policy  affects our more
significant  judgments  and  estimates  used in the preparation of our financial
statements

     Going  Concern.  In its report dated March 28, 2005, our auditors, Williams
     --------------
&  Webster, P.S., expressed an opinion that there is substantial doubt about our
ability  to  continue  as a going concern. We have been in the exploration stage
and  have  had  no  revenues  since inception. For the period from March 1, 2004
("Inception) to December 31, 2004, we recorded a net loss of $5,511,069.  As of
December  31,  2004,  we had deficit accumulated during the exploration stage of
$5,511,069.  The  accompanying  financial statements have been prepared assuming
that  the Company will continue as a going concern.  The financial statements do
not  include  any adjustments relating to the recoverability of recorded assets,
or  the amounts and classification of liabilities that might be necessary in the
event  the  Company  cannot  continue  in existence. Our continuation as a going
concern  is dependent upon future events, including the acquisition of more than
$5.2  million  of  additional financing (discussed above) to drill a replacement
well  on the DB3 Prospect.  If we are unable to continue as a going concern, you
will  lose  your  entire  investment.

NEW  ACCOUNTING  PRONOUNCEMENTS

     In December 2004, the Financial Accounting Standards Board issued Statement
of  Financial Accounting Standards ("SFAS") No. 153 and SFAS No. 152. We believe
the  adoption  of  these  statements  will  have  no  impact  on  our  financial
statements.  Also  in  December  2004,  the Financial Accounting Standards Board
issued SFAS No. 123R, "Accounting for Stock Based Compensation." We have not yet
determined  the  impact  to  our  financial statements from the adoption of this
statement.  In  November  2004,  the Financial Accounting Standards Board issued
SFAS  No.  151,  "Inventory Costs." As of December 31, 2004, we did not have any
inventory  and  we  believe  the  adoption  of  this statement will not have any
immediate  material  impact  on  our  financial  statements.  In  May  2003, the
Financial  Accounting  Standards  Board  issued  SFAS  No.  150, "Accounting for
Certain  Financial  Instruments  with  Characteristics  of  Both Liabilities and
Equity."  We  have determined that there was no impact from the adoption of this
statement.

                                       19
<PAGE>

PLAN  OF  OPERATION

     We  are  in the exploration stage as a natural gas exploration company.  As
such,  we  have  not  realized  any revenues from our planned operations. We are
engaged  in natural gas exploration activities in St. Mary Parish, Louisiana and
the  Wilcox,  Lower  Lopeno  sands  in  Starr  County,  Texas.

     During  2004,  we  raised  $2,539,428 from a combination of equity and debt
financing.  We  estimate  that we can satisfy our cash requirements for the next
three  (3)  months which does not take into account the costs for drilling wells
or  further exploration work on the Leased Property.  The Company estimates that
it  needs  to  raise  at  least $360,000 to satisfy its cash requirements for an
additional  nine  (9)  months,  excluding  the  costs  of  drilling  and  lease
exploration.  We  currently  use  approximately  $40,000  of  cash per month for
general  and  administrative  expenses  such  as  investor  relations,  advisory
services,  Internet/web-hosting, officers and directors fees, office and general
expenses,  professional  fees,  travel  and  entertainment  and rent and related
expenses.  We estimate that such uses of cash will continue throughout 2005.  In
addition,  we  spent $571,504 on lease exploration.  As discussed below, we need
more  than  $5.2  million  for  drilling.  If  we  do not receive any additional
financing,  after  the  next  three months, we will not be able to continue as a
going  concern,  our business operations will fail and investors will lose their
entire  investment.  As  of  the  filing  of  this  report,  the Company has not
executed  assignment  agreements  with  Argyle  to transfer the interests in the
Wyandotte Property  or approximately 3,600 additional acres comprising the Starr
County Property.  The Company hopes to execute such assignment agreements in the
near future, of which there can be no assurance.

     We  obtained  the  services  of  independent  contractors  to  complete
two-dimensional  geophysical  studies  of  the  Starr  County  Property  and
three-dimensional geophysical seismic studies on the Wyandotte Property. We plan
to  drill a replacement well on the DB3 Prospect. The DB3 Prospect is located on
the  Wyandotte Property. We need to raise more than $5.2 million of money to pay
for drilling and completion of the replacement well. We plan to obtain the money
for  drilling  from  our financial arrangement with Cornell, which is subject to
certain  terms  and  conditions  (including  the effectiveness of a registration
statement)  and is currently being restructured. The current status and terms of
the  Company's  financial  arrangement  with  Cornell are discussed below in the
sections  entitled  "Liquidity  and  Capital  Resources"  under  the  headings
"Financing  Provided  By  Cornell  Capital  Partners,  LP",  "Standby  Equity
Distribution  Agreement"  and  "Convertible Debentures". We have also contracted
with  a  financial  advisory  company  to  help  the  Company  raise  additional
financing. Except for the financial arrangement with Cornell (which is currently
being  restructured  to  address  the  Commission's  concern  with  the  current
structure and is otherwise subject to certain terms and conditions including the
effectiveness  of  a  registration statement), we do not have any commitments or
identified  sources  of  additional  capital  from  third  parties  or  from its
officers,  directors  or  majority shareholders. Additional financing may not be
available  to  the  Company  on favorable terms, if at all. In the event that we
cannot obtain enough money to drill the replacement well on the DB3 Prospect, we
intend  to  seek  a  drilling partner that could raise the money in exchange for
part  of  our  mineral  interest.  We  may  not  raise additional capital or, if
necessary,  find  a  suitable  drilling  partner.  We  may  not be successful in
restructuring  the  financial  arrangement  with  Cornell  on  terms  that  are
acceptable to the Company. In addition, we may not be successful in obtaining an
effective  registration  statement.  We  may  not  be able to produce commercial
quantities  of  natural  gas  from a replacement well on the DB3 Prospect. If we
cannot  raise the money or find a suitable drilling partner, we will not be able
to  drill  and our business will fail. Furthermore, the discovery of natural gas
and the ability to produce it in commercial quantities is very speculative. Even
assuming  that  we  obtain  the  necessary  financing for drilling, if we do not
discover  and produce commercial quantities of natural gas, we will not have any
products  or  services  to  offer  and  our  business  could  fail.

     We  plan  to  drill  the replacement well a few yards away from an existing
well  on the DB3 Prospect. We believe that we will have to drill the replacement
well  to  a  depth of at least 17,000 feet. We have estimated a dry hole cost of
$4.34  million  and  a  completed  cost  of  $5.27  million.

     If we discover and can produce commercial quantities of natural gas that we
can  sell,  we  intend  to  use  the  proceeds  to fund a second well on the DB3
Prospect  to accelerate the recovery time of the natural gas reserves.  Based on
the  Letter  Agreement  and  the  leases,  we  are entitled to receive a 70% net
revenue  interest.  In  addition,  the  Company  plans  to use the proceeds from
production  to  fund additional exploration and drilling on the Leased Property.
We  will need between $2 million and $7 million of additional financing for each
additional  well that we desire to drill.  We have not examined the title to the
Leased Property.

     We  do  not  expect  to purchase or sell any plant or significant equipment
during  the  next  twelve  months.

     We  have  two  (2)  full-time  employees consisting of Fred B. Zaziski, our
President  and  Chief  Executive  Officer,  and  Massimiliano  Pozzoni, our Vice
President  of Business Development, Secretary and Treasurer (Principal Financial
Officer). We do not expect significant changes in the number of employees during
the  next  twelve  months.  We intend to use several contractors on an as-needed
basis  to  conduct  its  operating  activities. Messrs. Zaziski and Pozzoni will
select  and  hire  these  contractors  and  manage  and  evaluate  their  work
performance.  Additionally,  we  have  formed  an  advisory  board  with  three
experienced members, Alan Aitchison, our former Chief Executive Officer, Paul C.
Kirkitelos  and  Daniel  H. Tesfamicael. We established the advisory board in an
effort  to  save  cost by relying on the members rather than consultants in such
areas  as  drilling,  petroleum  engineering,  and  capital  raising  efforts.

                                       20
<PAGE>

RESULTS OF OPERATIONS

     We  are  in  the exploration stage and have not generated any revenues from
our  planned  natural  gas  exploration  operations.  The  Acquisition  is being
accounted  for  as  a  reverse  merger  and recapitalization whereby Falcon, the
operating  company  which  was  incorporated on March 1, 2004, is the continuing
entity  for  all  accounting  purposes.

March 1, 2004 (Inception) To December 31, 2004
----------------------------------------------

     We  had  a  loss from operations of $4,882,235 for the period from March 1,
2004  to December 31, 2004, consisting of advisory services of $3,833,790, lease
exploration  expense  of  $571,504,  officer  and  director  fees  of  $136,977,
professional  fees of $135,386, investor relations expense of $115,750, rent and
related  expenses  of  $23,746,  travel  and entertainment of $22,779, Internet/
web-hosting  expense  of  $20,227,  office  and general expenses of $15,937, and
depreciation  and  amortization  of  $6,139.

     Total  other expense for the period from March 1, 2004 to December 31, 2004
was  $628,834,  consisting of financing fees of $500,000 and interest expense of
$129,854  that  were offset by other income of $500 and interest income of $520.

     We  had a net loss of $5,511,069 (or a basic and diluted net loss per share
of  $0.09)  for  the  period  from  March  1,  2004  to  December  31,  2004.

     As  of  December  31,  2004,  we  had an accumulated deficit of $5,511,069.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2004, we had total current assets of $164,227 consisting
of  cash  and  cash  equivalents  of $162,227 and accounts receivable of $2,000.

     As  of  December  31,  2004,  we had total current liabilities of $162,478,
consisting  of  a  note payable of $140,000, accounts payable of $7,349, accrued
liabilities  of  $6,959,  interest  payable of $4,854, a note payable to related
party  of  $3,216,  and  an  advance  from  shareholder  of  $100.

     We  had  net  working  capital  of  $1,749  at  December  31,  2004.

     Net  cash  used  by operating activities was $1,018,253 for the period from
March  1,  2004  to December 31, 2004, primarily due to a net loss of $5,511,069
which was primarily offset by an adjustment for common stock issued for services
of  $3,899,332,  an  adjustment  for common stock issued for financing costs and
charges  of  $500,000  and  an  adjustment  for  interest expense for beneficial
conversion  feature  of  $125,000.

     Net  cash  used  by investing activities was $1,358,948 for the period from
March 1, 2004 to December 31, 2004, due to the acquisition of oil and gas leases
of  $1,357,541  and the purchase of equipment of $4,088 that were offset by cash
received  through  recapitalization  and  acquisition  of  $2,681.

                                       21
<PAGE>

     Net  cash  provided  by  financing activities was $2,539,428 for the period
from March 1, 2004 to December 31, 2004, due to the issuance of common stock for
cash of $2,031,928, proceeds from convertible debt of $367,500 and proceeds from
notes  payable  of  $140,000.

     We  estimate  that  we can satisfy our cash requirements for the next three
(3)  months  which  does  not take into account the costs of drilling or further
exploration  work.  We  estimate  that  we  need  to  raise at least $360,000 to
satisfy  our  cash  requirements for an additional nine (9) months excluding the
costs  of  drilling  and  lease  exploration.  We  need  to raise more than $5.2
million  to  drill  the  replacement  well on the DB3 Prospect.  During 2004, we
raised  $2,539,428 from a combination of equity and debt financing. We initially
acquired  our  interest  in  the  Starr County Property from Argyle for $288,000
consisting  of  $63,000  cash and the issuance of 900,000 shares of common stock
valued  at  $0.25  per  share.  We  acquired interests in additional oil and gas
leases  covering  approximately  3,600  additional acres of land from Argyle for
$640,000  as  part  of  the  Starr  County Property.  On August 2, 2004, we paid
$204,655 to enter into a Letter Agreement to acquire the Wyandotte Property. The
Company  made two additional payments of $404,235 in August 2004 and $454,235 in
October  2004, to Argyle, along with the issuance of 2,500,000 restricted shares
of  our common stock to Davos in connection with the Letter Agreement.  Pursuant
to  the  Letter  Agreement,  Argyle is to exercise its options to acquire leases
covering  approximately 4,100 gross acres of land in St. Mary Parish, Louisiana,
and  assign  a 100% working interest in such leases to the Company.  In February
2005, we  successfully  bid  $21,924  and acquired from the State of Louisiana a
lease for oil and gas covering approximately 84 additional acres of land as part
of  the  Wyandotte  Property.  We  have  not  examined  the  title to the Leased
Property.   As  of  the  filing  of  this  report,  the Company has not executed
assignment  agreements  with  Argyle  to transfer the interests in the Wyandotte
Property  or  approximately  3,600  additional acres comprising the Starr County
Property.  The  Company  hopes to execute such assignment agreements in the near
future, of which there can be no assurance.

     We  will  need  between  $2 million and $7 million for any additional wells
that  we  decide  to  drill  on the Leased Property. We entered into a SEDA with
Cornell  to fund drilling and further exploration.  Pending the effectiveness of
a  registration  statement  covering  the  resale  of our shares of common stock
issuable  to  Cornell  under  the  SEDA and $1,000,000 of convertible debentures
which the Company issued to Cornell, Cornell is obligated to provide the Company
with  $10 million of additional financing.  We filed such registration statement
on  February  11,  2005;  however,  after receiving comments from the Commission
concerning  the  structure  of the equity and debt financing, on March 24, 2005,
the  Company  filed  a  request  to withdraw the registration statement with the
Commission.  The  Company  and Cornell intend to restructure the equity and debt
financing  transaction  to  address  the Commission's concerns with the current
structure.  We  need  the  additional  capital from Cornell or another source to
begin  drilling  on the DB3 Prospect.  We have also engaged a financial advisory
company to assist us in raising additional financing.  Except for the commitment
by  Cornell  (which  is currently being restructured and is otherwise subject to
certain  terms  and  conditions  including  the  effectiveness of a registration
statement),  we  do not have any commitments or identified sources of additional
capital  from  third  parties  or  from  our  officers,  directors  or  majority
shareholders.  We may not successfully restructure the equity and debt financing
transaction  with  Cornell on terms that are acceptable to the Company and/or to
address  the  Commission's  concerns.  We may not be successful in obtaining an
effective  registration statement.  Additional financing may not be available to
us  on  favorable  terms,  if  at  all.  If  we  are unable to raise the capital
necessary  to  drill a replacement well on the DB3 Prospect, we may be forced to
find a drilling partner in exchange for part of our mineral interest.  We cannot
raise  the  money  or  find  a suitable drilling partner, we will not be able to
drill  and our business will fail. Furthermore, the discovery of natural gas and
the  ability  to  produce it in commercial quantities is very speculative.  Even
assuming that the Company obtains the necessary financing for drilling, if we do
not  discover  and  produce  commercial  quantities of natural gas, our business
could  fail.  If  we  are  unable  to  raise  any additional financing or find a
partner to provide financing, we will not be able to continue as a going concern
for  more  than  three  (3)  months, and as a result, our business will fail and
investors  will  lose  their  entire  investment.

                                       22
<PAGE>

Financing  Provided  By  Cornell  Capital  Partners,  LP
--------------------------------------------------------

     During  the  last  quarter of 2004, we entered into a financing transaction
with Cornell, pursuant to which Cornell has provided the Company with $1,000,000
of  financing  in exchange for convertible debentures. Pending the effectiveness
of  a  registration  statement  covering  the  resale of the Company's shares of
common  stock issuable to Cornell under the convertible debentures and the SEDA,
and  certain  other  limitations,  Cornell  is  obligated to provide us with $10
million  of  additional  financing.  We  filed  such  registration  statement on
February  11,  2005;  however,  after  receiving  comments  from  the Commission
concerning the structure of the equity and debt financing, on March 24, 2005, we
filed  a request to withdraw the registration statement with the Commission. The
Company  and  Cornell  intend  to  restructure  the  equity  and  debt financing
transaction  with  Cornell  to  address  the  Commission's concerns. We need the
additional  capital  from Cornell or another source to begin drilling on the DB3
Prospect.  As  discussed  throughout  this  Annual  Report,  if we are unable to
restructure our financing arrangement with Cornell or otherwise obtain financing
under  the  SEDA,  our business could fail. We will report the material terms of
any  restructuring in a Form 8-K filed with the Commission. Certain terms of the
current  financing  are  set  forth  in  the  paragraphs  below.

Standby Equity Distribution Agreement
-------------------------------------

     On  November 19, 2004, we entered into a SEDA with Cornell. Pursuant to the
SEDA,  we  may, at our discretion, periodically sell to Cornell shares of common
stock  for a total purchase price of up to $10 million. For each share of common
stock  purchased under the SEDA, Cornell will pay the Company 100% of the lowest
volume  weighted  average  price  of  our  common  stock  on  the OTCBB or other
principal market on which the Company's common stock is traded for the five days
immediately  following  the  notice date. Cornell will retain 5% of each advance
under  the  SEDA.  Cornell  received  392,000  shares  of  our common stock as a
one-time  commitment  fee  under  the SEDA. Sloan received the issuance of 8,000
shares  of  our  common  stock  for  its  services  as  the placement agent. The
Company's  ability  to  receive  advances  under  the SEDA is subject to certain
conditions, including an effective registration statement relating to the shares
of  common stock sold under the SEDA. We are also limited to $750,000 per weekly
advance  and  $1,000,000  per  30  days.

                                       23
<PAGE>

Convertible Debentures
----------------------

     Pursuant  to  a  Securities Purchase Agreement entered into on November 19,
2004,  Cornell  purchased  $1,000,000  of  convertible  debentures,  which  was
disbursed  as  follows: (i) $500,000 on November 22, 2004 and (ii) the remaining
$500,000  on  January  27,  2005. The debentures are convertible at the holder's
option  any  time up to maturity at a conversion price equal to the lower of (i)
120%  of the closing bid price of the common stock on the date of the debentures
or  (ii)  80%  of  the lowest closing bid price of the common stock for the five
trading  days  immediately  preceding  the  conversion  date. The debentures are
secured  by  the  assets of the Company. The debentures have a two-year term and
accrue  interest  at  5% per year. Cornell received 10% of the gross proceeds of
the  convertible  debentures,  paid  directly from escrow upon each disbursement
described  above.  Source Capital received 7% of the first $500,000 disbursement
and  7%  of  the  second  $500,000  disbursement.

                                       24
<PAGE>

RISK  FACTORS

Risks  Relating  To  Our  Business
----------------------------------

IF  WE  ARE  UNABLE  TO  RAISE  ADDITIONAL FINANCING OUR BUSINESS COULD FAIL AND
INVESTORS  COULD  LOSE  THEIR  ENTIRE  INVESTMENT

     We  estimate that we can satisfy our current cash requirements for the next
three  (3)  months  based  upon  our  current  needs  and excluding the costs of
drilling  and  lease  exploration.  We  estimate  that we need to raise at least
$360,000 to satisfy our cash requirements for an additional nine (9) months.  We
need  to  raise  more than $5.2 million to drill the replacement well on the DB3
Prospect.  It is possible that we may not raise any additional financing for our
operations  or  to drill a well.  Other than the commitment by Cornell (which is
currently  being  restructured  and  is  otherwise  subject to certain terms and
conditions  including  the effectiveness of a registration statement), we do not
have  any  commitments  or  identified  sources of additional capital from third
parties  or  from  our officers, directors or majority shareholders.  Additional
financing  may not be available on favorable terms, if at all.  If we are unable
to  raise the capital necessary to drill a replacement well on the DB3 Prospect,
we  may be forced to find a drilling partner in exchange for part of our mineral
interest.   If we cannot raise enough money to drill the well or find a suitable
drilling  partner, we will not be able to drill, and our business will fail.  If
we  are  unable  to  raise any additional financing or find a partner to provide
financing,  we  will  not  be  able to continue as a going concern for more than
three  (3)  months,  and  as a result, our business will fail and investors will
lose  their  entire  investment.

WE  MAY  NOT  SUCCESSFULLY  RESTRUCTURE  OUR  FINANCING ARRANGEMENT WITH CORNELL
CAPITAL  PARTNERS,  LP  ON  TERMS  THAT  ARE  ACCEPTABLE  TO  US

     The  Company and Cornell are in the process of restructuring the equity and
debt  financing  transaction to address the Commission's concerns regarding the
current  structure.  We  need  the additional capital from Cornell or from other
sources  to  begin  drilling  a replacement well on the DB3 Prospect.  If we are
unable  to  restructure our financing arrangement with Cornell on terms that are
acceptable  to  us,  it  could  have material adverse effect on our business and
results  of  operation.

WE MAY NOT BE SUCCESSFUL IN REGISTERING THE RESALE OF SHARES OF OUR COMMON STOCK
THAT  ARE  ISSUABLE  TO  CORNELL  CAPITAL  PARTNERS, LP UNDER OUR CURRENT OR ANY
FUTURE  FINANCING  ARRANGEMENT

     On February 11, 2005, we filed a registration statement covering the resale
of  shares  of  our  common  stock  issuable  to  Cornell  under the convertible
debentures  and the SEDA.  However, after receiving comments from the Commission
concerning the structure of the equity and debt financing, on March 24, 2005, we
filed  a request to withdraw the registration statement with the Commission.  We
are  in  the  process of restructuring the equity and debt financing transaction
with  Cornell. Under our current arrangement with Cornell, our ability to obtain
funding  is  subject to certain terms and conditions including the effectiveness
of a registration statement.  We may not be successful in registering the resale
of  shares of our common stock issuable to Cornell under the current convertible
debentures  and  the  SEDA  or  any  future arrangement with Cornell.  If we are
unable  to  register  the  resale  of our common stock by Cornell, it could have
material  adverse  effect  on  our  business  and  results  of  operation.

                                       25
<PAGE>

WE  MAY BE REQUIRED TO MAKE RENTAL PAYMENTS OF APPROXIMATELY $782,000 ON CERTAIN
OIL  AND  GAS  LEASES  IN  ST. MARY PARISH, LOUISIANA IN OCTOBER 2005 TO PREVENT
LOSING  OUR  INTEREST  THEREIN

     We  will  receive  from  Argyle  an assignment of three (3) leases covering
approximately  4,080  total  acres  of  land  comprising  most  of the Wyandotte
Property.  Pursuant  to  the  terms  of  the leases, we will be required to make
rental payments in October 2005, if we have not commenced drilling or reworking,
and  with  respect to one of the leases, obtained production on the acreage. One
lease  covers approximately 2,730 acres of land and generally requires us to pay
$200  per  acre (or approximately $546,000) if we have not commenced drilling or
reworking or we have not obtained production therefrom on or before one (1) year
from  October  5,  2004,  or else the lease will terminate. If we are engaged in
drilling  or  reworking  operations  on  this  acreage, but we have not obtained
production  therefrom,  on or before such date, this lease will terminate unless
we  continuously  prosecute  such operations with no more than a ninety (90) day
lapse  between  the  abandonment  of operations on one well and the beginning of
drilling  or  reworking  operations  on  another  well.  The  other leases cover
approximately  680  acres  and  670 acres of land and require us to pay $150 per
acre  (or approximately $102,000) and $200 per acre (or approximately $134,000),
respectively,  if  we  have  not commenced drilling operations on the land or on
acreage  pooled  therewith  on  or  before  October 8, 2004 and October 5, 2004,
respectively,  or  else  they  will  terminate. We will need to raise additional
capital  to  make  the  rental  payments  if  we  have not commenced drilling or
reworking  or  obtained  production,  as the case may be. As discussed above, we
need  to also raise additional capital to begin drilling. If the rental payments
become  due  and  we  have not raised enough money to make the payments, we will
lose  our  entire interest in approximately 4,080 total acres of land comprising
most  of  the  Wyandotte  Property.

BECAUSE  OF  THE  SPECULATIVE  NATURE  OF  NATURAL  GAS  EXPLORATION,  THERE  IS
SUBSTANTIAL  RISK THAT NO COMMERCIALLY EXPLOITABLE NATURAL GAS WILL BE FOUND AND
THAT  THIS  BUSINESS  WILL  FAIL

     The  search  for  commercial  quantities  of  natural  gas as a business is
extremely  risky.  The  Leased Property may not contain commercially exploitable
quantities of natural gas. The exploration expenditures to be made by us may not
result  in  the discovery of commercial quantities of natural gas. Problems such
as unusual or unexpected formations and other conditions are involved in natural
gas  exploration  and  often result in unsuccessful exploration efforts.  We may
not  be able to discover and produce commercial quantities of natural gas from a
replacement  well  on  the  DB3  Prospect.  If  we  do  not discover and produce
commercial  quantities of natural gas, we will not have any products or services
to  offer  and  our  business  could  fail.

WE  HAVE  NOT  CONFIRMED TITLE TO THE LEASED PROPERTY OR PERFECTED TITLE THEREIN

     We  have  entered into various assignments and other agreements with Argyle
pursuant  to  which Argyle is to transfer certain oil, gas and mineral leases to
us  covering  the  Leased  Property.  Argyle  has  represented to us that Argyle
is the Lessee in the leases that Argyle is to assign to  us.  It is customary in
our  industry for leases to specifically disclaim warranties of title.  We  have
not  independently  examined the title to the Leased Property or perfected title
therein.  Title  to the Leased Property may be defective in some manner. If tile
to  the  Leased  Property  is defective, our business could  fail.

OUR AUDITORS HAVE EXPRESSED AN OPINION THAT THERE IS SUBSTANTIAL DOUBT ABOUT OUR
ABILITY  TO  CONTINUE  AS  A  GOING  CONCERN

     In its report dated March 28, 2005, our auditors, Williams & Webster, P.S.,
expressed  an  opinion  that  there  is  substantial  doubt about our ability to
continue  as a going concern. We have been in the exploration stage and have had
no  revenues since inception. For the period from March 1, 2004 ("Inception) to
December  31,  2004,  we  recorded a net loss of $5,511,069.  As of December 31,
2004, we had deficit accumulated during the exploration stage of $5,511,069. The
accompanying  financial  statements have been prepared assuming that the Company
will  continue  as a going concern.  The financial statements do not include any
adjustments  relating  to  the recoverability of recorded assets, or the amounts
and  classification  of  liabilities  that  might  be necessary in the event the
Company  cannot  continue  in  existence. Our continuation as a going concern is
dependent  upon  future  events,  including  the  acquisition  of more than $5.2
million of additional financing (discussed above) to drill a replacement well on
the  DB3  Prospect.  If  we  are unable to continue as a going concern, you will
lose  your  entire  investment.

                                       26
<PAGE>

WE  ARE  THE  DEFENDANT  IN VARIOUS LAWSUITS WHICH COULD HAVE A MATERIAL ADVERSE
EFFECT  ON  OUR BUSINESS, FINANCIAL POSITION, LIQUIDITY AND RESULTS OF OPERATION

     On  October  8,  2004,  Landmark filed a lawsuit against Falcon Natural Gas
Corporation  in  the  125th  District Court of Harris County, Texas. The Company
issued  a press release and posted on the Company's website a Report prepared by
Landmark,  which  Landmark  claims  was  in  violation  of  an agreement between
Landmark  and  the  Company.  The  Company issued a corrective press release and
removed  the  Report  from  its website. Landmark claims that Falcon Natural Gas
Corporation  breached  its  agreement with Landmark by engaging Market Movers to
create and distribute an Advertisement that quotes from and paraphrases portions
of  the Report and repeatedly refers to the Report as a report of "Halliburton,"
"Halliburton  Company," and "a Halliburton Company." Landmark is claiming breach
of  contract  and  injury  to its business reputation and trade names and marks.
Landmark  is  seeking  unspecified  damages,  reasonable  attorneys' fees, court
costs,  and  injunctive relief. The Company has generally denied the allegations
of  Landmark.  Landmark has agreed that if, after discovery, it finds that there
is no basis for a claim that the Company had knowledge of, or was involved with,
the  commissioning  or  financing  of  the  Advertisement, Landmark will dismiss
Falcon  Natural  Gas Corporation from the lawsuit. Landmark is currently seeking
to obtain sworn testimony through deposition of the third party that distributed
the Advertisement. On November 3, 2004, Falcon Gas, an unaffiliated company with
its  principal  place of business in Houston, Texas, filed a lawsuit against the
Company in the United States District Court, Southern District of Texas, Houston
Division.  Falcon  Gas is alleging trademark infringement and unfair competition
arising  from  the Company's use of the term "Falcon Natural Gas" as a corporate
name  and service mark in connection with the promotion, advertising, offer, and
sale  of  services  which  Falcon  Gas  claims  are substantially similar to the
services  offered  by  Falcon  Gas.  Falcon  Gas  alleges  that  it is a leading
developer  of  market-area  high-deliverability, multi-cycle natural gas storage
facilities.  Falcon  Gas  is  seeking  injunctive  relief as well as unspecified
damages  and payments to the Company of profits, gains, and advantages resulting
from  the  alleged  activities,  reasonable attorneys' fees, and court costs. We
believe  that  we have defenses to the cases discussed herein and are vigorously
contesting  these  matters.  An  unfavorable  outcome on either of these matters
could  have  a  material  adverse  effect  on  our business, financial position,
liquidity  or  results  of operations. In addition, we could be forced to change
our  corporate  name, and that of our subsidiary, if we lose the lawsuit brought
by  Falcon  Gas.

A  COMPANY  WHICH  IS  NOT  RELATED  TO  US  HAS  DISTRIBUTED INVESTOR RELATIONS
MATERIALS  WITHOUT  OUR  AUTHORIZATION  WHICH  MAY  CONTAIN  FALSE OR MISLEADING
STATEMENTS  AND  INVESTORS  IN  US  SHOULD  BE  CAUTIOUS  AND  NOT  RELY  ON THE
INFORMATION  CONTAINED  IN  THE  MATERIALS

                                       27
<PAGE>

     The  Company has become aware of investor relations materials ("Materials")
prepared and distributed by Market Movers newsletter ("Market Movers") which was
released  on  at  least  three  separate  occasions  during  2004  and 2005. The
Materials  may  contain  false  or  misleading  statements.  The  Company,  its
management,  Halliburton  Company,  and  Landmark  Graphics  Corporation are not
affiliated  with  Market Movers, did not pay for the preparation or distribution
of  the  Materials,  and did not approve either the information contained in the
Materials  or  its  public  dissemination. The Market Movers Materials contained
information  about  the  Leased Properties, studies and reports completed on the
Leased  Properties,  potential  gains  from  an  investment  in the Company, and
information  regarding  the  price  of  natural  gas and future prospects of the
Company  which  were  not  endorsed  by  the Company.  The Company disclaims any
association  with  the  use  of  this  information  by  investors for investment
decisions  and  invites investors to rely only on the Company's filings with the
Commission.  In  making  their  investment  decision  in  the  Company, existing
stockholders  and  potential  investors  should  not  rely  on  the  information
contained  in  the Materials or any future material distributed by Market Movers
as  such  information  may  be  false  or  misleading.

BECAUSE  WE  HAVE  NOT  COMMENCED  BUSINESS  OPERATIONS  AND  WE  HAVE A LIMITED
OPERATING  HISTORY,  WE  FACE  A  HIGH  RISK  OF  BUSINESS  FAILURE

     We  have a limited operating history upon which an evaluation of our future
performance  can  be  made.  You  should  be  aware of the difficulties normally
encountered  by  new  natural gas exploration companies similarly situated to us
and  the  high  rate  of  failure  of  such enterprises. Many of these risks and
uncertainties  are  described  in  more  detail elsewhere in this Risk Factors"
section.  If  we  do  not  successfully  address these, then our future business
prospects  will  be significantly limited and, as a result, the trading price of
our  common  stock  would  likely  decline.  Our  likelihood  of success must be
considered  in  light of the problems, expenses, difficulties, complications and
delays  encountered  in  connection  with the exploration of the Leased Property
that we plan to undertake. These potential problems include, but are not limited
to,  unanticipated  problems  relating  to exploration, and additional costs and
expenses  that may exceed current estimates.  You should consider the likelihood
of  our future success to be highly speculative in view of our limited operating
history,  as well as the complications frequently encountered by other companies
in  the  early stages of development.  If we realize problems, additional costs,
difficulties,  complications  or  delays  in  connection  with  our  exploration
activities,  it  will have a material adverse effect on our business, results of
operations  and  financial  condition, and as a result, our business could fail.

WE  ARE  RELIANT ON KEY MANAGEMENT AND CONTRACTORS AND IF WE LOSE ANY OF OUR KEY
MANAGEMENT,  IT  COULD  HAVE  A  MATERIAL  ADVERSE  EFFECT  ON  OUR BUSINESS AND
OPERATIONS

     Our  success  depends  upon  the  personal efforts and abilities of Fred B.
Zaziski,  a  Director  of  the  Company  and  our  President and Chief Executive
Officer, and Massimiliano Pozzoni, a Director and our Vice President of Business
Development,  Secretary  and  Treasurer  (Principal  Accounting  Officer).  Our
ability to operate and implement our exploration activities is heavily dependent
on  the  continued  service  of  Messrs. Zaziski and Pozzoni, and our ability to
attract  qualified  contractors  on  an  as-needed  basis.  We have entered into
one-year  employment  agreements  with  Mr.  Zaziski and Mr. Pozzoni expiring in
October  2005  and  March 2005, respectively.  We face continued competition for
Messrs.  Zaziski and Pozzoni (or other key management should we desire to attain
the same) and such contractors.  We cannot be certain that either Mr. Zaziski or
Mr.  Pozzoni  will  renew their respective employment agreements or that we will
otherwise  be  able  to  retain Messrs. Zaziski or Pozzoni or attract and retain
such  contractors.  The  loss  of Mr. Zaziski or Mr. Pozzoni or our inability to
attract  and  retain  qualified  contractors  on an as-needed basis could have a
material  adverse effect on our business and operations. We do not maintain life
insurance  on  any  of  our  executive  officers  or  directors.

                                       28
<PAGE>

BECAUSE  MR. POZZONI HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING
TO  DEVOTE  A  SUFFICIENT  AMOUNT  OF  TIME  TO  OUR  BUSINESS  OPERATIONS

     Massimiliano  Pozzoni is the Chief Executive Officer and a Director of Gulf
Coast Oil & Gas Inc., formerly Otish Mountain Diamond Company, a publicly traded
company  in  the  U.S.  The  current  business  activities of Gulf Coast require
approximately  five  (5)  hours  of  Mr.  Pozzoni's time per week.  Mr. Pozzoni
currently  dedicates  more  than  forty (40) hours a week to the Company.  It is
possible that the demands on Mr. Pozzoni from Gulf Coast could increase with the
result that he may have to devote less time as an executive officer and director
of  our  Company.  As  a  result, Mr. Pozzoni may not possess sufficient time to
serve  as  an  executive  officer and a director of our company.  If Mr. Pozzoni
does  not  have  sufficient  time to serve our Company, it could have a material
adverse  effect  on  our  business  and  operations.

OUR  EXECUTIVE  OFFICERS  AND  DIRECTORS  ONLY  OWN  APPROXIMATELY  8.03% OF OUR
OUTSTANDING  COMMON STOCK AND COULD BE REPLACED UPON A VOTE OF A MAJORITY OF OUR
SHAREHOLDERS  WHICH  COULD  HAVE  A  MATERIAL  ADVERSE  AFFECT  ON  OUR BUSINESS

     Massimiliano  Pozzoni,  a director of the Company and our Vice President of
Business  Development,  Secretary  and  Treasurer (Principal Financial Officer),
owns  approximately  8.03%  of  the outstanding shares of our common stock as of
April  7,  2005.  Fred  B.  Zaziski,  a  director  of  the Company and our Chief
Executive  Officer,  does  not  currently own any shares of our common stock.  A
majority  of  our  common  stock  is held by many shareholders who, voting their
shares  of  common stock, could effect a change of our directors and management,
which  could  have  a  material  adverse  affect  on  our  business.

BECAUSE  OF THE INHERENT DANGERS INVOLVED IN NATURAL GAS EXPLORATION, THERE IS A
RISK  THAT  WE  MAY  INCUR  LIABILITY  OR  DAMAGES  AS  WE  CONDUCT OUR BUSINESS

     The search for valuable minerals involves numerous hazards. As a result, we
may  become  subject  to  liability  for  such  hazards,  including  pollution,
explosions  and other hazards against which we cannot insure or against which we
may  elect  not  to  insure. In addition, we may be subject to certain liability
with  respect  to certain federal and state environmental laws. The Company does
not  maintain  insurance  against such hazards.  The payment of such liabilities
may  have  a  material  adverse  effect  on our financial position, liquidity or
results  of  operations.

OUR  FUTURE CAPITAL NEEDS MAY NOT BE MET AND WE MAY FORCED TO ABANDON OR CURTAIL
OUR  BUSINESS  PLAN  OR  OPERATIONS

                                       29
<PAGE>

     Our growth and continued operations could be impaired by limitations on our
access  to  capital  markets. If the market for the natural gas industry were to
weaken  for  an  extended  period of time, our ability to raise capital would be
substantially  reduced.  Capital  from  outside sources may not be available. If
such  financing  is  available,  it may involve issuing securities senior to our
common  stock or equity financings which will be dilutive to existing holders of
our  common stock.  If our future capital needs are not met, we may be forced to
abandon  or  curtail  our  business  plan  or  operations.

EVEN IF WE DISCOVER COMMERCIAL QUANTITIES OF NATURAL GAS ON THE LEASED PROPERTY,
WE  MAY  NOT  BE  ABLE  TO  SUCCESSFULLY  OBTAIN  COMMERCIAL  PRODUCTION

     Even  if our exploration programs are successful in establishing commercial
quantities  of  natural gas, we will still require additional funds to place the
Leased  Property  into  production.  If  we  are not able to successfully obtain
commercial  productions,  our  business,  results  of  operation  and  financial
condition  could  be  adversely  affected.

OUR  INDUSTRY  IS SUBJECT TO INTENSE COMPETITION AND COMPETITIVE PRESSURES COULD
ADVERSELY  AFFECT  OUR  BUSINESS,  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     The  natural gas industry is very competitive.  Natural gas prices are at a
10-year  high.  The  price  of  natural  gas is affected by continuous shifts in
supply  and demand.  Natural gas is becoming the preferred source of energy over
fossil  fuels because it is an environmentally friendlier source of energy.  The
demand  for  natural  gas  is  increasing  and  whether  or not their will be an
adequate  supply  is  very  uncertain.  Numerous  well-established companies are
focusing  significant  resources  on exploration and may be able to compete more
effectively  than  the  Company.  However,  we  do  not expect that the price of
natural  gas  will  drop  in  the  near future.  Due to these factors, we expect
competition  to  intensify,  particularly  with  respect  to  the acquisition of
natural  gas  exploration  services  from  independent  contractors.

     In  an  effort  to  achieve  operating  efficiency,  we rely on independent
contractors  to  conduct our operations.  For example, we have relied on various
independent  contractors  to  provide  technical,  geological,  geophysical  and
financial  reports  on  the  Leased Property.  We  engaged  Stokes  to  provide
engineering  support  in preparation for drilling, and to supervise all drilling
operations, on the DB3 Prospect. Because of the current high energy prices, lead
times  necessary  to  acquire  drilling  rigs  or  the  services  of independent
contractors  in  the industry are high. We are negotiating  with  an independent
contractor  to  be  the  operator  and conduct drilling  on  the  DB3  Prospect.
However, as the competition in the natural gas industry  intensifies, it will be
harder  for  us  to  obtain  a  drilling  rig  or  the services  of  independent
contractors  to  conduct  our  operations.  As  a  result, we may not be able to
compete  successfully  and  competitive  pressures  may  adversely  affect  our
business,  results  of  operations  and  financial  condition.

WE  MAY  NOT  BE  ABLE TO MANAGE GROWTH EFFECTIVELY AND OUR BUSINESS, RESULTS OF
OPERATIONS  AND  FINANCIAL  CONDITION  COULD  BE  ADVERSELY  AFFECTED

                                       30
<PAGE>

     If we grow, this growth could place a significant strain on our managerial,
operational  and  financial  resources.  Further,  if  we  enter into additional
contracts,  we  could  be required to manage multiple relationships with various
customers  and  other  third parties. These requirements could be exacerbated in
the  event  of  further growth of the Company or in the number of its contracts.
Our  systems,  procedures  or  controls  may  not  be  adequate  to  support our
operations and the Company's management may not be able to achieve the execution
necessary  to  successfully  implement  the  Company's  business plan. If we are
unable  to  manage  growth  effectively, our business, results of operations and
financial  condition  will  be  adversely  affected.

Risks  Relating  To  Our  Common  Stock
---------------------------------------

IF  THERE'S  A  MARKET  FOR  OUR  COMMON  STOCK, OUR STOCK PRICE MAY BE VOLATILE

     If  there's  a  market for our common stock, we anticipate that such market
would  be  subject  to  wide  fluctuations  in  response  to  several  factors,
including,  but  not  limited  to:

     -    actual  or  anticipated  variations  in  our  results  of  operations;
     -    our  ability  or  inability  to  generate  revenues;
     -    increased  competition;  and
     -    conditions  and  trends  in  the  natural  gas  industry.

     Our  common  stock is traded on the OTCBB. In recent years the stock market
in  general has experienced extreme price fluctuations that oftentimes have been
unrelated to the operating performance of the affected companies. Similarly, the
market  price of our common stock may fluctuate significantly based upon factors
unrelated  or  disproportionate  to  our  operating  performance.  These  market
fluctuations, as well as general economic, political and market conditions, such
as  recessions,  interest  rates  or  international  currency  fluctuations  may
adversely  affect  the  market  price  of  our  common  stock.

WE  HAVE NOT CREATED A MARKET TO SUSTAIN THE SIGNIFICANT AMOUNT OF SHARES IN OUR
PUBLIC  FLOAT

     We  have a significant number of shares of common stock in our public float
that were issued prior to the Exchange and change in our business focus. We have
not,  however,  created a market for our common stock.  We may not have adequate
time  to  create  such  a market prior to the time our shareholders resell their
shares.  If  our shareholders resell their shares before we can create a market,
it  may  exert  downward  pressure  on  the  price  of  our  common  stock.

WE  SOLD  $1,000,000  OF  CONVERTIBLE  DEBENTURES  AND  WE HAVE AN OBLIGATION TO
REGISTER  THE  RESALE  OF SHARES OF OUR COMMON STOCK UNDERLYING SUCH CONVERTIBLE
DEBENTURES WHICH MAY CAUSE DILUTION OF SHAREHOLDERS AND A SIGNIFICANT DECLINE IN
OUR  STOCK  PRICE

     We  sold  $1,000,000  of  Convertible  Debentures  to  Cornell which have a
two-year  term,  accrue interest at 5% per year, and are convertible into shares
of  our  common  stock  at  the  holder's  option  any  time up to maturity at a
conversion  price equal to the lower of (i) 120% of the closing bid price of the
common stock on the date of the debentures or (ii) 80% of the lowest closing bid
price  of  the  common stock for the five trading days immediately preceding the
conversion  date.  We  are obligated to register the resale of the shares of our
common  stock  issuable  upon  conversion  of the Convertible Debentures. If the
Debentures  are  converted  and/or  subsequently  resold it will have a dilutive
effect  on shareholders and there could possibly be a significant decline in our
stock  price.

                                       31
<PAGE>

A DEFAULT BY US UNDER THE CONVERTIBLE DEBENTURES WOULD ENABLE THE HOLDERS OF THE
CONVERTIBLE  DEBENTURES  TO  TAKE  CONTROL  OF  SUBSTANTIALLY ALL OF OUR ASSETS.

     We  agreed  to  secure  the  Convertible  Debentures pursuant to a Security
Agreement  under  which  we  pledged  substantially all of our assets, including
without  limitation  our machinery, equipment, furniture, furnishings, fixtures,
signs,  lights, tools, parts, supplies and motor vehicles, all of our inventory,
all  of  our  contract  rights  and  general  intangibles, all of our documents,
warehouse receipts, instruments and chattel paper, all of our accounts and other
receivables,  instruments  or  other  forms of obligations and rights to payment
together  with the proceeds thereof, to the extent assignable, all of our rights
under  all  present  and future authorizations, permits, licenses and franchises
issued  or  granted  in connection with the operations of any of its facilities,
and  all  products  and  proceeds  (including,  without  limitation,  insurance
proceeds) from the above-described assets. A default by us under the Convertible
Debentures  would enable the holders to take control of substantially all of our
assets.  The  holders of the Convertible Debentures have no operating experience
in  our  industry.  If  we  were  to  default and the holders of the Convertible
Debentures  were  to  take  over  control of our Company, they could force us to
substantially  curtail  or  cease  our  operations.  If this were to happen, any
investment  in  our  Company  would  become  substantially  devalued.

OUR  COMMON  STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SECURITIES AND
EXCHANGE  COMMISSION  WHICH LIMITS THE TRADING MARKET IN OUR COMMON STOCK, MAKES
TRANSACTIONS  IN  OUR  COMMON  STOCK  CUMBERSOME  AND MAY REDUCE THE VALUE OF AN
INVESTMENT  IN  OUR  COMMON  STOCK

     Our  common  stock  is considered a "penny stock" as defined in Rule 3a51-1
promulgated  by  the Securities and Exchange Commission (the "Commission" or the
"SEC")  under  the  Exchange  Act. In general, a security which is not quoted on
NASDAQ or has a market price of less than $5 per share where the issuer does not
have  in  excess  of $2,000,000 in net tangible assets (none of which conditions
the  Company  meets)  is  considered  a penny stock. The Commission's Rule 15g-9
regarding  penny  stocks  impose  additional  sales  practice  requirements  on
broker-dealers  who  sell  such  securities  to  persons  other than established
customers  and  accredited investors (generally persons with net worth in excess
of  $1,000,000  or  an annual income exceeding $200,000 or $300,000 jointly with
their  spouse).  For  transactions  covered by the rules, the broker-dealer must
make  a  special  suitability  determination  for  the purchaser and receive the
purchaser's  written  agreement  to the transaction prior to the sale. Thus, the
rules  affect the ability of broker-dealers to sell our common stock should they
wish  to  do so because of the adverse effect that the rules have upon liquidity
of  penny  stocks.  Unless  the transaction is exempt under the rules, under the
Securities  Enforcement  Remedies  and  Penny  Stock  Reform  Act  of  1990,
broker-dealers  effecting  customer transactions in penny stocks are required to
provide  their customers with (i) a risk disclosure document; (ii) disclosure of
current  bid  and ask quotations if any; (iii) disclosure of the compensation of
the  broker-dealer  and its sales personnel in the transaction; and (iv) monthly
account  statements  showing  the  market  value of each penny stock held in the
customer's  account.  As  a result of the penny stock rules the market liquidity
for  our  common  stock  may  be  adversely  affected by limiting the ability of
broker-dealers  to sell our common stock and the ability of purchasers to resell
our  common  stock.

     In  addition,  various  state  securities  laws  impose  restrictions  on
transferring  "penny  stocks" and as a result, investors in our common stock may
have  their  ability  to  sell  their  shares  of  the  common  stock  impaired.

WE  DO  NOT  EXPECT  TO  PAY  DIVIDENDS  FOR  THE  FORESEEABLE  FUTURE

     We  have not declared or paid, and do not anticipate declaring or paying in
the  foreseeable  future, any cash dividends on our common stock. Our ability to
pay  dividends  is  dependent  upon, among other things, our future earnings, if
any,  as  well  as  our operating and financial condition, capital requirements,
general  business  conditions  and  other  pertinent  factors.  Furthermore, any
payment  of  dividends  by  us  is  subject  to  the  discretion of our board of
directors.  Accordingly,  dividends  may  not  ever be paid on our common stock.

OFF BALANCE SHEET ARRANGEMENTS

     We  do  not  have  any  off  balance  sheet  arrangements  that have or are
reasonably likely to have a current or future effect on our financial condition,
changes  in  financial  condition,  revenues or expenses, results of operations,
liquidity,  capital  expenditures,  or  capital  resources  that  is material to
investors.

                                       32
<PAGE>

ITEM 7.     FINANCIAL STATEMENTS


                            FALCON NATURAL GAS CORP.

                        CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2004


<PAGE>

                            FALCON NATURAL GAS CORP.

                                TABLE OF CONTENTS

REPORT  OF  INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING  FIRM     1


FINANCIAL  STATEMENTS

     Consolidated  Balance  Sheet                                 2
     Consolidated  Statement  of  Operations                      3
     Consolidated  Statement  of  Stockholders'  Equity           4
     Consolidated Statement of Cash Flows                         5

NOTES TO FINANCIAL STATEMENTS                                     6

<PAGE>

Board of Directors
Falcon  Natural  Gas  Corp.
Houston,  Texas

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------

We  have  audited  the accompanying consolidated balance sheet of Falcon Natural
Gas  Corp.,  (an  exploration  stage  company)  as of December 31, 2004, and the
related  consolidated  statements  of  operations, stockholders' equity and cash
flows  for  the  ten  month  period  then  ended.  These  consolidated financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audit.

We  conducted  our  audit 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
consolidated  financial  statements are free of material misstatement.  An audit
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the  consolidated financial statements.  An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that  our  audit  provides  a  reasonable  basis  for  our opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Falcon Natural Gas
Corp.  as  of December 31, 2004 and the results of its operations, stockholders'
equity and its cash flows for the ten month period then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

As  discussed  in  Note  2,  the Company has been in the exploration stage since
inception, has an accumulated deficit, and has no revenues.  These factors raise
substantial  doubt  about  the Company's ability to continue as a going concern.
Management's  plans  regarding  those  matters  are  described  in  Note 2.  The
consolidated  financial  statements  do  not  include any adjustments that might
result  from  the  outcome  of  this  uncertainty.

Williams  &  Webster,  P.S.
Certified  Public  Accountants
Spokane,  Washington
March  28,  2005

<PAGE>

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2004

<S>                                                                           <C>
ASSETS

  CURRENT ASSETS
    Cash and cash equivalents                                         $       162,227
    Accounts receivable                                                         2,000
                                                                      ----------------
      Total Current Assets                                                    164,227
                                                                      ----------------

  PROPERTY & EQUIPMENT
    Equipment                                                                   4,088
    Less accumulated depreciation                                                (618)
                                                                      ----------------
      Total Property & Equipment                                                3,470
                                                                      ----------------

  OTHER ASSETS
    Oil and gas leases                                                      1,582,541
    Prepaid expenses                                                           50,000
    Rent deposit                                                                1,243
                                                                      ----------------
      Total Other Assets                                                    1,633,784
                                                                      ----------------

  TOTAL ASSETS                                                        $     1,801,481
                                                                      ================

LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES
    Accounts payable                                                  $         7,349
    Accrued liabilities                                                         6,959
    Advance from shareholder                                                      100
    Note payable - related party                                                3,216
    Note payable                                                              140,000
    Interest payable                                                            4,854
                                                                      ----------------
      Total Current Liabilities                                               162,478
                                                                      ----------------

  LONG TERM LIABILITIES
    Convertible debt                                                          500,000
    Discount on convertible debt                                             (126,979)
                                                                      ----------------
      Total Long Term Liabilities                                             373,021

  COMMITMENTS AND CONTINGENCIES                                                     -
                                                                      ----------------

  STOCKHOLDERS' EQUITY
    Common stock, $0.00001 par value; 200,000,000 shares authorized,
      62,182,000 shares issued and outstanding                                    621
    Additional paid-in capital                                              6,776,430
    Deficit accumulated during exploration stage                           (5,511,069)
                                                                      ----------------
      Total Stockholders' Equity                                            1,265,982
                                                                      ----------------

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $     1,801,481
                                                                      ================
</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------

                                                March 1, 2004
                                               (Inception) to
                                                 December 31
                                                     2004
                                       -----------------------------
REVENUES                               $                           -
                                       -----------------------------
<S>                                                 <C>
GENERAL AND ADMINISTRATIVE EXPENSES
  Depreciation and amortization                               6,139
  Investor relations                                        115,750
  Advisory services                                       3,833,790
  Lease exploration                                         571,504
  Internet/webhosting                                        20,227
  Officers & directors fees                                 136,977
  Office and general expenses                                15,937
  Professional fees                                         135,386
  Travel and entertainment                                   22,779
  Rent and related expenses                                  23,746
                                      ------------------------------
     Total Expenses                                       4,882,235
                                      ------------------------------

LOSS FROM OPERATIONS                                     (4,882,235)
                                      ------------------------------

OTHER INCOME (EXPENSES)
  Other income                                                  500
  Financing fees                                           (500,000)
  Interest expense                                         (129,854)
  Interest income                                               520
                                      ------------------------------
     Total Other Income (Expenses)                         (628,834)
                                      ------------------------------

LOSS BEFORE INCOME TAXES                                 (5,511,069)

PROVISION FOR TAXES                                               -
                                      ------------------------------

NET LOSS                              $                  (5,511,069)
                                      ==============================

NET LOSS PER COMMON SHARE,
  BASIC AND DILUTED                   $                       (0.09)
                                      ==============================

WEIGHTED AVERAGE NUMBER
  OF COMMON SHARES OUTSTANDING,
  BASIC AND DILUTED                                      60,286,557
                                      ==============================
</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
----------------------------------------------

                                                                                                      Deficit
                                                                 Common Stock                       Accumulated
                                                            ---------------------     Additional       During         Total
                                                             Number of                 Paid-in      Exploration   Stockholders'
                                                               Shares     Amount       Capital         Stage         Equity
                                                            -----------  ---------   ------------   -----------    ----------
<S>                                                             <C>          <C>          <C>            <C>           <C>
Stock issued for $0.001 per share for services
  on March 1, 2004                                          20,000,000   $     200   $     19,800   $         -    $   20,000

Shares issued for acquisition of leases at $0.25 per share     900,000           9        224,991             -       225,000

Reverse merger acquisition, recapitalization,
  and stock split                                           45,000,000         450         (4,671)            -        (4,221)

Shares issued  for cash at $1.00 per share
  net of expenses of $60                                       632,000           6        631,934             -       631,940

Shares issued for cash at approximately $0.93 per
  share net of expenses of $12                               1,500,000          15      1,399,973             -     1,399,988

Shares issued for services at $1.25 per share                   50,000           -         62,500             -        62,500

Shares issued for services at $1.42 per share                2,500,000          25      3,549,975             -     3,550,000

Shares issued for services at $1.34 per share                  100,000           1        133,999             -       134,000

Shares issued for services at $1.32 per share                  100,000           1        131,999             -       132,000

Rescission of shares from officer received at merger        (9,000,000)        (90)           934             -           844

Shares issued for financing costs and charges related
  to services provided                                         400,000           4        499,996             -       500,000

Beneficial conversion feature of convertible debt                    -           -        125,000             -       125,000

Net loss for period ending December 31, 2004                         -           -              -    (5,511,069)   (5,511,069)
                                                            -----------  ---------   ------------   -----------    ----------
BALANCE, December 31, 2004                                  62,182,000   $     621   $  6,776,430   $(5,511,069)   $1,265,982
                                                            ===========  =========   ============   ===========    ==========

</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FROM MARCH 1, 2004 (INCEPTION) TO DECEMBER 31, 2004
---------------------------------------------------
<S>                                                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                  $            (5,511,069)

  Adjustments to reconcile net loss to net cash
     (used) by operating activities:
  Depreciation and amortization                                               6,139
  Common stock issued for services                                        3,899,332
  Interest expense for beneficial conversion feature                        125,000
  Common stock issued for financing costs and charges                       500,000

  Changes in assets and liabilities:
    Decrease (increase) in rent deposit                                      (1,243)
    Decrease (increase) in accounts receivable                               (2,000)
    Decrease (increase) in prepaid expenses                                 (50,000)
    Increase (decrease) in accounts payable                                   3,675
    Increase (decrease) in accrued liabilities                                6,959
    Increase (decrease) in interest payable                                   4,854
    Increase (decrease) in advance from shareholder                             100
                                                            ------------------------
          Net cash used by operating activities                          (1,018,253)
                                                            ------------------------

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
    Purchase of equipment                                                    (4,088)
    Oil and gas lease                                                    (1,357,541)
    Cash received through recapitalization and acquisition                    2,681
                                                            ------------------------
         Net cash used by investing activities                           (1,358,948)
                                                            ------------------------

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
    Proceeds from notes payable                                             140,000
    Proceeds from convertible debt                                          367,500
    Issuance of common stock for cash                                     2,031,928
                                                            ------------------------
       Net cash provided by financing activities                          2,539,428

  Net increase (decrease) in cash and cash equivalents                      162,227

Cash and cash equivalents beginning of period                                     -
                                                            ------------------------

Cash and cash equivalents end of period                     $               162,227
                                                            ========================

SUPPLEMENTAL CASH FLOW DISCLOSURES:
  Income taxes paid                                                                -
                                                            ========================
  Interest paid                                                                    -
                                                            ========================

NON-CASH INVESTING AND FINANCING TRANSACTIONS:
  Common stock issued for services                          $             3,899,332
  Interest expense for beneficial conversion feature        $               125,000
  Common stock issued for financing costs and charges       $               500,000
</TABLE>

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

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

NOTE  1  -  ORGANIZATION  AND  DESCRIPTION  OF  BUSINESS

Falcon  Natural Gas Corporation was incorporated on March 1, 2004.  On April 16,
2004,  Countryside  Review,  Inc.  entered  into  a  reverse  merger transaction
agreement  with  Falcon Natural Gas Corporation, which transaction was completed
on  May  6,  2004. In contemplation of this transaction and a change in business
focus,  Countryside  Review,  Inc.  changed its name to Falcon Natural Gas Corp.
("the  Company")  effective  April  12,  2004.  As a result of this transaction,
Falcon  Natural Gas Corporation became a wholly-owned subsidiary.  The Company's
operations  are  conducted  through this wholly-owned subsidiary.  The Company's
year-end  is  December  31.

The  Company  is  in  the exploration stage as a natural gas exploration company
and,  as  such,  has not realized any revenues from its planned operations.  The
Company's  principal  office  is  located  in  Houston,  Texas.

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

This  summary  of  significant  accounting  policies  is  presented to assist in
understanding  the financial statements.  The financial statements and notes are
representations  of  the  Company's  management,  which is responsible for their
integrity  and  objectivity.  These  accounting  policies  conform to accounting
principles  generally accepted in the U.S. and have been consistently applied in
the  preparation  of  the  financial  statements.

Accounting  Methods
-------------------
The  Company's  financial  statements  are  prepared  using the accrual basis of
accounting  in  accordance  with accounting principles generally accepted in the
United  States  of  America.

Accounts  Receivable
--------------------
The  Company  carries  its  accounts  receivable  at  cost.

Recent  Accounting  Pronouncements
----------------------------------
In  December  2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 153. This statement addresses the measurement
of  exchanges  of  nonmonetary  assets.  The  guidance  in  APB  Opinion No. 29,
"Accounting  for  Nonmonetary  Transactions,"  is  based  on  the principle that
exchanges  of  nonmonetary  assets should be measured based on the fair value of
the  assets  exchanged.  The guidance in that opinion, however, included certain
exceptions  to that principle. This statement amends Opinion 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and replaces it
with  a  general  exception for exchanges of nonmonetary assets that do not have
commercial  substance.  A  nonmonetary  exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. This statement is effective for financial statements for fiscal
years  beginning  after  June  15,  2005.  Earlier  application is permitted for
nonmonetary  asset  exchanges  incurred  during fiscal years beginning after the
date  of  this  statement  is  issued.  Management believes the adoption of this
statement  will  have  no  impact  on  the  financial statements of the Company.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

In  December  2004, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards  No.  152,  which amends FASB statement No. 66,
"Accounting for Sales of Real Estate," to reference the financial accounting and
reporting guidance for real estate time-sharing transactions that is provided in
AICPA Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing
Transactions."  This  statement  also  amends FASB Statement No. 67, "Accounting
for  Costs and Initial Rental Operations of Real Estate Projects," to state that
the  guidance  for (a) incidental operations and (b) costs incurred to sell real
estate  projects  does  not apply to real estate time-sharing transactions.  The
accounting  for  those  operations  and  costs is subject to the guidance in SOP
04-2.  This  statement  is  effective  for financial statements for fiscal years
beginning  after  June  15,  2005.  Management  believes  the  adoption  of this
statement  will  have  no  impact  on  the  financial statements of the Company.

In  December 2004, the Financial Accounting Standards Board issued a revision to
Statement  of  Financial  Accounting  Standards  No. 123R, "Accounting for Stock
Based  Compensation."  This statement supersedes APB Opinion No. 25, "Accounting
for  Stock  Issued to Employees," and its related implementation guidance.  This
statement  establishes standards for the accounting for transactions in which an
entity  exchanges  its  equity  instruments  for  goods  or  services.  It  also
addresses  transactions  in  which  an entity incurs liabilities in exchange for
goods  or  services  that  are  based  on  the fair value of the entity's equity
instruments  or that may be settled by the issuance of those equity instruments.
This  statement  focuses  primarily  on  accounting for transactions in which an
entity  obtains  employee  services  in  share-based payment transactions.  This
statement  does  not  change  the  accounting  guidance  for share based payment
transactions  with  parties  other  than  employees  provided  in  Statement  of
Financial  Accounting  Standards  No.  123.  This statement does not address the
accounting  for  employee  share  ownership  plans,  which  are subject to AICPA
Statement  of Position 93-6, "Employers' Accounting for Employee Stock Ownership
Plans."  The  Company  has  not  yet  determined  the  impact  to  its financial
statements  from  the  adoption  of  this  statement.

In  November  2004,  the  Financial  Accounting  Standards  Board  (FASB) issued
statement  of  financial  accounting  standards  No.  151,  "Inventory Costs- an
amendment  of ARB No. 43, Chapter 4."  This statement amends the guidance in ARB
No.  43,  Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal
amounts  of  idle facility expense, freight, handling costs, and wasted material
(spoilage).  Paragraph  5  of  ARB 43, Chapter 4, previously stated that "under
some  circumstances,  items  such  as idle facility expense, excessive spoilage,
double  freight, and rehandling costs may be so abnormal as to require treatment
as  current  period  charges"  This  statement  requires  that  those  items be
recognized  as  current-period  charges  regardless  of  whether  they  meet the
criterion of "so abnormal." In addition, this statement requires that allocation
of  fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. This statement is effective for inventory
costs  incurred  during  fiscal  years  beginning  after  June  15, 2005.  As of
December 31, 2004, the Company does not have inventory and believes the adoption
of  this  statement  will not have any immediate material impact on the Company.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

In  May  2003,  the  Financial  Accounting  Standards  Board issued Statement of
Financial  Accounting  Standards  No.  150,  "Accounting  for  Certain Financial
Instruments  with  Characteristics  of Both Liabilities and Equity" (hereinafter
"SFAS No. 150"). Statement of Financial Accounting Standards No. 150 establishes
standards  for  classifying  and  measuring  certain  financial instruments with
characteristics  of  both  liabilities  and  equity  and  requires  that  those
instruments  be  classified  as liabilities in statements of financial position.
Previously,  many  of  those instruments were classified as equity. Statement of
Financial  Accounting  Standards  No. 150 is effective for financial instruments
entered  into  or  modified after May 31, 2003 and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. The Company
has  determined  that  there  was no impact from the adoption of this statement.

Cash  and  Cash  Equivalents
----------------------------
For  purposes  of the statements of cash flows, the Company considers all highly
liquid investments (or short-term debt) with original maturities of three months
or  less  to  be  cash  equivalents.

Concentration  of  Credit  Risk
-------------------------------
The  Company  maintains  its cash in one commercial account at a major financial
institution.  Although  the financial institution is considered creditworthy, at
December  31, 2004 the Company's cash balance exceeded Federal Deposit Insurance
Corporation  (FDIC)  limits  by  $62,227.

Derivative  Instruments
-----------------------
The  Financial  Accounting  Standards  Board  issued  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities"  (hereinafter  "SFAS  No.  133"),  as  amended  by  SFAS  No.  137,
"Accounting  for Derivative Instruments and Hedging Activities - Deferral of the
Effective  Date  of  FASB  No.  133",  and SFAS No. 138, "Accounting for Certain
Derivative  Instruments  and  Certain  Hedging  Activities",  and  SFAS No. 149,
"Amendment  of  Statement 133 on Derivative Instruments and Hedging Activities".
These  statements  establish  accounting  and reporting standards for derivative
instruments,  including  certain  derivative  instruments  embedded  in  other
contracts, and for hedging activities. They require that an entity recognize all
derivatives  as  either  assets  or liabilities in the balance sheet and measure
those  instruments  at  fair  value.

If  certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on  the  hedging  derivative with the recognition of (i) the changes in the fair
value  of the hedged asset or liability that are attributable to the hedged risk
or  (ii)  the  earnings  effect  of  the  hedged  forecasted  transaction. For a
derivative  not  designated  as  a  hedging  instrument,  the  gain  or  loss is
recognized  in  income  in  the  period  of  change.

Historically,  the  Company  has not entered into derivatives contracts to hedge
existing  risks  or  for  speculative  purposes.

At December 31, 2004, the Company has not engaged in any transactions that would
be  considered  derivative  instruments  or  hedging  activities.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

Earnings  Per  Share
--------------------
The  Company  has  adopted  Statement  of Financial Accounting Standard No. 128,
which  provides  for  calculation  of  "basic" and "diluted" earnings per share.
Basic  earnings  per  share includes no dilution and is computed by dividing net
income  available  to  common shareholders by the weighted average common shares
outstanding  for  the  period.  Diluted earnings per share reflect the potential
dilution  of securities that could share in the earnings of an entity similar to
fully  diluted earnings per share.  Although there were common stock equivalents
outstanding  December  31,  2004,  they  were not included in the calculation of
earnings  per  share  because  they  would  have  been considered anti-dilutive.

Estimates
---------
The  process  of  preparing  financial  statements in conformity with accounting
principles  generally  accepted in the United States of America requires the use
of  estimates  and  assumptions  regarding certain types of assets, liabilities,
revenues,  and  expenses.  Such  estimates  primarily  relate  to  unsettled
transactions and events as of the date of the financial statements. Accordingly,
upon  settlement,  actual  results  may  differ  from  estimated  amounts.

Exploration  Costs
------------------
In accordance with accounting principles generally accepted in the United States
of  America,  the  Company  expenses  lease exploration costs as incurred. As of
December  31,  2004,  the  exploration  costs  expensed  during  the  Company's
exploration  stage  have  been  approximately  $570,000.

Exploration  Stage  Activities
------------------------------
The  Company  has  been in the exploration stage since its formation on March 1,
2004.  It  is  primarily  engaged  in  natural  gas  exploration.

Fair  Value  of  Financial  Instruments
---------------------------------------
The  Company's  financial  instruments  as  defined  by  Statement  of Financial
Accounting  Standard  No.  107,  "Disclosures  about  Fair  Value  of  Financial
Instruments,"  include  cash,  trade  accounts  receivable, accounts payable and
accrued  expenses  and  short-term  borrowings.  All  instruments other than the
investment  in  securities  available-for-sale are accounted for on a historical
cost  basis,  which,  due  to the short maturity of these financial instruments,
approximates  fair  value  at  December  31,  2004

Going  Concern
--------------
As  shown in the accompanying financial statements, the Company has generated no
revenues  since  inception.  For the period ended December 31, 2004, the Company
recorded  losses  of approximately $5,500,000 and had no revenues.  The Company,
being  an  exploration  stage  enterprise,  is  currently implementing a revised
business  plan  that  will,  if  successful,  mitigate  these factors that raise
substantial  doubt  about  the Company's ability to continue as a going concern.
The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  of  recorded  assets,  or  the  amounts  and  classification  of
liabilities  that might be necessary in the event the Company cannot continue in
existence.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

Impaired  Asset  Policy
-----------------------
In  March  1995,  the  Financial  Accounting Standards Board issued Statement of
Financial  Accounting Standard No. 121, "Accounting for Impairment of Long-lived
Assets."  In  complying  with  this standard, the Company reviews its long-lived
assets  quarterly  to  determine  if any events or changes in circumstances have
transpired  which  indicate  that  the  carrying  value of its assets may not be
recoverable.  The  Company  determines  impairment by comparing the undiscounted
future  cash  flows  estimated to be generated by its assets to their respective
carrying  amounts.

The Company does not believe any adjustments are needed to the carrying value of
its  assets  at  December  31,  2004.

Oil  and  Gas  Properties
-------------------------
The  Company  uses  the  successful efforts method of accounting for oil and gas
producing  activities.  Costs  to  acquire  mineral  interests  in  oil  and gas
properties,  to drill and equip exploratory wells that find proved reserves, and
to  drill  and  equip  development  wells  are  capitalized.  Costs  to  drill
exploratory  wells  that do not find proved reserves, geological and geophysical
costs,  and  costs  of  carrying and retaining unproved properties are expensed.

Unproved  oil  and  gas  properties  that  are  individually  significant  are
periodically  assessed  for impairment of value, and a loss is recognized at the
time  of  impairment  by  providing  an  impairment  allowance.  Other  unproved
properties  are  amortized  based  on  the  Company's  experience  of successful
drilling and average holding period.  Capitalized costs of producing oil and gas
properties,  after considering estimated dismantlement and abandonment costs and
estimated salvage values, are depreciated and depleted by the unit-of-production
method.  Support equipment and other property and equipment are depreciated over
their  estimated  useful  lives.

On  the sale or retirement of a complete unit of a proven property, the cost and
related  accumulated  depreciation,  depletion,  and amortization are eliminated
from  the  property  accounts, and the resultant gain or loss is recognized.  On
the retirement or sale of a partial unit of proven property, the cost is charged
to  accumulated  depreciation, depletion, and amortization with a resulting gain
or  loss  recognized  in  income.

On  the  sale  of  an  entire  interest in an unproved property for cash or cash
equivalent,  gain  or  loss on the sale is recognized, taking into consideration
the  amount  of  any  unrecorded  impairment  if  the property had been assessed
individually.  If a partial interest in an unproved property is sold, the amount
received  is  treated  as  a  reduction  of  the  cost of the interest retained.

Property  and  Equipment
------------------------
Property  and  equipment  are  stated  at  cost.  Depreciation  of  property and
equipment is calculated using the straight-line method over the estimated useful
lives  of  the  assets,  which  is  three  years.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

Provision  for  Taxes
---------------------
Income taxes are provided based upon the liability method of accounting pursuant
to  Statement  of Financial Accounting Standards No. 109, "Accounting for Income
Taxes,"  (hereinafter  "SFAS  No.  109").  Under  this approach, deferred income
taxes  are  recorded  to  reflect  the  tax  consequences  in  future  years  of
differences  between the tax basis of assets and liabilities and their financial
reporting  amounts  at each year-end.  A valuation allowance is recorded against
deferred tax assets if management does not believe the Company has met the "more
likely  than  not" standard imposed by SFAS No. 109 to allow recognition of such
an  asset.

At  December  31, 2004, the Company had net deferred tax assets calculated at an
expected  rate  of  34% of approximately $1,870,000 principally arising from net
operating  loss  carry  forwards  for income tax purposes.  As management of the
Company  cannot  determine that it is more likely than not that the Company will
realize  the  benefit of the net deferred tax asset, a valuation allowance equal
to  the  net  deferred tax asset has been established at December 31, 2004.  The
significant  components  of  the deferred tax asset at December 31, 2004 were as
follows:

        Net  operating  loss  carry  forward          $  5,500,000
                                                      ============

        Deferred  tax  asset                          $  1,870,000
        Deferred  tax  asset  valuation  allowance    $ (1,870,000)

At  December  31,  2004,  the  Company  has  net operating loss carryforwards of
approximately  $5,500,000,  which  expire  in  the  year  2024.

Stock  Split
------------
In  April,  2004,  the  Company entered into a 5 for 1 forward stock split.  The
number  of  shares  of  the  registrant  company  outstanding at the time of the
adoption  of  the  5  for  1 forward stock split was 9,000,000 shares which were
restated  to  45,000,000  shares.  All  references in the accompanying financial
statements  have  been  restated  to  reflect  this  stock split.  (See Note 3.)

NOTE  3  -  SHARE  EXCHANGE

On  May 6, 2004, the Company, Falcon Natural Gas Corporation (the "Corporation")
and  shareholders  of  the  Corporation  completed  a share exchange whereby the
Corporation  became  a  wholly owned subsidiary of Falcon Natural Gas Corp. when
the  Company  issued  20,000,000 shares of its common stock to the Corporation's
shareholders in exchange for services received.  The Company computed the number
of shares issued in this transaction based on the par value of the Corporation's
common  stock  on  the date of issuance and recognized an expense of $20,000 for
services.  In  addition,  900,000  shares of common stock were issued in partial
payment  of  an  oil  and  gas  lease  valued  at  $0.25 per share, or $225,000.
Pursuant  to  the  share  exchange,  the Company issued 20,900,000 shares of its
common  stock  in  exchange  for  20,900,000  shares  of  common  stock,  which
represented 100% of the Corporation's issued and outstanding common stock.  This
acquisition  was  accounted  for  as  a  reverse

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

merger  and  recapitalization  whereby the operating company, Falcon Natural Gas
Corporation,  is  the  continuing  entity  for  all  accounting  purposes.

The recapitalization of the Company required the following accounting adjustment
in  order  to  properly  reflect  the  accumulated  deficit  in  the  financial
statements:

<TABLE>
<CAPTION>

                                                                Additional
                                   Number of                      Paid-in        Deficit      Shareholders'
                                    Shares         Amount         Capital      Accumulated      Equity
                                  ----------     ---------     ------------    -----------    -------------
<S>                                 <C>           <C>               <C>              <C>           <C>
Prior to recapitalization         45,000,000     $     450    $     99,550     $   (104,221)  $     (4,221)
Recapitalization adjustment
  to close deficit accumulated             -             -        (104,221)         104,221               -
                                  ----------     ---------     ------------    -----------    -------------
Total                             45,000,000     $     450    $     (4,671)    $         -    $     (4,221)
                                  ==========     =========     ============    ===========    =============

</TABLE>

The  net  liabilities  assumed  consisted  of  the  following  items:

             Cash  and  cash  equivalents          $      2,681
             Less:     Accounts  payable                 (3,686)
             Accounts  payable  shareholders             (3,216)
                                                   -------------

             Net  liabilities  assumed             $     (4,221)
                                                   =============

The  following  transactions  involved  the  majority shareholder of the Company
prior  to  the  share  exchange  with  Falcon  Natural  Gas  Corporation:

On  March  22,  2004,  an investor acquired an aggregate of 20,000,000 shares of
common  stock  of  Countryside Review, Inc. in exchange for $500,000 pursuant to
three stock purchase agreements with three shareholders.  On March 23, 2004, the
investor  returned 5,000,000 shares of common stock to Countryside Review, Inc.,
which shares were subsequently cancelled, returned to treasury, and then retired
and  restored  to  the  status of authorized and unissued.  As a result of these
transactions,  control  of  Countryside Review, Inc. shifted to the investor who
owned 15,000,000 shares of the common stock of Countryside Review, Inc. prior to
the  share  exchange  agreement  with  Falcon  Natural  Gas  Corporation.

Effective  April  12,  2004, Countryside Review, Inc. changed its name to Falcon
Natural  Gas  Corp. and authorized a 5 to1 forward stock split of the originally
issued  and  outstanding  Countryside Review Inc. shares.  All references in the
accompanying  financial  statements and notes to the common shares and per share
amounts have been restated to reflect the forward stock split.  The Company also
reauthorized two hundred million (200,000,000) shares of common stock with a par
value  of  $0.00001  per  share.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

NOTE  4  -  CONVERTIBLE  DEBT

In  November,  2004,  the  Company  entered  into  a loan agreement with Cornell
Capital  Partners,  LP ("the Investor") in which the Company received a $500,000
loan  less related expenses of $132,500, which has been allocated as discount on
debt  and  will be amortized over a two year period.  The convertible securities
are  guaranteed  by  the assets of the Company.  The convertible debt instrument
underlying  this  loan agreement will automatically convert into common stock at
either  120% of the closing bid price by the second anniversary date of issuance
or 80% of the average of the three lowest daily volume weighted average price of
the  common  stock  for the 30 trading days immediately preceding the conversion
date.  Under  the  agreement,  the  Company is required to keep available common
stock  duly  authorized  for  issuance  in satisfaction of the convertible.  The
conversion  amount  will  be the face amount of the convertible plus interest at
the  rate  of  5%  per  annum  from  the  closing  date of November, 2004 to the
conversion  date,  which  is  the date on which the Company receives a notice of
conversion  from  the  investor  exercising the right to convert the convertible
into  common  shares  of  the  Company.  The convertible debt will automatically
convert into common stock on the second anniversary date of issuance.  The terms
of  the  debt  does  not  require  regular  monthly  payments.

The convertible debentures contained a beneficial conversion feature computed at
its  intrinsic  value, which was the difference between the conversion price and
the fair value on the debenture issuance date of the common stock into which the
debt was convertible, multiplied by the number of shares into which the debt was
convertible  at the commitment date. Since the beneficial conversion feature was
to  be  settled  by  issuing  equity,  the  amount  attributed to the beneficial
conversion  feature,  or  $125,000,  was  recorded  as an interest expense and a
component  of  equity  on  the  issuance  date.

Standby  Equity  Distribution  Agreement
----------------------------------------
In  November,  2004,  the  Company  entered  into  a standby equity distribution
agreement  with  Cornell  Capital  Partners,  LP  ("Cornell").  Pursuant to this
agreement, Cornell will purchase up to $10,000,000 of the Company's common stock
through  a  placement  agent  over  a  two-year  period  after  the  effective
registration  of  the shares.  In addition, the Company issued 400,000 shares of
its  common  stock  to Cornell and the placement agent upon the inception of the
standby  equity  distribution agreement.  The $500,000 value of these shares was
based  on  the  fair  market  value of the shares on the date of the contract is
recognized as a period expense due to the fact that the 400,000 shares have been
deemed  to  be  fully  earned  as  of  the  date  of  the  agreement.

NOTE  5  -  LOAN  AGREEMENT

The  Company  borrowed $140,000 from Blue Mint Exploration on November 24, 2004.
The  loan  is  unsecured,  matures on May 25, 2005 on which date the entire loan
becomes  payable  with  interest.   The  loan  bears  interest at 12% per annum.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

NOTE  6  -  PROPERTY  AND  EQUIPMENT

Property  and  equipment are recorded at cost.  Depreciation is calculated using
the  straight-line  method  over  five  years.  The  following  is  a summary of
property,  equipment  and  accumulated  depreciation  at  September  30,  2004:

     Computer  Equipment                    $   4,088
                                           ----------
     Less:  Accumulated  Depreciation             618
     Total  Property  &  Equipment          $   3,470
                                           ==========

Depreciation  expense  for  the  period  ending  December  31,  2004  was  $618.

NOTE  7  -  OIL  AND  GAS  LEASES

On  March  25,  2004,  the  Company  paid  cash and issued stock for oil and gas
leases.  The  leases,  assigned  from Argyle Energy Corp (hereinafter "Argyle"),
entitle the Company to a 100% working interest and 70% net revenue interest in 5
tracts  of  land  in  Starr  County,  Texas.

NOTE  8  -  COMMITMENTS  AND  CONTINGENCIES

On June 14, 2004, the Company entered into a contract for one year from the date
of  the  contract  for  investor  relations services.  The terms of the contract
include  a  retainer  of  $5,000  per month plus any out-of-pocket expenses, and
50,000  restricted  shares  in  the  Company's  common  stock.  (See  Note  10.)

On  August  2,  2004, the Company contracted with Argyle Energy, Inc. ("Argyle")
for  various  oil, gas and mineral leases located in St. Mary Parish, Louisiana.
The  contract  provides that the Company will receive a 100% working interest in
these  leases  in  exchange  for  two  cash  payments  to Argyle of $404,235 and
$454,235  by  September  30,  2004.  As of December 31, 2004, a cash payment was
made  in  the  amount  of  $858,470.

On  August  2,  2004,  the Company entered into a business consultant agreement.
The  consultant  will  be paid $15,000 for work performed in accordance with the
agreement.  In  addition,  the Company agrees to pay the consultant 7.5% in cash
and  10%  in warrants for any financing monies raised.  As of December 31, 2004,
no  financing  monies had been raised by the consultant and $15,000 was paid for
services  performed.

On  August 9, 2004, the Company entered into an agreement for financial advisory
services.  The  terms  of  the  agreement include compensation of 2% cash and 2%
warrants on all monies raised by the financial advisory company and payment of a
retainer  in  the  amount of $5,000.  The agreement states a termination date of
January  1,  2005.  As  of December 31, 2004, the financial advisory company was
instrumental  in the raising of funds related to Cornell Capital Partners LP and
new  terms  related  to  the

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

agreement  dated  August  9, 2004 were renegotiated.  Under the new terms of the
agreement,  the Company paid a retainer in the amount of $5,000 in addition to a
fixed  one  time  payment  of  $35,000.

On  November  24, 2004, the Company entered into a loan agreement with Blue Mint
Exploration  in  the amount of $140,000 for a term of six months terminating May
25, 2005 and an interest rate of 12% per annum to be paid at the maturity of the
loan  agreement.  (See  Note  5.)

Standby  Equity  Distribution  Agreement
----------------------------------------
In  November,  2004,  the  Company  entered  into  a standby equity distribution
agreement  with  Cornell  Capital  Partners  LP  ("Cornell").  Pursuant  to this
agreement, Cornell will purchase up to $10,000,000 of the Company's common stock
through  a  placement  agent  over  a  two  year  period  after  the  effective
registration  of  the  shares.  (See  Note  4.)

NOTE  9  -  RELATED  PARTY  TRANSACTIONS

A shareholder advanced the Company $100 to open the Company's bank account.  The
funds  advanced  are  unsecured,  non-interest  bearing,  and  due  on  demand.

NOTE  10  -  COMMON  STOCK

During  the period ended December 31, 2004, the Company issued 20,000,000 shares
valued  at  $0.001  per  share  for  services  received.

During  the period ended December 31, 2004, the Company issued 900,000 shares of
common stock in partial payment of an oil and gas lease.  The shares were valued
at  $0.25  per  share,  or  $225,000.

During  the  period ended December 31, 2004, the Company issued for cash 632,000
shares  of  common  stock at $1.00 per share, less expenses of $60, for a net of
$631,940.

In  April,  2004,  the  Company entered into a 5 for 1 forward stock split.  The
number  of  shares  of  the  registrant  company  outstanding at the time of the
adoption  of  the  5  for  1 forward stock split was 9,000,000 shares which were
restated  to  45,000,000  shares.  (See  Note  3.)

On  June  14,  2004, the Company issued 50,000 restricted shares valued at $1.25
per  share  as  part  of  an  investor  relations  contract.  See  Note  8.

On August 2, 2004, the Company issued 2,500,000 shares valued at $1.42 per share
for  services  as  part  of  the  Argyle  Energy,  Inc.  lease  contract.

On  August 27, 2004, the Company issued 100,000 shares valued at $1.32 per share
to  an  independent  consultant  for  advisory  services.

On  September  7,  2004,  the  Company issued 100,000 shares valued at $1.34 per
share  to  an  independent  consultant  for  advisory  services.

<PAGE>

FALCON NATURAL GAS CORP.
(FORMERLY COUNTRYSIDE REVIEW INC.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004

On  October  8, 2004, the Company entered into a subscription agreement to issue
1,500,000  shares  at  the purchase price of approximately $0.93 per share.  The
Company  received  $1,400,000  less  expenses  of  $12, for a net of $1,399,988.

In  October,  2004,  an officer of the Company resigned from his position as CEO
and  rescinded  9,000,000  shares  that he currently held.  The rescinded shares
were  valued  at  par  because  they  were  part  of the recapitalization of the
company's  shares.

In October, 2004, the Company issued 392,000 shares to Cornell Capital and 8,000
to  the  placement  agent  related  to the standby equity distribution agreement
valued  at  fair  market  value  of  $1.25  per  share.  (See  Note  4.)

NOTE  11  -  SUBSEQUENT  EVENT

On  March 2, 2005, the Company issued 80,000 shares valued at $0.45 per share to
two  consultants  for  geological  services.

                                       33
<PAGE>

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

     None.

ITEM 8A.     CONTROLS AND PROCEDURES.

     Evaluation  of  disclosure  controls  and  procedures.  The Company's Chief
Executive  Officer  and  Principal  Financial  Officer,  after  evaluating  the
effectiveness  of the Company's "disclosure controls and procedures" (as defined
in  the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the
end of the fourth fiscal quarter of 2004 (the "Evaluation Date"), have concluded
that as of the Evaluation Date, the Company's disclosure controls and procedures
were  effective.  The  Company's Chief Executive Officer and Principal Financial
Officer  determined  that  an  error  had  been made in the determination of the
period  from  March  1,  2004 to September 30, 2004, in which certain consulting
agreements  were  to  be  reported. Once the error was discovered, the financial
statements  were  restated  to  reflect  the  share  issuance for the consulting
agreements in the proper period. Management has controls in place to ensure that
all  agreements  relating  to share issuances are stated in the proper period as
described  in  Regulation  S-B  Item  307  and  Item  308. The Company's current
internal  controls include discussing all issuances with its outside counsel and
independent  auditors  and  entering  into  agreements that include the material
terms  of the issuances prior thereto. The Company's Chief Executive Officer and
Principal  Financial  Officer discussed the control procedures that are in place
with  the  independent  auditors and determined that the restatement issues were
related  to  timing  rather  than an actual deficiency in the control procedures
presently  in  place.

     Changes  in  internal  control  over  financial  reporting.  There  were no
significant  changes  in the Company's internal control over financial reporting
during  the  fourth  fiscal  quarter  of  2004  that  materially affected, or is
reasonably  likely  to  materially  affect, the Company's internal control over
financial  reporting.

ITEM  8B.     OTHER  INFORMATION.

     The  Company submitted press releases regarding proven-undeveloped reserves
for  which  the Company has not provided sufficient back-up and such information
has  not  been  included  in  this  Form  10-KSB.

     Form  8-K, Item 5.05 Amendments to Registrants Code of Ethics, or Waiver of
     ---------------------------------------------------------------------------
     a  Provision  of  the  Code  of  Ethics.
     ----------------------------------------

     On  April  8,  2005,  the  Company's board of directors amended its code of
     ethics  in  its  entirety.  The Company's current directors did not believe
     that  the  code  of  ethics, as adopted by the Company's prior officers and
     directors,  was reasonably designed to deter wrongdoing and to promote: (1)
     honest  and  ethical  conduct,  including the ethical handling of actual or
     apparent  conflicts  of  interest  between  personal  and  professional
     relationships;  (2)  full,  fair,  accurate,  timely,  and  understandable
     disclosure  in  reports  and  documents  that a small business issuer files
     with, or submits to, the Commission and in other public communications made
     by  the  small business issuer; (3) compliance with applicable governmental
     laws,  rules  and  regulations;  (4)  the  prompt  internal  reporting  of
     violations  of  the  code to an appropriate person or persons identified in
     the  code;  and (5) accountability for adherence to the code. The directors
     believe that the Amended Code of Ethics is so designed. The Amended Code of
     Ethics  relates to all elements of the code of ethics definition enumerated
     in  Item  406(b)  of  Regulation  S-B.

                                       34
<PAGE>

                                    PART III

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

OFFICERS  AND  DIRECTORS

     Our executive officers and directors, and their ages and positions are as
follows:

NAME                      AGE    TITLE
----                      ---    -----

Fred B. Zaziski           52     Chief Executive Officer, President and
                                 Director

Massimiliano Pozzoni      29     Vice President of Business Development,
                                 Secretary and Treasurer (Principal
                                 Financial Officer)

BIOGRAPHICAL INFORMATION

Fred B. Zaziski
--------------

     Mr. Zaziski has served as our Chief Executive Officer and President, and as
a  member  of  our  board  of  directors since October 2004. From August 1999 to
October  2004,  Mr.  Zaziski  served  as  Chief Operations Officer for ComOxy, a
Houston-based  firm specializing in up-stream and down-stream project management
with  an  emphasis  on  refinery  and drilling operations. In this capacity, Mr.
Zaziski  directed  operations  and  project  management  teams,  developed  and
implemented  policies  and  procedures,  directed  all  phases  of  the  budget,
identified  new  business  opportunities  and served as the initial contact with
joint  venture  companies.  Mr.  Zaziski  has  over  26 years in the oil and gas
industry.  Mr.  Zaziski  has  also worked in Saudi Arabia for National Petroleum
Technology  Company  and  in  Manama, Bahrain, Saudi Arabia, Cairo and North and
West Africa for Halliburton Energy Services.  He has over 26 years of experience
in  the oil and gas industry. Mr. Zaziski received an MBA from the University of
Cairo  and  a  degree  in  Petroleum  Engineering  from Pennsylvania State.  Mr.
Zaziski  is  a  member  of  the  Society of Petroleum Engineers and the American
Society  of  Mechanical  Engineers.

                                       35
<PAGE>

Massimiliano  Pozzoni
---------------------

     Mr.  Pozzoni  reassumed  the  positions  as  our  Secretary  and  Treasurer
(Principal  Financial  Officer)  in  October  2004.  He  has  served as our Vice
President of Business Development since April 2004.  He has served as a Director
of  the Company since March 2004. Mr. Pozzoni previously served the Company from
March  2004 to June 2004 as the sole Director and the President, Chief Executive
Officer, Secretary and Treasurer (Principal Financial Officer). In June 2004, he
resigned  as  the  Company's  President,  Chief Executive Officer, Treasurer and
Secretary but continued to serve as a Director and as Vice President of Business
Development.  Since  November  2003,  Mr.  Pozzoni  has also served as the Chief
Executive  Officer  and  Director  of  Gulf Coast Oil & Gas Inc., formerly Otish
Mountain  Diamond  Company,  a  reporting  company.  From August 2003 to October
2003,  Mr.  Pozzoni  was  in negotiations for his position with Gulf Coast after
receiving  his  MBA.  From  September  2001  to  July 2003, Mr. Pozzoni attended
London Business School on a full-time basis.  From June 2002 to August 2002, Mr.
Pozzoni  worked as a Summer Associate at Lehman Brothers Inc.  From July 2001 to
August  2001, Mr. Pozzoni took time off prior to entering graduate school.  From
June  1998  to  June  2001,  Mr.  Pozzoni  worked as an engineer at Schlumberger
Oilfield  Services.  Mr.  Pozzoni  received  a  Bachelor degree in International
Business in 1998 from the University of Kansas and an MBA degree from the London
Business  School  in  2003.

     There  are  no  family  relationships  among  our  executive  officers  and
directors.

     We are not aware of the occurrence during the last five years of any events
described  in  Item  401(d)  (involvement  in  certain  legal  proceedings)  of
Regulation  S-B  under  the  Securities Act regarding our executive officers and
directors.

Employment Agreements
---------------------

     Mr.  Zaziski  and  the  Company entered into a one-year employment contract
pursuant  to  which Mr. Zaziski serves as our President, Chief Executive Officer
and  as  a  Director,  effective  October 27, 2004.  The employment agreement is
renewable upon the mutual written consent of the parties within thirty (30) days
of the ending date of the agreement.  Mr. Zaziski will receive $132,000 per year
as  well  as five weeks of paid vacation. Mr. Zaziski will receive as additional
consideration  of  1,000,000 restricted shares of the Company's common stock at
the  end  of  each  of the twelve-month periods (up to an aggregate of 5,000,000
restricted  shares)  immediately  following  October  27,  2004  for which he is
employed  by  the Company. In the event that Mr. Zaziski's employment terminates
prior to the end of such twelve-month period, his rights in the number of shares
that  would  otherwise  be  payable  at  the  end  of  such  twelve-month period
multiplied  by  the ratio which the number of months in such twelve-month period
that  Mr.  Zaziski  was  employed  by  the  Company  bears  to twelve (12) shall
immediately  and  fully  vest and shall be transferable by Mr. Zaziski as of the
date  his  employment terminates.  In the event that Mr. Zaziski dies during the
twelve-month  period  immediately  following  October  27,  2004,  his  right to
1,000,000  restricted  shares shall immediately vest and shall be payable to his
spouse.  In  the  event  of  a  consolidation  or  merger  or  sale  of  all  or
substantially  all of our assets, we are otherwise acquired or there is a change
of  control  of  the  Company, or in the event of liquidation of the Company, so
much of the 5,000,000 restricted shares that have not been issued to Mr. Zaziski
shall immediately vest and shall also be transferable by Mr. Zaziski immediately
prior  to  such  acquisition  or  liquidation.  Mr.  Zaziski  may  terminate his
employment  for  "good  reason"  by  giving  the Company ten (10) days written
notice  if:  (i) he is assigned, without his express written consent, any duties
materially  inconsistent with his positions, duties, responsibilities, or status
with  the  Company or a change in his reporting responsibilities or titles as in
effect  as  of  October 27, 2004; (ii) his compensation is reduced; or (iii) the
Company  does  not  pay  any  material  amount  of  compensation  due  under the
employment  agreement  and  then  fails either to pay such amount within the ten
(10) day notice period required for termination or to contest in good faith such
notice.  The  Company may also terminate the employment agreement.  In the event
of  termination  for good reason by Mr. Zaziski or without cause by the Company,
the  Company  is obligated to pay Mr. Zaziski a severance payment of $33,000, in
addition  to  all  payments of salary earned by Mr. Zaziski through such date of
termination  in  one  lump  sum  payment.

                                       36
<PAGE>

     Mr.  Pozzoni  and  the Company entered into a one-year employment agreement
pursuant  to  which  Mr.  Pozzoni  serves  as  the  Company's Vice President of
Business  Development  and as a Director effective April 1, 2004. The employment
agreement  is  renewable  upon  the  mutual written consent of the parties.  Mr.
Pozzoni  receives  $90,000  per year as well as five weeks of paid vacation. Mr.
Pozzoni  may  terminate his employment for "good reason" by giving the Company
ten (10) days written notice if: (i) he is assigned, without his express written
consent,  any  duties  materially  inconsistent  with  his  positions,  duties,
responsibilities,  or  status  with  the  Company  or  a change in his reporting
responsibilities  or  titles  as  in  effect  as  of  April  1,  2004;  (ii) his
compensation  is  reduced; or (iii) the Company does not pay any material amount
of  compensation due under the employment agreement and then fails either to pay
such amount within the ten (10) day notice period required for termination or to
contest  in  good  faith  such  notice.  The  Company  may  also  terminate  the
employment  agreement.  In  the  event  of  termination  for  good reason by Mr.
Pozzoni  or  without  cause  by the Company, the Company is obligated to pay Mr.
Pozzoni  a  severance  payment  of $22,500 in addition to all payments of salary
earned  by Mr. Pozzoni through such date of termination in one lump sum payment.

Recent Changes in Officers and Directors
----------------------------------------

     In  connection with the Acquisition, Mr. Pozzoni became the Company's sole
Director,  President,  Secretary  and Treasurer in March 2004.  On June 1, 2004,
Alan Aitchison took over as President, Secretary and Treasurer and also became a
Director  of the Company and the Company's Chief Executive Officer.  On October
25,  2004,  Alan  Aitchison  resigned  as  a  Director of the Company and as the
Company's  President, Chief Executive Officer, Secretary and Treasurer in order
to  pursue  international  opportunities  in  the  oil  and  gas  industry.  Mr.
Aitchison currently serves as a member of the Company's advisory board, but has
not received any additional compensation from the Company for such services.  On
October 27, 2004, the Company's Board of Directors appointed Fred B. Zaziski as
President  and  Chief Executive Officer and reappointed Mr. Pozzoni as Secretary
and  Treasurer  (Principal  Financial  Officer).

Advisory Board
--------------

                                       37
<PAGE>

     The  Company  formed  an  advisory  board consisting of three members: Alan
Aitchison,  the  Company's former Chief Executive Officer, Daniel H. Tesfamicael
and  Paul  C. Kirkitelos. The members of the advisory board are not Directors of
the  Company and do not vote at meeting of the Company's Board of Directors. The
Company  established  the advisory board in an effort to save cost by relying on
the  members  rather  than  consultants  in  such  areas  as drilling, petroleum
engineering,  and  capital  raising  efforts. Mr. Tesfamicael and Mr. Kirkitelos
each  received  100,000  shares  of restricted common stock from the Company for
their  services  on the advisory board. The shares issued to Mr. Tesfamicael and
Mr.  Kirkitelos  were  valued  at  $1.32  and $1.34 per share, respectively. Mr.
Aitchison  has  not  received  separate  compensation  for  his  services on the
advisory  board;  however,  he  does  hold  1,000,000  restricted  shares of the
Company's  common  stock  that  he retained after tendering his resignation as a
Director  and  executive  officer of the Company and joining the advisory board.

TERM OF OFFICE

     The  Directors  of  the  Company  are appointed for a period of one year or
until such time as their replacements have been elected by the shareholders. The
officers  of the Company are appointed by our board of directors and hold office
until  they  are  removed  by  the  board.

AUDIT COMMITTEE

     The  Company  does  not have a standing audit committee, an audit committee
financial  expert, or any committee or person performing a similar function. The
Company  currently  has  limited  working capital and no revenues. The Company's
financial  statements  are  currently  relatively  simple.  Management  does not
believe  that  it  would  be  in  the  best  interests  at  this  time to retain
independent  directors  to  sit on an audit committee. If the Company is able to
raise  sufficient financing in the future, then the Company will likely seek out
and  retain  independent  directors  and  form  an  audit  committee  and  other
committees.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section  16(a)  of  the  Exchange  Act,  as amended, requires the Company's
directors,  executive  officers  and persons who own more than 10% of a class of
the  Company's  equity securities which are registered under the Exchange Act to
file  with the Commission initial reports of ownership and reports of changes of
ownership of such registered securities.  Such executive officers, directors and
greater  than  10%  beneficial  owners  are required by Commission regulation to
furnish  the  Company  with  copies  of  all  Section  16(a) forms filed by such
reporting  persons.

To  the  Company's  knowledge,  based  solely  on a review of the copies of such
reports  furnished  to  the Company and on representations that no other reports
were  required,  no  person required to file such a report failed to file during
the  fiscal  year  covered by this report. Based on stockholder filings with the
Commission,  Fred  B.  Zaziski  and Massimiliano Pozzoni were subject to Section
16(a)  filing  requirements  during  the  fiscal  year  covered  by this report.

                                       38
<PAGE>

CODE OF ETHICS

     The  Company  has  adopted  an  Amended  Code of Ethics that applies to the
Company's  principal  executive  officer, principal financial officer, principal
accounting  officer or controller, or persons performing similar functions.  The
Company  will provide to any person without charge, upon request, a copy of such
code  of  ethics. Persons wishing to make such a request should do so in writing
to  the  Secretary at Falcon Natural Gas Corp., Westchase Center, 2500 City West
Boulevard,  Suite  300,  Houston,  Texas  77042.

                                       39
<PAGE>

ITEM 10.     EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

     The following table sets forth information concerning the compensation paid
by the Company to: (i) the Chief Executive Officer, and (ii) all persons serving
as the Company's Chief Executive Officer or acting in a similar capacity at any
time  during  the  last  completed fiscal year, except for the person serving in
such  capacity  prior  to  the  Acquisition,  which  person  did not receive any
compensation.  The  Company  did not have any other "named executive officers"
within  the  meaning  of  Item  402  of Regulation S-B under the Securities Act.

<TABLE>
<CAPTION>

  Name and Principal                                       Long Term Compensation (2)
       Position              Annual Compensation(1)                   Awards
                                                            Restricted     Securities
                                                               Stock       Underlying
                                         Salary       Bonus   award(s)    Options/SARs
                             Year          ($)         ($)       ($)           (#)
<S>                          <C>           <C>         <C>       <C>           <C>
Fred B. Zaziski              2004      $132,000(3)     --        --             --
Chief Executive Officer,
President and Director

Massimiliano Pozzoni,        2004      $ 90,000(4)     --        --             --
Vice President of Business
Development, Secretary,
Treasurer (Principal
Financial Officer),
Director, and For

Alan Aitchison,              2004       $ 60,000       --        90(5)          --
Former Chief Executive
Officer

</TABLE>

(1)  Does  not  include  perquisites and other personal benefits in amounts less
     than  10%  of  the  total  annual  salary  and  other  compensation.
(2)  There are no stock option, retirement, pension, or profit sharing plans for
     the  benefit  of  our  officers  and  directors.
(3)  Represents  yearly salary and is not prorated. Mr. Zaziski received $16,133
     of cash compensation during 2004 pursuant to his employment agreement which
     became  effective  on  October  27,  2004.
(4)  Represents  yearly salary and is not prorated. Mr. Pozzoni received $60,000
     of cash compensation during 2004 pursuant to his employment agreement which
     became  effective  on  April  1,  2004.
(5)  Mr.  Aitchison  received 10,000,000 shares of Common Stock from Mr. Pozzoni
     as  an  incentive  for  Mr.  Aitchison  to  take Mr. Pozzoni's place as the
     President,  Chief Executive Officer, Secretary and Treasurer of the Company
     for  an extended period of time. Mr. Aitchison only served five (5) months.
     In  consideration for the Company accepting Mr. Aitchison's resignation, he
     returned  9,000,000  shares  to the Company for cancellation. Mr. Aitchison
     currently  serves on the Company's advisory board, but has not received any
     separate  compensation  from  the  Company  for  such  service.

                                       40
<PAGE>

Fiscal  Years  2002,  2003  and  2004
-------------------------------------

     No salaries were paid during 2002, 2003 and 2004 to the prior employees of
the Company.

ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

     The  following  table  sets  forth  information  as  of April 7, 2005, with
respect to the beneficial ownership of our common stock by (i) each director and
officer  of  the  Company,  (ii) all directors and officers as a group and (iii)
each  person  known  by the Company to own beneficially 5% or more of our common
stock:

<TABLE>
<CAPTION>

                                           COMMON STOCK
                                        BENEFICIALLY OWNED (2)
NAME AND ADDRESS (1)                     NUMBER    PERCENT
<S>                                     <C>        <C>

Massimiliano Pozzoni                    5,000,000    8.03%

Anne Jenkins (3)                        4,000,000    6.42%

Fred B. Zaziski                                 0       0%

All officers and directors as a group   5,000,000    8.03%

</TABLE>

(1)  The  address for Mr. Pozzoni and Mr. Zaziski is Westchase Center, 2500 City
     West  Boulevard,  Suite  300,  Houston,  Texas  77042.  The address for Ms.
     Jenkins  is  1179  Lyon  Road,  North  Delta,  BC,  Canada  V4E  2S8.
(2)  The  number  of shares of common stock owned are those "beneficially owned"
     as  determined  under  the rules of the Commission, including any shares of
     common  stock  as to which a person has sole or shared voting or investment
     power  and  any  shares  of  common stock which the person has the right to
     acquire within 60 days of April 7, 2005 through the exercise of any option,
     warrant  or  right.  As  of  April 7, 2005, there were 62,262,000 shares of
     common  stock  outstanding.
(3)  The  number  and  percentage  of  shares  beneficially owned by Ms. Jenkins
     includes an aggregate of 2,500,000 shares owned by her two sons who live in
     her  household.

CHANGE IN CONTROL

     We  are  unaware  of  any  arrangement  or  understanding  that  may,  at a
subsequent  date,  result  in  a  change  of  control  of  our  Company.

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We believe that all prior related party transactions have been entered into
upon  terms  no  less  favorable  to  us  than those that could be obtained from
unaffiliated  third  parties.  Our reasonable belief of fair value is based upon
proximate  similar  transactions  with  third  parties or attempts to obtain the
consideration  from  third  parties.

                                       41
<PAGE>

     On  March  3,  2004,  a  shareholder  advanced the Company $100 to open the
Company's bank account.  The funds advanced are unsecured, non-interest bearing,
and  due  on  demand.

     During  the  period  ended  September 30, 2004, the Company borrowed $3,217
from  a  related  party.  The  related  party  note payable is unsecured, due on
demand and accrues interest at 10% per annum.  The Company repaid this amount in
2004.

     Alan  Aitchison received 10,000,000 shares of Common Stock from Mr. Pozzoni
as  an incentive for Mr. Aitchison to take Mr. Pozzoni's place as the President,
Chief  Executive Officer, Secretary and Treasurer of the Company for an extended
period  of time. Mr. Aitchison only served five (5) months. In consideration for
the  Company accepting Mr. Aitchison's resignation, he returned 9,000,000 shares
to the Company for cancellation. Mr. Aitchison currently serves on the Company's
advisory  board, but has not received any separate compensation from the Company
for  such  service

Employment  Agreements
----------------------

     Fred  B.  Zaziski  and  the  Company  entered  into  a  one-year employment
agreement  effective  October  27, 2004, pursuant to which Mr. Zaziski serves as
the  Company's  President,  Chief  Executive  Officer  and  as  a  Director. The
employment agreement is renewable upon the mutual written consent of the parties
within  thirty  (30)  days of the ending date of the agreement. Mr. Zaziski will
receive  $132,000  per  year as well as five weeks of paid vacation. Mr. Zaziski
will  receive  as additional consideration of 1,000,000 restricted shares of the
Company's  common stock at the end of each of the twelve-month periods (up to an
aggregate of 5,000,000 restricted shares) immediately following October 27, 2004
for  which  he  is  employed  by  the Company. The employment agreement contains
provisions  for  accelerated  vesting  of  Mr.  Zaziski's shares in the event of
termination, a consolidation, merger or liquidation of the Company, or a sale of
all  or  substantially  all  of  the  assets  of the Company. Mr. Zaziski or the
Company  may  terminate  the  employment  agreement;  however,  in  the event of
termination  for good reason by Mr. Zaziski or without cause by the Company, the
Company  is  obligated  to  pay  Mr.  Zaziski a severance payment of $33,000, in
addition  to  all  payments of salary earned by Mr. Zaziski through such date of
termination  in  one  lump  sum  payment.

     Massimiliano  Pozzoni  and  the  Company entered into a one-year employment
agreement  effective  April 1, 2004, pursuant to which Mr. Pozzoni serves as the
Company's  Vice  President  of  Business  Development  and  as  a  Director. The
employment  agreement  is  renewable  upon  the  mutual  written  consent of the
parties.  Mr.  Pozzoni  receives  $90,000 per year as well as five weeks of paid
vacation.  Mr.  Pozzoni  or  the Company may terminate the employment agreement;
however,  in  the event of termination for good reason by Mr. Pozzoni or without
cause  by  the  Company, the Company is obligated to pay Mr. Pozzoni a severance
payment  of  $22,500 in addition to all payments of salary earned by Mr. Pozzoni
through  such  date  of  termination  in  one  lump  sum  payment.

                                       42
<PAGE>

ITEM 13.     EXHIBITS

EXHIBIT NO.     DESCRIPTION OF EXHIBIT
-----------     ----------------------

2.1(1)          Exchange Agreement

3.1(2)          Articles of Incorporation

3.2(2)          By-Laws

3.3(3)          Certificate of Amendment to the Articles of Incorporation

4.1(4)          Promissory Note issued to Cornell Capital Partners, L.P.
                in the amount of $500,000

10.1(5)         Subscription Agreement with Liberty Natural Gas

10.2(5)         Assignment of Oil and Gas Lease for Starr County Property

10.3(5)         Option Agreement for Wyandotte Property

10.2(4)         Standby Equity Distribution Agreement with Cornell Capital
                Partners, LP

10.3(4)         Registration Rights Agreement with Cornell Capital Partners,
                LP regarding the Standby Equity Distribution Agreement

10.4(4)         Placement Agent Agreement with Cornell Capital Partners, LP
                and Sloan Securities Corporation

10.6(4)         Securities Purchase Agreement with Cornell Capital
                Partners, LP

10.7(4)         Security Agreement with Cornell Capital Partners, LP

10.8(4)         Registration Rights Agreement with Cornell Capital Partners,
                LP regarding the Promissory Note

10.9(4)         Side Letter with Cornell Capital Partners, LP regarding Name
                Change

10.10(6)        Employment Agreement with Fred B. Zaziski

10.11*          Employment Agreement with Massimiliano Pozzoni

14.1*           Amended Code of Ethics

31.1*           Certification by Chief Executive Officer pursuant to 15 U.S.C.
                Section 7241, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002

31.2*           Certification by Principal Financial Officer pursuant to 15
                U.S.C. Section 7241, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002

32.1*           Certification by Chief Executive Officer pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002

32.2*           Certification by Principal Financial Officer pursuant to 18
                U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002

                                       43
<PAGE>

(1)  Incorporated  by reference from Registrant's Form 8-K filed with the SEC on
     May  7,  2004.
(2)  Incorporated by reference from Registrant's Form SB-2 filed with the SEC on
     March  13,  2002.
(3)  Incorporated  by reference from Registrant's Form 8-K filed with the SEC on
     April  12,  2004.
(4)  Incorporated  by reference from Registrant's Form 8-K filed with the SEC on
     November  30,  2004.
(5)  Incorporated  by reference from Registrant's Form 10-QSB filed with the SEC
     on  August  23,  2004.
(6)  Incorporated  by  reference  from Registrant's Form 10-QSB/A filed with the
     SEC  on  November  8,  2004.
*    Filed  herein.

ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

     The  aggregate  fees  billed  for  each  of  the  last two fiscal years for
professional  services  rendered  by  the  principal accountant for our audit of
annual  financial  statements and review of financial statements included in our
Forms  10-QSB  or  services  that  are  normally  provided  by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years  was:

     2004 -    $26,483 billed by Williams & Webster, P.S. This amount includes a
               $4,000  retainer  for audit of the Company's financial statements
               for  2004. The fees for such audit have not been billed as of the
               filing  of  this  report.
     2003 -    $11,622.50  billed  by  Williams  &  Webster,  P.S.

AUDIT-RELATED  FEES

     The  aggregate  fees  billed  in  each  of  the  last  two fiscal years for
assurance  and related services by the principal accountants that are reasonably
related  to  the  performance of the audit or review of our financial statements
and  are  not  reported  in  the  preceding  paragraph:

     2004 -  $0.00  billed  by  Williams  &  Webster,  P.S.
     2003 -  $0.00  billed  by  Williams  &  Webster,  P.S.

                                       44
<PAGE>

TAX  FEES

     The  aggregate  fees  billed  in  each  of  the  last  two fiscal years for
professional  services  rendered by the principal accountant for tax compliance,
tax  advice,  and  tax  planning  was:

     2004 -  $0.00  billed  by  Williams  &  Webster,  P.S.
     2003 -  $700.00  billed  by  Williams  &  Webster,  P.S.

ALL  OTHER  FEES

     The  aggregate  fees  billed  in  each  of the last two fiscal yeas for the
products  and  services  provided  by  the  principal accountant, other than the
services  reported  in  paragraphs  (1),  (2),  and  (3)  was:

     2004 -  $0.00  billed  by  Williams  &  Webster,  P.S.
     2003 -  $0.00  billed  by  Williams  &  Webster,  P.S.

PERCENTAGE  OF  HOURS  EXPENDED

     The  percentage  of hours expended on the principal accountant's engagement
to  audit  our  financial  statements  for the most recent fiscal year that were
attributed  to  work  performed by persons other than the principal accountant's
full  time,  permanent  employees  was  0%.

                                   SIGNATURES

     In  accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   FALCON  NATURAL  GAS  CORP.

                                   By:  /s/ Fred  B.  Zaziski
                                      ------------------------
                                   Name:  Fred  B.  Zaziski
                                   Title: Chief  Executive  Officer  and
                                          Director
                                   Date:  April  14,  2005

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

                                       45
<PAGE>

SIGNATURE                        TITLE                            DATE
---------                        -----                            ----

By: /s/ Fred B. Zaziski          Chief Executive Officer          April 14, 2005
   --------------------          and Director
   Fred B. Zaziski

By: /s/ Massimiliano Pozzoni     Vice President, Secretary,       April 14, 2005
   -------------------------     Treasurer,
  Massimiliano Pozzoni           (Principal Financial Officer)
                                 and Director

                                       46
<PAGE>