##### Table of Contents



U.S. SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-KSB
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    August 31, 2006o

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission file
    no. 0-20879
  PYR ENERGY
    CORPORATION
 (Name of small business issuer
    in its charter)
  Maryland

95-4580642(State or jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)1675 Broadway, Suite 2450,
    Denver, CO(Address of principal
    executive offices)

80202(Zip Code)   Registrants telephone number, including area
    code: (303)
    825-3748
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which Registered$.001 Par Value Common Stock

American Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
 (Title of Class)
   þ o
  Regulation S-B Form 10-KSB Form 10-KSB.  Yes þ o
  Rule 12-b-2 o þ
      *
    
    Without asserting that any of the issuers directors or
    executive officers, or the entities that own 10% or greater of
    the registrants shares of common stock, are affiliates,
    the shares of which they are beneficial owners have been deemed
    to be owned by affiliates solely for this calculation.




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##### 



TABLE
    OF CONTENTS
  PagePART I


1ITEM 1 and
    ITEM 2.     DESCRIPTION OF
    BUSINESS AND PROPERTIES


1ITEM 3.

LEGAL
    PROCEEDINGS


21PART II


22ITEM 5.

MARKET FOR COMMON
    EQUITY AND RELATED STOCKHOLDER MATTERS


22ITEM 6.

MANAGEMENTS
    DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS


23ITEM 7.

FINANCIAL
    STATEMENTS


31ITEM 8.

CHANGES IN AND
    DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE


31ITEM 8A.

CONTROLS AND
    PROCEDURES


31ITEM 8B.

OTHER
    INFORMATION


31PART III


32ITEM 9.

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


32ITEM 10.

EXECUTIVE
    COMPENSATION


34ITEM 11.

SECURITY OWNERSHIP
    OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
    STOCKHOLDER MATTERS


36ITEM 12.

CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS


38ITEM 13.

EXHIBITS


39ITEM 14.

PRINCIPAL
    ACCOUNTANT FEES AND SERVICES


40SIGNATURES


41CONSOLIDATED
    FINANCIAL STATEMENTS


F-1List of the Company's SubsidiariesConsent of HEIN & Associates LLPConsent of Ryder Scott CompanyCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification Pursuant to Section 906 by CEOCertification Pursuant to Section 906 by CFO   i




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##### Table of Contents



PART I  ITEM 1
    and ITEM 2.
    DESCRIPTION
    OF BUSINESS AND PROPERTIES  General
      (303) 825-3748, (303) 825-3768
  PROPERTIES
    AND BUSINESS ACTIVITIES
  Oil and
    Gas Exploration and Development Activities
      Rocky
    Mountain Exploration
  Mallard Project. th 3-D 3-D
 1




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##### Table of Contents



Pioneer Prospect.
  Ryckman Creek Project.
  Montana Foothills Project.
  Texas
    and Gulf Coast Exploration:
  Nome Field.
     2




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##### Table of Contents



Cotton Creek Prospect.
  Madison Prospect.
   3




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##### Table of Contents



Tortuga Grande Prospect.
  Merganser Prospect.
  Bayou Duralde Prospect.
  West Westbury Prospect.
  Wilburton Field.
  Hansford Project.
 4




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##### Table of Contents



OTHER
  Utah
    San Joaquin
    Basin, California
  Bulldog and Wedge
  Blizzard.
  Bulldog Prospect.
  Wedge Prospect.
  Markets
    and Major Customers
    2006


2005Customer A


26
%


Customer B


20
%


38
%Customer C


11
%


Customer D






22
%Customer E






10
%    5




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##### Table of Contents



Employees
    and Office Space
    Business
    Strategy
    
    our inventory of Texas and Rocky Mountain development and
    exploration projects,
    our control of pre-drill exploration phases, and
    our ability to identify suitable development and exploitation
    drilling opportunities.    
    Execute Exploration and Development Drilling on Our
    Undrilled Projects.  We have interests in
    several exploration projects in the Texas Gulf Coast and select
    areas of the Rocky Mountains. In the Rocky Mountains, our most
    notable project is the Mallard prospect located in southwestern
    Wyoming. We are currently expanding our drilling activities on
    the Mallard prospect with the drilling of the UPRC
    25-1 well and completion of
    3-D seismic.
    In the Texas Gulf Coast, we have interests in several
    exploration projects and PUD locations to be drilled in the
    future. We are currently attempting completion of recently
    drilled wells in the Nome and Madison prospects.
    Continue to Internally Generate Exploration
    Prospects.  We believe that by continuing to
    generate exploitation and exploration prospects with a special
    emphasis on applying our seismic expertise to deep, structurally
    complex formations, we can identify prospects with significant
    oil and gas reserve potential. We then assemble acreage
    positions on these prospects. This enables us to control costs
    during the pre-drill phases of exploration and to sell a portion
    of our interests to industry participants, while potentially
    retaining a carried interest in the initial drilling.
    Evaluate Low Risk, Shallow Exploitation and Development
    Drilling Opportunities.  As part of our
    ongoing strategy, we are evaluating lower risk drilling
    opportunities relative to our higher risk, internally generated,
    exploration projects. If found to be appropriate, these
    opportunities can provide the Company with suitable internal
    rates of return on investment, geographic and risk
    diversification, and exposure to reserves and potential cash
    flow. We continue to review and evaluate additional development
    and exploitation opportunities as they arise.
    Continue a Disciplined Acquisition
    Process.  As part of our ongoing strategy, we
    diligently look for properties or opportunities with significant
    upside in our core areas. Through our personal contacts,
    industry knowledge and expertise, we look to find under-worked
    properties or missed structures, that with strong operatorship,
    may be productive.  Certain
    Definitions
    AMI.
 6




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##### Table of Contents



Bbl.
  Bbl/d.
  Bc/d.
  Bcf.
  Bcfe.
  Boe.
  Btu or British thermal unit.
  Capital Expenditures.
  Carried through the tanks.
  Completion.
  Condensate.
  Developed Acreage.
  Development Well.
  Exploitation.
  Exploration.
  Exploratory Well.
  Field. and/or
  Finding and Development Costs.
  Gross Acres or Gross Wells.
  Lease.
  Mcf.
 7




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##### Table of Contents



Mcf/d.
  Mcfe.
  MMcf.
  Net Acres or Net Wells.
  Operator.
  Participant Group. and/or
  PV-10
    value.
  Productive well.
  Prospect.
  Proved developed reserves.
  Proved reserves.
  Proved undeveloped reserves (PUD).
  Re-entry.
  Reserves.
  Reservoir.
  Royalty.
  Sidetrack.
 8




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##### Table of Contents



Tcf.
  3-D
    Seismic. 3-D
  Undeveloped Acreage.
  Working Interest.
  Proved
    Reserves
    As of August 31,2005


2006Estimated Net Proved Reserves:Natural gas (MMcf)


3,668



5,738Oil & NGLs (MBbls)


566



628Total (MMcfe)


7,064



9,508Percent proved developed


61.8
%


61.7
%Standardized Measure (in
    thousands)(1)

$
28,752


$
28,685     (1)
    
    The Standardized Measure represents the present value of
    estimated future cash inflows from proved natural gas and oil
    reserves, less future development, production, and income tax
    expenses, discounted at 10% per annum to reflect timing of
    future cash flows and using market prices for natural gas and
    oil at each of August 31, 2005 and 2006, which were
    $11.74 per Mcf of gas and $66.95 per bbl of oil at
    August 31, 2005 and $5.49 per Mcf of gas and
    $67.12 per Bbl of oil at August 31, 2006.     9




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Production
    and Prices
    As of August 31,2005


2006Production Data:Natural gas (Mcf)


392,067



915,973Oil (Bbls)


61,948



53,049NGLs (Bbls)


336



5,267Combined volumes (MMcfe)


766



1,266Daily combined volumes (MMcfe/d)


2.1



3.5Average Prices:Natural gas (per Mcf)

$
7.54


$
7.32Oil (per Bbl)

$
50.04


$
63.55NGLs (per Bbl)

$
29.53


$
34.83Combined (per Mcfe)

$
7.96


$
8.15Average Costs (Per
    Mcfe):Lease operating expenses

$
0.94


$
1.22Production taxes, gathering and
    transportation

$
0.50


$
0.54Depreciation, depletion and
    amortization

$
1.13


$
2.05General and administrative

$
2.49


$
1.78   Productive
    Wells
   10




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##### Table of Contents



Gross


NetOil


Gas


Total


Oil


Gas


TotalLocationCanada






1



1







0.05



0.05California


3







3



0.24







0.24Oklahoma


17



27



44



2.86



0.85



3.71Texas


20



15



35



4.42



4.41



8.83Utah


5







5



1.68







1.68Wyoming






1



1







0.29



0.29TOTAL


45



44



89



9.20



5.60



14.80   Drilling
    Activities
    
    During the fiscal year ended August 31, 2006, PYR
    participated in the drilling of three exploration wells, with
    one exploration well in the Wyoming Overthrust, one in the
    southeast Gulf Coast, and one in Louisiana. PYR also
    participated in drilling a workover in Hansford County, Texas
    and another one in the Constitution Field in the Gulf Coast.
    During this time period, the Company participated in drilling
    seven PUDs total, with one drilled in Hansford, Texas (100% WI),
    five drilled in the Willburton Field in Oklahoma (2.42% WI), and
    one in the Gulf Coast area (17.5% WI). As of mid-November 2006,
    both workovers were producing to sales, all of the exploratory
    wells were either producing or in the process of being
    completed, and all of the PUD wells were also either producing
    to sales or in the process of being completed.
    During the fiscal year ended August 31, 2005, we
    participated in the drilling of two exploration wells in the
    Wyoming Overthrust, one exploration well in East Texas, and two
    development wells in Oklahoma. Four of these wells were
    successful, and one of the Wyoming Overthrust exploration wells
    was plugged and abandoned in November 2005. Additionally in
    fiscal year 2005, the Company participated in several well
    workovers in Texas and Oklahoma.    Full Cost
    Method of Accounting for Oil and Gas Properties
   11




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Developed
    and Undeveloped Acreage
    Gross Acres


Net AcresState

Developed


Undeveloped


Developed


UndevelopedCalifornia


400



5,000



33



5,000Louisiana






2,665







2,615Oklahoma


5,659







197



Texas


25,633



8,306



9,610



7,048Utah


4,943







1,504



Wyoming


640



7,872



184



5,100TOTAL


37,275



23,843



11,528



19,763   Competition
    Government
    Regulation of the Oil and Gas Industry
  General.
      Federal Regulation of the Sale and Transportation of Oil and
    Gas.
 12




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and/or
     13




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##### Table of Contents



State Regulation.
  Environmental Matters. clean-up
   14




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##### Table of Contents



state-of-the-art
  clean-up
    Title to
    Properties
    Risk
    Factors
    We have a limited history of drilling and monitoring oil and
    gas properties.
 15




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We may not discover commercially productive
    reserves.
  Exploratory drilling is an uncertain process with many
    risks.
  
    unexpected drilling conditions,
    pressure or irregularities in formations,
    equipment failures or accidents,
    adverse weather conditions,
    compliance with governmental requirements,
    shortages or delays in the availability of drilling rigs and the
    delivery of equipment, and
    shortages of trained oilfield service personnel.    Our exploration and development activities are subject to
    reservoir and operational risks.
   16




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Our operations require large amounts of capital and our cash
    resources are limited.
  
    our success in locating and producing reserves in other projects,
    the level of production from existing wells, and
    prices of oil and gas.    
    a substantial portion of our operating cash flow being dedicated
    to the payment of principal and interest,
    our being more vulnerable to competitive pressures and economic
    downturns, and
    restrictions on our operations.    We depend heavily on exploration success and subsequent
    success in developing our exploration
    projects.
  We depend on industry alliances. project-by-project
  We have limited control over our oil and gas
    projects.
  
    the abilities of the operator of the project,
    the availability of leases with favorable terms and the
    availability of required permitting for projects,
    the availability of future capital resources to us and the other
    participants to be used for purchasing leases and drilling wells, 17




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##### Table of Contents




    the approval of other participants for the purchasing of leases
    and the drilling of wells on the projects, and
    the economic conditions at the time of drilling, including the
    prevailing and anticipated prices for oil and gas.    Oil and gas prices are volatile and an extended decline in
    prices could hurt our business prospects.
  
    have a material adverse effect on our results of operations,
    limit our ability to attract capital,
    make the formations we are targeting significantly less
    economically attractive,
    reduce our cash flow and borrowing capacity, and
    reduce the value and the amount of any future reserves.    
    worldwide and domestic supplies of oil and gas,
    the ability of the members of the Organization of Petroleum
    Exporting Countries to agree to and maintain oil price and
    production controls,
    political instability or armed conflict in oil or gas producing
    regions,
    the price and level of foreign imports,
    worldwide economic conditions,
    marketability of production,
    the level of consumer demand,
    the price, availability and acceptance of alternative fuels,
    the availability of processing and pipeline capacity,
    weather conditions, and
    actions of federal, state, local and foreign authorities.    Accounting rules may require
    write-downs.
  We face risks related to title to the leases we enter into
    that may result in additional costs and affect our operating
    results.
 18




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##### Table of Contents



Limitations on the effectiveness of
    controls.
  Our industry is highly competitive and many of our
    competitors have more resources than we do.
  Technological changes could put us at a competitive
    disadvantage.
  Our industry is heavily regulated.
 19




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##### Table of Contents



Our operations must comply with complex environmental
    regulations.
  Our business depends on transportation facilities owned by
    others.
  Attempts to grow our business could have an adverse
    effect.
  We may not be able to retain our listing on the American
    Stock Exchange.
  We depend on key personnel.
  Disclosure
    Regarding Forward-Looking Statements and Cautionary
    Statements
    
    failure to obtain, or a decline in, oil or gas production, or a
    decline in oil or gas prices,
    incorrect estimates of required capital expenditures,
    increases in the cost of drilling, completion and gas collection
    or other costs of production and operations,
    an inability to meet growth projections, and
    other risk factors set forth under Risk Factors in
    this annual report. In addition, the words believe,
    may, could, will,
    when, estimate, continue,
    anticipate, intend, expect
    and similar expressions, as they relate to PYR, our business or
    our management, are intended to identify forward-looking
    statements. 20




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##### Table of Contents



ITEM 3.
    LEGAL
    PROCEEDINGS      th
 21




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##### Table of Contents



400-acre
     PART II  ITEM 5.
    MARKET
    FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS  Market
    for Common Equity
    High


LowFiscal Year Ended
    August 31, 2005First Quarter

$
1.31


$
0.90Second Quarter


1.79



0.95Third Quarter


1.99



1.20Fourth Quarter


1.64



1.30Fiscal Year Ended
    August 31, 2006First Quarter

$
2.07


$
1.00Second Quarter


1.78



1.23Third Quarter


1.57



1.18Fourth Quarter


1.30



1.01     Stockholders
    of Record
    Dividends
   22




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##### Table of Contents



Equity
    Compensation Plan Information
  Equity Compensation Plan InformationNumber ofSecuritiesRemaining AvailableNumber of





for Future IssuanceSecurities to be





under EquityIssued Upon


Weighted-Average


Compensation PlansExercise of


Exercise Price of


(ExcludingOutstanding


Outstanding


SecuritiesOptions, Warrants


Options, Warrants


Reflected inPlan Category

and Rights


and Rights


Column (a))*(a)


(b)


(c)Equity compensation plans approved
    by security holders


2,331,750


$
1.08



4,429,250Equity compensation plans not
    approved by security holders










Total


2,331,750


$
1.08



4,429,250       ITEM 6.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS  Form 10-KSB.
  Overview
        Liquidity
    and Capital Resources
   23




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##### Table of Contents



and/or
  Cash
    Flows from Operating Activities
      Cash
    Flows used in Investing Activities
       24




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##### Table of Contents



Cash
    Flows provided by Financing Activities
    and/or
  Contractual
    Obligations
    Payments due by PeriodContractual Obligations

Total


2007


2008


2009Convertible Notes

$
8,474


$



$



$
8,474Office Leases


93



70



23



Total Contractual Cash Obligations

$
8,567


$
70


$
23


$
8,474    25




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Results
    of Operations
  The
    twelve months ended August 31, 2006 (2006)
    compared with the twelve months ended August 31, 2005
    (2005)
  Increase (Decrease)2006


2005


Amount


Percent($ in thousands, except for per unit prices and costs)Operating Results:RevenuesGas production revenues

$
6,706


$
2,957


$
3,749



127
%Oil production revenues


3,371



3,135



236



8
%Natural gas liquids revenues


184



10



174



1740
%Other products


58



0



58



Total revenues

$
10,319


$
6,102


$
4,217



69
%Operating ExpensesLease operating expense

$
1,547


$
721


$
826



115
%Production taxes, gathering and
    transportation expense


689



383



306



80
%Net profits expense


829



1,343



(514
)


(38
)%Depletion, depreciation,
    amortization and accretion


2,616



893



1,723



193
%Impairment of oil and gas
    properties


0



580



(580
)


(100
)%General and administrative


2,256



1,909



347



18
%Total operating expenses

$
7,937


$
5,829


$
2,108



36
%Interest Expense

$
371


$
343


$
28



8
%Production Data:Natural gas (Mcf)


915,973



392,067



523,906



134
%Oil (Bbls)


53,049



61,948



(8,899
)


(14
)%Natural gas liquids (Bbls)


5,267



336



4,931



1468
%Combined volumes (Mcfe)


1,265,869



765,771



500,098



65
%Daily combined volumes (Mcfe/d)


3,468



2,098



1,370



65
%Average Prices:Natural gas (per Mcf)

$
7.32


$
7.54


$
(0.22
)


(3
)%Oil (per Bbl)


63.55



50.04



13.51



27
%Natural gas liquids (per Bbl)


34.83



29.53



5.30



18
%Combined (per Mcfe)


8.15



7.96



0.19



2
%Average Costs (per
    Mcfe):Lease operating expense

$
1.22


$
0.94


$
0.28



30
%Production taxes, gathering and
    transportation expense


0.54



0.50



0.04



8
%Net profit expense


0.65



1.75



(1.10
)


(63
)%Depletion, depreciation,
    amortization and accretion


2.05



1.13



0.92



81
%General and administrative


1.78



2.49



(0.71
)


(28
)%Interest expense


0.29



0.45



(0.16
)


(36
)%     Oil and Gas Revenues.
 26




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Lease Operating Expenses.
  Production Taxes, Gathering and Transportation
    Expenses.
  Net Profits Expense.
  Depreciation, Depletion, Amortization and Accretion
    Expense. Form 10-KSB.
  Impairment and Abandonments.
  General and Administrative Expenses.
 27




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Interest Expense.
  Interest Income.
  The
    twelve months ended August 31, 2005 (2005)
    compared with the twelve months ended August 31, 2004
    (2004)
  Increase (Decrease)2005


2004


Amount


Percent($ in thousands, except for per unit prices and costs)Operating Results:RevenuesGas production revenues

$
2,957


$
334


$
2,623



785
%Oil production & PP
    revenues


3,145



529



2,616



495
%Total revenues

$
6,102


$
863


$
5,239



607
%Operating ExpensesLease operating expense (including
    production taxes, gathering, transportation)

$
1,104


$
335


$
769



229
%Net profits expense


1,343



0



1,343



Depletion, depreciation,
    amortization and accretion


893



273



620



227
%Impairment of oil and gas
    properties


580



0



580



General and administrative


1,909



1,324



585



44
%Total operating expenses

$
5,829


$
1,933


$
3,896



202
%Interest expense

$
343


$
327


$
16



5
%Production Data:Natural gas (Mcf)


392,067



60,285



331,782



551
%Oil and NGLs (Bbls)


62,284



13,973



48,311



346
%Combined volumes (Mcfe)


765,771



144,123



621,648



432
%Daily combined volumes (Mcfe/d)


2,098



395



1703



431
%Average Prices:Natural gas (per Mcf)

$
7.54


$
5.54


$
2.00



36
%Oil and NGLs (per Bbl)


50.49



37.88



12.61



33
%Combined (per Mcfe)


7.97



5.99



1.98



33
%Average Costs (per
    Mcfe):Lease operating expense

$
1.44


$
2.33


$
(0.89
)


(38
%)Net profit expense


1.75



0.00



1.75



Depletion, depreciation,
    amortization and accretion


1.13



1.20



(0.07
)


(6
%)General and administrative


2.49



9.19



(6.70
)


(73
%)Interest expense


0.45



2.27



(1.82
)


(80
%)  28




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##### Table of Contents



Oil and Gas Revenues.
  Lease Operating Expenses.
  Net Profits Expense.
  Depreciation, Depletion, Amortization and
    Accretion. Form 10-KSB.
  Impairment and Abandonments.
  General and Administrative Expenses.
  Interest Expense.
  Interest Income.
 29




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Critical
    Accounting Policies And Estimates
    Reserve
    Estimates:
  and/or
    Property,
    Equipment and Depreciation:
    Revenue
    Recognition:
    Recent
    Accounting Pronouncements
  Share-Based Payment Accounting
    for Stock-Based Compensation Accounting for Stock Issued to Employees
 30




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Accounting for Conditional Asset Retirement Obligations Accounting for Asset Retirement
    Obligations, and/or
  Accounting for Uncertainty in Income
    Taxes  an Interpretation of FASB Statement 109
  ITEM 7.
    FINANCIAL
    STATEMENTS  Form 10-KSB. Form 10-KSB.
  ITEM 8.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 8A.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e)
  ITEM 8B.
    OTHER
    INFORMATION   31




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

Age

Position with the Company

SinceKenneth R Berry, Jr.


54


Chief Executive Officer and
    President


David Kilpatrick


56


Chairman of the Board


2002Bryce W. Rhodes


53


Director


1999Dennis M. Swenson


71


Director


2004Jane M. Richards


58


Chief Financial Officer


Tucker L. Franciscus


38


Vice President of Strategic
    Development and Corporate Secretary


   Kenneth R. Berry, Jr.
  David B. Kilpatrick
  Bryce W. Rhodes
  Dennis M. Swenson
 32




---



##### Table of Contents



Jane M. Richards
  Tucker L. Franciscus
  Section 16(a)
    Beneficial Ownership Reporting Compliance
    Employee
    Code of Conduct and Code of Ethics and Reporting of Accounting
    Concerns
       33




---



##### Table of Contents



Audit
    Committee Financial Expert
    Identification
    of Audit Committee
  Form 10-KSB Form 10-Q
  ITEM 10.
    EXECUTIVE
    COMPENSATION  Summary
    Compensation Table
    Summary Compensation TableAnnual Compensation


Long-Term CompensationAwards


PayoutsOther Annual


Restricted


Securities


LTIP


All OtherFiscal


Salary


Bonus


Compensation


Stock


Underlying


Payouts


CompensationName and Principal Position

Year


($)(1)


($)


($)(3)


Awards ($)


Options (#)


($)(3)


($)Kenneth R. Berry Jr.


2006


$
121,000















175,000







Chief Executive Officer


2005


$
108,000























2004


$
93,150















135,000







Jane M. Richards


2006


$
104,000















85,000







Chief Financial Officer


2005


$
38,000















90,000







2004



























Tucker L. Franciscus


2006


$
89,000















25,000







Vice President


2005


$
120,000















150,000







2004



























D. Scott Singdahlsen(4)


2006


$
175,000















25,000







2005


$
175,000















200,000







2004


$
175,000























     (1)
    
    The dollar value of base salary (cash and non-cash) received
    during the year indicated.(2)
    
    During the period covered by the Summary Compensation Table, we
    did not pay any other annual compensation not properly
    categorized as salary or bonus, including perquisites and other
    personal benefits, securities or property.(3)
    
    We do not have in effect any plan that is intended to serve as
    incentive for performance to occur over a period longer than one
    fiscal year except for our 1997 and 2000 Stock Option Plans and
    our 2006 Stock Incentive Plan.(4)
    
    Mr. Singdahlsen was the Companys Chief Executive
    Officer, Chief Financial Officer and President through
    July 25, 2006, which was the effective date of his
    resignation from these positions. Mr. Singdahlsen remains
    an 34




---



##### Table of Contents



employee of the Company, and as a result his compensation
    disclosed above includes both compensation as Chief Executive
    Officer, Chief Financial Officer and President through
    July 25, 2006 and compensation as an employee from
    July 25, 2006 through August 31, 2006.  Aggregated
    Option Exercises And Fiscal Year-End Option Value
    Table
    Aggregated Option Exercises in last Fiscal Year and Year-End
    Option Values(1)Number of SecuritiesUnderlying Unexercised


Value of UnexercisedShares





Options at


In-the-Money
    Options atAcquired on


Value


Fiscal Year-End (#)(4)


Fiscal Year-End ($)(5)Name

Exercise(2)


Realized ($)(3)


Exercisable


Unexercisable


Exercisable


UnexercisableKenneth R. Berry , Jr.










397,500



115,000



158,300



1,950Jane M. Richards










75,000



100,000







Tucker L. Franciscus










75,000



100,000



5,500



11,000     (1)
    
    No stock appreciation rights are held by any of the named
    executive officers.(2)
    
    The number of shares received upon exercise of options during
    the year ended August 31, 2006.(3)
    
    With respect to options exercised during the year ended
    August 31, 2006, the dollar value of the difference between
    the option exercise price and the market value of the option
    shares purchased on the date of the exercise of the options.(4)
    
    The total number of unexercised options held as of
    August 31, 2006, separated between those options that were
    exercisable and those options that were not exercisable on that
    date.(5)
    
    For all unexercised options held as of August 31, 2006, the
    aggregate dollar value of the excess of the market value of the
    stock underlying those options over the exercise price of those
    unexercised options. These values are shown separately for those
    options that were exercisable and those options that were not
    yet exercisable on August 31, 2006 based on the closing
    sale price of our common stock on that date, which was $1.05 per
    share.  Employee
    Retirement Plans, Long-Term Incentive Plans and Pension
    Plans
    1997
    Stock Option Plan
    2000
    Stock Option Plan
   35




---



##### Table of Contents



2006
    Stock Incentive Plan
    Compensation
    Committee Interlocks and Insider Participation
    Employment
    Contracts and Termination of Employment and
    Change-In-Control
    Arrangements
    change-in-control change-in-control, change-in-control.
  ITEM 11.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Stock
    Ownership of Directors and Principal Stockholders
   36




---



##### Table of Contents



Number of Shares

Percentage ofName and Address of Beneficial Owner

Beneficially Owned(1)

Shares OutstandingKenneth R. Berry, Jr.


570,365(2
)


1.5
%1675 Broadway, Suite 2450
    Denver, Colorado 80202Bryce W. Rhodes


175,583(3
)


*c/o Whittier Energy
    Company
    7770 El Camino Real
    Carlsbad, CA 92009David B. Kilpatrick


98,169(4
)


*9105 St. Cloud Lane
    Bakersfield, CA 93311Dennis M. Swenson


78,169(5
)


*5360 Lakeshore Drive
    Littleton, CO 80123Tucker L. Franciscus


125,000(6
)


*1675 Broadway, Suite 2450
    Denver, Colorado 80202Jane M. Richards


75,000(7
)


*1675 Broadway, Suite 2450
    Denver, Colorado 80202All Executive Officers and
    Directors as a group (six persons)


1,142,286(2
)(3)(4)(5)(6)(7)


3.0
%D. Scott Singdahlsen


2,151,750(8
)


5.6
%1675 Broadway, Suite 2450
    Denver, Colorado 80202Victory Oil Company


2,773,204(9
)


7.3
%222 West Sixth Street,
    Suite 1010
    San Pedro, California 90731Eastbourne Capital Management,
    L.L.C.


3,634,000(10
)


9.6
%1101 Fifth Avenue,
    Suite 160
    San Rafael, CA 94901     (*)
    
    Less than one percent.(1)
    
    Beneficial ownership is defined in the regulations
    promulgated by the U.S. Securities and Exchange Commission
    as having or sharing, directly or indirectly (1) voting
    power, which includes the power to vote or to direct the voting,
    or (2) investment power, which includes the power to
    dispose or to direct the disposition of shares of the common
    stock of an issuer. The definition of beneficial ownership
    includes shares underlying options or warrants to purchase
    common stock, or other securities convertible into common stock,
    that currently are exercisable or convertible or that will
    become exercisable or convertible within 60 days. Unless
    otherwise indicated, the beneficial owner has sole voting and
    investment power.(2)
    
    Includes the following securities held directly or indirectly by
    Kenneth R. Berry, Jr.: an aggregate of 172,865 shares
    owned by various entities, IRAs, and trusts with which
    Mr. Berry, or his spouse or minor daughter, is associated;
    and options to purchase 397,500 shares of common stock at
    exercise prices ranging from $.29 to $1.65 per share that
    currently are exercisable or that will become exercisable within
    the next 60 days. Does not include options to purchase an
    additional 15,000 shares at $0.92 until August 25,
    2009 that become exercisable in fiscal 2007 and options to
    purchase 100,000 shares at $1.12 until July 25, 2011
    of which 50,000 share increments become exercisable in July
    2007 and 2008, respectively.(3)
    
    Includes 13,000 shares of common stock owned by
    Mr. Rhodes and 64,414 shares of common stock owned by
    Adventure Seekers Travel, Inc. Adventure Seekers is owned by
    Mr. Rhodes wife and Mr. Rhodes is the 37




---



##### Table of Contents



President of Adventure Seekers. Also includes options to
    purchase 20,000 shares at $1.65 per share until
    April 11, 2007, options to purchase 50,000 shares at
    $1.15 per share until October 14, 2009, options to
    purchase 15,000 shares at $1.34 per share until
    November 22, 2010 and options to purchase
    13,169 shares at $0.97 per share until
    October 10, 2011 that are exercisable or will become
    exercisable within the next 60 days. Does not include
    options to purchase an additional 13,169 shares at
    $0.97 per share until October 10, 2011 of which 6,585
    and 6,584 become exercisable on February 28, 2007 and
    May 31, 2007, respectively. Excludes 171,625 shares
    that are held by Whittier Energy Company. Mr. Rhodes is a
    President and CEO of Whittier Energy Company. Mr. Rhodes
    disclaims beneficial ownership of the shares beneficially owned
    by Whittier Energy Company.(4)
    
    Includes options to purchase 20,000 shares at
    $1.72 per share until June 4, 2007, options to
    purchase 50,000 shares at $1.15 per share until
    October 14, 2009, options to purchase 15,000 shares at
    $1.34 per share until November 22, 2010 and options to
    purchase 13,169 shares at $0.97 per share until
    October 10, 2011 that are exercisable or will become
    exercisable within the next 60 days. Does not include
    options to purchase an additional 13,169 shares at
    $0.97 per share until October 10, 2011 of which 6,585
    and 6,584 become exercisable on February 28, 2007 and
    May 31, 2007, respectively.(5)
    
    Includes options to purchase 50,000 shares at
    $1.24 per share until October 1, 2009, options to
    purchase 15,000 shares at $1.34 per share until
    November 22, 2010 and options to purchase
    13,169 shares at $0.97 per share until
    October 10, 2011 that are exercisable or will become
    exercisable within the next 60 days. Does not include
    options to purchase an additional 13,169 shares at
    $0.97 per share until October 10, 2011 of which 6,585
    and 6,584 become exercisable on February 28, 2007 and
    May 31, 2007, respectively.(6)
    
    includes options to purchase 100,000 shares at
    $.94 share until September 1, 2009 and options to
    purchase 25,000 shares at $1.34 per share until
    November 1, 2010. Does not include options to purchase an
    additional 50,000 shares at $0.94 share until
    September 1, 2009 which become exercisable on
    September 1, 2007.(7)
    
    Includes options to purchase 30,000 shares at $1.46 until
    April 15, 2010, options to purchase 25,000 shares at
    $1.34 until November 22, 2010 and options to purchase
    20,000 at $1.12 until July 25, 2011. Does not include
    options to purchase an additional 40,000 shares at $1.12 of
    which 20,000 share increments will become exercisable on
    July 26, 2007 and 2008, respectively.(8)
    
    The shares shown for Mr. Singdahlsen include
    200,000 shares owned by Mr. Singdahlsens two
    minor children. Also includes options to purchase
    15,000 shares at $1.82 per share until April 12,
    2007, options to purchase 200,000 shares at $0.29 per
    share until February 4, 2010, options to purchase
    81,750 shares at $1.30 per share until
    February 4, 2010, options to purchase 80,000 shares at
    $0.96 per share until November 17, 2014 and options to
    purchase 25,000 shares at $1.34 per share until
    November 22, 2010.(9)
    
    Based on the information provided by shareholder.(10)
    
    The shares reflected include shares beneficially owned by
    Eastbourne Capital Management, L.L.C., a registered investment
    adviser, Richard Jon Barry, Manager of Eastbourne and the
    following companies to which Eastbourne is investment adviser:
    Black Bear Offshore Master Fund Limited, a Cayman Island
    exempted company, Black Bear Fund I, L.P. and Black Bear
    Fund II, LLC. Not included are equivalent shares of common
    stock underlying $7,309,500 of convertible notes held by Black
    Bear Offshore Master Fund Limited, Black Bear Fund I,
    L.P. and Black Bear Fund II, LLC.  ITEM 12.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS    Form 8-K
 38




---



##### Table of Contents



ITEM 13.
    EXHIBITS  Exhibit Index
  Number

Description3
.1*

Articles of Incorporation, filed
    with the Maryland Secretary of State on June 18, 2001(1)3
.2*

Articles of Merger, filed with the
    Maryland Secretary of State on July 3, 2001(1)3
.3*

Bylaws(1)4
.1*

Specimen Common Stock
    Certificate(2)4
.2*

Subscription and Registration
    Rights Agreement between Wellington parties and the Company,
    September 2005(3)21


List of the Companys
    Subsidiaries23
.1

Consent of HEIN &
    Associates LLP.23
.2

Consent of Ryder Scott Company31
.1

Certification of Chief Executive
    Officer31
.2

Certification of Chief Financial
    Officer32
.1

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
    Executive Officer32
.2

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
    Financial Officer      *
    
    Previously filed.(1)
    
    Incorporated by reference from the Companys
    Form 10-KSB
    for the year ended August 31, 2001.(2)
    
    Incorporated by reference from the Companys
    Form 10-KSB/A1
    for the year ended August 31, 1997.(3)
    
    Incorporated by reference from the Companys Report on
    Form 8-K
    filed on October 8, 2005. 39




---



##### Table of Contents



ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES  Audit
    Fees
  Forms 10-Q,
  Audit-Related
    Fees
  Form S-3 8-K
  Tax
    Fees
    All Other
    Fees
    Audit
    Committee Pre-Approval Policies
   40




---



##### Table of Contents



SIGNATURES      By:
    /s/  Kenneth
    R. Berry, Jr.       By:
    /s/  Jane
    M. Richards         Signatures

Title

Date/s/  Kenneth
    R. Berry, Jr.Kenneth
    R. Berry, Jr.

Chief Executive Officer

November 22, 2006/s/  Jane
    M. RichardsJane
    M. Richards

Chief Financial Officer

November 22, 2006/s/  David
    KilpatrickDavid
    Kilpatrick

Chairman of the Board

November 22, 2006/s/  Dennis
    M. SwensonDennis
    M. Swenson

Director

November 22, 2006/s/  Bryce
    W. RhodesBryce
    W. Rhodes

Director

November 22, 2006  41




---



##### Table of Contents



PYR
    ENERGY CORPORATION
  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
  Report of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance
    Sheets
    August 31, 2006 and 2005


F-3Consolidated
    Statements of
    Operations
    Years Ended August 31, 2006 and 2005


F-4Consolidated
    Statements of Stockholders
    Equity For
    the Period from September 1, 2004 to August 31,
    2006


F-5Consolidated
    Statements of Cash
    Flows Years
    Ended August 31, 2006 and 2005


F-6Notes to
    Consolidated Financial Statements


F-7  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            HEIN & ASSOCIATES LLP
    F-2




---



##### Table of Contents



PYR
    ENERGY CORPORATION



CONSOLIDATED
    BALANCE SHEETS August 31,2006


2005(In thousands, except share and per share data)ASSETSCurrent
    Assets:Cash

$
6,254


$
2,934Oil and gas receivables


1,784



1,618Other receivable


62



124Prepaid expenses and other assets


64



59Total current assets


8,164



4,735Property
    and Equipment, at costOil and gas properties under full
    cost, net


20,421



13,242Furniture and equipment, net


45



2920,466



13,271Other
    Assets:Deferred financing costs and other
    assets


29



80Total
    Assets

$
28,659


$
18,086LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent
    Liabilities:Accounts payable

$
321


$
89Amounts payable to oil and gas
    property owners


38



2Accrued expenses:Accrued interest payable


99



94Accrued net profits payable


231



1,287Other accrued liabilities


936



282Asset retirement obligation


907



904Total current liabilities


2,532



2,658Long-Term
    Liabilities:Convertible notes


7,310



6,958Asset retirement obligation


366



293Total long-term liabilities


7,676



7,251Commitments
    And Contingencies(Note 9)Stockholders
    Equity:Preferred stock, $.001 par
    value; authorized 1,000,000 shares; issued and
    outstanding  none






Common stock, $.001 par
    value; authorized 75,000,000 shares; issued and
    outstanding  37,993,259 at 8/31/06 and
    31,640,259 shares at 8/31/05


38



32Capital in excess of par value


51,292



43,294Accumulated deficit


(32,879
)


(35,149
)Total stockholders equity


18,451



8,177Total
    Liabilities and Stockholders Equity

$
28,659


$
18,086    F-3




---



##### Table of Contents



PYR
    ENERGY CORPORATION



CONSOLIDATED STATEMENTS OF OPERATIONS  Years Ended August 31,2006


2005(In thousands, except per share data)Revenues:Oil and gas revenues

$
10,319


$
6,102Operating
    Expenses:Lease operating expenses


1,547



721Production taxes, gathering and
    transportation


689



383Net profits expense


829



1,343Impairment






580Depreciation, depletion,
    amortization and accretion


2,616



893General and administrative


2,256



1,909Total operating expenses


7,937



5,829Income
    From Operations


2,382



273Other
    Income (Expense):Interest income


245



93Interest (expense)


(371
)


(343
)Other (expense) income


14



(11
)Total other income (expense)


(112
)


(261
)Net
    Income

$
2,270


$
12Net
    Income Per Common Share -Basic And Diluted

$
0.06


$
0.00Weighted
    Average Shares OutstandingBasic


37,319



31,597Diluted


37,864



32,290    F-4




---



##### Table of Contents



PYR
    ENERGY CORPORATION



CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY  Capital inCommon Stock


Excess of


AccumulatedShares


Amount


Par Value


Deficit(In thousands)Balance,
    September 1, 2004


31,564


$
32


$
43,221


$
(35,161
)Exercise of common stock options
    for cash


76







58



Issuance of common stock options
    for director services










15



Net income














12Balance,
    August 31, 2005


31,640



32



43,294



(35,149
)Exercise of common stock options
    for cash


78







33



Private Placement sale of common
    stock, net of offering costs of $196,000


6,275



6



7,955



Issuance of non-qualifying options










10Net income














2,270Balance,
    August 31, 2006


37,993


$
38


$
51,292


$
(32,879
)    F-5




---



##### Table of Contents



PYR
    ENERGY CORPORATION



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended August 31,2006


2005(In thousands)Operating
    Activities:Net income

$
2,270


$
12Adjustments to reconcile net
    income to net cash used by operating activitiesDepreciation and amortization


2,593



868Impairment






580Amortization of financing costs


3



3Interest expense converted into
    debt


352



335Accretion of asset retirement
    obligation


22



25Stock option expense for
    non-qualifying options issued


10



Stock options issued for director
    services






15Changes in current assets and
    liabilities (Increase) in accounts receivable


(104
)


(1,266
)Decrease (increase) in prepaids
    and other receivables


(5
)


44Increase in accounts payable


30



4Increase in amounts payable to oil
    and gas property owners


36



Increase in accrued liabilities


284



22(Decrease) increase in net profits
    payable


(1,056
)


1,287Other






Net cash provided by operating
    activities


4,435



1,929Investing
    Activities:Cash paid for furniture and
    equipment


(29
)


(10
)Cash paid for oil and gas
    properties


(9,526
)


(5,862
)Proceeds from sale of exploration
    options






750Proceeds from sale of oil and gas
    properties


398



49Net cash used in investing
    activities


(9,157
)


(5,073
)Financing
    Activities:Proceeds from sale of common stock


8,157



Proceeds from exercise of options


33



58Cash paid for offering costs


(178
)


(18
)Other


30



Net cash provided by financing
    activities


8,042



40Net
    (Decrease) Increase In Cash


3,320



(3,104
)Cash,
    Beginning Of Year


2,934



6,038Cash,
    End Of Year

$
6,254


$
2,934Cash paid for interest and income
    taxes

$
10


$
Non-cash financing activities:Asset retirement obligation
    increase

$
54


$
15Net increase in payables and
    accrued liabilities for capital expenditures


578



3Debt issued for interest


351



335    F-6




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 For the fiscal years ended August 31, 2005 and
    2006
  1.  Organization
    And Summary Of Significant Accounting
    Policies
  Organization And Business
    Basis Of Presentation
  Cash Equivalents
  Receivables And Credit Policies
  Oil And Gas Properties
        Furniture And Equipment
 F-7




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Revenue Recognition
  Deferred Financing Costs
  Income Taxes Accounting for Income Taxes
    Use Of Estimates
    clean-up
  Net Income Per Share
  Share Based Compensation Accounting for
    Stock-Based Compensation Accounting for Stock Issued to Employees
 F-8




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005(In thousands, except per share data)Net income:As reported

$
2,270


$
12Total compensation cost determined
    under the fair value base method for all awards


(559
)


(331
)Pro forma net income (loss)

$
1,711


$
(319
)Net pro forma income (loss) per
    share:As reported  Basic and
    Dilutive

$
0.06


$
(0.00
)Pro forma  Basic and
    Dilutive

$
0.05


$
(0.01
)   Recent
    Accounting Pronouncements
  Gas Balancing
  Fair Value
    Concentration Of Risk
     F-9




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005Customer A


26
%


Customer B


20
%


38
%Customer C


11
%


Customer D






22
%Customer E






10
%   Reclassification
  Recent Accounting Pronouncements Share-Based Payment Accounting for Stock-Based
    Compensation Accounting for Stock Issued to
    Employees.
  Accounting for Conditional Asset Retirement Obligations Accounting for Asset Retirement
    Obligations, and/or
  Accounting for Uncertainty in Income
    Taxes  an Interpretation of FASB
    Statement 109
  2.
    Acquisition
    and Divestitures of Properties   F-10




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      3.  Property
    and Equipment
  Oil and Gas Properties
  2006


2005(In thousands)Oil and gas properties, full cost
    methodUnevaluated costs, not subject to
    amortizationUnited States

$
1,852


$
5,164Evaluated costs


47,079



37,76748,931



42,931Less accumulated depreciation,
    depletion, amortization and impairment


(28,510
)


(29,689
)$
20,421


$
13,242       Period Incurred2006

$
1,1182005


3452004


3482003


41$
1,852   Regulation S-X Rule 4-10(c)(2).
   F-11




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005(In thousands)Property acquisition costs

$
1,714


$
440Exploration costs


5,597



5,101Development costs


2,793



276$
10,104


$
5,817   Furniture and Equipment
  2006


2005(In thousands)Furniture and equipment

$
178


$
149Less accumulated depreciation


(133
)


(120
)$
45


$
29     4.  Asset
    Retirement Obligations
  Accounting for Asset
    Retirement Obligations.
    2006


2005(In thousands)Asset retirement obligations,
    beginning of fiscal year

$
1,197


$
1,158Liabilities incurred


54



19Liabilities settled






Accretion of asset retirement
    obligation including revision of estimates


22



20Asset retirement obligations, end
    of fiscal year


1,273



1,197Less current portion


(907
)


(904
)Long-term portion

$
366


$
293  F-12




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.  Net
    Income per Share
    Years Ended August 31,2006


2005Numerator:Net income

$
2,270


$
12Denominator:Weighted-average shares outstanding


37,319



31,597Effect of Dilutive Securities:Assumed exercise of dilutive
    options


545



693Weighted-average shares and
    dilutive potential common shares


37,864



32,290Basic and dilutive income per share

$
0.06


$
0.00   6.
    Convertible
    Notes Payable      7.
    Income
    Taxes        Years Ended August 31,2006


2005Federal statutory income tax rate


(34
)%


(34
)%Increase in valuation allowance


34
%


34
%Effective rate






  F-13




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2006


2005(In thousands)Deferred tax assets:Asset retirement obligation

$
472


$
444Tax loss carryforward


15,988



15,296Total deferred tax assets


16,460



15,740Less valuation allowance


(13,658
)


(14,471
)Net deferred tax assets

$
2,802


$
1,269Deferred tax liabilities:Property impaired for financial
    reporting, but capitalized for tax; offset by intangible
    drilling and other exploration costs capitalized for financial
    reporting purposes but deducted for tax purposes


(2,802
)


(1,269
)Total deferred tax liabilities

$
(2,802
)

$
(1,269
)Net deferred taxes

$



$
     8.
    Stockholders
    Equity:  Preferred Stock 
  Common Stock
  Warrants
    Issue Date

Shares Exercisable

Exercise Price

Expiration DateMay 9, 2002


200,000


$
1.49


May 8, 2007December 1, 2003


100,000


$
0.65


December 1, 2006May 5, 2004


225,000


$
1.30


May 5, 2009June 11, 2004


150,000


$
1.24


June 11, 2009October 17, 2005


52,500


$
1.30


October 17, 2010  F-14




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock Options
    Number of


Weighted Avg.


Weighted Avg. FairShares


Exercise Price


ValueOptions Outstanding 
    August 31, 2004


2,183,834


$
1.76Granted


675,000


$
1.08


$
.68Exercised


(75,834
)

$
.76Expired/forfeited


(548,250
)

$
2.43Options Outstanding 
    August 31, 2005


2,234,750


$
1.41Granted


435,000


$
1.23


$
.89Exercised


(78,000
)

$
.42Expired/forfeited


(260,000
)

$
2.83Options Outstanding 
    August 31, 2006


2,331,750


$
1.08Exercisable as of August 31,
    2006


1,744,752


$
1.07     2006


2005Expected option life-years


5



7Risk-free interest rate


4.7
%


3.5
%Dividend yield


0



0Weighted average volatility


90.6
%


70.0
%     Options OutstandingRemainingContractual Life


Options ExercisableExercise Price

August 31, 2006


(Years)


at August 31, 2006$0.29  $0.46


325,000



3



325,000$0.47  $0.96


402,000



3



247,002$0.97  $1.30


1,089,750



4



717,750$1.31  $1.82


515,000



3



455,000Total


2,331,750







1,744,752  F-15




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    Commitments
    and Contingencies  Litigation
     F-16




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  th 400-acre
      Other
    contractual obligations
    Payments Due by PeriodContractual Obligations

Total


2007


2008


2009Convertible Notes

$
8,474


$



$



$
8,474Office Leases


93



70



23



Total Contractual Cash Obligations

$
8,567


$
70


$
23


$
8,474       Delay Rentals
  Environmental
 F-17




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  Contingencies
  10.
    Operations
    by Geographic Area  Disclosures About Segments of an
    Enterprise and Related Information.
  Year
    ended August 31, 2006
  Oil and Gas OperationsUnitedCanada


States


Total


Corporate


TotalRevenue

$
10


$
10,309


$
10,319


$



$
10,319ExpensesOperating costs


(15
)


(2,221
)


(2,236
)






(2,236
)Net profits interest expense






(829
)


(829
)






(829
)Depreciation, depletion and
    amortization expense






(2,580
)


(2,580
)






(2,580
)Asset retirement obligation
    accretion






(22
)


(22
)






(22
)Earnings (loss) from operations


(5
)


4,657



4,652







4,652CorporateGeneral and administrative














(2,256
)


(2,256
)Depreciation and amortization














(14
)


(14
)Interest income and other expenses














259



259Interest expense














(371
)


(371
)Earnings (loss) before income taxes

$
(5
)

$
4,657


$
4,652


$
(2,382
)

$
2,270Capital expenditures, net

$
1


$
9,705


$
9,706


$
29


$
9,735Property and equipment, net

$
16


$
20,405


$
20,421


$
45


$
20,466  F-18




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year
    ended August 31, 2005
 Oil and Gas OperationsUnitedCanada


States


Total


Corporate


TotalRevenue

$
1


$
6,101


$
6,102


$



$
6,102ExpensesOperating costs


(5
)


(1,099
)


(1,104
)






(1,104
)Net profits interest expense






(1,343
)


(1,343
)






(1,343
)Depreciation, depletion and
    amortization expense






(860
)


(860
)






(860
)Impairment of oil and gas
    properties


(580
)






(580
)






(580
)Asset retirement obligation
    accretion






(25
)


(25
)






(25
)Earnings (loss) from operations


(584
)


2,774



2,190







2,190CorporateGeneral and administrative














(1,909
)


(1,909
)Depreciation and amortization














(8
)


(8
)Interest income and other expenses














82



82Interest expense














(343
)


(343
)Earnings (loss) before income taxes

$
(584
)

$
2,774


$
2,190


$
(2,178
)

$
12Capital expenditures

$
37


$
5,825


$
5,862


$
10


$
5,872Property and equipment, net

$
15


$
13,227


$
13,242


$
29


$
13,271   11.
    Estimate
    of Proved Oil and Gas Reserves (Unaudited)       F-19




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Analysis Of Changes In Proved Reserves
  Oil and Natural


NaturalGas Liquids


Gas(Bbls)


(Mcf)Proved reserves at
    September 1, 2004


684,865



1,393,000Purchase of reserves






1,610,852Revisions of previous estimates


(80,027
)


171,634Extensions and discoveries


23,475



884,579Production


(62,289
)


(392,065
)Proved reserves at August 31,
    2005


566,024



3,668,000Purchase of reserves






1,636,235Revisions of previous estimates


(1,990
)


(914,767
)Extensions and discoveries


122,627



2,264,505Production


(58,317
)


(915,973
)Proved reserves at August 31,
    2006


628,344



5,738,000Proved developed
    reserves  end of yearAugust 31, 2005


503,767



1,345,000August 31, 2006


518,788



2,755,000     Standardized
    Measure of Estimated Discounted Future Net Cash
    Flows
  2006


2005(In thousands)Future cash inflows

$
73,657


$
80,966Future cash outflows:Production cost(1)


(23,168
)


(24,168
)Development cost


(4,237
)


(5,255
)Future net cash, before income
    taxes


46,252



51,543Future income taxes


(661
)


(813
)Future net cash flows


45,591



50,730Adjustment to discount future
    annual net cash flows at 10%


(16,906
)


(21,978
)Standardized measure of discounted
    future net cash flows

$
28,685


$
28,752     (1)
    
    Production costs include lease operating expenses, production
    and ad valorem taxes and net profits expense. F-20




---



##### Table of Contents



PYR
    ENERGY CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Changes
    in Standardized Measure of Estimated Discounted Net Cash
    Flows
  2006


2005(In thousands)Standardized measure, beginning of
    period

$
28,752


$
11,044Sales of oil and gas, net of
    production costs and taxes


(7,254
)


(3,655
)Purchase of reserves in place


3,994



7,232Net change in sales prices, net of
    production cost


(13,628
)


10,062Discoveries, extensions and
    improved recoveries, net of future development cost


14,888



7,100Development costs incurred


815



682Change in future development costs


1,800



143Revisions of quantity estimates


(3,266
)


(4,398
)Changes in future income tax


70



(504
)Accretion of discount


2,514



1,046Other






Standardized measure, end of period

$
28,685


$
28,752  F-21




---



##### Table of Contents



EXHIBIT INDEX
  Number

Description3
.1*

Articles of Incorporation, filed
    with the Maryland Secretary of State on June 18, 2001(1)3
.2*

Articles of Merger, filed with the
    Maryland Secretary of State on July 3, 2001 (1)3
.3*

Bylaws(1)4
.1*

Specimen Common Stock
    Certificate(2)4
.2*

Subscription and Registration
    Rights Agreement between Wellington parties and the Company,
    September 2005(3)21


List of the Companys
    Subsidiaries23
.1

Consent of HEIN &
    Associates LLP23
.2

Consent of Ryder Scott Company31
.1

Certification of Chief Executive
    Officer31
.2

Certification of Chief Financial
    Officer32
.1

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
    Executive Officer32
.2

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 by Chief
    Financial Officer     *
    
    Previously filed.(1)
    
    Incorporated by reference from the Companys
    Form 10-KSB
    for the year ended August 31, 2001.(2)
    
    Incorporated by reference from the Companys
    Form 10-KSB/A1
    for the year ended August 31, 1997.(3)
    
    Incorporated by reference from the Companys Report on
    Form 8-K
    filed on October 8, 2005.