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 1934For the fiscal year endedMarch 31, 2003______________________________TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from________________________ to ________________________




Commission file number: 0-30193NATION ENERGY, INC.______________________________(Name of Small Business Issuer in its Charter)Wyoming59-2887569____________________________________________________________(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)Suite 1100
    609 West Hastings Street
    Vancouver British ColumbiaV6B 4W4____________________________________________________________(Address of principal executive offices)(Zip Code)


Issuer's telephone number: (800) 400-3969

Securities registered pursuant to Section 12(b) of the Act: 
Not applicable.

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value per share______________________________________
(Title of Class)

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

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

State issuer's revenues for its most recent fiscal year. Nil

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.)

5,507,200 common shares @ $0.09(1) = $495,648

(1) Average of bid and ask closing prices on June 13, 2003.

Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

16,020,000 common shares, $0.001 par value outstanding as of
  June 30, 2003.

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

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## PART I

### Item 1. Description of Business.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

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.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this annual report, the terms "we", "us", "our", and "Nation Energy" mean Nation Energy Inc., unless otherwise indicated.

All dollar amounts refer to US dollars unless otherwise indicated.

Business of the Company

We are an oil and gas exploration stage company with interests in properties located in the Province of Alberta, Canada.  Nation Energy is a Wyoming corporation with its business offices located at Suite 1100, 609 West Hastings Street, Vancouver, British Columbia.  Our telephone number is (800) 400-3969.

Corporate History

We were formed under the laws of the state of Florida on April 19, 1988 under the name Excalibur Contracting, Inc. and from that date until September 1998 we conducted no business and existed as a shell corporation.  After the restatement of our Articles of Incorporation on September 16, 1998, our main focus has been the procurement of mineral leasehold interests, primarily for oil and gas exploitation rights.  We reincorporated as a Delaware corporation on February 2, 2000 and changed our name to Nation Energy, Inc. on February 15, 2000.  Pursuant to the change in our focus, we commenced corporate strategic development whereby we have been exploring potential oil and gas projects.  Though we reviewed potential participation in several oil and gas projects in the Rocky Mountain region we entered into only one agreement as of this date for the exploration of oil and gas properties in that region.  This agreement was the Joint Operating Agreement with Saurus Resources, Inc. dated December 1, 1999 which was attached as an exhibit to our Form 10-SB filed with the Securities and Exchange Commission on March 31, 2000 and was described in detail in that filing.  On June 13, 2003 we merged from the State of Delaware with Nation Energy Inc., a corporation organized and existing under the laws of the State of Wyoming.

We held interests in 28 oil and gas leases located in the Great
  Trona Area prospect, located in and around Sweetwater County, Wyoming.  These
  leases cover approximately 22,000 acres.  Under the Joint Operating Agreement,
  Saurus Resources was the operator of oil and gas exploration on the property
  covered by these leases and has certain rights and duties as the operator.   We
  advanced a total of approximately $2,167,000 under our agreement with Saurus
  Resources.  Operational difficulties in developing the test wells are
  largely responsible for greater than anticipated operating costs.  These
  difficulties include mineral precipitation in the well bore, which inhibits
  production.  The wells were perforated and hydraulically
  fractured; these geophysical traits make extraction of gas much more complicated
  and expensive than anticipated.

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Because of the poor operating results under the Joint Operating Agreement, we began to explore other alternatives to this arrangement.  On February 28, 2001 we entered into a Purchase and Sale Agreement with VRD, Inc., an affiliate of Saurus Resources, under which we agreed to sell to VRD, Inc. all of our interest in our oil and gas leases in the Greater Trona Area, all right, title and interest in and to all of the personal property, fixtures and improvements appurtenant to the such leases, and all of our rights under the Joint Operating Agreement with Saurus Resources.  The rights that were to be sold included the right to participate in the drilling, completion, tie-in and production of wells within the contract area.  In consideration for the sale, were to receive from VRD, Inc. $2,165,780 in cash and we were to retain certain royalty interests.

We attempted to obtain the approval of our shareholders of the transactions contemplated in the Purchase and Sale Agreement with VRD, Inc..  The details of this transaction and the reasons for the sale were described in detail in Our Consent Solicitation Statement on Schedule 14A, which was filed on April 26, 2001 and subsequently amended by a filing made June 28, 2001.  We obtained clearance from the SEC to distribute the Schedule 14A to our shareholders on September 26, 2001.  However, by the time of the SEC clearance, the Purchase and Sale Agreement had expired in accordance with its terms and VRD, Inc. was unwilling to proceed with the transaction.

We entered into a Quitclaim, Release and Assumption Agreement,
  dated December 6, 2001, with VRD, Inc. and Saurus Resources, pursuant to which
  we disposed of any and all interests that we held in the oil and gas leases
  located in the Greater Trona Area of Sweetwater County, Wyoming.  We felt
  that this was in the best interests of the Company given our potential liability
  under the oil and gas leases and the fact that it was unlikely that the properties
  in question had any realizable value.  We wrote off the remaining value
  of the properties as of March 31, 2002.

Due to our current operations and their location in Alberta, Canada, we registered as an extra-provincial company in the province of Alberta on June 3, 2003.

Our Current Business

On November 21, 2001 we entered into a farm-in agreement with
  Olympia Energy Inc. (the "Farm-in") under which we will share the
  development costs and revenues for a natural gas project in the Smoky area
  near Grande Prairie, Alberta, Canada (the “Bolton Prospect”). Under
  the terms of the Farm-in we will fund 25% of the cost to drill and complete
  a 4,800 meter well in the Bolton Prospect and will earn a 15% interest after
  payout in the Bolton Prospect. Drilling costs for the Bolton Prospect were
estimated to be CDN $11,000,000.

An initial well was drilled to a total depth of 4,830 meters
  in March  2002 and logged. During the fiscal year ended March 31, 2003, a completion
  program was attempted on the well, but
      the well
    flowed small amounts of gas and large amounts of salt water. Various attempts
    to shut off the salt water were unsuccessful. Testing has shown the Leduc
  formation to be non-productive, and the zone has been plugged and abandoned.

In March 2003 Nation participated in a testing program on
  the shallower Gething formation, which was producing gas on test. The Operator
  has shut-in the well
    for Spring break-up and intends to resume testing the Gething and other potentially
    productive zones by August 2003. Additional costs to test these zones are
      estimated to be $400,000.   Total costs incurred by Nation for the Bolton
  Prospect to date are $2,870,902. We believe that there are economically recoverable
  reserves at the Bolton Prospect. However, we do not believe that we will be
  able to recover the full amount of our investment and, accordingly, have recognized
  a write down of our unproven oil and gas properties of $2,370,902 for the year
  ended March 31, 2003.

Our primary objective over the 12 months ending March 31,
  2004, will be to continue to participate in the Farm-in with Olympia Energy
  Inc. We intend
      to participate in, and develop, further wells on the Bolton Prospect,
  based upon the results that we receive from the initial well.

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We do not foresee hiring any additional employees in the next
  twelve months.  We do not intend to purchase any significant equipment
  over the twelve months ending March 31, 2004.  Any monies raised by us
will first be expended pursuant to our obligations under the Farm-in agreement.

We have not had any operating revenues from the date of our
  formation in April 18, 1988 to the present.  We anticipate that we have enough cash to meet our expenses and capital commitments during the next twelve months.

**RISK FACTORS**

Much of the information included in this Form 10-KSB
  includes or is based upon estimates, projections or other "forward looking
  statements".  Such
  forward-looking statements include any projections or estimates made by us
  and our management in connection with our business operations.  While
  these forward-looking statements, and any assumptions upon which they are based,
  are made in good faith and reflect our current judgement regarding the direction
  of our business, actual results will almost always vary, sometimes materially,
  from any estimates, predictions, projections, assumptions or other future performance
  suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below.  We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Our shares of common stock are considered speculative while we proceed with our commitments in connection with the Smoky project or while we continue our search for a new business opportunity.  Prospective investors should consider carefully the risk factors set out below.

Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We are engaged in the business of exploring and, if warranted, developing commercial reserves of oil and gas. Our properties are in the exploration stage only and are without known reserves of oil and gas.   Accordingly, we have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short term.  Any profitability in the future from our business will be dependent upon locating and developing economic reserves of oil and gas, which itself is subject to numerous risk factors as set forth herein.

A portion of our interest in our properties may be lost if we are unable to obtain significant additional financing.

Our ability to continue exploration and, if warranted, development
  of our properties will be dependent upon our ability to raise significant additional
  financing. If we are unable to obtain such financing, a portion of our interest
  in our properties may be lost to exploration partners or our properties may
  be lost entirely.  We have limited financial resources and negative cash
  flow from operations and we are dependent  on our ability to sell
  our common
  shares, primarily on a private placement basis.  There can be no assurance
  that we will be able to obtain financing on that basis in light of factors
  such as the market demand for our securities, the state of financial markets
  generally and other relevant factors.  The method of financing employed
  by us to date results in increased dilution to the existing shareholders each
  time a private placement is conducted.

There can be no assurance that additional funding will be available
  to us for exploration and development of our projects or to fulfill our obligations
  under any applicable agreements.  Although historically we have announced
  additional financings to proceed with the development of some of our previous
  properties, there can be no assurance that we will be able to obtain adequate
  financing in the future or that the terms of such financing will be favourable.  Failure
  to obtain such additional financing could result in delay or indefinite postponement
  of further exploration and development of our projects with the possible loss
  of such properties.

We will require substantial funds to enable us to decide whether our properties contain commercial oil and gas deposits and whether they should be brought into production, and if we cannot raise the necessary funds we may never be able to realize the potential of our properties.

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Our decision as to whether our properties contain commercial oil and gas deposits and should be brought into production will require substantial funds and depend upon the results of exploration programs and feasibility studies and the recommendations of duly qualified engineers, geologists, or both.  This decision will involve consideration and evaluation of several significant factors including but not limited to: (1) costs of bringing a property into production, including exploration and development work, preparation of production feasibility studies, and construction of production facilities; (2) availability and costs of financing; (3) ongoing costs of production; (4) market prices for the oil and gas to be produced; (5) environmental compliance regulations and restraints; and (6) political climate, governmental regulation and control.

We have obtained title reports, but these reports do not guarantee title against all possible claims.  Our properties may be subject to prior unregistered agreements, native land claims or transfers which have not been recorded or detected, resulting in a possible claim against any future revenues generated by such properties.

We have obtained title reports with respect to our oil and gas properties and believe our interests are valid and enforceable; however, these reports do not guarantee title against all possible claims.  The properties may be subject to prior unregistered agreements, native land claims or transfers which have not been recorded or detected through title research.  Additionally, the land upon which we hold oil and gas leases may not have been surveyed; therefore, the precise area and location of such interests may be subject to challenge.

Our accounts are subject to currency fluctuations which may materially affect our financial position and results.

We maintain our accounts in US and Canadian currencies and are therefore subject to currency fluctuations and such fluctuations may materially affect our financial position and results. We do not engage in currency hedging activities.

We may not be able to manage the significant strains that future growth may place on our administration infrastructure, systems and controls.

In the event our properties commence production, we could experience rapid growth in revenues, personnel, complexity of administration and in other areas.  There can be no assurance that we will be able to manage the significant strains that future growth may place on our administrative infrastructure, systems, and controls.  If we are unable to manage future growth effectively, our business, operating results and financial condition may be materially adversely affected.

The loss of Donald Sharpe would have an adverse impact on future development and could impair our ability to succeed.

We are dependent on our ability to hire and retain highly skilled and qualified personnel. We face competition for qualified personnel from numerous industry sources, and there can be no assurance that we will be able to attract and retain qualified personnel on acceptable terms. We do not have key man insurance on any of our employees. The loss of service of any of our key personnel could have a material adverse effect on our operations or financial condition.

We are dependent upon Olympia Energy Inc.s expertise in the area of oil and gas exploration.

Under the Farm-in Agreement, Olympia Energy Inc. will act as operator for the purposes of carrying out the work necessary to obtain our right to earn an interest under the Farm-in Agreement and we are therefore dependent upon Olympia Energy Inc. expertise in the area of oil and gas exploration.

Our management currently engages in other oil and gas businesses and, as a result, conflicts could arise.

In addition to their interest in our company, our management currently engages, and intends to engage in the future, in the oil and gas business independently of our company. As a result, conflicts of interest between us and management of our company might arise.

Trading of our stock may be restricted by the SECs penny stock regulations which may limit a stockholders ability to buy and sell our stock.

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Our shares of common stock are subject to rules promulgated by the Securities and Exchange Commission relating to "penny stocks," which apply to companies whose shares are not traded on a national stock exchange or on the NASDAQ system, trade at less than $5.00 per share, or who do not meet certain other financial requirements specified by the Securities and Exchange Commission.  These rules require brokers who sell "penny stocks" to persons other than established customers and "accredited investors" to complete certain documentation, make suitability inquiries of investors, and provide investors with certain information concerning the risks of trading in the such penny stocks.  These rules may discourage or restrict the ability of brokers to sell our shares of common stock and may affect the secondary market for our shares of common stock.  These rules could also hamper our ability to raise funds in the primary market for our shares of common stock.

Since our shares are thinly traded, and trading on the OTC Bulletin Board may be sporadic because it is not an exchange, stockholders may have difficulty reselling their shares.

Our shares of common stock are currently publicly traded on the OTC Bulletin Board service of the National Association of Securities Dealers, Inc.  The trading price of our shares of common stock has been subject to wide fluctuations.  Trading prices of our shares of common stock may fluctuate in response to a number of factors, many of which will be beyond our control.  The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation.  There can be no assurance that trading prices and price earnings ratios previously experienced by our shares of common stock will be matched or maintained.  These broad market and industry factors may adversely affect the market price of our shares of common stock, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted.  Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our by-laws contain provisions with respect to the indemnification
  of our officers and directors against all expenses (including, without limitation,
  attorneys' fees, judgments, fines, settlements, and other amounts actually
  and reasonably incurred in connection with any proceeding arising by reason
  of the fact that the person is one of our officers or directors) incurred by
  an officer or director in defending any such proceeding to the maximum extent
  permitted by Delaware, or subsequent to June 13, 2003 Wyoming,
law.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of our company under Delaware law or otherwise, we have been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.

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Investors interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of 50,000,000 shares of common stock, each with a par value of $0.001.  In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold.  If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders.  Further, any such issuance may result in a change in our control.

Our by-laws do not contain anti-takeover provisions which could result in a change of our management and directors if there is a take-over of our company.

We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws.  Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.

Risks Relating to the Industry

As our properties are in the exploration and development stage there can be no assurance that we will establish commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to a number of risk factors.  While the rewards to an investor can be substantial if an economically viable discovery is made, few of the properties that are explored are ultimately developed into producing oil and/or gas wells. Our properties are in the exploration and development stage only and are without proven reserves of oil and gas.  There can be no assurance that we will establish commercial discoveries on any of our properties.

The potential profitability of oil and gas ventures depends upon factors beyond the control of our company

The potential profitability of oil and gas properties is dependent upon many factors beyond our control.  For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments.  Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project.  These changes and events may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations.  A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well.  In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances.  The marketability of oil and gas which may be acquired or discovered will be affected by numerous factors beyond our control.  These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. The extent of these factors cannot be accurately predicted but the combination of these factors may result in our company not receiving an adequate return on invested capital.

Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring desirable oil and gas leases.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staffs.  Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds.  There can be no assurance that the necessary funds can be raised or that any projected work will be completed.

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The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control.

These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations.  The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Oil and gas operations are subject to federal, provincial, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment.  Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment.  Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received.  No assurance can be given that environmental standards imposed by federal, provincial, or local authorities will not be changed or that any such changes would not have material adverse effects on our activities.  Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us.  Additionally, we may be subject to liability for pollution or other environmental damages which it may elect not to insure against due to prohibitive premium costs and other reasons.

Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations.

In general, our exploration and production activities are subject to certain federal, provincial and local laws and regulations relating to environmental quality and pollution control.  Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation.  Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date.  Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes.  In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities.  However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance.  Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.

We believe that our operations comply, in all material respects, with all applicable environmental regulations.

Our operating partners maintain insurance coverage customary to the industry; however, it is not fully insured against all environmental risks.

Exploratory drilling involves many risks and we may become liable for pollution or other liabilities which may have an adverse effect on our financial position.

Drilling operations generally involve a high degree of risk.  Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labour, and other risks are involved. We may become subject to liability for pollution or hazards against which it cannot adequately insure or which it may elect not to insure.  Incurring any such liability may have a material adverse effect on our financial position and operations.

Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

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There is no assurance that the laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency will not be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business.

The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on our Company.  Any or all of these situations may have a negative impact on our ability to operate and/or become profitable.

### Item 2. Description of Property.

We hold an interest in an oil and gas property (the Bolton Prospect)
  in the Smoky area near Grande Prairie, Alberta, Canada. The legal description
  of the Bolton Prospect is TWP 59, Rge 2 W6M, which encompasses 5,760 total
  acres. At the date hereof, we have not ascertained the status of any oil and
gas reserves which may be recoverable from the well.

Our principal executive office is located at Suite 1100, 609 West Hastings Street, Vancouver, British Columbia.  We occupy the Vancouver premises on a proportional cost basis for office rent and administration services and expenses, month to month.

### Item 3. Legal Proceedings.

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation.  There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholders are an adverse party or has a material interest adverse to us.

### Item 4. Submissions of Matters to a Vote of Security Holders.

No matters were submitted to a vote of the shareholders either through solicitation of proxies or otherwise in the fourth quarter of the fiscal year ended March 31, 2003.



## PART II

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

Our common stock is quoted on the OTC Bulletin Board under the
  symbol "NEGY".  Prior to March 13, 2000, our common stock traded
  on the OTC Bulletin Board under the symbol "XCNT", which was a result
  of a change in our name from Excalibur Contracting, Inc. to our current name.  The
  following quotations reflect the high and low bids for our common stock based
  on inter-dealer prices, without retail mark-up, mark-down or commission and
  may not represent actual transactions.  The high and low prices of our
  common stock (obtained from Canada Stockwatch) for the periods indicated below
  are as follows:

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Quarter EndedHighLowSeptember 30, 2001$0.90$0.80December 31, 2001$0.51$0.30March 31, 2002$0.90$0.25June 30, 2002$0.93$0.83September 30, 2002$0.34$0.10December 31, 2002$0.13$0.09March 31, 2003$0.19$0.09


Our shares of common stock are issued in registered form. Interwest Transfer Co., Inc., of 1981 East 4800 South, Suite 100, Salt Lake City, UT 84117 (Telephone: 801.272.9294, facsimile: 801.277.3147) is the registrar and transfer agent for our shares of common stock.

As of June 30, 2003, we had 16,020,000 shares of common stock
  outstanding and approximately 20 stockholders of record.  This number
  of stockholders does not include stockholders who hold our securities in street
  name.

Dividend Policy

We have not declared or paid any cash dividends since inception.  We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future.  There are no restrictions that limit our ability to pay dividends on our shares of common stock.

Recent Sales of Unregistered Securities

We did not issue any shares during the fiscal year ended March 31, 2003.

### Item 6. Management's Discussions and Analysis or Plan of Operation.

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report.  The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" found under "Item 1.  Description of Business".

Results of Operations

Fiscal Year Ended March 31, 2003 Compared to Fiscal Year
Ended March 31, 2002

We incurred a net loss of $2,469,763 for the fiscal year ended
  March 31, 2003 compared to a net loss of $2,779,131 for the year ended March
  31, 2002. The net loss per common share for the fiscal year ended March 31,
  2003 was $0.15, compared to a net loss per common share of $0.25 for the year
  ended March 31, 2002. During the year ended March 31, 2003 we wrote down the
  value of our unproved oil and gas properties by $2,370,902 based on our estimate
  of the amount of recoverable reserves at the Bolton Prospect. During the year
  ended March 31, 2002 we wrote down our entire interest of $1,370,678 in the
  oil and gas leases located in the Greater Trona area of Sweetwater County,
  Wyoming. Additionally, for the year ended March 31, 2002 the Company recorded
  stock compensation expense of $1,250,000 as a result of issuing 5,000,000 shares
of common stock to an affiliate below its fair market value.

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Discussion and analysis
    related to significant operating activities undertaken during
the years is set out below.

Lack of Revenues

We have not generated any material revenues to date from operations.  At this time, our ability to generate any revenues continues to be uncertain.

Investment

As at March 31, 2003, we have invested a total of $2,870,902
  under the Farm-in agreement with Olympia Energy Inc. towards the drilling and
  development costs of the initial well at the Bolton Prospect. The testing required
  to determine the level of economically recoverable reserves has not been completed
  as of the date of this filing. We have written down the value of this property
  by $2,370,902 based upon our estimate of economically recoverable reserves.
  As of March 31, 2003, the carrying value of our unproved oil and gas properties
was $500,000.

Liquidity and Capital Resources

These financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  Our company has suffered recurring losses and has not generated profitable operations since inception.



We are currently relying on our existing cash reserves to fund our continuing operating expenses and to fund the identification and evaluation of further oil and gas properties.  As of March 31, 2003 and March 31, 2002, our cash and cash equivalent balances were $446,216 and $1,385,254, respectively.  We anticipate that we may require additional financing in order to fund our obligations under the Farm-in agreement.  Should we require additional financing, we would likely seek to secure any additional financing necessary through a private placement of our shares of common stock.

Our material commitments for capital expenditures are limited to the Farm-in with Olympia Energy for the development of the Bolton Prospect.

We have no operating history.  We can only estimate the future needs for capital based on the current status of our operations, our current plans and current economic condition.  Due to the uncertainties regarding our future activities, we are unable to predict precisely what amount will be used for any particular purpose, other than the funds which we will be required to expend under the Farm-in agreement.

Plan of Operation for the 12 Months ending March 31, 2004

Our primary objectives over the 12 months ending March 31, 2004, will be to continue to participate in the Farm-in agreement with Olympia Energy Inc. in regards to the development of the shallow formation in the Bolton Prospect and continue to investigate other potential oil and gas property acquisitions.

---





Cash Requirements

Over the next twelve months we intend to use funds to continue our participation in the Bolton Prospect and to investigate further acquisitions, as follows:

Estimated Funding Required During the Next Twelve Months

General and Administrative$120,000OperationsFarm-in contributions$400,000Working Capital$50,000Total$570,000


We have suffered recurring losses from operations.  The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital. Management's plan in this regard is to raise additional capital through a debt or an equity offering.  The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations.

Due to the uncertainty of our ability to meet our current operating
  expenses and the capital expenses noted above, in their report on the financial
  statements as of and for the year ended March 31, 2003, our independent auditors
  included an explanatory paragraph regarding concerns about our ability to continue
  as
  a going concern.  Our
  financial statements contain additional note disclosures describing the circumstances
that lead to this disclosure by our independent auditors.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further financing, a successful program of acquisition and exploration, and, finally, achieving a profitable level of operations.  The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

---



There are no assurances that we will be able to obtain further funds required for our continued operations.  We are pursuing various financing alternatives to meet our immediate and long-term financial requirements.  There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.  If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due.  In such event, we will be forced to scale down or perhaps even cease our operations.

Product Research and Development

We do not anticipate that we will expend any significant monies on research and development over the next twelve months.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment through March 31, 2004.

Employees

Over the twelve months ending March 31, 2004, we do not anticipate an increase in the number of employees that we may retain  We currently have no employees other than our directors and officers.

New Accounting Pronouncements

In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
  Instruments with Characteristics of Both Liabilities and Equity." The
  provisions of SFAS 150 require issuers to classify as liabilities, or assets
  in some circumstances, certain classes of free financial instruments that embody
  obligations for the issuer. The provisions of SFAS 150 are effective for financial
  instruments entered into or modified after May 31, 2003, and otherwise shall
  be effective at the beginning of the first interim period beginning after June
  15, 2003. The adoption of SFAS 150 is not expected to have a material effect
  on the Company's financial statements or results of operations.

In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133
  on Derivative Instruments and Hedging Activities." SFAS 149 amends and
  clarifies financial accounting and reporting for derivative instruments, including
  certain derivative instruments embedded in other contracts (collectively referred
  to as derivatives) and for hedging activities under SFAS 133, "Accounting
  for Derivative Instruments and Hedging Activities." SFAS 149 is effective
  for contracts entered into or modified after June 30, 2003, except in certain
  instances, and for hedging relationships designated after June 30, 2003. In
  addition, except in those certain instances, all provisions of this Statement
  should be applied prospectively. The adoption of SFAS 149 is not expected to
  have a material effect on the Company's financial statements or results of
operations.

In December 2002, the Financial Accounting Standards Board (FASB) issued SFAS
  148 "Accounting for Stock-Based Compensation--Transition and Disclosure--an
  amendment of SFAS 123." SFAS 148 provides alternative methods of transition
  for a voluntary change to the fair value based method of accounting for stock-based
  employee compensation from the intrinsic value-based method of accounting prescribed
  by APB 25. As allowed by SFAS 123, the Company has elected to continue to apply
  the intrinsic value-based method of accounting, and has adopted the disclosure
  requirements of SFAS 123. The Company currently does not anticipate adopting
  the provisions of SFAS 148.

In July 2002, the FASB issued SFAS 146, "Accounting for Costs Associated
  with Exit or Disposal Activities." SFAS 146 provides new guidance on the
  recognition of costs associated with exit or disposal activities. The standard
  requires companies to recognize costs associated with exit or disposal activities
  when they are incurred rather than at the date of commitment to an exit or
  disposal plan. SFAS 146 supercedes previous accounting guidance provided by
  the EITF Issue No. 94-3 "Liability Recognition for Certain Employee Termination
  Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
  in a Restructuring)." EITF Issue No. 94-3 required recognition of costs
  at the date of commitment to an exit or disposal plan. SFAS 146 is to be applied
  prospectively to exit or disposal activities initiated after December 31, 2002.
  Early application is permitted. The adoption of SFAS 146 by the Company is
  not expected to have a material impact on the Company's financial position,
  results of operations, or cash flows.

---



In April 2002, the FASB issued SFAS 145, "Rescission of FASB Statements
  No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." Among
  other things, this statement rescinds FASB Statement No. 4, "Reporting
  Gains and Losses from Extinguishment of Debt" which required all gains
  and losses from extinguishment of debt to be aggregated and, if material, classified
  as an extraordinary item, net of related income tax effect. As a result, the
  criteria in APB Opinion No. 30, "Reporting the Results of Operations --
  Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
  Unusual and Infrequently Occurring Events and Transactions," will now
  be used to classify those gains and losses. The provisions of SFAS 145 related
  to the classification of debt extinguishment are effective for years beginning
  after May 15, 2002. The adoption of SFAS 145 by the Company is not expected
  to have a material impact on the Company's financial position, results of operations,
  or cash flows.

In November 2001, the EITF of the FASB issued EITF 01-9 "Accounting for
  Consideration Given by a Vendor to a Subscriber (Including a Reseller of the
  Vendor's Products)." EITF 01-9 provides guidance on when a sales incentive
  or other consideration given should be a reduction of revenue or an expense
  and the timing of such recognition. The guidance provided in EITF 01-9 is effective
  for financial statements for interim or annual periods beginning after December
  15, 2001. The adoption of EITF 01-9 by the Company did not have a material
  impact on the Company's financial statements.

In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment
  or Disposal of Long-Lived Assets." SFAS 144 provides new guidance on the
  recognition of impairment losses on long-lived assets with definite lives to
  be held and used or to be disposed of and also issued the definition of what
  constitutes a discontinued operation and how the results of a discontinued
  operation are to be measured and presented. SFAS 144 is effective for fiscal
  years beginning after December 15, 2001. The adoption of SFAS 144 did not have
  a material impact on the Company's financial position, results of operations,
  or cash flows.

In June 2001, the FASB issued SFAS 143, "Accounting for Asset Retirement
  Obligations." SFAS 143 requires the fair value of a liability for an asset
  retirement obligation to be recognized in the period that it is incurred if
  a reasonable estimate of fair value can be made. The associated asset retirement
  costs are capitalized as part of the carrying amount of the long-lived asset.
  SFAS 143 is effective for fiscal years beginning after June 15, 2002. The adoption
  of SFAS 143 is not expected to have a material impact on the Company's financial
  position, results of operations or cash flows.

In June 2001, the FASB issued SFAS 142, "Goodwill and Other Intangible
  Assets," which provides for non-amortization of goodwill and intangible
  assets that have indefinite useful lives, annual tests of impairments of those
  assets and interim tests of impairment when an event occurs that more likely
  than not has reduced the fair value of such assets. The statement also provides
  specific guidance about how to determine and measure goodwill impairments,
  and requires additional disclosure of information about goodwill and other
  intangible assets. The provisions of this statement are required to be applied
  starting with fiscal years beginning after December 15, 2001, and applied to
  all goodwill and other intangible assets recognized in the financial statements
  at that date. Goodwill and intangible assets acquired after June 30, 2001 will
  be subject to the non-amortization provisions of the statement. Early application
  is permitted for entities with fiscal years beginning after March 15, 2001,
  provided that the first interim financial statements had not been issued previously.
  The Company's adoption of the provisions of SFAS 142 did not have a material
  impact on the Company's financial position, results of operations or cash flows.

In June 2001, the FASB issued SFAS 141, "Business Combinations," which
  is effective for all business combinations initiated after June 30, 2001. SFAS
  141 requires companies to account for all business combinations using the purchase
  method of accounting, recognize intangible assets if certain criteria are met,
  as well as provide additional disclosures regarding business combinations and
  allocation of purchase price. The adoption of SFAS 141 did not have a material
impact on the Company's financial position, results of operations or cash flows.

---



Application of Critical Accounting Policies

**Cash and Cash Equivalents**
  The Company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.

**Estimates**
  The preparation of the Company’s financial statements in conformity with
  accounting principles generally accepted in the United States of America requires
  the Company’s management to make estimates and assumptions that affect
  the amounts reported in these financial statements and accompanying notes.
Actual results could differ from those estimates.

**Fair Value of Financial Instruments**
  Fair value estimates discussed herein are based upon certain market assumptions
    and pertinent information available to management as of March 31, 2003. The
    respective carrying value of certain on-balance-sheet financial instruments
    approximated their fair values. These financial instruments include cash,
    accounts payable, and accounts payable – related party. Fair values
    were assumed to approximate carrying values for these financial instruments
    because they are short term in nature and their carrying amounts approximate
fair values or they are payable on demand.



**Net (Loss) per Common Share**
  The Company follows Statement of Financial Accounting Standards (SFAS) 128, “Earnings
  Per Share.” Basic earnings (loss) per common share calculations are determined
  by dividing net income (loss) by the weighted average number of shares of common
  stock outstanding during the year. Diluted earnings (loss) per common share
  calculations are determined by dividing net income (loss) by the weighted average
  number of common shares and dilutive common share equivalents outstanding.
  During the periods when they are anti-dilutive, common stock equivalents, if
any, are not considered in the computation.

**Impairment of Long-Lived Assets**

The Company periodically reviews the carrying amount of its unproved oil and
  gas properties to determine whether current events or circumstances warrant
  adjustments to such carrying amounts. If an impairment adjustment is deemed
  necessary, such loss is measured by the amount that the carrying value of such
  assets exceeds their fair value. Considerable management judgment is necessary
  to estimate the fair value of assets; accordingly, actual results could vary
  significantly from such estimates. Assets to be disposed of are carried at
  the lower of their financial statement carrying amount or fair value less costs
  to sell.

**Unproved Oil and Gas Properties**

The Company follows the full cost method of accounting for oil and gas operations
  whereby all costs associated with the exploration for and development of oil
  and gas reserves, whether productive or unproductive, are capitalized. Such
  expenditures include land acquisition costs, drilling, exploratory dry holes,
  geological and geophysical costs not associated with a specific unevaluated
  property, completion and costs of well equipment. Internal costs are capitalized
  only if they can be directly identified with acquisition, exploration, or development
  activities. As of March 31, 2003, the Company has not capitalized any internal
  costs.

Expenditures that are considered unlikely to be recovered are written off.
  On a quarterly basis the Board of Directors assesses whether or not there is
  an asset impairment. The current oil and gas exploration and development activities
  are considered to be in the pre-production stage.

**Segment Reporting**

The Company follows SFAS 131, “Disclosure about Segments of an Enterprise
  and Related Information”. Certain information is disclosed, per SFAS
  131, based on the way management organizes financial information for making
  operating decisions and assessing performance. The Company currently operates
  in one business segment and will evaluate additional segment disclosure requirements
  as it expands operations.

---



**Stock-Based Compensation**

The Company accounts for stock based compensation in accordance with SFAS
  123, "Accounting for Stock-Based Compensation." The provisions of
  SFAS 123 allow companies to either expense the estimated fair value of stock
  options or to continue to follow the intrinsic value method set forth in Accounting
  Principles Board Opinion 25, "Accounting for Stock Issued to Employees" (APB
  25) but disclose the pro forma effects on net income (loss) had the fair value
  of the options been expensed. The Company has elected to continue to apply
  APB 25 in accounting for its stock option incentive plans.

The Company has issued its common stock as compensation to non-employees.
  The Company measures the amount of stock-based compensation as of the earlier
  of (1) the date at which an agreement is reached with the non-employee as to
  the number of shares to be issued for performance, or (2) the date at which
the non-employees performance is complete.



### Item 7. Financial Statements.

Our financial statements are stated in United States Dollars
  (US$) and are prepared in accordance with accounting principles generally accepted
in the United States

---





Nation Energy, Inc.
As of March 31, 2003 and for the
Years Ended March 31, 2003 and 2002



Table of Contents

Report of Independent Auditors
    18Balance Sheet
    19Statements of Operations
    20Statement of Changes in Stockholders' Equity
    21Statements of Cash Flows
    22Notes to Financial Statements
    23-32




---



REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
  Nation Energy, Inc.

We have audited the accompanying balance sheet of Nation Energy, Inc. as of
  March 31, 2003, and the related statements of operations, changes in stockholders'
  equity, and cash flows for the years ended March 31, 2003 and 2002. These financial
  statements are the responsibility of the Company's management. Our responsibility
  is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
  in the United States of America. Those standards require that we plan and perform
  the audits to obtain reasonable assurance about whether the financial statements
  are free of material misstatement. An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements.
  An audit also includes assessing the accounting principles used and significant
  estimates by management, as well as evaluating the overall financial statement
  presentation. We believe that our audits provide a reasonable basis for our
  opinion.

In our opinion, the financial statements referred to above present fairly,
  in all material respects, the financial position of Nation Energy, Inc. as
  of March 31, 2003, and the results of its operations, and its cash flows for
  the years ended March 31, 2003 and 2002, in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
  Company will continue as a going concern. As discussed in Note 2 to the financial
  statements, the Company has suffered recurring losses. These factors raise
  substantial doubt about the Company's ability to continue as a going concern.
  Management's plans in regard to these matters are also discussed in Note 2.
  The financial statements do not include any adjustments that might result from
  the outcome of this uncertainty.

Stark Winter Schenkein & Co., LLP
  Denver, Colorado
  June 25, 2003

---





Nation
            Energy, Inc.Balance
            SheetMarch
            31, 2003ASSETSCURRENT ASSETSCash
      $      446,216Prepaid
          expenses
      5,142Total
          current assets
      451,358Unproved oil and gas
          properties - full cost method
      500,000$      951,358LIABILITIES
          AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESAccounts
          payable
      $      290,734Accounts
          payable - related party
      24,057Total
          current liabilities
      314,791STOCKHOLDERS'
          EQUITYPreferred
          stock, $.001 par value; 5,000,000shares
          authorized; none outstanding
      -Common
          stock, $.001 par value; 50,000,000shares
          authorized; 16,020,000 shares issuedand
          outstanding
      16,020Additional
          paid-in capital
      6,868,380Accumulated
          (deficit)
      (6,247,833)636,567$     951,358


The accompanying notes are an integral part of the financial statements

---





Nation
            Energy, Inc.Statements
            of OperationsFor
          the years ended March 31,2003
      
      2002REVENUE
      
      $               -
      
      $               -COST AND EXPENSESGeneral,
          selling and administrative
      
      101,474
      
      194,154Write
          down of unproved oil and gas properties
      
      2,370,902
      
      1,370,678Stock
          compensation expense
      
      -
      
      1,250,0002,472,376
      
      2,814,832OTHER INCOME (EXPENSE)Interest
          income
      
      2,613
      
      35,701NET (LOSS)
      
      $   (2,469,763)
      
      $   (2,779,131)PER SHARE INFORMATIONWeighted
          average number of commonshares
          outstanding - basic and diluted
      
      16,020,000
      
      11,184,384Net
          (loss) per common share - basic and diluted
      
      $           (0.15)
      
      $           (0.25)


The accompanying notes are an integral part of the financial statements

---





Nation
            Energy, Inc.Statement
            of Changes in Stockholders' EquityCommon
          Stock
      
      Additional
      
      
      
      TotalNumber
          of
      
      
      
      Paid-in
      
      Accumulated
      
      Stockholders'Shares
      
      Amount
      
      Capital
      
      (Deficit)
      
      EquityBalance March 31,
          2001
      
      
      11,020,000
      
      $     11,020
      
      $     4,623,380
      
      $      (998,939)
      
      $  3,635,461Issuance of common
          stockat
          $0.45 per share
      
      
      5,000,000
      
      5,000
      
      2,245,000
      
      -
      
      2,250,000Net (loss) for the
          year
      
      
      -
      
      -
      
      -
      
      (2,779,131)
      
      (2,779,131)Balance March 31,
          2002
      
      
      16,020,000
      
      16,020
      
      6,868,380
      
      (3,778,070)
      
      3,106,330Net (loss) for the
          year
      
      
      -
      
      -
      
      -
      
      (2,469,763)
      
      (2,469,763)Balance March 31,
          2003
      
      
      16,020,000
      
      $     16,020
      
      $     6,868,380
      
      $   (6,247,833)
      
      $     636,567


The accompanying notes are an integral part of the financial statements

---





Nation
            Energy, Inc.Statements
            of Cash FlowsFor
          the years ended March 31,2003
      
      2002CASH FLOW FROM OPERATING
          ACTIVIITESNet
          (loss)
      $    (2,469,763)
      
      $    (2,779,131)Adjustments to reconcile
          net (loss) to net cash providedby (used
          in) operating activities:Write
          down of unproven oil and gas properties
      2,370,902
      
      1,370,678Stock
          compensation expense
      -
      
      1,250,000(Increase)
          in prepaid expenses
      (24)
      
      (5,118)Increase
          in accounts payable
      277,001
      
      1,403Increase
          (decrease) in accounts payable - related party
      10,230
      
      (1,400)Net cash provided
          by (used in) operating activities
      188,346
      
      (163,568)CASH FLOW FROM INVESTING
          ACTIVITIESPurchase
          of unproved oil and gas properties
      (1,127,384)
      
      (1,743,518)Net cash (used in)
          investing activities
      (1,127,384)
      
      (1,743,518)CASH FLOW FROM FINANCING
          ACTIVITIESProceeds
          from common stock issuances
      -
      
      1,000,000Net cash provided
          by financing activities
      -
      
      1,000,000Net (decrease) in
          cash
      (939,038)
      
      (907,086)Beginning cash
      1,385,254
      
      2,292,340Ending cash
      $        446,216
      
      $     1,385,254SUPPLEMENTAL CASH
          FLOW INFORMATIONCash paid
          for interest
      $                 -
      
      $                 -Cash paid
          for income taxes
      $                 -
      
      $                 -




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

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was incorporated on April 19, 1988, in the State
  of Florida as Excalibur Contracting, Inc.  The Company was reincorporated
  as a Delaware corporation and changed its name to Nation Energy, Inc. in February
  2000.  Subsequent to March 31, 2003 the Company reincorporated as a Wyoming
  corporation.  The Company is an oil and gas drilling company in the exploration
  stage and currently has no revenue producing operations.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased
  with a maturity of three months or less to be cash equivalents.

Estimates

The preparation of the Companys financial statements in
  conformity with accounting principles generally accepted in the United States
  of America requires the Companys management to make estimates and assumptions
  that affect the amounts reported in these financial statements and accompanying
  notes.  Actual results could differ from those estimates.

Fair Value of Financial Instruments

Fair value estimates discussed herein are based upon certain
  market assumptions and pertinent information available to management as of
  March 31, 2003.  The respective carrying value of certain on-balance-sheet
  financial instruments approximated their fair values.  These financial
  instruments include cash, accounts payable, and accounts payable  related
  party.  Fair values were assumed to approximate carrying values for these
  financial instruments because they are short term in nature and their carrying
  amounts approximate fair values or they are payable on demand.

Net (Loss) per Common Share

The Company follows Statement of Financial Accounting Standards
  (SFAS) 128, Earnings Per Share.  Basic earnings (loss) per
  common share calculations are determined by dividing net income (loss) by the
  weighted average number of shares of common stock outstanding during the year.  Diluted
  earnings (loss) per common share calculations are determined by dividing net
  income (loss) by the weighted average number of common shares and dilutive
  common share equivalents outstanding.  During the periods when they are
  anti-dilutive, common stock equivalents, if any, are not considered in the
  computation.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

Impairment of Long-Lived Assets

The Company periodically reviews the carrying amount of its
  unproved oil and gas properties to determine whether current events or circumstances
  warrant adjustments to such carrying amounts. If an impairment adjustment is
  deemed necessary, such loss is measured by the amount that the carrying value
  of such assets exceeds their fair value. Considerable management judgment is
  necessary to estimate the fair value of assets; accordingly, actual results
  could vary significantly from such estimates.  Assets to be disposed of
  are carried at the lower of their financial statement carrying amount or fair
  value less costs to sell.

Unproved Oil and Gas Properties

The Company follows the full cost method of accounting for oil
  and gas operations whereby all costs associated with the exploration for and
  development of oil and gas reserves, whether productive or unproductive, are
  capitalized.  Such expenditures include land acquisition costs, drilling,
  exploratory dry holes, geological and geophysical costs not associated with
  a specific unevaluated property, completion and costs of well
  equipment.  Internal costs are capitalized only if they can be directly
  identified with acquisition, exploration, or development activities.  As
  of March 31, 2003, the Company has not capitalized any internal costs.

Expenditures that are considered unlikely to be recovered are
  written off.  On a quarterly basis the Board of Directors assesses whether
  or not there is an asset impairment.  The current oil and gas exploration
  and development activities are considered to be in the pre-production stage.

Segment Reporting

The Company follows SFAS 131, Disclosure about Segments
  of an Enterprise and Related Information.  Certain information is
  disclosed, per SFAS 131, based on the way management organizes financial information
  for making operating decisions and assessing performance.  The Company
  currently operates in one business segment and will evaluate additional segment
  disclosure requirements as it expands operations.

Stock-Based Compensation

The Company accounts for stock based compensation in accordance
  with SFAS 123, "Accounting for Stock-Based Compensation." The provisions
  of SFAS 123 allow companies to either expense the estimated fair value of stock
  options or to continue to follow the intrinsic value method set forth in Accounting
  Principles Board Opinion 25, "Accounting for Stock Issued to Employees" (APB
  25) but disclose the pro forma effects on net income (loss) had the fair value
  of the options been expensed. The Company has elected to continue to apply
  APB 25 in accounting for its stock option incentive plans.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

The Company has issued its common stock as compensation to non-employees.  The
    Company measures the amount of stock-based compensation as of the earlier
  of (1) the date at which an agreement is reached with the non-employee as to
  the
    number of shares to be issued for performance, or (2) the date at which the
    non-employees performance is complete.

Recent Pronouncements

In May 2003, the Financial Accounting Standards Board (FASB)
  issued SFAS 150, "Accounting for Certain Financial Instruments with Characteristics
  of Both Liabilities and Equity." The provisions of SFAS 150 require issuers
  to classify as liabilities, or assets in some circumstances, certain classes
  of free financial instruments that embody obligations for the issuer. The provisions
  of SFAS 150 are effective for financial instruments entered into or modified
  after May 31, 2003, and otherwise shall be effective at the beginning of the
  first interim period beginning after June 15, 2003. The adoption of SFAS 150
  is not expected to have a material effect on the Company's financial statements
  or results of operations.

In April 2003, the FASB issued SFAS 149, "Amendment of
  Statement 133 on Derivative Instruments and Hedging Activities." SFAS
  149 amends and clarifies financial accounting and reporting for derivative
  instruments, including certain derivative instruments embedded in other contracts
  (collectively referred to as derivatives) and for hedging activities under
  SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
  149 is effective for contracts entered into or modified after June 30, 2003,
  except in certain instances, and for hedging relationships designated after
  June 30, 2003. In addition, except in those certain instances, all provisions
  of this Statement should be applied prospectively. The adoption of SFAS 149
  is not expected to have a material effect on the Company's financial statements
  or results of operations.

In December 2002, the FASB issued SFAS 148 "Accounting
  for Stock-Based Compensation--Transition and Disclosure--an amendment of SFAS
  123." SFAS 148 provides alternative methods of transition for a voluntary
  change to the fair value based method of accounting for stock-based employee
  compensation from the intrinsic value-based method of accounting prescribed
  by APB 25. As allowed by SFAS 123, the Company has elected to continue to apply
  the intrinsic value-based method of accounting, and has adopted the disclosure
  requirements of SFAS 123. The Company currently does not anticipate adopting
  the provisions of SFAS 148.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

In July 2002, the FASB issued SFAS 146, "Accounting for
  Costs Associated with Exit or Disposal Activities." SFAS 146 provides
  new guidance on the recognition of costs associated with exit or disposal activities.
  The standard requires companies to recognize costs associated with exit or
  disposal activities when they are incurred rather than at the date of commitment
  to an exit or disposal plan. SFAS 146 supercedes previous accounting guidance
  provided by the EITF Issue No. 94-3 "Liability Recognition for Certain
  Employee Termination Benefits and Other Costs to Exit an Activity (including
  Certain Costs Incurred in a Restructuring)." EITF Issue No. 94-3 required
  recognition of costs at the date of commitment to an exit or disposal plan.
  SFAS 146 is to be applied prospectively to exit or disposal activities initiated
  after December 31, 2002. Early application is permitted. The adoption of SFAS
  146 by the Company is not expected to have a material impact on the Company's
  financial position, results of operations, or cash flows.

In April 2002, the FASB issued SFAS 145, "Rescission of
  FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
  Technical Corrections." Among other things, this statement rescinds FASB
  Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt" which
  required all gains and losses from extinguishment of debt to be aggregated
  and, if material, classified as an extraordinary item, net of related income
  tax effect. As a result, the criteria in APB Opinion No. 30, "Reporting
  the Results of Operations -- Reporting the Effects of Disposal of a Segment
  of a Business, and Extraordinary, Unusual and Infrequently Occurring Events
  and Transactions," will now be used to classify those gains and losses.
  The provisions of SFAS 145 related to the classification of debt extinguishment
  are effective for years beginning after May 15, 2002. The adoption of SFAS
  145 by the Company is not expected to have a material impact on the Company's
  financial position, results of operations, or cash flows.

In November 2001, the EITF of the FASB issued EITF 01-9 "Accounting
  for Consideration Given by a Vendor to a Subscriber (Including a Reseller of
  the Vendor's Products)." EITF 01-9 provides guidance on when a sales incentive
  or other consideration given should be a reduction of revenue or an expense
  and the timing of such recognition. The guidance provided in EITF 01-9 is effective
  for financial statements for interim or annual periods beginning after December
  15, 2001. The adoption of EITF 01-9 by the Company did not have a material
  impact on the Company's financial statements.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

In August 2001, the FASB issued SFAS 144, "Accounting for
  the Impairment or Disposal of Long-Lived Assets." SFAS 144 provides new
  guidance on the recognition of impairment losses on long-lived assets with
  definite lives to be held and used or to be disposed of and also issued the
  definition of what constitutes a discontinued operation and how the results
  of a discontinued operation are to be measured and presented. SFAS 144 is effective
  for fiscal years beginning after December 15, 2001. The adoption of SFAS 144
  did not have a material impact on the Company's financial position, results
  of operations, or cash flows.

In June 2001, the FASB issued SFAS 143, "Accounting for
  Asset Retirement Obligations." SFAS 143 requires the fair value of a liability
  for an asset retirement obligation to be recognized in the period that it is
  incurred if a reasonable estimate of fair value can be made. The associated
  asset retirement costs are capitalized as part of the carrying amount of the
  long-lived asset. SFAS 143 is effective for fiscal years beginning after June
  15, 2002. The adoption of SFAS 143 is not expected to have a material impact
  on the Company's financial position, results of operations or cash flows.

In June 2001, the FASB issued SFAS 142, "Goodwill and Other
  Intangible Assets," which provides for non-amortization of goodwill and
  intangible assets that have indefinite useful lives, annual tests of impairments
  of those assets and interim tests of impairment when an event occurs that more
  likely than not has reduced the fair value of such assets. The statement also
  provides specific guidance about how to determine and measure goodwill impairments,
  and requires additional disclosure of information about goodwill and other
  intangible assets. The provisions of this statement are required to be applied
  starting with fiscal years beginning after December 15, 2001, and applied to
  all goodwill and other intangible assets recognized in the financial statements
  at that date. Goodwill and intangible assets acquired after June 30, 2001 will
  be subject to the non-amortization provisions of the statement. Early application
  is permitted for entities with fiscal years beginning after March 15, 2001,
  provided that the first interim financial statements had not been issued previously.
  The Company's adoption of the provisions of SFAS 142 did not have a material
  impact on the Company's financial position, results of operations or cash flows.

In June 2001, the FASB issued SFAS 141, "Business Combinations," which
  is effective for all business combinations initiated after June 30, 2001. SFAS
  141 requires companies to account for all business combinations using the purchase
  method of accounting, recognize intangible assets if certain criteria are met,
  as well as provide additional disclosures regarding business combinations and
  allocation of purchase price. The adoption of SFAS 141 did not have a material
  impact on the Company's financial position, results of operations or cash flows.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

Note 2.  GOING CONCERN

The accompanying financial statements have been prepared in
  conformity with accounting principles generally accepted in the United States
  of America, which contemplates continuation of the Company as a going concern.  The
  Company has incurred losses since inception of $6,247,833, has committed up
  to $400,000 to complete drilling on the Bolton Prospect (See Note 3), and is
  reliant on raising capital to initiate its business plan.

The Companys ability to continue as a going concern is
  contingent upon being able to secure financing and attain profitable operations.  The
  Company is pursuing financing for its operations and is in the process of determining
  whether the Bolton Prospect has sufficient reserves to justify additional drilling.

The financial statements do not include any adjustments to reflect
  the possible future effects on the recoverability and classification of assets
  or the amounts and classification of liabilities that may result from the possible
  inability of the Company to continue as a going concern.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

Note 3.  UNPROVED OIL AND GAS PROPERTIES

On November 21, 2001, the Company entered into a farm-in agreement
  with Olympia Energy Inc. (the Farm-in) under which the Company will share the
  development costs and revenues for a natural gas project in the Smoky area
  near Grande Prairie, Alberta, Canada (the Bolton Prospect), which encompasses
  5,760 acres.  Under the terms of the Farm-in, the Company will fund 25%
  of the cost to drill and complete a 4,800 meter well in the Bolton Prospect
  and will earn a 15% interest after payout in the Bolton Prospect.  Following
  is a summary of the costs incurred on unproved oil and gas properties as of
  March 31, 2003:

Acquisition of unproved properties
      $               -Exploration costs
      2,124,728Development costs
      746,174Less: Asset impairment
      (2,370,902)$    500,000


Gross drilling costs for the well were initially estimated to
  be $7,000,000.  Drilling on the well began on November 13, 2001, and was
  expected to take approximately 120 days.  The well was drilled to a total
  depth of 4,830 meters in March 2002 and logged.  A completion program
  was attempted on the well, but the well flowed small amounts of gas and large
  amounts of salt water.  Various attempts to shut off the salt water were
  unsuccessful.  Testing has shown the well to be non-productive, and the
  zone has been plugged and abandoned.

During March 2003 the Company participated in a testing program
  on shallower zones in the Bolton Prospect that produced gas on test.  The
  Operator has shut-in the well for Spring break-up and intends to resume testing
  this well and other potentially productive zones by August 2003.  Additional
  costs to be incurred by the Company to test these zones are estimated at $400,000.

The Company has not ascertained the status of any oil and gas
  reserves that may be recoverable from the well.  As of March 31, 2003,
  the Company had advanced a total of $2,870,902 under the Farm-in agreement
  with Olympia Energy, Inc. towards the drilling and development costs at the
  Bolton Prospect.  The Company determined there was an impairment related
  to the abandonment of the initial test well at the Bolton Prospect and, accordingly,
  recognized an impairment loss of $2,370,902 for the year ended March 31, 2003.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

The Company was actively involved in another project during the
    year ended March 31, 2002, named the Greater Trona Prospect located in southeastern
    Wyoming.

Acquisition of unproved properties
      $     401,290Exploration costs
      830,621Development costs
      944,442Less: Asset impairment - 2000
      (  67,000)Less: Asset impairment  2001
      (738,675)Less: Asset impairment  2002
      (1,370,678)$               -


As of December 31, 2000 the Company had participated in the
  drilling of 23 wells in the Greater Trona area. During February 2001, the Company
  hired an independent engineer to evaluate the Greater Trona project.  Based
  on the recommendations in this report, the Company negotiated a sale of its
  interests in the Greater Trona area to VRD Inc. This agreement was signed on
  February 28, 2001. The Company attempted to obtain the approval of the shareholders
  of the transactions contemplated in the Purchase and Sale Agreement with VRD,
  Inc.  The Company obtained clearance from the SEC to distribute the Schedule
  14A to the shareholders on September 26, 2001; however, by the time of the
  SEC clearance, the Purchase and Sale Agreement had expired in accordance with
  its terms and VRD, Inc. was unwilling to proceed with the transaction.

The Company entered into a Quitclaim, Release and Assumption
  Agreement, dated December 6, 2001, with VRD, Inc. and Saurus Resources, pursuant
  to which the Company disposed of any and all interests that it held in the
  oil and gas leases located in the Greater Trona Area of Sweetwater County,
  Wyoming.  As a result, the Company wrote off the remaining value, $1,370,678,
  of the property during the year ended March 31, 2002.

Note 4.  CONCENTRATIONS OF CREDIT RISK

The Companys funds are federally insured up to $100,000.  As
  of March 31, 2003, the funds deposited at a financial institution exceed this
  insured amount by approximately $238,000.

Note 5.  STOCKHOLDERS EQUITY

Common Stock

On March 20, 2002, the Company issued 5,000,000 shares of its
  common stock to an affiliate at a price of $0.20 per share through a private
  placement.  The fair market value of the stock on that date was $0.45.  The
  difference between the fair market value and the issue price was recorded as
  stock compensation expense of $1,250,000.

---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

Stock Options

The Company has a compensatory stock option plan. Under the
  plan, the Company may grant options for up to 2,500,000 shares of common stock.
  The exercise price of each option shall be determined by the Compensation Committee
  or by the CEO with reference to factors such as current fair market value of
  the common stock, net book value per share, regular or other remuneration already
  being received by the optionee. The maximum term of the options is five years
  and they vest on the date granted.

Summarized information relative to the Companys stock option
  plan is as follows:

Number of
      Weighted AverageShares
      Exercise PriceOutstanding at March 31, 2001
      -
      $       -Granted
      225,000
      1.00Outstanding at March 31, 2002And 2003
      225,000
      $ 1.00


The options for 225,000 shares of common stock expire in 2006.

The effect of applying SFAS No. 123 pro forma net (loss) is
  not necessarily representative of the effects on reported net income (loss)
  for future years due to, among other things, the vesting period of the stock
  options and the fair value of additional stock options in future years.  The
  fair values of the options granted during the year ended March 31, 2002, are
  estimated at $0.30 on the date of grant using the Black-Scholes option pricing
  model with the following assumptions: no dividend yield, volatility of 30%,
  a risk-free interest rate of 5.0%, and expected lives of 5 years from date
  of vesting.

For purpose of pro forma disclosure, the estimated fair value of
  the options is charged to expense in the year that the options were granted.  The
  Companys pro forma information for the year ended March 31, 2002 is as
  follows:

Pro forma net
          (loss)
      $ (2,846,631)Pro forma (loss)
          per shareBasic
          and diluted
      $         (0.25)


---



Nation Energy, Inc.
Notes to Financial Statements
March 31, 2003

Note 6.  INCOME TAXES

The Company accounts for income taxes under SFAS 109, "Accounting
  for Income Taxes", which requires use of the liability method.  SFAS
  109 provides that deferred tax assets and liabilities are recorded based on
  the differences between the tax bases of assets and liabilities and their carrying
  amounts for financial reporting purposes, referred to as temporary differences.  Deferred
  tax assets and liabilities at the end of each period are determined using the
  currently enacted tax rates applied to taxable income in the periods in which
  the deferred tax assets and liabilities are expected to be settled or realized.

The types of temporary differences between the tax basis of assets
  and their financial reporting amounts that give rise to a significant portion
  of the deferred tax asset are as follows:

ReconcilingItem
      TaxEffectNet operating loss carryforward
      $4,997,000
      $1,699,000


The net operating loss carryforward will expire through 2023.  The
  deferred tax asset has been fully reserved at March 31, 2003.  The change
  in the valuation allowance during the year ended March 31, 2003 was $840,000.

The provision for income taxes differs from the amount computed
  by applying the statutory federal income tax rate of 34% to income before income
  taxes due to the effect of the net operating loss.  The net operating
  loss negates any provision for income taxes.

Note 7. RELATED PARTY TRANSACTIONS

During March 2002, the Company entered into a verbal agreement
  with a related party in which the related party will provide management services
  on a month-to-month basis.   For the year ended March 31, 2003, the
  agreement called for quarterly payments of $9,630.  Total expenses recognized
  under this agreement for the years ended March 31, 2003 and 2002 were $38,520
  and $1,200, respectively.

On July 1, 2002 the Company entered into an agreement with a
  related party in which the related party will provide management services for
  a monthly fee of $1,250.  The agreement was retroactive to April 1, 2002.  Total
  expenses recognized under this agreement for the years ended March 31, 2003
  and 2002 were $15,000 and $-, respectively.



---



### Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

## PART III

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

Directors and Executive OfficersAll directors of our
  company hold office until the next annual meeting of the shareholders or until
  their successors have been elected and qualified.  The officers of our
  company are appointed by our board of directors and hold office until their
death, resignation or removal from office.

As at June 30, 2003, our directors and executive officers, their
  ages, positions held, and duration of such, are as follows:

NamePosition Held with our CompanyAgeDate First
    Elected or AppointedDonald A. SharpePresident, Chief Executive Officer and Director45June 4, 1999John R. HislopChairman of the Board, Vice-President, Chief Financial Officer, Secretary and Director50June 4, 1999


Business ExperienceThe following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee, indicating the principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Donald A. Sharpe, President, Chief Executive Officer and DirectorMr.
  Sharpe has been President, CEO and a director of our company since June 1999.  As President, CEO and a member of the board of directors since 1997 of Netco Energy Inc. (formerly known as Green River Holdings, Inc.), a public company located in Vancouver, British Columbia, Mr. Sharpe oversaw the reorganization and initial financing of that company.  Mr. Sharpe was responsible for the negotiations and completion of Netco Energy's farm-in arrangement that resulted in the acquisition of the oil and gas interests in more than 64,000 acres in the Green River basin of Wyoming.  Prior to his tenure at Netco Energy, Mr. Sharpe was president and a director of JABA Inc., of Vancouver, British Columbia, from April 1995 to November 1997.  As president, Mr. Sharpe was responsible for the administration of the public company, coordination of the financing and the filing of a plan of reactivation which the company used to begin trading on the Alberta Stock Exchange.  Mr. Sharpe was also responsible for securing joint venture partners for JABAsprojects in the Southwestern U.S. and Northern Mexico.  From
  1981 to 1994, Mr. Sharpe was a Geophysicist with Suncor Inc., of Calgary, Alberta
  where Mr. Sharpe held positions of increasing responsibility in the areas of
exploration, management and marketing.

Over the past five years Mr. Sharpe has been a director of the following companies: Capital Charter Corp. from November 1998 to March 2000, UKT Recycling Technologies Inc. from November 1994 to January 1999 (Mr. Sharpe was also Chairman from January 1996 to January 1999 and CEO from January 1996 to January 1998), Velvet Exploration Company, Ltd. from November 1996 to November 1998, Watch Resources since April 2002, Patriot Petroleum Corp. since June 1999 (Mr. Sharpe has also been the President and CEO since 1999), Result Energy Inc. since April 1999, Gemini Energy Corp. since October 2000 (Mr. Sharpe has also been President since 2000), Empress Capital Corp. from April 1999 to May 2000 (Mr. Sharpe was also President and CEO during that term) and Director of Heartland Oil and Gas Corp. from September 18, 2002.  Mr. Sharpe received his B.Sc. in Geophysics from the University of British Columbia and Certificate in Business Management from the University of Calgary.

---



John R. Hislop, Chairman of the Board, Vice-President, Chief Financial Officer, Secretary and DirectorMr.
  Hislop has been Chairman, Vice President, Chief Financial Officer, Secretary
  and a Director of our company since June 1999.  Since 1990, Mr. Hislop has been working as an independent financial consultant and has served as an officer and director of various emerging growth companies.  He is currently a director of Cubix Investments, Ltd. (formerly named Cubix Investments Inc.), a holding company for various public oil and gas and internet companies, and has been a director since February 1994 and served as President of Cubix Investments, Inc. from February 1994 to February 2001.  In the past five years Mr. Hislop has also been a director of the following companies: Gemini Energy Corp. from March 1995 to June 27, 2002 (Mr. Hislop also served as President from March 1997 to January 1998), Ultra Petroleum Corp. from March 1993 to January 2001 (Mr. Hislop also served as CFO from December 1994 to December 1997), Rio Amarillo Mining Ltd. prior to April 1994, Spectrum Resources, Ltd. from September 1996 to November 1997, Exxel Energy Corp. since October 15, 2001 (Mr. Hislop also served as President since October 15, 2001), Warrior Energy N.V. (formerly Luxmatic Technologies N.V.) since October 1997 (Mr. Hislop has also served as President since 1997), KinYSIS Pharmaceutical, Inc. from July 1997 to October 1997 (Mr. Hislop also served as President, Secretary, CEO and CFO from July 1997 to August 1997), Ultra Holdings Inc. from July 1999 to November 2001 (Mr. Hislop also has served as President since July 1999), Zconnexx Corporation (formerly known as Capital Charter Corp.) from November 1998 to May 2000, Netco Energy Inc. (formerly known as Green River Holdings Inc. and Green River Petroleum, Inc.) since June 1999, and Patriot Petroleum Corp. since April 1999.  Mr. Hislop trained as a Chartered Accountant with Ernst & Young
and has a bachelor of Commerce in Finance from the University of British Columbia.

Committees of the Board

We do not have an audit or compensation committee at this time.

Family Relationships

There are no family relationships between any of our directors or executive officers.

Involvement in Certain Legal Proceedings

Other than as discussed below, none of our directors, executive officers, promoters or control persons have been involved in any of the following events during the past five years:

1. any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either
    at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
    minor offenses);
3. being subject to any order, judgment, or decree, not subsequently
      reversed, suspended or vacated, of any court of competent jurisdiction,
    permanently or temporarily enjoining, barring, suspending or otherwise limiting
    his involvement
    in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil
      action), the Commission or the Commodity Futures Trading Commission to
    have violated a federal or state securities or commodities law, and the judgment
    has not been reversed, suspended, or vacated.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively.  Executive officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish our company with copies of all Section 16(a) reports they file.

---



To the best of our knowledge, all executive officers, directors and greater than 10% shareholders filed the required reports in a timely manner.

### Item 10. Executive Compensation.

The following table summarizes the compensation paid to our President and Chief Executive Officer during the last fiscal year.  No other officers or directors received annual compensation in excess of $100,000 during the last three complete fiscal years.

Annual Compensation
    Long Term
    Compensation(1)
    Pay-outsName and Principal
    Position
    Year
    Salary
    Bonus
    Other
    Annual
    Compen-
    sation(1)Securities
    Under
    Options/
    SAR's
    GrantedRestricted
    Shares or
    Restricted
    Share Units
    LTIP
    Pay-outsDonald Sharpe
    President, CEO and Director2003
    2002
    2001Nil
    Nil
    NilNil
    Nil
    Nil$15,563(2)1,255(2)NilNil
    150,000(3)NilNil
    Nil
    NilNil
    Nil
    Nil


(1) The value of perquisites and other personal benefits, securities and property for the Named Executive Officers that do not exceed the lesser of $50,000 or 10% of the total of the annual salary and bonus is not reported herein.

(2) On March 1, 2002, a verbal arrangement became effective with Mr. Sharpe to receive remuneration in the amount of Cdn $2,000 per month for services rendered.  This arrangement was finalized pursuant to a Management Agreement dated July 1, 2002 between the Company and D. Sharpe Management Inc., a private management company wholly owned by Mr. Sharpe.

(3) On July 20, 2001, we granted 150,000 stock options to Mr. Sharpe, with each option entitling Mr. Sharpe to purchase one common share at an exercise price of $1.00 per common share up to July 20, 2006.

As of the date of this annual report, we have no compensatory plan or arrangement with respect to any officer that results or will result in the payment of compensation in any form from the resignation, retirement or any other termination of employment of such officer's employment with our company, from a change in control of our company or a change in such officer's responsibilities following a change in control.

Employment/Consulting Agreements

We have not entered into any employment or consulting agreements with any of our current officers, directors or employees.

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers, except that our directors and executive officers may receive stock options at the discretion of our board of directors.  Other than the management agreements discussed above, we do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.

Stock Options/SAR Grants

There were no stock options or stock appreciation rights made during the fiscal year ended March 31, 2003.

---



**VALUE OF THE OPTIONS GRANTED TO OUR NAMED EXECUTIVE OFFICERS IN THE YEAR ENDED MARCH 31, 2003**

NameShares
    Acquired on
    Exercise (#)Value
    Realized
    ($)Number of Shares
    of Common Stock
    Underlying
    Unexercised
    Options as
    March 31, 2003
    Exercisable/
    UnexercisableValue of
    Unexercised
    In-the-Money
    Options at
    March 31, 2003
    Exercisable /
    Unexercisable(1)Donald SharpeNilNil150,000 exercisableNilJohn HislopNilNil75,000 exercisableNil


(1) The closing price on March 31, 2003 was $0.10.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers, except that our directors and executive officers may receive stock options at the discretion of our board of directors.  We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

Directors Compensation

We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director's fees or other cash compensation for services rendered as a director in the year ended March 31, 2003.

No cash compensation was paid to any of our directors for the director's services as a director during the fiscal year ended March 31, 2003.  We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors except for the granting from time to time of incentive stock options.  The board of directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director.  Other than indicated below, no director received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.

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### Item 11. Security Ownership of Certain Beneficial Owners and Management and Stockholder Matters.

Principal Stockholders

The following table sets forth, as of March 31, 2003, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock, as well as by each of our current directors and executive officers.  Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated.  Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

Name and Address of Beneficial OwnerAmount and Nature of
    Beneficial Ownership(1)Percentage
    of Class(1)Jeffrey L. Taylor
    500 N. Rainbow Blvd., Suite 300
    Las Vegas, NV  89107920,0005.7%Cubix Investments Ltd.(2)c/o Suite 1100, 609 West Hastings Street
    Vancouver, BC  Canada  V6B 4W48,010,00050.0%Sextan Capital, Inc.(2)Suite 1100, 609 West Hastings Street
    Vancouver, BC  Canada  V6B 4W43,000,00018.7%Donald Sharpe
    1281 Eldon Road
    North Vancouver, BC  V7R 1T5150,000(3)*%John Hislop
    1589 Marpole Avenue
    Vancouver, BC  V6J 2R975,000(4)*%Directors and Executive Officers as a GroupNil*%


*Less than 1%

(1)Based on 16,020,000 shares of common stock issued and outstanding as of March 31, 2003.  Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable.  Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(2)Sextan Capital, Inc. is a wholly-owned subsidiary of Cubix Investments, Ltd.  John Hislop, our Chairman, Vice-President, Chief Financial Officer, Secretary and director, is a director of Cubix Investments, Ltd.

(3)   Includes options to acquire an aggregate of 150,000 shares of common stock, exercisable within sixty days.

(4)Includes options to acquire an aggregate of 75,000 shares of common stock, exercisable within sixty days.

---



Equity Compensation Plan Information

We adopted our current stock option plan, entitled the 1999 Stock Option and Incentive Plan, on May 6, 1999 which was subsequently approved by over 50% of the shares of common stock held by stockholders of our company.  The following table provides a summary of the number of options granted under our stock option plan, the weighted average exercise price and the number of options remaining available for issuance all as at March 31, 2003.

Number of Common Shares to be issued upon exercise of outstanding optionsWeighted-Average exercise price of outstanding optionsNumber of options remaining available for further issuance225,000$1.002,275,000


### Item 12. Certain Relationships and Related Transactions.

Except as otherwise indicated below, we have not been a party
  to any transaction, proposed transaction, or series of transactions in which
  the amount involved exceeds $60,000, and in which, to its knowledge, any of
  its directors, officers, five percent beneficial security holder, or any member
  of the immediate family of the foregoing persons has had or will have a direct
  or indirect material interest. We receive administrative services and back
  office support under an oral administrative service agreement with Caravel
  Management Corp., pursuant to which we are charged $3,000 per month. Caravel
  Management Corp. is a private management company that is wholly-owned by John
  Hislop, our Chairman, Secretary and Chief Financial Officer.  The agreement
  with Caravel Management Corp. is on a month-to-month basis.

We have entered into a Management Agreement dated July 1, 2002
  with D. Sharpe Management to which we are charged $2,000 Cdn per month for
  Mr. Sharpe's management services. This agreement became effective March 1,
  2002 and is on a month-to-month basis.

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

Reports of Form 8-K

On February 14, 2003, we filed a current report on Form 8-K announcing the filing of our Form 10-QSB Quarterly Report for the period ended December 31, 2002 with the United States Securities and Exchange Commission.  In connection with the legislation that requires our Chief Executive Officer and Chief Financial Officer to certify periodic reports that contain financial statements, we attached as exhibit 99.1 to the Form 8-K Current Report the Certification of the President and Chief Executive Officer and the Certification of the Chairman of the Board and Chief Financial Officer, respectively.

Exhibits Required by Item 601 of Regulation S-B

Exhibit Number and Description

(3)          Articles of Incorporation/Bylaws

3.1         Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB filed with the SEC on March 31, 2000)

3.2         Certificate of Amendment of Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB filed with the SEC on March 31, 2000)

3.3         Bylaws (incorporated by reference from our Registration Statement on Form 10-SB filed with the SEC on March 31, 2000)

3.4        **Certificate of Merger (Delaware) effective June 12, 2003

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3.5        **Certificate of Merger (Wyoming) effective June 13, 2003

(10)          Material Contracts

10.1         1999 Stock Option Plan (incorporated by reference from our Registration Statement on Form 10-SB filed with the SEC on March 31, 2000)

10.2         Quitclaim Release and Assumption Agreement with Saurus Resources, Inc. and VRD, Inc., dated December 6, 2001 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the SEC on  February 14, 2002).

10.3         Farm-in Agreement with Olympia Energy Inc., dated November 21, 2001 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the SEC on February 14, 2002).

10.4          Management Agreement with D. Sharpe Management Ltd., July 1, 2002 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the SEC on August 14, 2002).

(99)             Additional Exhibits

99.1        **Section
  906 Certification under Sarbanes-Oxley Act of 2002 of Donald Sharpe, dated
  June 27, 2003

99.2        **Section
  906 Certification under Sarbanes-Oxley Act of 2002 of John Hislop, dated June
  27, 2003

**Filed herewith

### Item 14.

Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to the filing date of this report, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures.  This evaluation was carried out under the supervision and with the participation of our management, including our president and chief executive officer.  Based upon that evaluation, our president and chief executive officer concluded that our disclosure controls and procedures are effective.  There have been no significant changes in our internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to  ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure.

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### 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.

NATION ENERGY, INC.a Wyoming corporation

Donald A. Sharpe______________________________
By: Donald Sharpe, President, CEO
and Director

Date: June 27, 2003

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.

Signatures

Donald A. Sharpe_____________________________________
Donald Sharpe, President,
Chief Executive Officer and Director

Date: June 27, 2003

John Hislop_____________________________________
John Hislop,  Chairman of the Board,
Chief Financial Officer and Director

Date: June 27, 2003

---



CERTIFICATION PURSUANT TO18 U.S.C. ss.1350, AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Donald A. Sharpe, certify that:

1. I have reviewed this annual report on Form 10-KSB of Nation Energy Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement
  of a material fact or omit to state a material fact necessary to make the statements
  made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information
  included in this annual report, fairly present in all material respects the
  financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for establishing
  and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
  information relating to the registrant, including its consolidated subsidiaries,
  is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
  procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness
  of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
  our most recent evaluation, to the registrant's auditors and the audit committee
  of the registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
  which could adversely affect the registrant's ability to record, process, summarize
  and report financial data and have identified for the registrant's auditors
any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
  annual report whether or not there were significant changes in internal controls
  or in other factors that could significantly affect internal controls subsequent
  to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: June 27, 2003Donald A. Sharpe_____________________________________

Donald A. Sharpe
President and Chief Executive Officer
(Principal Chief Executive Officer)

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CERTIFICATION PURSUANT TO18 U.S.C. ss.1350, AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Hislop, certify that:

1. I have reviewed this annual report on Form 10-KSB of Nation Energy Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement
  of a material fact or omit to state a material fact necessary to make the statements
  made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information
  included in this annual report, fairly present in all material respects the
  financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for establishing
  and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
  information relating to the registrant, including its consolidated subsidiaries,
  is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
  procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness
  of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
  our most recent evaluation, to the registrant's auditors and the audit committee
  of the registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
  which could adversely affect the registrant's ability to record, process, summarize
  and report financial data and have identified for the registrant's auditors
any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
  annual report whether or not there were significant changes in internal controls
  or in other factors that could significantly affect internal controls subsequent
  to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: June 27, 2003

John Hislop_____________________________________
John Hislop
Chief Financial Officer and Director
(Principal Chief Financial and Accounting Officer)