UNITED STATES
    SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-KSB (Mark One)[X]
        ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
            ACT OF 1934For the fiscal year ended:  March 31, 2001[  ]
        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
            ACT OF 1934Commission file number: 0-30193
  NATION ENERGY, INC. 
 (Name of Small Business Issuer in its Charter) Delaware
        
        59-2887569(State or other jurisdiction of
        
        (I.R.S. Employer Identification No.)incorporation or organization)Suite 1100 - 609 West Hastings StreetVancouver BC Canada V6B 4W4
        
        N/A(Address of principal executive offices)
        
        (Zip Code)
 Issuer's telephone number: (800) 400-3969 
    Securities registered pursuant to Section 12(b) of the Act: Title of each class
        
        Name of each exchange on whichto be so registered
        
        each class is to be registeredN/A
        
        N/A
  -1-  Securities registered pursuant to Section 12(g) of the Act:

  Common Stock, $0.001 par value per share

  

  (Title of Class)

  Check whether the registrant (1) filed all reports required to be filed by
    Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
    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 [ ]

  Indicate by check mark if disclosure of delinquent filers pursuant to Item
    405 of Regulation S-B is not contained herein, and will not 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. [  ]

  The issuer had no revenues for the fiscal year ended March 31, 2001.

  The aggregate market value of the common stock held by non-affiliates of the
    registrant at June 26, 2001, was approximately $4,083,352 based on the closing
    price for the common stock on the OTC Bulletin Board on that date. At June
    26, 2001, 11,020,000 shares of registrant's common stock were outstanding.

  This Form 10-KSB incorporates by reference the issuer's amended Consent Solicitation
    Statement on Schedule 14A which was filed on June 28, 2001 (incorporated by
    reference in "DESCRIPTION OF THE BUSINESS--SALE OF INTERESTS TO VRD").

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

  This Form 10-KSB contains forward-looking statements. These statements include
    statements regarding our plans, goals, strategies, intent, beliefs or current
    expectations. These statements are expressed in good faith and we believe
    had a reasonable basis when expressed, but there can be no assurance that
    these expectations will be achieved or accomplished. Sentences in this document
    containing verbs such as "plan," "intend," "anticipate,"
    "target," "estimate," "expect," etc., and/or
    future-tense or conditional constructions ("will," "may,"
    "could," "should," etc.) constitute forward-looking statements
    that involve risks and uncertainties. Items contemplating, or making assumptions
    about, actual or potential future sales, market size, collaborations, trends
    or operating results also constitute such forward-looking statements. These
    statements are only predictions and actual results could differ materially.
    Certain factors that might cause such a difference are discussed throughout
    this Form 10-KSB including the section entitled "Risk Factors" beginning
    on page 10 of this document. Any forward-looking statement speaks only as
    of the date we made the statement, and we do not undertake to update the disclosures
    contained in this document or reflect events or circumstances that occur subsequently
    or the occurrence of unanticipated events.

  -2-NATION ENERGY, INC.

  FORM 10-KSB

  TABLE OF CONTENTS

  PART IItem 1.
        Description of BusinessItem 2.
        Description of PropertyItem 3.
        Legal ProceedingsItem 4.
        Submission of Matters to a Vote of Security HoldersPART IIItem 5.
        Market for Common Equity and Related Stockholder MattersItem 6.
        Management's Discussion and AnalysisItem 7.
        Financial StatementsItem 8.
        Changes in and Disagreements With Accountants on Accounting and Financial
            DisclosurePART IIIItem 9.
        Directors, Executive Officers, Promoters and Control Persons; Compliance
            with Section 16(a) of the Exchange ActItem 10.
        Executive CompensationItem 11.
        Security Ownership of Certain Beneficial Owners and ManagementItem 12.
        Certain Relationships and Related TransactionsItem 13.
        Exhibits and Reports on Form 8-K

  

  -3-PART I

  ITEM 1. DESCRIPTION OF BUSINESS

  THE COMPANY

  Nation Energy, Inc. ("Nation Energy" or the "Company") is an exploration
    stage company. It was 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 it conducted no business and existed as a shell corporation.
    After the reinstatement of the Company's Articles of incorporation on September
    16, 1998, the Company's main focus has been the procurement of mineral leasehold
    interests, primarily oil and gas exploitation rights. The Company reincorporated
    as a Delaware corporation on February 2, 2000 and changed its name to Nation
    Energy, Inc. on February 15, 2000. Pursuant to its recent focus, the Company
    has commenced corporate strategic development whereby the Company has been
    exploring potential oil and gas projects. Though the Company has reviewed
    its potential participation in several oil and gas projects in the Rocky Mountain
    region it has entered into only one agreement as of this date for the exploration
    of oil and gas properties.  This agreement is the Joint Operating Agreement
    with Saurus Resources, Inc. dated December 1, 1999 which was attached as an
    exhibit to Nation Energy's Form 10-SB filed with the Securities and Exchange
    Commission on March 31, 2000 and was described in detail in that filing.

  ACTIVITIES UNDER THE AGREEMENT WITH SAURUS RESOURCES

  The Company holds interests in 28 oil and gas leases located in the Greater
    Trona Area prospect, located in and around Sweetwater County, Wyoming. 
    These leases cover approximately 22,000 acres.   See "DESCRIPTION
    OF PROPERTY."   Under the Joint Operating Agreement, Saurus Resources
    is the operator of oil and gas exploration on the property covered by these
    leases and has certain rights and duties as the operator.  The agreement
    states the initial ownership interests of the parties in the covered leases,
    specifies procedures for confirming and adjusting the interests of the parties
    and sets forth agreements concerning future acquisitions or transfers of interests
    of the leases.  The agreement also has provisions that allow a party
    to propose the drilling of a well on properties covered by the covered leases
    and allow the other party to elect whether or not to participate in the proposed
    drilling.  If a party elects to not pay its share of the cost of drilling
    a proposed well, such non-participating party must surrender to others who
    do participate in the proposed well all of the revenue attributable to its
    nominal ownership interest in the well until the participating party has recouped
    from net revenues otherwise due to the non-participating party 300% of the
    cost of the well attributable to the non-participating party's interest. 
    The agreement also provides rules for managing the production, maintenance
    and abandonment of wells drilled on the covered leases, has provisions that
    specify the liability of the parties for various expenses and expenditures
    for or related to operations on the covered leases and sets forth various
    procedures for operations on the covered leases and making decisions under
    the agreement.

  -4-The Company's only material activities to date have been related to its participation
    in exploration conducted under the Joint Operating Agreement with Saurus Resources. 
    To date, 24 test wells have been drilled and completed under this agreement. 
    Costs per well have exceeded by four times or more the original estimate of
    $35,000 per well.  Nation Energy has advanced a total of approximately
    $2,167,000 under its agreement with Saurus Resources.  Operational difficulties
    in developing the test wells are largely responsible for the greater operating
    costs experienced.  These difficulties include mineral precipitation
    in the well bore, which inhibits production.  The wells drilled to date
    have been perforated and hydraulically fractured; these geophysical traits
    make extraction of gas much more complicated and expensive than anticipated. 
    Poor weather and lack of available crews have also contributed to operational
    difficulties and greater expenses. Despite the significantly greater exploration
    expenditures, there are no strong indications to date that the test wells
    or other potential wells within the interests held by Nation Energy will produce
    sufficient gas to be able to recover the exploration costs expended to date,
    let alone be profitable.

  Nation Energy's management has reviewed analyses of the open hole logs and
    mud logs of the wells drilled to date and concluded that there is no evidence
    that the wells contain sufficient gas to prove economically viable.  Both
    the open hole logs (which reveal porosity and electric resistivity, both of
    which are indicators of production potential) and the mud logs are inconclusive. 
    The electric resistivity logs indicate that permeability, a measure of production
    capacity, is very low in the test wells.  The mud logs indicate small
    amounts of gas to be present each time a drill pipe connection is made but
    there is no indication that any particular depth is likely to be productive. 
    While there are indications that gas is present, permeability and pressure
    are so low that it is doubtful that economic amounts of gas could be extracted.

  Production testing of the Trona Area project has been complicated by the precipitation
    of sodium carbonate in the test wells.  This precipitation is the result
    of geological conditions in the Trona area and has resulted in plugged tubing
    in the test wells.  As a result there has been no flow testing that has
    lasted for more than a few days before operations were shut down. Attempts
    were made to clean out the plugs and put the wells back on production but
    none had been successful for more than a few days before another plug formed. 
    Consequently there is no meaningful information regarding the sustained production
    capacity of the wells. No cores have been taken from the test wells in the
    Trona Area project.  It is Nation Energy's understanding that the operator
    determined that core testing was uneconomical because the cost of performing
    such testing was not justified in light of the other testing being performed. 
    Because the operator has not undertaken to perform core testing, these data
    are not available to Nation Energy.

  SALE OF INTERESTS TO VRD

  Because of the poor operating results under the Joint Operating Agreement,
    the Company began to explore other alternatives to this arrangement. 
    On February 28, 2001 the Company entered into a Purchase and Sale Agreement
    with VRD, Inc., an affiliate of Saurus Resources, under which the Company has
    agreed to sell to VRD all of its interest in its 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 its rights under the Joint Operating Agreement with Saurus Resources. 
    The rights to be sold include the right to participate in the drilling, completion,
    tie-in and production of wells within the contract area.   In consideration
    for the sale, the Company will receive from VRD $2,165,780 in cash.

  -5-In addition, VRD will (a) assign to Nation Energy an overriding royalty interest
    equal to an undivided 2% to 3% (Nation Energy will retain a 3% royalty in
    leases covering approximately 3200 acres of the property in Sweetwater County
    and a 2% royalty in the remaining property to which it has a leasehold interest)
    of certain oil, gas and other hydrocarbons produced, saved and sold, and (b) upon
    the acquisition of an interest in an oil and gas lease within a specified
    area prior to December 31, 2021, assign an overriding royalty of an undivided
    minimum of 1% and a maximum of 2% of 8/8ths of all oil, gas and other hydrocarbons
    produced, saved and sold from such interest.  In essence, as a result
    of the sale VRD will acquire Nation Energy's interest in the Greater Trona
    prospect in exchange for cash and an interest in possible future royalty payments
    that will be paid if the properties are put into production and the production
    from the oil and gas leases is sold.  Due to the highly speculative nature
    of the venture set forth in the Joint Operating Agreement, and its failure
    to create any revenues to date as explained below, the Board of Directors
    of Company has determined that resources committed under the Joint Operating
    Agreement could be better directed to other as yet undetermined activities.

  The Company has proposed to obtain the approval of its shareholders of the
    transactions contemplated in the Purchase and Sale Agreement.  This details
    of this transaction and the reasons for this transaction are described in
    detail in the Company's Consent Solicitation Statement on Schedule 14A, which
    was filed on April 26, 2001 and subsequently amended by a filing made June
    28, 2001.  This filing, as amended, is incorporated into this Form 10-KSB
    by reference.  The Company is hopeful that it will be able to send the
    Consent Solicitation Statement to its shareholders and obtain shareholder
    approval of the sale shortly after the date of  filing of this Form 10-KSB. 
    Following the consummation of the sale, the Company will be a shell company
    without operations but with significant cash assets.  It is expected
    that Nation Energy will continue to investigate business opportunities consistent
    with its historical oil and gas exploration activities as well as other business
    opportunities outside of its previous business activities.  At this time
    the Company has not yet identified any additional oil and gas opportunities
    which it is willing to pursue.

  Neither Nation Energy, its affiliates, its control persons, nor, to Nation
    Energy's knowledge, any beneficial owners of Nation Energy's capital stock,
    have any business relationship or other affiliation with Saurus Resources
    outside of the Joint Operating Agreement.  Neither Nation Energy, nor,
    to Nation Energy's knowledge, any beneficial owners of Nation Energy's capital
    stock, have any  business relationship or other affiliation with VRD,
    Inc. outside of the Purchase and Sale Agreement.

  SELECTION OF TARGET AREAS FOR ACQUISITION

  The Company has historically  considered several factors in choosing
    a region for acquisition of oil and gas leases. The Company has considered
    those regions in which its industry contacts, the officers of the Company,
    have the most experience in order to benefit from such experience.  Donald
    A. Sharpe, the Company's President, Chief Executive Officer, and a director,
    has over twenty years of experience in oil and gas exploration and development
    in the Western Canadian sedimentary basin, the U.S. Rocky Mountain basin,
    the U.S. gulf coast area, and several international basins.  John R.
    Hislop , the Company's Chairman of the Board of Directors, Vice President
    and Chief Financial Officer, Secretary and a director, has experience in oil
    and gas exploration and development in the U.S. Green River basin, the U.S.
    Powder River basin, and the Western Canadian sedimentary basin.  The
    Company has determined which leases it is interested in exploring based upon
    the analysis of technical and production data, financial analysis based on
    such production analysis, on site verification of well equipment and production
    capability, and verification of ownership of leasehold rights.

  -6-GEOLOGICAL AND GEOPHYSICAL TECHNIQUES

  The Company has employed and may employ in the future detailed geological
    interpretation to identify
    potential ventures. Geological interpretation is based upon data recovered
    from existing oil and gas wells in an area and other sources. Such information
    is either purchased from the company that drilled the wells or becomes public
    knowledge through state agencies after a period of years. Through analysis
    of rock types, fossils and the electrical and chemical characteristics of
    rocks from existing wells, the Company can construct a picture of rock layers
    in the area. Further, the Company will have access to the logs from the existing
    operating wells which will allow the Company to extrapolate a decline curve
    and make an estimation of the number of recoverable barrels of oil or cubic
    feet of gas existing beneath a particular lease. The Company has not purchased,
    leased, or entered into any agreements to purchase or lease any of the equipment
    necessary to conduct more advanced geological or geophysical testing
	techniques that its competitors may utilize.

  MARKET FOR OIL PRODUCTION

  The market for oil and gas production is regulated by federal, state and foreign
    governments. The overall market is mature and with the exception of gas, all
    producers in a producing region will receive the same price. The major oil
    companies will purchase all crude oil offered for sale at posted field prices.
    There are price adjustments for deviations from the quality standards established
    by the purchaser. Oil sales are normally contracted with a "gatherer"
    which is a third-party who contracts to pick-up the oil at the well site.
    In some instances there may be deductions for transportation from the wellhead
    to the sales point. The majority of crude oil purchasers do not at this time
    charge transportation fees, unless the well is outside their service area.
    The oil gatherer will usually handle disbursements of sales revenue to both
    the owners of the well (a "working interest owner") as well as payments
    to persons entitled to royalties as a result of such sales ("royalty
    owners"). The Company typically will be a working interest owner in the
    projects that it undertakes or in which it invests. By being a working interest
    owner, the Company is responsible for the payment of its proportionate share
    of the operating expenses of the well. Royalty owners receive a percentage
    of gross oil production for the particular lease and are not obligated in
    any manner whatsoever to pay for the cost of operating the lease. Therefore,
    the Company, in most instances, will be paying the expenses for the oil and
    gas revenues paid to the royalty owners.

  MARKET FOR GAS PRODUCTION

  In contrast to sales of oil, the gas purchaser will pay the well operator
    100% of the sales proceeds monthly for the previous month's sales. The operator
    is responsible for all checks and distributions to the working interest and
    royalty owners. There is no standard price for gas. Prices will fluctuate
    with the seasons and the general market conditions. It is the Company's intention
    to utilize this market whenever possible in order to maximize revenues. The
    Company does not anticipate any significant change in the manner its gas production
    would be purchased, however, no assurance can be given that such changes will
    not occur in the future.

  -7-RELIANCE ON MANAGEMENT

  If the proposed sale of the Company's interests in the Greater Trona Area
    prospect  to VRD is consummated, the Company will essentially be a shell company
    without operations but with significant cash assets.  Whether this transaction
    is consummated or not, investors will have to rely upon the judgment and ability
    of the Company's management with regard to locating additional oil and gas
    and other business opportunities, finding partners to spread the risk of the
    projects in which it engages, acquiring additional funding, and applying the
    Company's limited resources if and when the Company is able to identify other
    projects in which the company may choose to participate.  The Company
    has not entered into employment contracts with and does not carry key-person
    insurance for its officers and directors.  Since the nature and extent
    of the Company's participation in the Greater Trona Area project and other
    projects, as well as any other activities in which the Company may engage,
    is subject to many uncertainties, investors must have a high level of confidence
    in the judgment and ability of the management of the Company to make decisions
    on behalf of the Company pursuant to the circumstances surrounding such projects.
    Any investors that are not comfortable with these risks and the uncertainties
    of the Company's potential participation in the Greater Trona Area project,
    and other projects, or any investor relying upon the fact that the Company
    will participate in the Greater Trona Area project and not have to possibly
    search for other prospects should not invest.

  COMPETITION

  The oil and gas industry is highly competitive. Competition for prospects
    and producing properties is intense. If the Company pursues new opportunities
    in oil and gas exploration, it will be competing with a number of other potential
    purchasers of prospects and producing properties, most of which will have
    greater financial resources than the Company. The bidding for prospects has
    become particularly intense with different bidders evaluating potential acquisitions
    with different product pricing parameters and other criteria that result in
    widely divergent bid prices. The presence in the market of bidders willing
    to pay prices higher than are supported by the Company's evaluation criteria
    could further limit the ability of the Company to acquire prospects and low
    or uncertain prices for properties can cause potential sellers to withhold
    or withdraw properties from the market. In this environment, there can be
    no assurance that there will be a sufficient number of suitable prospects
    available for acquisition by the Company or that the Company will be able
    to obtain financing for or participants to join in the development of prospects.
    The Company's competitors and potential competitors include major oil companies
    and independent producers of varying sizes. Most of the Company's competitors
    have greater financial, personnel and other resources than the Company and
    therefore have greater leverage to use in acquiring prospects, hiring personnel
    and marketing oil and gas. A high degree of competition in these areas is
    expected to continue indefinitely.

  GOVERNMENTAL REGULATION

  The production and sale of oil and gas is subject to regulation by state,
    federal, local authorities, and foreign governments. In most areas there are
    statutory provisions regulating the production of oil and natural gas under
    which administrative agencies may set allowable rates of production and promulgate
    rules in connection with the operation and production of such wells, ascertain
    and determine the reasonable market demand of oil and gas, and adjust allowable
    rates with respect thereto.

  -8-The sale of liquid hydrocarbons was subject to federal regulation under the
    Energy Policy and Conservation Act of 1975 that amended various acts, including
    the Emergency Petroleum Allocation Act of 1973. These regulations and controls
    included mandatory restrictions upon the prices at which most domestic crude
    oil and various petroleum products could be sold. All price controls and restrictions
    on the sale of crude oil at the wellhead have been withdrawn. It is possible,
    however, that such controls may be reimposed in the future but when, if ever,
    such reimposition might occur and the effect thereof on the Company cannot
    be predicted.

  Approvals to conduct oil and gas exploration and production operations are
    required from various governmental agencies. There is no assurance when and
    if such approvals will be granted.

  EMPLOYEES

  Nation Energy currently has no employees other than its officers and directors. 
    Management of Nation Energy expects to hire additional employees as needed.
     Management currently estimates that Nation Energy will not hire any
    employees in the next twelve months.  Beginning in January 2001, Nation
    Energy has received administrative and back office support under an oral administrative
    services agreement with Caravel Management Corp., under which Nation Energy
    is charged $3,000 per month.  Caravel Management Corp. is a management
    company that is wholly-owned by John R. Hislop, Nation Energy's Chairman of
    the Board, Secretary and Vice President and Chief Financial Officer and a
    director.  The administrative agreement is on a month-to-month basis.

  ENVIRONMENTAL LAWS

  The Company intends to conduct its operations in compliance with all applicable
    environmental laws. The cost of such compliance has been and will be factored
    into the estimated costs of drilling and production. The effects of applicable
    environmental laws are to add to the cost of operations in the Trona region
    and elsewhere and to add to the time it takes to bring a project to fruition.
     The Company estimates that the cost of compliance with the various environmental
    regulations that apply to drill rig operations in the Greater Trona Area will
    average approximately $20,000 per well site.  Under its arrangement with
    Saurus, the Company will bear one-half of the operating costs of its drill
    rig operations in the Trona Area venture, thus the Company's estimated cost
    of environmental compliance will approximate $10,000 per well head. 
    These estimated costs include the costs of site restoration and abandonment
    as well as compliance with regulations affecting the ongoing operation of
    the rigs.  These costs will not be incurred should it proceed with the
    sale of its interests in the Greater Trona Area project to VRD.  In the
    event the Company enters into oil and gas projects in the future, it is anticipated
    that the Company will bear its proportionate share of similar or greater costs
    under such arrangements.

  -9-ITEM 2. DESCRIPTION OF PROPERTY

  PRINCIPAL PROPERTY

  The Company holds interests in 28 oil and gas leases located in the Greater
    Trona Area prospect, located in and around Sweetwater County, Wyoming. 
    These leases cover approximately 22,000 acres.   The interests proposed
    to be sold to VRD under the Purchase and Sale Agreement consist of both Nation
    Energy's rights under these leases, as well as Nation Energy's rights under
    the Joint Operating Agreement with Saurus Resources (described above). 
    These interests include Nation Energy's interest in leases from the State
    of Wyoming of oil and gas rights located in the Greater Trona Area. 
    The leases with the State of Wyoming have five year terms beginning December
    8, 1999 and thereafter and provide that one-sixth of the royalties earned
    for development on the leased lands are payable to the state of Wyoming. 
    The interests proposed to be sold also include Nation Energy's interest in
    leases from the United States Department of the Interior, Bureau of Land Management,
    of oil and gas rights located in the Greater Trona Area.  These leases
    with the United States have ten year terms beginning February 1, 2000 and
    thereafter and provide that one-eighth of the royalties earned from the development
    on the leased lands are payable to the United States.  The leased interests
    proposed to be sold to VRD are set forth in detail in Exhibit A to the Purchase
    and Sale Agreement attached to the Company's Consent Solicitation Statement
    on Schedule 14A which has been incorporated in this Form 10-KSB by reference.

  The Company anticipates that the Purchase and Sale Agreement will ultimately
    be approved and the sale to VRD completed as set forth in that agreement. 
    However, in the event the sale is not approved or otherwise does not close,
    Nation Energy will continue to be bound by the Joint Operating Agreement with
    Saurus. Under the agreement with Saurus, Saurus and the Company will each
    pay 50% of the costs of obtaining the necessary rights and drilling exploratory
    wells in the Greater Trona prospect.  If the proposed sale does not occur,
    Nation Energy will continue to have the interests  that would be sold
    under the Purchase and Sale Agreement, which include the right to participate
    in the acquisition of leases within the contract area and to participate in
    capital programs as may be presented,  for an indefinite period of time.  Nation
    Energy will also continue to pay its proportionate share of annual lease payments
    of between $1.00 and $1.50 per acre per year under its oil and gas leases
    until such leases are sold.  The agreement terminates only upon the event
    that either Saurus or the Company loses its respective rights to develop within
    the Greater Trona Area.

  The only other real property utilized by the Company is office space located
    at Suite 1100 - 609 West Hastings Street, Vancouver BC  Canada 
    V6B 4W4.  In January 2001, the Company entered into an oral administrative
    services agreement with Caravel Management Corp., under which the Company
    receives office and administrative support services and use of office space
    for a monthly charge of $3,000.  Caravel Management Corp. is a management
    company that is wholly-owned by John R. Hislop, Nation Energy's chairman of
    the Board, Secretary and Vice President and Chief Financial Officer. 
    The administrative agreement is on a month-to-month basis.  Prior to
    January 2001 Nation Energy was not charged rent due the minimal amount of
    space required to direct operations and store records.  Nation Energy
    does not plan to make any investments in real estate mortgages, in securities
    of persons primarily engaged in real estate activities.  Nation Energy
    may acquire interests in real estate in the future in connection with its
    oil and gas exploration and development activities or in connection with other
    business activities that are unforeseen at this time.

  The Company has no real estate interests carried on its books as assets. The
    Company has no proved oil or gas reserves. The Company as yet has no oil production,
    productive wells or acreage and no delivery commitments.

  -10-ITEM 3. LEGAL PROCEEDINGS

  None.

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

  None.

  PART II

  ITEM 5. MARKET FOR COMMON EQUITY AND OTHER SHAREHOLDER MATTERS

  (a)           Market information.

  The Company's Common Stock is traded over-the-counter on NASD'S Over the Counter
    Bulletin Board ("OTCBB") under the symbol "NEGY". Prior
    to March 13, 2000, the Company's Common Stock traded on the OTCBB under the
    symbol "XCNT." The change in the symbol resulted from the Company's
    change of its name from Excalibur Contracting, Inc. to its current name on
    February 15, 2000.

  The price range of high and low bid for the Company's Common Stock as published
	by a third party service for the
    periods shown is set forth below. The Company's common stock was not traded
    on the OTC Bulletin Board until the first quarter of 1999. The quotations
    reflect inter-dealer prices, without retail mark-ups, mark-downs or commissions,
    and may not represent actual transactions.  According to information
    published by the OTC Bulletin Board, from January 1, 2001 to May 31, 2001,
    the total volume of trades  of the Company's Common Stock was 504,000
    shares.  The average daily volume is extremely volatile, with no trades
    occurring on most trading days.

  Period (1)(2)
      High
      LowSecond quarter 1999
      1 1/2
      1/8Third quarter 1999
      1 1/2
      1Fourth quarter 1999
      1 1/2
      7/8First quarter 2000
      5
      7/8Second quarter 2000
      5
      1/2Third quarter 2000
      2 5/8
      9/16Fourth quarter 2000
      2 3/8
      1/2First quarter 2001(3)
      1 9/32
      29/32(1) Calendar quarters. 
    (2) Source: IDD Information Services, Tradeline.  
    (3) No pricing activity for the last day of the period.

  -11-(b)           Stockholders.

  As of April 26, 2001 there were approximately 35 shareholders of record of
    Company common stock. No shares of Preferred Stock have been issued.

  (c)           Dividends.

  The Company has never declared a cash dividend.  The Company's ability
    to pay dividends is limited by applicable Delaware law.

  On January 22, 2001, the Company closed a private offering of 3,850,000 shares
    of its Common Stock at an offering price of $1.00 per share.  Net proceeds
    from this offering  were approximately $3,850,000.  The following
    persons acquired shares in the private placement described: Sextan Capital,
    3,000,000 shares; Jeffrey L. Taylor, 65,000 shares; and Crown Taylor, 400,000
    shares.  An additional 385,000 shares were purchased in the private placement
    by accredited investors who, to the knowledge of the Company, are not related
    to the Company or its affiliates persons and who are otherwise not subject
    to disclosure obligations under applicable law.  This transaction resulted
    in a change of control which was reported on Form 8-K which was filed with
    the Securities and Exchange Commission on February 6, 2001.  3,465,000
    of the shares sold in this private placement were sold to affiliates of the
    Company.  See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT--Security
    Ownership of Certain Beneficial Owners" and "CERTAIN RELATIONSHIPS AND RELATED
    PARTY TRANSACTIONS."  This offering was not underwritten.

  

  The offering was extended to only a small number of persons known to the Company
    who represented that they were accredited investors as defined under Regulation
    D, sophisticated, and purchasing the shares for investment and not with a
    view to a distribution.  Purchasers under the offering received disclosure
    and were required to acknowledge that the shares were not registered and could
    not be resold except in compliance with the Securities Act.  The transfer
    agent for the shares was instructed to (a) place legends stating that the
    shares are not registered under the Securities Act and the restrictions on
    resale applicable to such shares, and (2) put stop transfer orders in effect
    with respect to the securities sold.  The Company engaged in no general
    solicitation or general advertising, as described in Rule 504, in connection
    with the offering.  The Company believes that this offering is exempt
    from registration under Section 4(2) of the Securities Act, and subject to
    filing of notices of sale on Form D with respect to the offering in compliance
    with Rule 503, the offering is in compliance with Rule 506.

  -12-ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

  RESULTS OF OPERATIONS

  Nation Energy entered into a definitive
    Joint Operating Agreement on December 1, 1999 with Saurus Resources, Inc.,
    under which Nation Energy and Saurus Resources agreed to jointly develop their
    respective interests in land within the Greater Trona Area located in and
    around Sweetwater County, Wyoming, and Nation Energy could participate in
    up to 50% of the profits therefrom. 
	Assuming the completion of Nation Energy's sale of its rights under this agreement and
	certain assets to VRD,
    Inc., Nation Energy will essentially be a shell company and will not conduct
    any significant operations.	See "MANAGEMENT'S DISCUSSION
    AND ANALYSIS-PLAN OF OPERATION" and "DESCRIPTION OF THE BUSINESS--ACTIVITIES
    UNDER THE AGREEMENT WITH SAURUS RESOURCES."

  REVENUES

  Nation Energy has had no revenues from the date of its formation in April
    18, 1988 to the present.

  PLAN OF OPERATION

  Nation Energy has conducted no significant operations.  Although Nation
    Energy has reviewed its potential participation in several oil and gas projects
    in the Rocky Mountain region, it has entered into only one agreement as of
    this date.  This agreement is the Joint Operating Agreement with Saurus
    Resources Inc., described above in "DESCRIPTION OF THE BUSINESS--ACTIVITIES
    UNDER THE AGREEMENT WITH SAURUS RESOURCES."  Nation Energy is seeking
    shareholder approval of a sale of its interests under this agreement and its
    interests in land to VRD, Inc. as described above in " DESCRIPTION OF
    THE BUSINESS--SALE TO VRD."  Following the consummation of this sale,
    the Company will essentially be a shell company without operations but with significant
    cash assets.  It is expected that Nation Energy will continue to actively
    investigate business opportunities consistent with its historical business
    activities of oil and gas exploration as well as other business opportunities
    outside of its historical business activities.  At this time the Company
    has not yet identified any additional oil and gas opportunities which it is
    willing to pursue.

  Prior to the consummation of the sale to VRD, and in the event the sale to
    VRD is not consummated, the Company will continue to hold its interests in
    28 lease hold interests in the Greater Trona Area and hold its rights under
    the Joint Operating Agreement with Saurus Resources.  If the sale to
    VRD is not consummated, Nation Energy will continue to hold its right to participate
    in the acquisition of leases within the contract area and to participate in
    oil and gas exploration and development in such area for an indefinite period
    of time.  Nation Energy will also continue to pay its proportionate
    share of annual lease payments of between $1.00 and $1.50 per acre per year
    (or an aggregate amount of approximately $30,000) under the oil and gas leases
    in which it holds an interest.   Due to the poor results to date
    of the drilling operations under the Joint Operating Agreement, it is uncertain
    whether the Company will elect to participate in future exploration opportunities
    under the Joint Operating Agreement.

  The Company does not foresee hiring any additional employees in the next twelve
    months. The Company currently expects to make no capital acquisitions over
    the next twelve months. Whether or not the sale to VRD is consummated, the
    Company has enough cash to meet its obligations the next twelve months.

  -13-GEOLOGICAL AND GEOPHYSICAL TECHNIQUES

  The Company may, within the next twelve months or thereafter, employ detailed
    geological interpretation combined with advanced seismic exploration techniques
    to identify potential ventures. Geological interpretation is based upon data
    recovered from existing oil and gas wells in an area and other sources. Such
    information is either purchased from the company that drilled the wells or
    becomes public knowledge through state agencies after a period of years. Through
    analysis of rock types, fossils and the electrical and chemical characteristics
    of rocks from existing wells, the Company can construct a picture of rock
    layers in the area. Further, the Company will have access to the logs from
    the existing operating wells which will allow the Company to extrapolate a
    decline curve and make an estimation of the number of recoverable barrels
    of oil or cubic feet of gas existing beneath a particular lease. The Company
    has not purchased, leased, or entered into any agreements to purchase or lease
    any of the equipment necessary to conduct the geological or geophysical testing
    referred to herein and will only to do so should the Board of Directors find
    that the information otherwise available to the Company is insufficient to
    identify potentially profitable oil and gas properties.

  LIQUIDITY AND CAPITAL RESOURCES

  The Company's material commitments for capital expenditures are limited to
    (a) the Company's obligation under the Joint Operating Agreement with Saurus
    Resources to pay the one-half of annual lease rentals, which range between
    $1.00 and $1.50 per acre per year (the Joint Operating Agreement currently
    covers approximately 22,000 acres), and (b) the Company's share of eventual
    abandonment and lease restoration costs for the wells in which it has participated,
    which is estimated to average $10,000 per well for a total of 24 wells drilled
    to date.  Whether or not the sale to VRD is consummated, the Company
    has enough cash to meet its obligations the next twelve months.

  The Company has no operating history.  The Company can only estimate
    the future needs for capital based on the current status of the Company's
    operations, its current plans and current economic condition. Due to the uncertainties
    regarding its future activities, the Company is unable to predict precisely 
    what amount will be used for any particular purpose.

  -14-RISK FACTORS

  THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS. ACTUAL EVENTS OR RESULTS
    COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS
    AS A RESULT OF VARIOUS FACTORS INCLUDING, WITHOUT LIMITATION, THE RISK FACTORS
    SET FORTH BELOW AND ELSEWHERE IN THIS REPORT. AN INVESTMENT IN THE SECURITIES
    OF THE COMPANY INVOLVES A HIGH DEGREE OF RISK. THE FOLLOWING DOES NOT PURPORT
    TO BE A COMPREHENSIVE SUMMARY OF ALL THE RISKS ASSOCIATED WITH AN INVESTMENT
    IN THE COMPANY. RATHER, THE FOLLOWING ARE ONLY CERTAIN PARTICULAR RISKS TO
    WHICH THE COMPANY IS SUBJECT THAT THE COMPANY WISHES TO ENCOURAGE PROSPECTIVE
    INVESTORS TO DISCUSS IN DETAIL WITH THEIR PROFESSIONAL ADVISORS. PROSPECTIVE
    INVESTORS, PRIOR TO MAKING AN INVESTMENT IN THE COMPANY, SHOULD CAREFULLY
    CONSIDER, AMONG OTHERS, THE FOLLOWING RISK FACTORS:

  No Operating History and Revenues. Assuming the completion of the Company's
    sale of certain assets to VRD, Inc. the Company will be a shell company and is
    subject to all the risks inherent in the creation of a new business. The Company
    has no established business plan or operating results which may be used to
    evaluate the Company's prospects.  The Company has no employees other
    than its management team. Management of the Company has substantial discretion
    with respect to the use of assets of the Company.  Since the Company
    is a new venture, it has no record of operations, and there is nothing at
    this time upon which to base an assumption that the Company's future activities
    will prove successful. If the Company's activities prove to be unsuccessful, investors
    in the Company may lose all or a substantial part of their investment.

  Regulation of Penny Stocks.  The Company's securities are subject
    to Securities and Exchange Commission rules that impose special sales practice
    requirements upon broker-dealers who sell such securities to persons other
    than established customers or accredited investors.  For purposes of
    the rule, the phrase "accredited investors" means, in general terms, institutions
    with assets in excess of $5,000,000, or individuals having a net worth in
    excess of $1,000,000 or having an annual income that exceeds $200,000 (or
    that, when combined with a spouse's income, exceeds $300,000).  For transactions
    covered by the rule, the broker-dealer must make a special suitability determination
    for the purchaser and receive the purchaser's written agreement to the transaction
    prior to the sale.  Consequently, the rule may affect the ability of
    broker-dealers to sell the Company's securities and also may affect the ability
    of purchasers to sell their securities in any market that might develop therefore.

  In addition, the Securities and Exchange Commission has adopted a number of
    rules to regulate "penny stocks".  Such rules include Rules 3a51-1, 15g-1,
    15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities Exchange
    Act of 1934, as amended.  Because the securities of the Company may constitute
    "penny stocks" within the meaning of the rules, the rules would apply to the
    Company and to its securities.  The rules may further affect the ability
    of owners of shares to sell the securities of the company in any market that
    might develop for them.

  -15-Shareholders should be aware that, according to the Securities and Exchange
    Commission, the market for penny stocks has suffered in recent years form
    patterns of fraud and abuse.  Such patterns include (1) control of the
    market for the security by one or a few broker-dealers that are often related
    to the promoter or issuer; (ii) manipulation of prices through prearranged
    matching of purchases and sales and false and misleading press releases; (iii)
    "boiler room" practices involving high-pressure sales tactics and unrealistic
    price projections by inexperienced sales person; (iv) excessive and undisclosed
    bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale
    dumping of the same securities by promoters and broker-dealers after prices
    have been manipulated to a desired level, along with the resulting inevitable
    collapse of those prices and with consequent investor losses.  The Company's
    management is aware of the abuses that have occurred historically in the penny
    stock market.  The Company does not expect to be in a position to dictate
    the behavior of the market or of broker-dealers who participate in the market.

  No Contracted Projects. Assuming the completion of the Company's sale
    of certain assets to VRD, Inc. the Company will be essentially a shell corporation.
	There is no assurance that the Company will be able
    to successfully identify and enter into agreements with regards to any attractive
    business prospects or, if such prospects are identified and agreements are
    entered into, that such prospects will be financially successful. See "DESCRIPTION
    OF BUSINESS."

  Lack of Liquidity and Publicly Available Information. The Common Stock
    is currently trading on the OTC Bulletin Board under the symbol "NEGY".
    The Common Stock is thinly traded on the OTC Bulletin Board and there can
    be no assurance that the shares of the Common Stock will be readily saleable
    thereon.  According to information published by the OTC Bulletin Board,
    from January 1, 2001 to May 31, 2001, the total volume of trades of the Company's
    Common Stock was 504,000 shares.  The average daily volume is extremely
    volatile, with no trades occurring on most trading days.

  Conflicts of Interest.  Certain conflicts of interest may exist
    between the Company and its officers and directors.  They have other
    business interests to which they devote their attention, and may be expected
    to continue to do so although management time should be devoted to the business
    of the Company.  As a result, conflicts of interest may arise that can
    be resolved only through exercise of such judgment as is consistent with fiduciary
    duties to the Company.

  Wildcat Drilling. The Company may engage in additional exploration
    of hydrocarbons by drilling unproven prospects. Such a practice is known as
    wildcat drilling, a very high risk drilling activity. Investors should be
    aware that there is a high probability that the Company could drill a "dry
    hole" and that the investor could lose all or a substantial part of their
    entire investment.

  Volatility of Oil and Gas Markets.  The price of oil and gas historically
    has been subject to substantial volatility which has only increased in recent
    years.  For example, from June 1999 to June 2001, the historical monthly
    average NYMEX price for light sweet crude oil has varied from $18 per barrel
    to over $34 per barrel, and the historical monthly average NYMEX price for
    natural gas has varied from less than $2.50 to over $8.50 per million Btu. 
    There can be no assurance that this volatility will not continue in the future,
    making it difficult for the Company's strategic planning and the valuation
    of prospects.

  -16-Availability of Suitable Prospects or Producing Properties. Competition
    for prospects and producing properties is intense.  Should the Company
    pursue additional oil and gas opportunities, it will be competing with a number
    of other potential purchasers of prospects and producing properties, most
    of whom will have greater financial resources than the Company. The bidding
    for prospects has become particularly intense with different bidders evaluating
    potential acquisitions with different product pricing parameters and other
    criteria that result in widely divergent bid prices. The presence in the market
    of bidders willing to pay prices higher than are supported by the Company's
    evaluation criteria could further limit the ability of the Company to acquire
    prospects and low or uncertain prices for properties can cause potential sellers
    to withhold or withdraw properties from the market. In this environment, there
    can be no assurance that there will be a sufficient number of suitable prospects
    available for acquisition by the Company or that the Company can obtain financing
    for or participants to join in the development of prospects. See "DESCRIPTION
    OF BUSINESS."

  Title to Properties. It is customary in the oil and gas industry to
    acquire an interest in a property based upon a preliminary title investigation. 
    The Company has not undertaken to have title searches performed on the properties
    in which it holds an interest and it does not anticipate that it will do so
    in the future.  If the title to the prospects should prove to be defective,
    the Company could lose the costs of acquisition, or incur substantial costs
    for curative title work.

  Shut-in Wells and Curtailed Production. Production from gas wells may
    be curtailed or shut-in for considerable periods of time due to a lack of
    market demand, and such curtailments may continue for a considerable period
    of time in the future. There may be an excess supply of gas in areas where
    the Company's operations will be conducted. In such an event, it is possible
    that there will be no market or a very limited market for the Company's prospects.

  Operating and Environmental Hazards. Hazards incident to the operation
    of oil and gas properties, such as accidental leakage of petroleum liquids
    and other unforeseen conditions, may be encountered by the Company if it participates
    in developing a well and, on occasion, substantial liabilities to third parties
    or governmental entities may be incurred. The Company could be subject to
    liability for pollution and other damages. Governmental regulations relating
    to environmental matters could also increase the cost of doing business or
    require alteration or cessation of operations in certain areas.  The
    Company estimates that the costs of environmental compliance and site restoration
    will average $20,000 per well site; under its arrangement with Saurus Resources
    the Company bears one-half of the cost for the well sites in which it elects
    to participate.  These substantial costs will affect the profitability
    of the wells in which the Company has an undivided interest and if actual
    cost of compliance is greater than anticipated or unforeseen liabilities are
    encountered, it may cause the Company to lose money on well sites that would
    otherwise be profitable.

  Uninsured Risks. The Company may not be insured against losses or liabilities
    which may arise from operations, either because such insurance is unavailable
    or because the Company has elected not to purchase such insurance due to high
    premium costs or other reasons.  The Company currently lacks adequate
    insurance to cover all of the material risks that it may face.

  Federal and State Taxation. Federal and state income tax laws are of
    particular significance to the oil and gas industry. Recent legislation has
    eroded previous benefits to oil and gas producers, and any subsequent legislation
    may continue this trend. The states in which the Company may conduct oil and
    gas activities also impose taxes upon the production of oil and gas located
    within such states. There can be no assurance that the tax laws will not be
    changed or interpreted in the future in a manner which adversely affects the
    Company.

  -17-Government Regulation. The oil and gas business is subject to substantial
    governmental regulation, including the power to limit the rates at which oil
    and gas are produced and to fix the prices at which oil and gas are sold.
    It cannot be accurately predicted whether additional legislation or regulation
    will be enacted or become effective.

  Write-downs and Limits on Accuracy of Reserve Estimates. Oil and gas
    reserve estimates are necessarily inexact and involve matters of subjective
    engineering judgment. In addition, any estimates of future net revenues and
    the present value of such revenues are based on price and cost assumptions
    provided by the Company as its best estimate. These estimates may not prove
    to have been correct over time. A further decline in oil and gas prices may
    require the Company to write-down the value of its oil and gas reserves.

  Need for Additional Key Personnel. At present, the Company employs
    no full time employees. The success of the Company's proposed business may
    in the future depend, in part, upon the Company's ability to attract and retain
    qualified employees. If the Company is unable to engage and retain the necessary
    personnel, its business would be materially and adversely affected.

  Reliance Upon Directors and Officers. The Company is wholly dependent,
    at the present, upon the personal efforts and abilities of its officers who
    will exercise control over the day to day affairs of the Company, and upon
    its Directors, most of whom are engaged in other activities, and will devote
    limited time to the Company's activities.  The Company's officers devote
    limited time to the Company's activities.  It is estimated that John
    R. Hislop devotes approximately 5% of his working hours and that Donald Sharpe
    devotes approximately 10% of his working hours to the affairs of the Company. 
    For a description of the other business activities of Messrs. Hislop and Sharpe,
    please see "DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
    COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT."

  FOR ALL OF THE AFORESAID REASONS AND OTHERS SET FORTH HEREIN THE PURCHASE
    OF THE SHARES OF THE COMPANY INVOLVES A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING
    AN INVESTMENT IN THE SHARES OF THE COMPANY SHOULD BE AWARE OF THESE AND OTHER
    FACTORS SET FORTH IN THIS REPORT. THE SHARES OF COMMON STOCK SHOULD BE PURCHASED
    ONLY BY PERSONS WHO CAN AFFORD TO ABSORB A TOTAL LOSS OF THEIR INVESTMENT
    IN THE COMPANY AND HAVE NO NEED FOR A RETURN ON THEIR INVESTMENT.

  -18-ITEM 7. FINANCIAL STATEMENTS

  

  
  Nation Energy, Inc.
  As of March 31, 2001 and for the 
    Years Ended March 31, 2001 and 2000
  
  Table of Contents
  

  PageReport of Independent Auditors
        20Balance Sheet
        21Statements of Operations
        22Statements of Changes in Stockholders' Equity
        23Statements of Cash Flows
        24Notes to Financial Statements
        25-29

  

  -19-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, 2001, and the related statements of operations, changes in stockholders'
    equity, and cash flows for the years ended March 31, 2001 and 2000. These
    financial statements are the responsibility of the Company's management. Our
    responsibility is to express an opinion on these financial statements based
    on our audit.

  We conducted our audits in accordance with 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, 2001, and the results of its operations, and its cash flows for
    the years ended March 31, 2001 and 2000, in conformity with accounting principles
    generally accepted in the United States of America.

  Stark Tinter & Associates, LLC

  Denver, Colorado 
    June 20, 2001

  -20-Nation Energy, Inc.
             Balance Sheet 
            March 31, 2001ASSETSCurrent assets:Cash
        
        
        
        
        $   2,292,340Unproved oil and gas properties - full cost method
        
        
        
        
        2,169,353$   4,461,693LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable
        
        
        
        
        $        12,330Accounts payable - related party
        
        
        
        
        15,22727,557Stockholders' equity:Preferred stock, $.001 par value; 5,000,000shares authorized; none
            outstanding
        
        
        
        
        -Common stock, $.001 par value; 50,000,000shares authorized; 11,020,000
            shares issuedand outstanding
        
        
        
        
        11,020Additional paid-in capital
        
        
        
        
        4,588,380Accumulated deficit
        
        
        
        
        (165,264)4,434,136$   4,461,693

  

  The accompanying notes are an integral part of the financial statements

  -21-Nation Energy, Inc. 
            Statements of OperationsFor the
        
        
        For theYear Ended
        
        
        Year EndedMarch 31, 2001
        
        
        March 31, 2000Revenue:
        
        
        $                   
            -
        
        
        $                   
            -Costs and expenses:General, selling and administrative
        
        
        92,520
        
        
        50,808Total costs and expenses
        
        
        92,520
        
        
        50,808Net (loss)
        
        
        $           
            (92,520)
        
        
        $           
            (50,808)Per share information:Weighted average number of commonshares outstanding - basic and
            diluted
        
        
        8,127,240
        
        
        7,161,803Net (loss) per common share - basic and diluted
        
        
        $               
            (0.01)
        
        
        $               
            (0.01)

  

  

  

  


  The accompanying notes are an integral part of the financial statements

  -22-Nation Energy, Inc. 
            Statements of Changes in Stockholders' EquityCommon StockAdditional
        
        Common
        
        
        
        TotalNumber of
        
        
        
        Paid-in
        
        Stock
        
        Accumulated
        
        Stockholders'Shares
        
        Amount
        
        Capital
        
        Subscriptions
        
        Deficit
        
        EquityBalance, March 31, 1999
        
        
        7,070,000
        
        $   7,070
        
        $   722,330
        
        $                
              -
        
        $   (21,936)
        
        $   707,464Issuance of common stockfor services at $.20 per share
        
        
        100,000
        
        100
        
        19,900
        
        -
        
        -
        
        20,000Common stock subscribedfor at $1.00 per share
        
        
        -
        
        -
        
        -
        
        3,500,000
        
        -
        
        3,500,000Net (loss) for the year
        
        
        -
        
        -
        
        -
        
        -
        
        (50,808)
        
        (50,808)Balance March 31, 2000
        
        
        7,170,000
        
        7,170
        
        742,230
        
        3,500,000
        
        (72,744)
        
        4,176,656Common stock subscribedfor at $1.00 per share
        
        
        -
        
        -
        
        -
        
        350,000
        
        -
        
        350,000Conversion of common stocksubscriptions into common stock
        
        
        3,850,000
        
        3,850
        
        3,846,150
        
        (3,850,000)
        
        -
        
        -Net (loss) for the year
        
        
        -
        
        -
        
        -
        
        -
        
        (92,520)
        
        (92,520)Balance March 31, 2001
        
        
        11,020,000
        
        $   11,020
        
        $   4,588,380
        
        $                
              -
        
        $   (165,264)
        
        $   4,434,136

  

  

  

  

  


  The accompanying notes are an integral part of the financial statements

  -23-Nation Energy, Inc. 
            Statements of Cash FlowsFor the
        
        For theYear Ended
        
        Year EndedMarch 31, 2001
        
        March 31, 2000Cash flows from operating activities:Net (loss)
        
        
        
        
        $           
            (92,520)
        
        $          
            (50,808)Adjustments to reconcile net (loss) to net cashprovided by (used in) operating activities:Common stock issued for services
        
        
        
        
        -
        
        20,000Decrease (increase) in prepaid expenses
        
        
        
        
        100,632
        
        (100,632)Increase (decrease) in accounts payable
        
        
        
        
        18,354
        
        (11,538)Net cash provided by (used in) operating activities
        
        
        
        
        26,466
        
        (142,978)Cash flows from investing activities:Purchase of oil and gas properties
        
        
        
        
        (1,978,475)
        
        (190,878)Net cash (used in) investing activities
        
        
        
        
        (1,978,475)
        
        (190,878)Cash flows from financing activities:Proceeds from common stock subscriptions
        
        
        
        
        350,000
        
        3,500,000Net cash provided by financing activities
        
        
        
        
        350,000
        
        3,500,000Net increase (decrease) in cash
        
        
        
        
        (1,602,009)
        
        3,166,144Beginning cash
        
        
        
        
        3,894,349
        
        728,205Ending cash
        
        
        
        
        $        2,292,340
        
        $        3,894,349Supplemental cash flow information:Cash paid for interest
        
        
        
        
        $                   
            -
        
        $                  
            -Cash paid for income taxes
        
        
        
        
        $                   
            -
        
        $                  
            -

  The accompanying notes are an integral part of the financial statements

  -24-Nation Energy, Inc.
    Notes to Financial Statements
  

  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. 
    The Company is an oil and gas drilling company in the exploration stage and
    currently has no operations.

  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, 2001. 
    The respective carrying value of certain on-balance-sheet financial instruments
    approximated their fair values.  These financial instruments include
    cash and accounts payable.  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.

  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.

  Net (Loss) per Common Share
  The Company calculates net income (loss) per share as required by SFAS No.
    128, "Earnings per Share."  Basic earnings (loss) per share
    is calculated by dividing net income (loss) by the weighted average number
    of common shares outstanding for the period.  Diluted earnings (loss)
    per share is calculated by dividing net income (loss) by the weighted average
    number of common shares and dilutive common stock equivalents outstanding. 
    During periods when they are anti-dilutive, common stock equivalents are not
    considered in this computation.

  Comprehensive Income
  The Company follows Statement of Financial Accounting Standards No. 130, "Reporting
    Comprehensive Income" ("SFAS No. 130"). SFAS No. 130 establishes
    standards for reporting and display of comprehensive income and its components
    in the financial statements.

  -25-Nation Energy, Inc.
    Notes to Financial Statements
  
  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, completion and
    costs of well equipment.  Expenditures, which are considered unlikely
    to be recovered, are written off.  Internal costs are capitalized only
    if they can be directly identified with acquisition, exploration, or development
    activities.  As of March 31, 2001, the Company has not capitalized any
    internal costs.  The current oil and gas exploration and development
    activities are considered to be in the pre-production stage.

  Segment Reporting
  The Company follows Statement of Financial Accounting Standards No. 131, "Disclosures
    About Segments of an Enterprise and Related Information."  The Company
    operates as a single segment and will evaluate additional segment disclosure
    requirements as it expands its operations.

  Estimates
  The preparation of the Company's financial statements in conformity with generally
    accepted accounting principles 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.

  Stock-Based Compensation
  The Company accounts for stock based compensation in accordance with SFAS
    No. 123, "Accounting for Stock-Based Compensation." The provisions
    of SFAS No. 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 APB 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 reserved a total of 2,500,000 shares of common stock related
    to their stock option plan.  As of March 31, 2001, the Company had not
    granted any stock options.

  -26-Nation Energy, Inc.
    Notes to Financial Statements
  Recent Pronouncements
  The FASB recently issued Statement No 137, "Accounting for Derivative
    Instruments and Hedging Activities-Deferral of Effective Date of FASB Statement
    No. 133". The Statement defers for one year the effective date of FASB
    Statement No. 133, "Accounting for Derivative Instruments and Hedging
    Activities".  The rule now will apply to all fiscal quarters of
    all fiscal years beginning after June 15, 2000.  In June 1998, the FASB
    issued SFAS No. 133,  "Accounting for Derivative Instruments and
    Hedging Activities".  The Statement will require the Company to
    recognize all derivatives on the balance sheet at fair value.  Derivatives
    that are not hedges must be adjusted to fair value through income.  If
    the derivative is a hedge, depending on the nature of the hedge, changes in
    the fair value of derivatives will either be offset against the change in
    fair value of the hedged assets, liabilities, or firm commitments through
    earnings or recognized in other comprehensive income until the hedged item
    is recognized in earnings.  The ineffective portion of a derivative's
    change in fair value will be immediately recognized in earnings.  The
    Company has not engaged in any hedging activities since its inception on April
    19, 1988.

  During December 1999, the Securities and Exchange Commission released Staff
    Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAS
    No. 101), which provides guidance on the recognition, presentation and disclosure
    of revenue in financial statements.  SAB No. 101 did not impact the Company's
    revenue recognition policies.

  Note 2.  UNPROVED OIL AND GAS PROPERTIES
  The Company currently is involved in one project as of March 31, 2001, the
    Greater Trona Prospect located in southeastern Wyoming.  Following is
    a summary of the costs incurred on unproved oil and gas properties as of March
    31, 2001:

  Acquisition of unproved properties
      $    401,290Exploration costs
      830,621Development costs
      937,442$ 2,169,353Note 3.  CONCENTRATIONS OF CREDIT RISK
  The Company's funds are federally insured up to $100,000.  As of March
    31, 2001, the funds under deposit exceed this insured amount by $2,196,268.

  Note 4.  STOCKHOLDERS' EQUITY
  On September 16, 1998, the Company forward split its common stock 1,000 for
    1, thus increasing the number of outstanding common stock shares from 1,000
    shares to 1,000,000 shares. All shares and per shares amounts have been adjusted
    to give effect to this split.

  -27-Nation Energy, Inc.
    Notes to Financial Statements
  At inception the Company issued 1,000,000 shares of its $0.001 par value common
    stock for services valued at $1,000.  These shares were valued at their
    fair market value on the date the Company agreed to issue the shares.

  On February 10, 1999, the Company issued 6,070,000 shares of its $0.001 par
    value common stock to various investors for cash aggregating $728,400 or $.12
    per share.

  On May 6, 1999, the Company issued 65,000 shares of the Company's common stock
    to the President of the Company for payment in full for consulting work performed
    on behalf of the Company and invoiced in the amount of $13,000 or $.20 per
    share.  These shares were valued at their fair market value on the date
    the Company agreed to issue the shares.

  In addition, on May 6, 1999, the Company issued 35,000 shares of the Company's
    common stock to the treasurer of the Company for payment in full for legal
    work performed on behalf of the Company and invoiced in the amount of $7,000
    or $.20 per share.  These shares were valued at their fair market value
    on the date the Company agreed to issue the shares.

  The Company began a private placement on March 1, 2000.  The private
    placement offered 4,500,000 shares of common stock at a price of $1.00 per
    share.  The private placement closed on January 22, 2001 with a total
    of 3,850,000 shares subscribed.  The subscribed shares were also issued
    during January 2001.

  Note 5.  AGREEMENTS
  On August 11, 1999, the Company signed a letter of intent with Saurus Resources
    Inc., giving the Company the option to enter into a joint venture with Saurus
    under which the Company may acquire up to 50% of the profits resulting from
    oil and gas development by the venture in the Greater Trona Area prospect,
    located in southwest Wyoming. Saurus currently has an interest in 11,960 acres
    and is negotiating to acquire an interest in an additional 10,155 acres in
    the Greater Trona Area prospect. Under the terms of the letter, the Company
    paid for a study reporting on the economic and geologic merits of the Trona
    venture and had until September 15, 1999, to enter into a joint venture with
    Saurus. On October 1, 1999, the Company elected to proceed with the joint
    venture. The operating agreement was signed and dated December 1, 1999. 
    During the year ended March 31, 2001 the Company had advanced sufficient funds
    to earn the right to 50% of the profits of the Greater Trona Area joint venture. 
    As of March 31, 2001 the joint venture had not generated any revenues (see
    Note 8).

  Note 6.  INCOME TAXES
  The Company accounts for income taxes under Statement of Financial Accounting
    Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
    109"), which requires use of the liability method.  SFAS No. 
    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.

  -28-Nation Energy, Inc.
    Notes to Financial Statements
  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:

  Reconciling
           Item
      Tax 
          EffectNet operating loss carryforward
      $165,000
      $56,000The net operating loss carryforward will expire through 2020.  The deferred
    tax asset has been fully reserved at March 31, 2001.  The change in the
    valuation allowance during the year ended March 31, 2001 was $52,400.

  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 TRANSACTION
  During the year ended March 31, 2001, the Company entered into a verbal agreement
    with a related party to receive administrative services.  The agreement
    calls for monthly payments of $3,000 plus reimbursement of direct costs.  
    For the year ended March 31, 2001 the Company has accrued $15,227 of expense
    related to this agreement.

  The Company had a subscription for 3,000,000 shares of its common stock at
    $1.00 a share from an affiliated company of an officer and director of Nation
    Energy.  The officer and director of Nation Energy is also a director
    of the affiliated company.  The subscription was converted into common
    stock during January 2001.

  Note 8. SALE OF UNPROVEN OIL AND GAS PROPERTIES (UNAUDITED)
  During February 2001 the Company entered into an agreement to sell its unproven
    oil and gas properties for cash of $2,165,780 and a royalty interest in the
    project subject to the approval of its shareholders.  Subsequent to March
    31, 2001, the Company filed a proxy statement to obtain approval for this
    transaction.

  The proforma effect of this transaction would be as follows:

  The Company would receive gross proceeds of $2,165,780The Company would transfer their interest in unproved oil and gas propertiesThe Company would have no material income tax consequences since the purchase
        price approximates the tax basis of the unproved oil and gas propertiesITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

  None.

  -29-PART III

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

  The directors and executive officers of the Company and their respective ages
    are as follows:

  Name
        Age
        PositionJohn R. Hislop
        48
        Chairman of the Board of Directors, VicePresident and Chief Financial Officer,Secretary, DirectorDonald A. Sharpe
        43
        President, Chief Executive Office, Director

  All directors hold office until the next annual meeting of stockholders and/or
    until their successors have been duly elected and qualified. There are no
    agreements with respect to the election of directors. The Company has not
    compensated its directors for service on the Board of Directors or any committee
    thereof. Officers are appointed annually by the Board of Directors and each
    executive officer serves at the discretion of the Board of Directors. There
    are no other family relationships between any of the directors and executive
    officers. The Company does not have any standing committees at this time.

  John R. Hislop, Chairman of the Board of Directors, Vice President and Chief
    Financial Officer, Secretary and Director

  Mr. Hislop has been Chairman, Vice President, Chief Financial Officer and
    Secretary and a director of the 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 R.I.S. Resources International
    Corp.), 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. (formerly known as Arrowhead Minerals Corp.) since March 1995 (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 President
    March 1993 to May 1996 and as CFO from May 1996 to September 1998), Ariel
    Resources, Ltd. from December 1991 to March 2000 (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,
    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. since July 1999 (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 Capital 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.

  -30-Donald A. Sharpe, President, Chief Executive Officer, Director

  Mr. Sharpe has been the President, CEO and a director of the 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 large-scale
    farm-in arrangement that resulted in 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 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, coordinated the financing of
    the company, and the filing of the 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 the company's projects 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 also been director of the following
    companies: Zconnexx Corporation (formerly known as Capital Charter Corporation)
    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, Patriot Capital Corp. since June
    1999 (Mr. Sharpe has also been the President and CEO since 1999), Daybreak
    Resources Corp. since April 1999, Gemini Energy Corp. since October 2000 (Mr.
    Sharpe has also been President since 2000), and Empress Capital Corp from
    April 1999 to May 2000 (Mr. Sharpe was also President and CEO during that
    term). Mr. Sharpe received his B.Sc. in Geophysics from the University of
    British Columbia and Certificate in Business Management from the University
    of Calgary.

  Initial Statements of  Beneficial Ownership of Securities on Securities
    and Exchange Commission Form 3 were not filed timely by John R. Hislop, Donald
    A. Sharpe and beneficial owners of more than 10% of the Company's securities
    during the fiscal year ended March 31, 2001.

  ITEM 10. EXECUTIVE COMPENSATION

  The Summary Compensation Table shows certain compensation information for
    the Chief Executive Officer. Compensation data for other executive officers
    is not presented in the graphs because aggregate annual compensation for such
    officers does not exceed $100,000. This information includes the dollar value
    of base salaries, bonus awards, the number of stock appreciation rights/options
    granted, and certain other compensation, if any, whether paid or deferred.

  -31-SUMMARY COMPENSATION TABLE

  The following table sets forth the aggregate compensation paid by the Company
    to its Chief Executive Officer for services rendered during the periods indicated:

  Name and
            Principal
            Position
        
        Year
        Annual 
            Compensation
        Long Term 
            Compensation AwardsSalary
        Other Annual 
            Compensation
        Restricted
            Stock Awards
        Securities
             Underlying 
            Options/SARs
        All other
            compensationDonald A. Sharpe, CEO
        
        2001(1)
        $0
        $0
        0
        0
        0Jeffrey L. Taylor, CEO
        
        2001(1)
        $0
        $0
        0
        0
        0(2)

  (1) The results reported in the "Summary Compensation Table" for
    the period designated "2001" are for the current fiscal year ending
    March 31, 2001. Mr. Taylor served as CEO and President of the Company from
    February 8, 1999 to June 4, 1999. Mr. Sharpe has served as CEO and President
    of the Company since June 4, 1999. No executive officers of the corporation
    received any compensation during the fiscal year ended March 31, 1999 or prior
    to that date.

  (2) Mr. Taylor was issued 65,000 shares of the Company's Common Stock then
    valued at $.20 per share on May 6, 1999 as compensation for consulting work
    performed on behalf of the Company not in connection with his services as
    President and CEO.

  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  The following table sets forth, based upon the latest available filings with
    the Securities and Exchange Commission, the beneficial ownership of Nation
    Energy shares of each beneficial owner of 5% or more of Nation Energy's common
    stock known to Nation Energy.

  -32-Name and Address 
            of Beneficial Owner
        Amount and Nature 
            of Beneficial Owner
        Percent of
            ClassSinclair Publishing Limited(2)
            Palm Chambers
            Road Town, Tortola
            British Virgin Islands
        670,000(1)
        6.07%Lynx Knights de Finance SA(2)
            3076 Sir Francis Drake Highway
            Road Town, Tortola
            British Virgin Islands
        670,000(1)
        6.07%Westin Machineries Pension SA(2)
            3076 Sir Francis Drake Highway
            Road Town, Tortola
            British Virgin Islands
        670,000(1)
        6.07%Liegeman, SA(2)
            3076 Sir Francis Drake Highway
            Road Town, Tortola
            British Virgin Islands
        670,000(1)
        6.07%Croix Merchants & Barter(2)
            3076 Sir Francis Drake Highway
            Road Town, Tortola
            British Virgin Islands
        670,000(1)
        6.07%Jeffrey L. Taylor(3)
            500 N. Rainbow Blvd., Suite 300
            Las Vegas, NV 89107
        3,132,800(1)
        28.43%Crown Taylor(4)
        400,000(1)
        3.63%Sextan Capital, Inc.(5)
            Suite 1100-609 West Hastings Street
            Vancouver, B.C., Canada 
            V6B 4W4
        3,000,000(1)
        27.22%

  _________________(1)
      Holder of 5% or more of the common stock of Nation Energy.(2)
      Based solely on the representations of share ownership
          made by persons representing themselves as owners of Nation Energy's
          common stock in connection with the proxies solicited for the January
          14, 2000 meeting of Nation Energy's shareholders.  The identity
          of the beneficial owner of the shares held by such holder is not known
          to Nation Energy and there is no known affiliation between any such
          holder and Nation Energy or its known affiliates.(3)
      Based solely on Schedule 13D/A filed February 13, 2001(4)
      The Schedule 13D/A filed by Jeffrey Taylor on February
          13, 2001 indicates that Crown Taylor is a venture capital firm of which
          Jeffrey L. Taylor is a principal.(5)
      Based solely on Schedule 13D filed January 22, 2001. 
          Sextan Capital, Inc. is a wholly owned subsidiary of Cubix Investments,
          Inc.  John R. Hislop, Nation Energy's Chairman of the Board, Secretary
          and Vice President and Chief Financial Officer, is a director of Cubix
          Investments, Inc.-33-The following table sets forth the beneficial ownership of Nation Energy shares
    held by executive officers and directors of the Company.

  Name and Address 
            of Beneficial Owner
        Amount and Nature 
            of Beneficial Owner
        Percent of
            ClassDonald A. Sharpe, CEO and director
        230,000(1)
        2.087%

  

  (1)  These shares were purchased on the open market.

  Change of Control

  A change of control of Nation Energy occurred during Nation Energy's fiscal
    year ended March 31, 2000.  Sextan Capital, Inc., a wholly owned subsidiary
    of Cubix Investments Inc., purchased 3,000,000 shares common stock of Nation
    Energy for $3,000,000, pursuant to a Stock Purchase Agreement, dated January
    22, 2001, between Nation Energy and Sextan.  See "CERTAIN RELATIONSHIPS
    AND RELATED PARTY TRANSACTIONS".

  ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  Sextan Capital, Inc., a wholly owned subsidiary of Cubix Investments Inc.,
    purchased 3,000,000 shares common stock of Nation Energy for $3,000,000, pursuant
    to a Stock Purchase Agreement, dated January 22, 2001, between Nation Energy
    and Sextan.  As a result of this transaction, Sextan is the beneficial
    owner, directly or indirectly, of approximately 27% of the common stock of
    Nation Energy.  This transaction was reported on Form 8-K which was filed
    with the Securities and Exchange Commission on February 6, 2001.  Cubix
    Investments, Inc. (formerly named R.I.S. Resources International, Inc.) is
    a Bermuda corporation whose common stock is traded on the Canadian Venture
    Exchange.   John R. Hislop, Nation Energy's Chairman of the Board,
    Secretary and Vice President and Chief Financial Officer, is a director of
    Cubix Investments, Inc.

  In this same private placement and also on January 22, 2000, Jeffrey L. Taylor
    acquired 65,000 shares and Crown Taylor acquired 400,000 shares.  According
    to the Schedule 13D/A filed by Jeffrey Taylor on February 13, 2001, Mr. Taylor
    is the beneficial owner of 3,132,800 shares of the Company's common stock
    and Crown Taylor is a venture capital firm of which Jeffrey L. Taylor is a
    principal.

  -34-ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

  The following exhibits are attached to this report and are incorporated herein
    by reference:

  Exhibit No.
      Exhibit Name2.1
      Purchase and Sale Agreement dated February 28, 2001(1)3.1
      Certificate of Incorporation of Company, filed December 16, 1999(2)3.2
      Certificate of Amendment of Certificate of Incorporation of Company,
          filed February 15, 2000(2)3.3
      Bylaws of the Company(2)10.1
      Joint Operating Agreement with Saurus Resources, Inc. dated December
          1, 1999(2)10.2
      1999 Stock Option and Incentive Plan(2)27.1
      Financial Data Schedule(1) Incorporated by reference from the Company's Consent Solicitation Statement
    on Schedule 14A filed with the Securities and Exchange Commission April 26,
    2001
    (2) Incorporated by reference from the Company's Form 10-SB filed with the
    Securities and Exchange Commission March 31, 2000

  A Form 8-K was filed February 6, 2001 reporting the change in control of the
    issuer.

  

  -35-SIGNATURES 
    In accordance with the requirements of Section 13 or 15(d) of the Securities
    Exchange Act of 1934, the registrant caused this report to be signed on its
    behalf by the undersigned, thereunto duly authorized.

  Date: June 29, 2001
      NATION ENERGY INC.
           (Registrant)

        

        By: /s/ Donald A. Sharpe
                 Donald A. Sharpe,  CEOIn accordance with the Securities Exchange Act of 1934, this report has been
    signed below by the following persons on behalf of the registrant and in the
    capacities and on the dates indicated.

  Name
        Title
        Date/s/ Donald A. Sharpe
        
        June 29, 2001Donald A. Sharpe
        President and Chief ExecutiveOfficer, Director(Principal Executive Officer)/s/ John R. Hislop
        
        June 29, 2001John R. Hislop
        Chairman of the Board of Directors,Vice President and Chief Financial Officer,and Secretary(Principal Financial and Accounting Officer)

  -36-