<PAGE>   1

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

                                   FORM 10-KSB

(Mark One)

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

                                      For the fiscal year ended:  March 31, 2000


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

                                                 Commission file number: 0-30193


                               NATION ENERGY, INC.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)


<TABLE>
<S>                                       <C>
                Delaware                              59-2887569
     -------------------------------      ------------------------------------
     (State or other jurisdiction of      (I.R.S. Employer Identification No.)
     incorporation or organization)

 Suite 1100 - 609 West Hastings Street
       Vancouver BC Canada V6B 4W4                        N/A
----------------------------------------  ------------------------------------
(Address of principal executive offices)               (Zip Code)
</TABLE>

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


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

<TABLE>
<S>                                          <C>
         Title of each class                 Name of each exchange on which
         to be so registered                 each class is to be registered

                N/A                                        N/A
         -------------------                 -------------------------------
</TABLE>


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 [ ]


                                       1
<PAGE>   2

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. [X]

The issuer had no revenues for the fiscal year ended March 31, 2000.

The aggregate market value of the common stock held by non-affiliates of the
registrant at July 10, 2000, was approximately $9,407,040 based on the closing
price for the common stock on the OTC Bulletin Board. At June 19, 2000,
7,170,000 shares of registrant's common stock were outstanding.

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

This Form 10-KSB contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. 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" on 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.



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<PAGE>   3

                               NATION ENERGY, INC.

                                   FORM 10-KSB

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
PART I
Item 1.   Description of Business ............................................ 4
Item 2.   Description of Property ............................................ 8
Item 3.   Legal Proceedings .................................................. 9
Item 4.   Submission of Matters to a Vote of Security Holders ................ 9

PART II
Item 5.   Market for Common Equity and Related Stockholder Matters ...........13
Item 6.   Management's Discussion and Analysis ...............................14
Item 7.   Financial Statements ...............................................20
Item 8.   Changes in and Disagreements With Accountants on Accounting and
            Financial Disclosure .............................................32

PART III
Item 9.   Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act ................32
Item 10.  Executive Compensation .............................................32
Item 11.  Security Ownership of Certain Beneficial Owners and Management .....33
Item 12.  Certain Relationships and Related Transactions .....................34
Item 13.  Exhibits and Reports on Form 8-K ...................................34
</TABLE>




                                       3
<PAGE>   4

PART I

ITEM 1. DESCRIPTION OF BUSINESS

THE COMPANY

        Nation Energy, Inc. (the "Company") is a development 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
negotiating regarding 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 properties and has purchased two leases totaling 560 acres in
connection with that project. No assurance can be given that the Company will be
successful in its negotiations and will in fact participate in exploration for
hydrocarbons in this region or others or that such exploration activities will
be successful.

SELECTION OF TARGET AREAS FOR ACQUISITION

        The Company's proposed plans call for it to consider several factors in
choosing a region for acquisition of oil and gas leases. The Company considers
those regions in which its industry contacts have the most experience in order
to benefit from such experience. The Company will determine 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.

GEOLOGICAL AND GEOPHYSICAL TECHNIQUES

        The Company may 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, upon the
successful completion of this Offering.

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


                                       4
<PAGE>   5

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.

INITIAL FOCUS

        The initial principal activity for the Company will be the securing of
oil and gas exploration contracts and joint ventures in the Greater Trona Area,
Wyoming. 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, and to
date has advanced to Saurus payments totaling approximately $638,000.

        Under the arrangement 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. The Company expects to spend $525,000 on
drilling and completing approximately 10 wells to a minimum depth of 1,200 feet.
If the cost of drilling and completing these wells is less than $525,000, the
Company will spend the difference on preparing the wells for production and
connecting the wells to a sales line. After spending the $525,000, the Company
will be deemed to have the right to 50% of the profits of the Greater Trona Area
joint venture.

        On June 2, 2000 Saurus commenced drilling the first of the wells to be
drilled under the agreement. As of June 21, 2000 Saurus had drilled the first
three wells of the initial ten well program. The Company and Saurus will
evaluate the results of the initial ten well drilling program before making a
decision to proceed further with the Trona project.

        If additional lands become available for purchase and the Company is
successful in leasing such additional lands, Saurus shall have the option to
defer its 50% share of the cost of the first 100,000 acres


                                       5
<PAGE>   6

of such additional land that the Company may purchase. Saurus will have this
option for a period of six months from the date of the completion of the last of
the ten initial wells discussed above.

        The Greater Trona Area has a mature market for oil and gas production.
The area is serviced by numerous pipelines, providing the Company with access to
a number of potential buyers. The Company will be responsible for moving its oil
and gas production to the sales point. In the case of gas production, the sales
point will be at a pipeline interconnect. In the case of oil production, the
Company will have the option to sell at the wellhead or to elect to build a
tie-in pipeline. Because the areas in which the Company anticipates conducting
its oil and gas exploration have a good infrastructure of both oil and gas
pipelines, the distance to tie in, and therefore the cost, is expected to be
minimal.

        At this time the Company has not yet identified any additional lands for
purchase.

RELIANCE ON MANAGEMENT

        Investors will have to rely upon the judgment and ability of the
Company's management with regard to 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 participate in
the Greater Trona Area project and other projects in which the company may
choose to participate. Since the nature and extent of the Company's
participation in the Greater Trona Area project and other projects, as well as
any other ventures 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. Further, no assurance can be given that even if the Company
participates in this project that the test well or any other wells drilled will
be capable of producing oil and/or gas in commercial quantities or that the
venture will be successful.

POSSIBLE DRILL RIG OPERATION

        Management is of the opinion that one of the ways to enhance the
Company's position in the development of oil and gas may be the purchase and
operation of drilling rigs. Though no assurances can be given that the Company
will purchase drilling rigs and enter into the drilling business nor that the
Company will be successful in such an enterprise, the Company is currently
investigating the purchase of used drilling rigs.

        The Company would have the option to enter into different types of
drilling contracts with operators, each with varying degrees of risk and reward.
There are three basic types of contract used in the oil and gas industry:
"daywork," "footage," and "turnkey". Pursuant to a daywork contract the rig and
necessary personnel are contracted out at a fixed day rate. Most risks and
delays to drilling are born by the entity hiring the rig. In footage contracts
wells are drilled on a dollars per foot basis to a designated depth. These
contracts are more expensive because part of the burdens for delays and the risk
of drilling are born by the drilling contractor and part by the entity hiring
the rig. A turnkey contract is a well drilled by the contractor for a fixed
price. This type of contract bears the greatest risk for the drilling
contractor, but this risk is usually reflected in the contract with a
substantial increase in service costs or through a substantial participation by
the drilling contractor in the well if it is successful. If and when the Company
purchases drilling rigs, management will decide on a deal by deal basis after
evaluation of the particular risks and circumstances which type of drilling
contract, in its sole discretion, will best serve the interests of the Company.


                                       6
<PAGE>   7

COMPETITION

        The oil and gas industry is highly competitive. Competition for
prospects and producing properties is intense. The Company 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.

        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

        The Company currently has no employees other than its officers and
directors. None of the officers and directors are employed by the Company on a
full-time basis. Management of the Company expects to hire additional employees
as needed. Management currently estimates that the Company will not hire any
employees in the next twelve months.

ENVIRONMENTAL LAWS

        The Company intends to conduct its operations in compliance with all
applicable environmental laws. The cost of such compliance will be factored in
to 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
to add to the time it takes to bring a project to fruition. The Company has
considered these factors in its


                                       7
<PAGE>   8

decision to proceed with the Trona joint venture and will consider these factors
when it evaluates future exploration and development projects.

ITEM 2. DESCRIPTION OF PROPERTY

PRINCIPAL PROPERTY

        The principal real estate utilized by the Company is located in the
Greater Trona Area (which lies in Sweetwater County, Wyoming). 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 and the Company and
Saurus Resources, Inc. entered into a definitive Joint Operating Agreement on
December 1, 1999. Under their agreement, the Company and Saurus agree to jointly
develop their respective interests in land within the Greater Trona area. The
Company has advanced a total of approximately $638,000 under its 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. The Company expects to spend $525,000 on
drilling and completing approximately 10 wells to a minimum depth of 1,200 feet.
If the cost of drilling and completing these wells is less than $525,000, the
Company will spend the difference on preparing the wells for production and
connecting the wells to a sales line. The Company cannot assess the likelihood
that such costs will fall below $525,000. After spending the $525,000, the
Company will be deemed to have the right to 50% of the profits of the Greater
Trona Area joint venture. The agreement terminates only upon the event that
Saurus or the Company lose their respective rights to develop within the Greater
Trona Area.

        The Company has entered into an arrangement to lease from the State of
Wyoming oil and gas rights to 320 acres located in the Greater Trona Area. This
lease has a five year term beginning December 8, 1999 and under the terms of the
lease one-sixth of the royalties earned by the Company for development on the
leased lands are payable to the state of Wyoming. The Company has entered into
an arrangement to lease from the United States Department of the Interior,
Bureau of Land Management, oil and gas rights to 240 acres located in the
Greater Trona Area. This lease has a ten year term beginning February 1, 2000
and under the terms of the lease one-eighth of the royalties earned by the
Company for development on the leased lands are payable to the United States.
The Company has not received from either the State of Wyoming or the Department
of Interior the final forms of the definitive agreements representing such
leases.

        If additional lands become available for purchase and the Company is
successful in leasing such additional lands, Saurus shall have the option to
defer its 50% share of the cost of the first 100,000 acres of such additional
land that the Company may purchase. Saurus will have this option for a period of
six months from the date of the completion of the last of the ten initial wells
discussed above. At this time the Company has not identified any additional
lands for purchase.

        The Company does not plan to make any investments in real estate
mortgages, in securities of persons primarily engaged in real estate activities
or, except as described above, in real estate or interests in real estate. The
only other real property utilized by the Company is the office space located at
Suite


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<PAGE>   9

1100 - 609 West Hastings Street, Vancouver BC Canada V6B 4W4, which is used
without charge by the Company under an oral arrangement with the lessor of the
property, Caravel Management Corp. Should this oral arrangement be terminated,
the Company would be required lease office space, however the Company does not
believe this is likely to happen, and should the Company be required to lease
office space, any cost associated with such lease would not be material to the
Company.

        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. On June 2,
2000 the operator of the Trona project, Saurus Resources Inc., commenced
drilling on the Trona project. As of June 21, 2000 three wells of the initial
ten well program had been drilled and were awaiting evaluation.

ITEM 3. LEGAL PROCEEDINGS

    None.

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

        On January 14, 2000, the Company held its annual meeting of
shareholders. At the January 14, 2000 annual meeting, Donald A. Sharpe, John R.
Hislop and Darrell Brookstein were elected as directors of the Company.
Subsequent to the annual meeting, Darrell Brookstein resigned as a director for
personal reasons. The Company has no other directors.

        The matters voted upon in the January 14, 2000 annual meeting and the
number of votes cast for and against, as well as the number of broker non-votes
and abstentions, were as follows:

               (i) The following nominees were elected to serve on the board of
directors of the Company until the Company's next annual meeting of shareholders
or until their successors are elected and qualified, and each received 5,831,000
votes, which represented approximately 81% of the shares outstanding. Each
nominee received the number of votes set opposite their respective name:

<TABLE>
<CAPTION>
                                            Against or
                             For             withheld            Abstain       Broker non-votes
                          ---------         ----------           -------       ----------------
<S>                       <C>               <C>                  <C>           <C>
Donald A. Sharpe          5,831,000              0                  0                  0
John R. Hislop            5,831,000              0                  0                  0
Darrell Brookstein        5,831,000              0                  0                  0
</TABLE>

               (ii) A proposal to ratify the Articles of Amendment to the
Articles of Incorporation of the Company that were approved by written consent
of a majority of shareholders and filed with the Florida Secretary of State on
September 16, 1998 was approved by the shareholders of the Company with the
following votes:

<TABLE>
<CAPTION>
                 For          Against or withheld       Abstain       Broker non-votes
              ---------       -------------------       -------       ----------------
<S>                           <C>                       <C>           <C>
              5,831,000                0                   0                  0
</TABLE>

        The September 16, 1998 amendments to the Company's Articles of
Incorporation provided for the following changes: (1) the outstanding Common
Stock of the Company was split 1,000 for one (i.e. following the effectiveness
of the Amendments, each share of Common Stock of the Company became 1,000 shares
of Common Stock of the Company); (2) the authorized capital of the Company was
increased from 1,000 shares of Common Stock, par value $1.00 per share, to
50,000,000 shares of Common Stock, $0.001 par value per share; (3) the address
of Company's principal place of business


                                       9
<PAGE>   10

within Florida was updated; (4) it was provided that the number of directors of
the company shall be established by the Bylaws of the company but shall not be
less than one; (5) it was provided that the shareholders of the Company shall
not have any preemptive rights except as established in the Articles of
Incorporation or by resolution of the Board of Directors (generally speaking, a
preemptive right is a right of first refusal to acquire shares issued by the
Company); (6) it was provided that the Bylaws of the Company may only be
adopted, modified or repealed upon a vote of the shareholders of the Company
holding a majority of the shares entitled to vote thereon; (7) the Board of
Directors was authorized to make reasonable rules to determine the time, place
and conditions under which the books and records of the Company will be subject
to inspection by its shareholders; (8) it was provided that any provisions
relating to a "control share acquisition" under the Florida Business Corporation
Act shall not apply to the Company (the "control share acquisition" provisions
provide that, unless the articles of incorporation of a company provide
otherwise, the voting rights of shares which following their acquisition would
give the holder thereof voting power in excess of certain stated percentage
limits will be limited to only such voting rights as shall be approved by the
shareholders of such company); (9) it was provided that the holders of one-third
of the voting shares of the Company shall constitute a quorum for purposes of
shareholders' meetings; (10) it was provided that actions by shareholders of the
Company shall require a vote of 50.01% to be effective; (11) the liability of
directors and officers of the Company was limited to the fullest extent
permitted by law and the Company was authorized to undertake, either in its
Bylaws or by action of its shareholders or Board of Directors, to indemnify its
directors and officers against any contingency or peril determined to be in the
best interest of the Company and to procure insurance to cover such indemnity;
and (12) no contract or transaction of the Company shall be affected by the fact
that an officer or director of the Company has an interest in such contract or
transaction. The September 16, 1998 amendments were at that time approved by
written consent of Roy Meadows, who at the time of such consent was the
beneficial owner of Common Stock representing 97.5% of the capital stock of the
Company.

               (iii) A proposal to reincorporate the Company under the laws of
the State of Delaware by means of a merger of the Company with and into a newly
formed wholly-owned subsidiary incorporated in the State of Delaware was
approved by the shareholders with following votes:

<TABLE>
<CAPTION>
                 For          Against or withheld       Abstain       Broker non-votes
              ---------       -------------------       -------       ----------------
<S>                           <C>                       <C>           <C>
              5,831,000                0                   0                  0
</TABLE>

        Following its approval by the shareholders, the reincorporation in
Delaware was effected on February 10, 2000. In connection with and by operation
of the reincorporation, the Company was authorized to issue preferred stock, par
value $.001 per share, with the right conferred upon the board of directors to
set the dividend, voting, conversion, liquidation and other rights as well as
such redemption or sinking fund provisions and the qualifications, limitations
and restrictions with respect thereto of such preferred stock as they may
determine from time to time. Under the proposal approved by the Shareholders,
the number of shares of preferred stock available for issuance is 5,000,000
shares. The reincorporation in Delaware did not result in any change in the
business, management, assets, liabilities or net worth of the Company.

        The reincorporation in Delaware was undertaken to allow the Company to
take advantage of certain provisions of the corporate laws of Delaware and to
authorize the Company to issue preferred stock. The Board of Directors of the
Company believes that the reincorporation has provided and will provide
flexibility for both the management and business of the Company. Delaware is
recognized both domestically and internationally as a favorable legal and
regulatory environment within which to operate. Such an environment will enhance
the Company's operations and its ability to effect acquisitions and other
transactions. For many years, Delaware has followed a policy of encouraging
incorporation in that state and, in furtherance of that policy, has adopted
comprehensive, modern and flexible corporate laws


                                       10
<PAGE>   11

which are periodically updated and revised to meet changing business needs. As a
result, many major companies have initially chosen Delaware for their domicile
or have subsequently reincorporated in Delaware. The Delaware courts have
developed considerable expertise in dealing with corporate issues, and a
substantial body of case law has developed construing Delaware law and
establishing public policies with respect to Delaware companies, thereby
providing greater predictability with respect to corporate legal affairs.

               (iv) A proposal to adopt the Company's 1999 Stock Option and
Incentive Plan was approved by the shareholders with the following votes:

<TABLE>
<CAPTION>
                 For          Against or withheld       Abstain       Broker non-votes
              ---------       -------------------       -------       ----------------
<S>                           <C>                       <C>           <C>
              5,831,000                0                   0                  0
</TABLE>

        On May 6, 1999, the Board of Directors of the Company adopted the
Company's 1999 Stock Option and Incentive Plan, subject to shareholder approval,
which approval was obtained at the January 14, 2000 meeting of shareholders. The
Board of Directors previously found that stock options are desirable (1) as an
effective incentive for participating key employees, consultants and Directors
to use their judgment, initiative and efforts to ensure the successful conduct
of the Company's business, (2) to further align the interests of such employees,
consultants and Directors with those of the Company's shareholders by providing
an opportunity to increase their stock ownership, and (3) to encourage such
employees, consultants and Directors to remain in the service of the Company.
Pursuant to the 1999 Plan, participants may be granted stock options to acquire
common stock of the Company, which may be incentive stock options or
non-qualified stock options.

        The total number of options authorized under the 1999 Plan is 2,500,000
shares of the Company's common stock (which number is subject to adjustment in
the event of stock dividends, stock splits and other similar events). To the
extent that options granted under the 1999 Plan expire or terminate without
having been exercised, the shares of the Company's common stock covered by such
options will again become available for award. The 1999 Plan is administered by
the Company's Board of Directors or, if the Board of Directors so elects, an
option committee of the Board of Directors will be created by the Board of
Directors, which will have authority to administer the 1999 Plan. The Board of
Directors or any option committee appointed thereby have the authority to
determine the employees to whom options will be granted, the time when such
Options shall be granted, the number of shares which shall be subject to each
option (subject to certain limitations in the case of incentive stock options),
the purchase price or exercise price of each option (no less than 100% of fair
market value for incentive stock options), the period(s) during which such
options shall be exercisable (whether in whole or in part) and the other terms
and provisions thereof. Generally, options may be granted only to employees
employed and consultants and vendors engaged by the Company or any subsidiary of
the Company. Directors of the Company and its subsidiaries are also eligible to
participate. Consultants and vendors are eligible to receive awards of
non-qualified stock options, but are not eligible to receive incentive stock
options.

               (v) A proposal to ratify the issuance of 100,000 shares of the
Company's common stock to Jeffrey L. Taylor and Gregory W. Gibson, former
directors of the Company, was approved by the shareholders with the following
votes:

<TABLE>
<CAPTION>
                 For          Against or withheld       Abstain       Broker non-votes
              ---------       -------------------       -------       ----------------
<S>                           <C>                       <C>           <C>
              5,823,000              8,000                 0                  0
</TABLE>

        In a special meeting of the Board of Directors held May 6, 1999, Jeffrey
L. Taylor ("Taylor") and Gregory V. Gibson ("Gibson"), who then constituted all
of the directors of the Company, passed a resolution granting an aggregate of
100,000 shares of the Company's Common Stock to themselves for


                                       11
<PAGE>   12

services rendered to the Company. Through his company London Taylor Group,
Taylor presented the Company with an invoice dated April 29, 1999 in the amount
of $13,000 for twenty-six hours of consulting services rendered. These services
included strategic planning for the Company's drilling business, negotiation of
an option to purchase drilling equipment and financial planning services. By its
resolution of May 6, 1999, the Board of Directors issued to Taylor 65,000 shares
of the Company's common Stock as payment in full for the April 29, 1999 invoice.
The law firm of Gibson, Hagland & Johnson, of which Gibson is a principal,
presented an invoice to the Company dated April 29, 1999 in the amount of $7,000
for legal services rendered in connection with the preparation of the Company's
1999 Stock Option and Incentive Plan. By its resolution of May 6, 1999, the
Board of Directors issued to Gibson 35,000 shares of the Company's Common Stock
as payment in full for the April 29, 1999 invoice.

               (vi) A proposal to create a series of preferred stock with such
rights, privileges and preferences as the Board of Directors may determine from
time to time was approved by the shareholders with the following votes:

<TABLE>
<CAPTION>
                 For          Against or withheld       Abstain       Broker non-votes
              ---------       -------------------       -------       ----------------
<S>                           <C>                       <C>           <C>
              5,831,000                0                   0                  0
</TABLE>

        On December 14, 1999, the Company's board of directors unanimously
approved and recommended that the Company's Shareholders consider and approve an
amendment to Article IV of the Company's Articles of Incorporation that would
authorize a series of preferred stock, par value $.001 per share, with the right
conferred upon the board of directors to set the dividend, voting, conversion,
liquidation and other rights as well as such redemption or sinking fund
provisions and the qualifications, limitations and restrictions with respect
thereto of such preferred stock as they may determine from time to time (such
preferred stock is often referred to as "blank-check preferred"). Under the
proposal approved by the Shareholders, the number of shares of preferred stock
available for issuance is 5,000,000 shares. The reincorporation in Delaware
separately had the effect of authorizing a class of 5,000,000 shares of blank
check preferred stock (the proposal was put to a separate vote of shareholders
in case the reincorporation was not approved by the shareholders).

        Prior to the reincorporation, the Company was not authorized to issue
any preferred stock (or any other class of capital stock other common stock).
The creation of the new preferred stock was recommended by the board of
directors to provide the board of directors with the necessary flexibility to
issue preferred stock in connection with acquisitions, merger transactions or
financings without the expense and delay incidental to obtaining shareholder
approval of an amendment to the Company's Certificate of Incorporation at the
time of such action.

               (vii) The proposal to authorize the Board of Directors to change
the name of the Company to an as yet undetermined name if the Board of Directors
determines that such a name change is in the best interests of the Company was
approved by the shareholders with the following votes:

<TABLE>
<CAPTION>
                 For          Against or withheld       Abstain       Broker non-votes
              ---------       -------------------       -------       ----------------
<S>                           <C>                       <C>           <C>
              5,831,000                0                   0                  0
</TABLE>

        As approved by the shareholders of the Company, this proposal granted
the Board of Directors the authority to amend Article I of the Company's
Certificate of Incorporation to change the name of the Company to any name
approved by the Board of Directors upon a determination by the Board of
Directors that such a name change is in the best interests of the Company. No
further action of the shareholders of the Company would be required to authorize
such name change. The board of directors exercised the authority granted in this
proposal on January 25, 2000 by adopting a resolution to change the Company's
name from Excalibur Contracting, Inc. to Nation Energy, Inc. A certificate of
amendment


                                       12
<PAGE>   13

amending Article I of the Company's Certificate of Incorporation to effect such
name change was filed with the Delaware Secretary of State on February 15, 2000.

               (viii) The resolution ratifying the appointment of Stark Tinter &
Associates LLC as the Company's independent auditors for the fiscal year ending
March 31, 2000 was approved by the shareholders with the following votes:

<TABLE>
<CAPTION>
                 For          Against or withheld       Abstain       Broker non-votes
              ---------       -------------------       -------       ----------------
<S>                           <C>                       <C>           <C>
              5,831,000                0                   0                  0
</TABLE>

        No further actions were taken at the annual meeting of shareholders held
January 14, 2000.

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 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.


<TABLE>
<CAPTION>
        Period (1)(2)                           High       Low
        -------------                           ----      ------
<S>                                             <C>       <C>
        First quarter 1999                      .625      .625
        Second quarter 1999                     1.25      .125
        Third quarter 1999                      1.50      1.00
        Fourth quarter 1999                     1.25      .875
        First quarter 2000                      3.00      1.0625
        Fourth quarter 2000                     5.00      1.3125
</TABLE>

(1) Calendar quarters.
(2) Source: Nasdaq Trading and Market Services and BigCharts.com


(b)     Stockholders.

        As of June 19, 2000 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. Delaware law limits the
Company's ability to pay dividends on its Common Stock if any such dividend
would render the Company insolvent.


                                       13
<PAGE>   14

        The Company has had pending a private offering of up to 4,500,000 shares
of its Common Stock at an offering price of $1.00 per share for several months.
It is unclear whether the Company will proceed with this offering. Net proceeds
from this offering, should it proceed (after deducting expenses of the Offering
estimated to be $10,000) are expected to be $4,490,000 if all of the shares
proposed to be offered are sold. The Company has received subscriptions totaling
$3,500,000 which have not yet been accepted by the Company. The Company intends
to use al1 of the foregoing amounts for working capital. This offering shall be
exempt from registration pursuant to Regulation D under the Securities Act of
1933 and is not being underwritten. See "MANAGEMENT'S DISCUSSION AND
ANALYSIS--Private Placement."

        In February of 1999, the Company completed a private offering pursuant
to Regulation D under the Securities Act of 1933 whereby it placed 6,070,000
shares of its Common Stock for a purchase price of $.12 per share. This offering
was not underwritten.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

        The Company is a shell company and has not conducted any significant
operations to date.

REVENUES

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

PLAN OF OPERATION

        The Company has conducted no significant operations. 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
with Saurus Resources Inc., described below in "--Initial Focus," for the
exploration of properties and has purchased two leases totaling 560 acres in the
Greater Trona Area, Wyoming, under this agreement. During the next twelve months
the Company plans to focus its resources on exploring this region and evaluating
additional opportunities for developing oil and gas projects.

        During the next twelve months the Company's proposed plans call for it
analyze additional regions for acquisition of oil and gas leases based on
several factors. The Company considers those regions in which it's industry
contacts have the most experience in order to benefit from such experience. The
Company will determine 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.

INITIAL FOCUS

        The principal activity for the Company in the next twelve months and
beyond will be the securing of oil and gas exploration contracts and joint
ventures in the Greater Trona Area, Wyoming. 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,


                                       14
<PAGE>   15

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, and has advanced the initial payment of $202,131 U.S.

        Under the arrangement 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. The Company expects to spend $525,000 US on
drilling and completing approximately 10 wells to a minimum depth of 1,200 feet.
If the cost of drilling and completing these wells is less than $525,000 US, the
Company will spend the difference on preparing the wells for production and
connecting the wells to a sales line. After spending the $525,000 US, the
Company will be deemed to have the right to 50% of the profits of the Greater
Trona Area joint venture.

        If additional lands become available for purchase and the Company is
successful in leasing such additional lands, Saurus shall have the option to
defer its 50% share of the cost of the first 100,000 acres of such additional
land that the Company may purchase. Saurus will have this option for a period of
six months from the date of the completion of the last of the ten initial wells
discussed above. At this time the Company has not identified any additional
lands for purchase.

        To date, the Company has purchased one state of Wyoming lease totaling
320 acres and one federal lease totaling 240 acres. The state lease has a term
of five years and carries a one-sixth royalty and the federal lease has a term
of ten-year term with a one-eighth royalty. Both leases are in the first year of
their term.

        The Company does not foresee hiring any additional employees in the next
twelve months.

        Capital acquisitions over the next twelve months are expected to total
$200,000. These capital acquisitions will consist of wellhead, tie-in and
compression equipment needed to produce gas in the event the Company's
exploration wells are successful. The Company has enough cash to meet its
obligations in the Greater Trona joint venture.

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.

POSSIBLE DRILL RIG OPERATION

        Management is of the opinion that one of the ways to enhance the
Company's position in the development of oil and gas may be the purchase and
operation of drilling rigs. Though no assurances can


                                       15
<PAGE>   16

be given that the Company will purchase drilling rigs and enter into the
drilling business nor that the Company will be successful in such an enterprise,
the Company is currently investigating the purchase of used drilling rigs and
could possibly apply the proceeds of this Offering to obtain one or more
drilling rigs.

        The Company would have the option to enter into different types of
drilling contracts with operators, each with varying degrees of risk and reward.
There are three basic types of contract used in the oil and gas industry:
daywork, footage, and turnkey. Pursuant to a daywork contract the rig and
necessary personnel are contracted out at a fixed day rate. Most risks and
delays to drilling are born by the entity hiring the rig. In footage contracts
wells are drilled on a dollars per foot basis to a designated depth. These
contracts are more expensive because part of the burdens for delays and the risk
of drilling are born by the drilling contractor and part by the entity hiring
the rig. A turnkey contract is a well drilled by the contractor for a fixed
price. This type of contract bears the greatest risk for the drilling
contractor, but this risk is usually reflected in the contract with a
substantial increase in service costs or through a substantial participation by
the drilling contractor in the well if it is successful. If and when the Company
purchases drilling rigs, Management will decide on a deal by deal basis after
evaluation of the particular risks and circumstances which type of drilling
contract, in its sole discretion, will best serve the interests of the Company.

LIQUIDITY AND CAPITAL RESOURCES

        The Company has no operating history. The Company does not expect to
generate sufficient revenues within the foreseeable future to support the
expenses of its development and marketing activities and therefore will need to
rely upon significant additional funding to implement its development plans. It
is anticipated that this funding will be accomplished through the sale of the
Company's equity securities or through borrowing. Prior to March, 2000, the
Company has sold 7,170,000 shares of its Common Stock for approximately $728,400
prior to deduction of offering expenses. The Company intends to raise future
requisite funds by subsequent offerings of its Common Stock and will not be able
to institute its full plan of operation without significant additional funding.
The Company has had pending a private placement of its Common Stock the gross
proceeds of which, should it proceed and all of the shares offered are sold,
will amount to $4,500,000 assuming that all of the shares offered for sale are
sold. See "--Private Placement," below. As of its audited financial statements
of March 31, 2000 the Company had assets of $4,185,859. The foregoing funds will
be and have been mainly used by the company to develop, exploit and market oil
and gas projects. $3,500,000 of such funds are cash advanced for subscriptions
for common stock in the private placement that have not yet closed. If the
private placement does not close, such funds will be returned to the
subscribers. The Company currently anticipates that, assuming that all of the
shares offered for sale are sold, this private placement will satisfy the cash
requirements of the Company for the next twelve months. If the Company does not
proceed with this private placement, the Company will need to obtain alternative
financing to pursue its plan of operations.

PRIVATE PLACEMENT

        The Company has pending a private offering of up to 4,500,000 shares of
its Common Stock at an offering price of $1.00 per share. This offering has been
pending for several months and it is unclear whether or not it will ultimately
close. Net proceeds from this offering, should it proceed (after deducting
expenses of the offering estimated to be $10,000) is expected to be $4,490,000
if all of the Shares are sold. The Company intends to use al1 of the foregoing
amounts for working capital. Funds will be used as general working capital
including but not limited to, obtaining oil and/or gas leases, hiring executive
and support personnel, and obtaining facilities to conduct operations, and
inventory equipment. At present the Company is negotiating regarding several
projects and has entered into a joint operating agreement with Saurus Resources,
Inc. for an option on a 50% interest in a project in the Greater Trona Prospect,


                                       16
<PAGE>   17

located in southwest Wyoming. The Company has also purchased two oil and gas
leases totaling 560 acres. No assurance can be given that the Company will be
able to obtain such additional arrangements as will be necessary to develop and
implement its plan in a timely manner or if implemented that said enterprise
will be profitable. No assurance can be given that significant revenues will be
derived from the development and operation of it's the Company's development
plans. Until required for specific purposes, the net proceeds of the offering
may be invested temporarily in short-term obligations such as short-term
government obligations.

        The Company has received advances for subscriptions totaling $3,500,000.
These subscriptions have not yet been accepted by the Company and are being held
subject to such acceptance and the final closing of the private placement. Of
the 3,500,000 shares currently subscribed for, 3,000,000 have been subscribed
for by Cubix Investments, Inc., a British Columbia, Canada, corporation whose
Common Stock is traded on the Canadian Venture Exchange. John R. Hislop, the
Company's chairman of the Board, Secretary and Vice President and Chief
Financial Officer, is the President and a director of Cubix Investments, Inc.
See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTION."

        The Company can only estimate the future use of proceeds based on the
current status of the Company's operations, its current plans and current
economic condition. Due to the uncertainties of fund raising and negotiations,
the Company is unable to predict precisely what amount will be used for any
particular purpose. The Company will apply the proceeds of this offering in such
manner as it deems appropriate under the then existing circumstances. The
Company reserves the right to amend the use of proceeds by vote of a majority of
the Board of Directors.

        Should the offering not proceed under its current terms, the Company
will be required to pursue alternative sources of capital. Without additional
capital, the Company's ability to pursue its plan of operations will be severely
curtailed.

EMPLOYEES

    The Company currently has no employees other than its Officers and
Directors. Management of the Company expects to hire additional employees as
needed. Management currently estimates that the Company will not hire any
employees in the next twelve months.

                            INVESTMENT CONSIDERATIONS

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. The Company is a shell company and is
subject to all the risks inherent in the creation of a new business. The Company
has no employees other than its management team and no set business plan.
Management of the Company has substantial discretion with


                                       17
<PAGE>   18

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 plans will prove successful. If the
Company's plans prove to be unsuccessful, investors in the Company may lose all
or a substantial part of their investment.

        No Contracted Projects. The Company is a shell corporation in its
initial stages of development and though it has identified some initial projects
at present it has only entered into one agreement for the exploration of oil and
gas. There is no assurance that the Company will be able to raise funds in a
timely manner or successfully enter into other agreements with regards to any of
its current prospects or, if such agreements are entered into, that it will be
successful in its exploration activities. 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.

        Wildcat Drilling. The Company expects to engage in the 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. Recently the price of oil and gas has
been subject to substantial volatility. 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.

        Availability of Suitable Prospects or Producing Properties. Competition
for prospects and producing properties is intense. The Company 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 sell
prospectus or 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.
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


                                       18
<PAGE>   19

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.

        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.

        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.

        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 Subsequent Funding. The Company believes it will need to raise
substantial additional funds in order to maintain its operations. The Company's
continued operations therefore will depend upon its ability to raise additional
funds through bank borrowings or equity or debt financing. There is no assurance
that the Company will be able to obtain additional funding when needed, or that
such funding, if available, can be obtained on terms acceptable to the Company.
If the Company cannot obtain needed funds, it may be forced to curtail or cease
its activities. See "MANAGEMENT'S DISCUSSION AND ANALYSIS--Liquidity and Capital
Resources."

        Need for Additional Key Personnel. At present, the Company employs no
full time employees. The success of the Company's proposed business will depend,
in part, upon the Company's ability to attract and retain qualified employees.
The Company believes that it will be able to attract competent employees, but no
assurance can be given that the Company will be successful in this regard. 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.

        FOR ALL OF THE AFORESAID REASONS AND OTHERS SET FORTH HEREIN, AS WELL AS
OTHER FACTORS NOT SET FORTH HEREIN, THE PURCHASE OF THE SHARES OF THE COMPANY
INVOLVES A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING AN


                                       19
<PAGE>   20

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.

ITEM 7. FINANCIAL STATEMENTS



                               Nation Energy, Inc.
                          (A Development Stage Company)
                        As of March 31, 2000, and for the
                      Years Ended March 31, 2000 and 1999,
                  and for the Period April 19, 1988 (Inception)
                                to March 31, 2000


                                       20
<PAGE>   21

                               Nation Energy, Inc.
                          (A Development Stage Company)
                                Table of Contents

<TABLE>
<CAPTION>
                                                                 Page
                                                                 ----
<S>                                                              <C>
Report of Independent Auditors                                    22

Balance Sheet                                                     23

Statements of Operations                                          24

Statement of Changes in Stockholders' Equity                      25

Statements of Cash Flows                                          26

Notes to Financial Statements                                    27-31
</TABLE>


                                       21
<PAGE>   22

                         REPORT OF INDEPENDENT AUDITORS


Shareholders and Board of Directors
Nation Energy, Inc.
Vancouver, B. C. Canada


We have audited the accompanying balance sheet of Nation Energy, Inc. (A
Development Stage Company) as of March 31, 2000, and the related statements of
operations, changes in stockholders' equity, and cash flows for the years ended
March 31, 2000 and 1999, and the period from April 19, 1988 (inception) to March
31, 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 generally accepted auditing
standards. 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. (A
Development Stage Company) as of March 31, 2000, and the results of its
operations, and its cash flows for the years ended March 31, 2000 and 1999, and
the period from April 19, 1988 (inception) to March 31, 2000, in conformity with
generally accepted accounting principles.






Stark Tinter & Associates, LLC
Denver, Colorado
June 27, 2000


                                       22
<PAGE>   23

                               NATION ENERGY, INC.
                          (A Development Stage Company)
                                  Balance Sheet
                                 March 31, 2000


                                     ASSETS

<TABLE>
<CAPTION>
<S>                                                     <C>
Current assets:
     Cash                                               $ 3,894,349
     Prepaid expenses                                       100,632
                                                        -----------
         Total current assets                             3,994,981

Oil and gas properties - full cost method                   190,878
                                                        -----------

 Total assets                                           $ 4,185,859
                                                        ===========

                  LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
      Accounts payable                                  $     9,203

 Stockholders' equity:
      Common stock, $.001 par value; 50,000,000
        shares authorized; 7,170,000 shares issued
        and outstanding                                       7,170
      Additional paid-in capital                            742,230
      Common stock subscriptions                          3,500,000
      Deficit accumulated during the
        development stage                                   (72,744)
                                                        -----------
           Total stockholders' equity                     4,176,656
                                                        -----------
 Total liabilities and stockholders' equity             $ 4,185,859
                                                        ===========
</TABLE>


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


                                       23
<PAGE>   24

                              NATION ENERGY, INC.
                          (A Development Stage Company)
                            Statements of Operations

<TABLE>
<CAPTION>
                                                                                           FOR THE PERIOD
                                                          FOR THE            FOR THE       APRIL 19, 1988
                                                         YEAR ENDED        YEAR ENDED      (INCEPTION) TO
                                                       MARCH 31, 2000    MARCH 31, 1999    MARCH 31, 2000
                                                       --------------    --------------    --------------
<S>                                                    <C>               <C>               <C>
Revenue:                                                 $        --       $        --       $      --
                                                         -----------       -----------       ---------
Costs and expenses:
   General, selling and administrative                        50,808            20,936          72,744
                                                         -----------       -----------       ---------
        Total costs and expenses                              50,808            20,936          72,744
                                                         -----------       -----------       ---------
Net (loss)                                               $   (50,808)      $   (20,936)      $ (72,744)
                                                         ===========       ===========       =========
Per share information:

    Weighted average number of common
       shares outstanding - basic and diluted              7,161,803         1,562,419         734,342
                                                         ===========       ===========       =========

    Net (loss) per common share - basic and diluted      $     (0.01)      $     (0.01)      $   (0.10)
                                                         ===========       ===========       =========
</TABLE>


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


                                       24
<PAGE>   25

                               NATION ENERGY, INC.
                          (A Development Stage Company)
                  Statement of Changes in Stockholders' Equity
          For the period April 19, 1988 (inception) to March 31, 2000


<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                 Common Stock                                         Accumulated
                                           ----------------------      Additional       Common         During The         Total
                                           Number of                    Paid-in          Stock        Development     Stockholders'
                                            Shares         Amount       Capital      Subscriptions       Stage            Equity
                                           ---------       ------      ----------    -------------    -----------     -------------
<S>                                        <C>             <C>         <C>           <C>              <C>             <C>
April 19, 1988 (inception)                        --       $   --       $     --       $       --       $     --        $       --

Issuance of common stock
  for services at $.001 per share          1,000,000        1,000             --               --             --             1,000

Net (loss) incurred in fiscal 1988                --           --             --               --         (1,000)           (1,000)
                                           ---------       ------       --------       ----------       --------        ----------
Balance, March 31, 1998                    1,000,000        1,000             --               --         (1,000)               --

Issuance of common stock for cash at
   $0.12 per share                         6,070,000        6,070        722,330               --             --           728,400

Net (loss) for the year                           --           --             --               --        (20,936)          (20,936)
                                           ---------       ------       --------       ----------       --------        ----------
Balance, March 31, 1999                    7,070,000        7,070        722,330               --        (21,936)          707,464

Issuance of common stock
  for services at $.20 per share             100,000          100         19,900                                            20,000

Common stock subscribed
  for at $1.00 per share                          --           --             --        3,500,000             --         3,500,000

Net (loss) for the year                           --           --             --               --        (50,808)          (50,808)
                                           ---------       ------       --------       ----------       --------        ----------
Balance March 31, 2000                     7,170,000       $7,170       $742,230       $3,500,000       $(72,744)       $4,176,656
                                           =========       ======       ========       ==========       ========        ==========
</TABLE>


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


                                       25
<PAGE>   26

                               NATION ENERGY, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                             FOR THE PERIOD
                                                             FOR THE          FOR THE        APRIL 19, 1988
                                                           YEAR ENDED        YEAR ENDED      (INCEPTION) TO
                                                         MARCH 31, 2000    MARCH 31, 1999    MARCH 31, 2000
                                                         --------------    --------------    --------------
<S>                                                      <C>               <C>               <C>
Cash flows from operating activities:
    Net (loss)                                             $   (50,808)       $ (20,936)       $   (72,744)
Adjustments to reconcile net (loss) to net cash
 used in operating activities:
    Common stock issued for services                            20,000                              20,000
    (Increase) in prepaid expenses                            (100,632)              --           (100,632)
    Increase (decrease) in accounts payable                    (11,538)          20,741             10,203
                                                           -----------        ---------        -----------
Net cash (used in) operating activities                       (142,978)            (195)          (143,173)
                                                           -----------        ---------        -----------
Cash flows from investing activities:
    Purchase of oil and gas properties                        (190,878)              --           (190,878)
                                                           -----------        ---------        -----------
Net cash (used in) investing activities                       (190,878)              --           (190,878)

Cash flows from financing activities:
    Proceeds from common stock issued and subscribed         3,500,000          728,400          4,228,400
                                                           -----------        ---------        -----------
Net cash provided by financing activities                    3,500,000          728,400          4,228,400
                                                           -----------        ---------        -----------
Net increase in cash                                         3,166,144          728,205          3,894,349

Beginning cash                                                 728,205               --                 --
                                                           -----------        ---------        -----------
Ending cash                                                $ 3,894,349        $ 728,205        $ 3,894,349
                                                           ===========        =========        ===========
Supplemental cash flow information:
  Cash paid for interest                                   $        --        $      --        $        --
                                                           ===========        =========        ===========
  Cash paid for income taxes                               $        --        $      --        $        --
                                                           ===========        =========        ===========
</TABLE>


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


                                       26
<PAGE>   27

                               Nation Energy, Inc.
                          (A Development Stage Company)
                          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 development 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, 2000. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash,
prepaid expenses 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 receivable
or payable on demand.

Impairment of long-lived assets

The Company periodically reviews the carrying amount of its identifiable assets
to determine whether current events or circumstances warrant adjustments to such
carrying amounts. If an impairment adjustment is deemed necessary, such loss is
measured by the amount that the carrying value of such assets exceeds their fair
value. Considerable management judgement is necessary to estimate the fair value
of assets, accordingly, actual results could vary significantly from such
estimates. Assets to be disposed of are carried at the lower of their financial
statement carrying amount or fair value less costs to sell. As of March 31,
2000, management does not believe there is any impairment of the carrying
amounts of assets.

Revenue recognition

Revenues from oil and gas sales are accrued as earned based on joint interest
billings obtained from the well operator.

Income taxes

The Company follows Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" ("SFAS No. 109") for recording the provision for
income taxes. Deferred tax assets and liabilities are computed based upon the
difference between the financial statement and income tax basis of assets and
liabilities using the enacted marginal tax rate applicable when the related
asset or liability is expected to be realized or settled. Deferred income tax
expenses or benefits are based on the changes in the asset or liability each
period. If available evidence suggests that it is


                                       27
<PAGE>   28

                               Nation Energy, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements

more likely than not that some portion or all of the deferred tax assets will
not be realized, a valuation allowance is required to reduce the deferred tax
assets to the amount that is more likely than not to be realized. Future changes
in such valuation allowance are included in the provision for deferred income
taxes in the period of change.

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 the periods presented common stock
equivalents were not considered as their effect would be anti- dilutive.

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.

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. 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.


                                       28
<PAGE>   29

                               Nation Energy, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements

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.

Recent Pronouncements

The FASB recently issued Statement No. 138 "Accounting for Certain Derivative
Instruments and Certain Hedging Activities" and Statement No 137, "Accounting
for Derivative Instruments and Hedging Activities-Deferral of Effective Date of
FASB Statement No. 133". Both Statements defer for one year the effective date
of FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities". The rules 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," which is
required to be adopted in years beginning after June 15, 1999. The Statement
permits early adoption as of the beginning of any fiscal quarter after its
issuance. 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 yet determined if it will early-adopt and what the effect of
SFAS No. 133 will be on the earnings and financial position of the Company.

Note 2. CONCENTRATIONS OF CREDIT RISK

The Company's funds are federally insured up to $100,000. As of March 31, 2000,
the funds under deposit exceed this insured amount by $3,794,349.

Note 3. STOCKHOLDERS' EQUITY

On May 1, 1988, the Company issued 1,000,000 shares of its $.001 par value
common stock for services valued at $1,000.

On September 16, 1998, the State of Florida approved the Company's restated
Articles of Incorporation, which increased its capitalization from 1,000 common
shares to 50,000,000 common shares. The par value was changed from $1.00 to
$0.001.


                                       29
<PAGE>   30

                               Nation Energy, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements

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.

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.

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.

The Company began a private placement on March 1, 2000. The private placement
offered 4,500,000 shares of common stock, par value $.001 at a price of $1.00
per share. As of March 31, 2000, 3,500,000 shares of this offering were
subscribed and paid for by various investors.

Note 4. 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. The Company has prepaid
drilling expenses of $90,423 and oil and gas properties, which consist of
leasehold costs, totaling $190,878.

Under the arrangement 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. The Company expects to spend $525,000 on drilling
and completing approximately 10 wells to a minimum depth of 1,200 feet. The
first payment of $199,872 was advanced on April 11, 2000. If the cost of
drilling and completing these wells is less than $525,000, the Company will
spend the difference on preparing the wells for production and connecting the
wells to a sales line. After spending the $525,000, the Company will be deemed
to have the right to 50% of the profits of the Greater Trona Area joint venture.


                                       30
<PAGE>   31

                               Nation Energy, Inc.
                          (A Development Stage Company)
                          Notes to Financial Statements

Note 5. INCOME TAXES

The Company has a Federal net operating loss carryforward of approximately
$72,700, which will expire in the year 2020. The tax benefit of this net
operating loss of approximately $3,600 has been offset by a full allowance for
realization. This carryforward may be limited upon the consummation of a
business combination under Section 381 of the Internal Revenue Code.


                                       31
<PAGE>   32

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

        None.

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:

<TABLE>
<CAPTION>
     Name                 Age                   Position
     ----                 ---                   --------
<S>                       <C>    <C>
John R. Hislop            47     Chairman of the Board of Directors, Vice
                                 President and Chief Financial Officer,
                                 Secretary

Donald A. Sharpe          42     President, Chief Executive Office, Director
</TABLE>

        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

        Mr. Hislop has been a director of the Company since June 4, 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 Ultra Petroleum Corp., a public Oil and Gas production
and exploration company, and served as the company's President from March of
1993 to May of 1996 and as Chief Financial Officer from May of 1996 to September
of 1998. He is currently President and Director of Cubix Investments, Inc.
(formerly named R.I.S. Resources International Corp.), a Canadian holding
company for various public oil and gas and internet Companies. In the past five
years Mr. Hislop has also been an executive officer and/or director of the
following companies: Arrowhead Minerals Corp., Ariel Resources, Ltd., Rio
Amarillo Mining Ltd., Spectrum Resources, Ltd., Luxmatic Technologies N.V.,
Kinesys Pharmaceutical, Inc., Capital Charter Corp., Green River Petroleum,
Inc., and Patriot Capital Corp. Mr. Hislop trained as a Chartered Accountant
with Ernst & Young and has a bachelor of Commerce in Finance from the University
of British Columbia.

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

        Mr. Sharpe has been a director of the Company since June 4, 1999. As
President and a member of the Board of Directors of Green River Holdings, Inc.,
a public Company located in Vancouver, British Columbia, Mr. Sharpe oversaw the
reorganization and initial financing of the Company. Mr. Sharpe was responsible
for the negotiations and completion of Green River'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 his tenure at Green River Mr. Sharpe was
President and Director of JABA Inc., of Vancouver, British Columbia, from 1995
to 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: Capital Charter
Corporation, UKT Recycling Technologies Inc., Jaba Inc., Velvet Exploration
Company, Ltd., Patriot Capital Corp., and Empress Capital Corp. Mr. Sharpe
received his B.Sc. in Geophysics from the University of British Columbia and
Certificate in Business Management from the University of Calgary.

        Darrell Brookstein resigned from the Board of Directors of the Company
on May 22, 2000.

               No reports pursuant to Section 16(a) of the Securities Exchange
Act of 1934 have been filed with respect to the Company.

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.


                                       32
<PAGE>   33

                           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:

<TABLE>
<CAPTION>
                                                        Long Term Compensation
                                                                Awards
                              Annual Compensation     ----------------------------
Name and                    ----------------------                     Securities
Principal                             Other Annual     Restricted      Underlying       All other
Position          Year      Salary    Compensation    Stock Awards    Options/SARs    compensation
---------        -------    ------    ------------    ------------    ------------    ------------
<S>              <C>        <C>       <C>             <C>             <C>             <C>
Donald A.        2000(1)      $0          $0               0               0               0
Sharpe, CEO

Jeffrey L.       2000(1)      $0          $0               0               0               0(2)
Taylor, CEO
</TABLE>

(1) The results reported in the "Summary Compensation Table" for the period
designated "2000" are for the current fiscal year ending March 31, 2000. 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

(a) Security ownership of certain beneficial owners

        The following table sets forth the beneficial ownership of Company
shares of each beneficial owner of 5% or more of the Company's common stock
known to the Company. The following information is based solely on the
representations of share ownership made by persons representing themselves as
owners of the Company's common stock in connection with the proxies solicited
for the January 14, 2000 meeting of the Company's shareholders.


<TABLE>
<CAPTION>
        Name and address of               Amount and nature         Percent of
         beneficial owner              of beneficial owner(1)         class
        -------------------            ----------------------       ----------
<S>                                    <C>                          <C>
Sinclair Publishing Limited                   670,000                 9.344%
Palm Chambers
Road Town, Tortola
British Virgin Islands

Lynx Knights de Finance SA                    670,000                 9.344%
3076 Sir Fraces Drake Highway
Road Town, Tortola
British Virgin Islands

Westin Machineries Pension SA                 670,000                 9.344%
3076 Sir Fraces Drake Highway
Road Town, Tortola
British Virgin Islands

Liegeman, SA                                  670,000                 9.344%
3076 Sir Fraces Drake Highway
Road Town, Tortola
British Virgin Islands

Croix Merchants & Barter                      670,000                 9.344%
3076 Sir Fraces Drake Highway
Road Town, Tortola
British Virgin Islands
</TABLE>

(1)  Holder of 5% or more of the common stock of the Company


                                       33
<PAGE>   34

(b) Security ownership of management

        The following table sets forth the beneficial ownership of Company
common stock of each executive officer and director, and all directors and
executive officers as a group.

<TABLE>
<CAPTION>
        Name and address of               Amount and nature         Percent of
        beneficial owner(1)              of beneficial owner           class
        -------------------              -------------------        ----------
<S>                                      <C>                        <C>
John R. Hislop                                  0(2)                    0%

Donald A. Sharpe                                0(3)                    0%

All directors and executive                     0                       0%
officers as a group (5 persons)
</TABLE>

(1) The address for each of the persons listed is Suite 1100 - 609 West Hastings
Street, Vancouver BC Canada V6B 4W4

(2) John R. Hislop is the Chairman of the Board of Directors, Vice President and
Chief Financial Officer, and Secretary of the Company

(3) Donald A. Sharpe is the President, Chief Executive Office, Director of the
Company


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Cubix Investments, Inc. (formerly named R.I.S. Resources International,
Inc.), a British Columbia, Canada, corporation whose Common Stock is traded on
the Canadian Venture Exchange, has submitted a subscription for 3,000,000 shares
of Common Stock in the private placement that is currently pending. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS--Private Placement." John R. Hislop, the
Company's Chairman of the Board, Secretary and Vice President and Chief
Financial Officer, is the President and a director of Cubix Investments, Inc.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

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

<TABLE>
<CAPTION>
Exhibit No.     Exhibit Name
-----------     ------------
<S>             <C>
                Report of Independent Auditors--Stark Tinter & Associates, LLC
                      Balance Sheet of March 31, 2000 and March 31, 1999
                      Statements of Operations for the period March 31, 1999 to
                          March 31, 2000
                      Statement of Changes in Stockholders' Equity for the period
                          March 31, 1999 to March 31, 2000
                      Statements of Cash Flows for the period March 31, 1999 to
                          March 31, 2000
                      Notes to Financial Statements

2.1             Certificate of Incorporation of Company, filed December 16, 1999*

2.2             Certificate of Amendment of Certificate of Incorporation of Company,
                filed February 15, 2000*

2.3             Bylaws of the Company*
</TABLE>


                                       34
<PAGE>   35

<TABLE>
<S>             <C>
6.1             Joint Operating Agreement with Saurus Resources, Inc. dated December 1, 1999*

6.2             1999 Stock Option and Incentive Plan*

27.1            Financial Data Schedule
</TABLE>


* Incorporated by reference from the Company's Form 10-SB filed with the
Securities and Exchange Commission March 31, 2000

No Form 8-K has been filed by the Company during the period covered by this
report.


                                       35
<PAGE>   36

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.

                                            NATION ENERGY, INC.
                                           (Registrant)


Date: July 12, 2000                         By: /s/ Donald A. Sharpe
                                               ---------------------------------
                                               Donald A. Sharpe, CEO

        In 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.


<TABLE>
<CAPTION>
Name                                         Title                                  Date
----                                         -----                                  ----
<S>                           <C>                                              <C>
/s/ Donald A. Sharpe                                                           July  12, 2000
---------------------
Donald A. Sharpe              President and Chief Executive
                              Officer, Director
                              (Principal Executive Officer)

/s/ John R. Hislop                                                             July  12, 2000
---------------------
John R. Hislop                Chairman of the Board of Directors,
                              Vice President and Chief Financial Officer,
                              and Secretary
                              (Principal Financial and Accounting Officer)
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