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

## Form 10-KSB

[X]
      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934For the fiscal year ended
      March 31, 2002______________________________[  ]
      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934For the transition period from
      ________________________ to ________________________


|                                                                              
|------------------------------------------------------------------------------
|Commission file number: 0-30193                                               
|                                                                              
|NATION ENERGY, INC.                                                           
|                                                                              
|(Name of Small Business Issuer
      in its Charter)                          
|                                                                              
|Delaware                                                                      
|                                                                              
|(State or other jurisdiction of incorporation
      or organization)          
|                                                                              
|Suite 1100
        609 West Hastings Street
        Vancouver British Columbia
|                                                                              
|(Address of principal executive offices)                                      

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

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

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

Common Stock, $0.001 par value per share


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

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

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

---

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

(1)


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

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

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

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

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




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

---

## PART I

### Item 1. Description of Business.

FORWARD-LOOKING STATEMENTS

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

Although we believe that the expectations reflected in the forward-looking
  statements are reasonable, we cannot guarantee future results, levels of activity,
  performance or achievements.  Except as required by applicable law, including
  the securities laws of the United States, we do not intend to update any of
  the forward-looking statements to conform these statements to actual results.

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

All dollar amounts refer to US dollars unless otherwise indicated.

Business of the Company

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

Corporate History

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

We held interests in 28 oil and gas leases located in the Great Trona Area
  prospect, located in and around Sweetwater County, Wyoming.  These leases
  cover approximately 22,000 acres.  Under the Joint Operating Agreement,
  Saurus Resources was the operator of oil and gas exploration on the property
  covered by these leases and has certain rights and duties as the operator. 
  Our only material activities until recently had been related to our participation
  in exploration conducted under the Joint Operating Agreement with Saurus Resources. 
  To date, 24 test wells have been drilled and completed under the Joint Operating
  Agreement.  We advanced a total of approximately $2,167,000 under our agreement
  with Saurus Resources.  Operational difficulties in developing the test
  wells are largely responsible for greater than anticipated operating costs. 
  These difficulties include mineral precipitation in the well bore, which inhibits
  production.  The wells drilled to date have been perforated and hydraulically
  fractured; these geophysical traits make extraction of gas much more complicated
  and expensive than anticipated.  Poor weather and lack of available crews
  have also contributed to operational difficulties and greater expenses. 
  Despite the significantly greater exploration expenditures, there are no strong
  indications to date that the test wells or other potential wells within the
  interests held by us will produce sufficient gas to enable us to recover the
  exploration costs expended to date, let alone be profitable.

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

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

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

Our Current Business

On November 21, 2001 we entered into a farm-in agreement with Olympia Energy
  Inc. (the "Farm-in") under which we will share the development costs and revenues
  for a natural gas project in the Smoky area near Grande Prairie, Alberta, Canada
  (the “Bolton Prospect”).  Under the terms of the Farm-in we
  will fund 25% of the cost to drill and complete a 4,800 meter well in the Bolton
  Prospect and will earn a 15% interest after payout in the Bolton Prospect. 
  Drilling costs for the Bolton Prospect are estimated to be CDN $11,000,000. 
  Drilling on an initial well at 09-09-59-02-W6M began on November 13th and was
  expected to take approximately 120 days.  The well was drilled to a total
  depth of 4830 meters in March of 2002 and has been logged.  The well is
  currently undergoing completion and testing.

Management is of the view that the Bolton Prospect has a very good potential
  for substantial recoverable gas.  The Smoky area has existing infrastructure
  facilities and pipelines and there is currently production within 5 miles of
  the Bolton Prospect area.

Our primary objective over the 12 months ending March 31, 2003, will be to
  continue to participate in the Farm-in with Olympia Energy Inc. We intend to
  participate in, and develop, further wells on the Bolton Prospect if warranted,
  based upon the results that we receive from the initial well.

We do not foresee hiring any additional employees in the next twelve months. 
  We do not intend to purchase any significant equipment over the twelve months
  ending March 31, 2003.  Any monies raised by us will first be expended
  pursuant to our obligations under the Farm-in agreement.

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

RISK FACTORS

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

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

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

Likelihood of Profit

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

Lack of Financial Resources

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

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



Financial Considerations

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

Property Defects

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

Currency Fluctuations

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

Need to Manage Growth

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

Dependence on Key Personnel/Employees

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

Dependence on Meota Resources Corp.

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

Conflicts of Interest

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

"Penny Stock" Rules May Restrict the Market for the Company's Shares

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

Possible Volatility of Share Prices

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

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

Indemnification of Directors, Officers and Others

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

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

Future Dilution

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

Anti-Takeover Provisions

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

Risks Relating to the Industry

Oil and Gas Exploration

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

Potential Profitability of Oil and Gas Ventures Depends Upon Factors Beyond
  the Control of Our Company

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

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

Competitiveness of Oil and Gas Industry

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

Fluctuating Price and Demand

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

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

Comprehensive Regulation of Oil and Gas Industry

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

Environmental Regulations

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

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

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

Risks Associated with Drilling

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

Government Regulation/Administrative Practices

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

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

### Item 2. Description of Property.

We hold a 15% interest, after payout, in an oil and gas property in the Smoky
  area near Grande Prairie, Alberta, Canada.  One well has been drilled on
  the property and is awaiting completion and undergoing testing.  At the
  date hereof, we have not ascertained the status of any oil and gas reserves
  which may be recoverable from the well.

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

### Item 3. Legal Proceedings.

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

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

On January 29, 2002, a majority of our shareholders approved an Agreement and
  Plan of Merger with Nation Energy Inc., a Wyoming corporation in order to relocate
  our domicile of incorporation from the State of Delaware to the State of Wyoming. 
  At the time of the consent of the shareholders we had 11,020,000 common shares
  issued and outstanding.  Shareholders holding 6,532,000, or 59%, of our
  common shares provided their approval to the proposed merger.  The proposed
  merger has not yet become effective as we are in the process of disseminating
  an Information Statement on Schedule 14C to our shareholders.

## PART II

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

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

Quarter Ended
      High
      LowSeptember 30, 2000
      $2.375
      $0.75December 31, 2000
      $2.00
      $0.51March 31, 2001
      $1.10
      $0.90June 30, 2001
      $0.93
      $0.83September 30, 2001
      $0.90
      $0.80December 31, 2001
      $0.51
      $0.30March 31, 2002
      $0.90
      $0.25


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

As of June 21, 2002, we had 16,020,000 shares of common stock outstanding and
  approximately 18 stockholders of record.  This number of stockholders does
  not include stockholders who hold our securities in street name.

Dividend Policy

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

Recent Sales of Unregistered Securities

Year Ended March 31, 2002

On March 20, 2002 we issued an aggregate of 5,000,000 shares of common stock
  to an accredited investor.  The shares were issued in a transaction that
  was private in nature, in reliance upon Section 4(2) and Rule 506 promulgated
  under the Securities Act of 1933.

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

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

Results of Operations

Fiscal Year Ended March 31, 2002 Compared to Fiscal Year Ended March 31,
  2001 (Restated)

We incurred a net loss of $2,779,131 for the fiscal year ended March 31, 2002
  compared to a net loss of $846,195 for the year ended March 31, 2001. 
  The net loss per common share for the fiscal year ended March 31, 2002 was $0.25,
  compared to a net loss per common share of $0.10 for the year ended March 31,
  2001.  The increased loss is due primarily to losses incurred in the further
  writedown of unproved oil and gas properties.  For the year ended March
  31, 2002, we wrote down $1,370,678 in unproved oil and gas properties, compared
  to a write-down of $738,675 for the year ended March 31, 2001. We have
  written down our entire interest in the oil and gas leases located in the Greater
  Trona area of Sweetwater County, Wyoming.



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

Lack of Revenues

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

Investment

As at March 31, 2002, we have invested a total of $1,743,518 under the Farm-in
  agreement with Olympia Energy Inc. towards the drilling and development costs
  of the initial well at the Bolton Prospect.

Liquidity and Capital Resources

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

We are currently relying on our existing cash reserves to fund our continuing
  operating expenses and to fund the identification and evaluation of a suitable
  business opportunity or business combination.  As of March 31, 2002 and
  March 31, 2001, our cash and cash equivalent balances were $1,385,254 and $2,292,340,
  respectively.  We anticipate that we will not require any additional financing
  in order to fund our obligations under the Farm-in agreement.  Should we
  require additional financing, we would likely seek to secure any additional
  financing necessary through a private placement of our shares of common stock.

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

On December 4, 2001 we announced a private placement of 5,000,000 shares at
  $0.20 per share for gross proceeds of $1,000,000.  The proceeds of the
  private placement will be used to fund our obligations under the Farm-in agreement
  for the Bolton Prospect. On March 20, 2002, the Company issued these shares.
  The fair market value of the stock on that date was $0.45. The difference between
  the fair market value and the issue price was recorded as stock compensation
  expense of $1,250,000.

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

Plan of Operation for the 12 Months ending March 31, 2003

Our primary objective over the 12 months ending March 31, 2003, will be to
  continue to participate in the Farm-in agreement with Olympia Energy Inc. in
  regards to the development of the Bolton Prospect.

Cash Requirements

We anticipate that we may require financing from unrelated third parties in
  order to continue our operations and fund our capital commitments under the
  Farm-in agreement.  We anticipate that we will have sufficient capital
  to fund our ongoing operations and capital expenditure commitments to March
  31, 2003.  However, we may be required to raise additional financing for
  a particular business opportunity.  We would likely seek to secure any
  additional financing necessary through a private placement of our common stock.

Product Research and Development

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

Purchase of Significant Equipment

We do not intend to purchase any significant equipment through March 31, 2003.

Employees

Over the twelve months ending March 31, 2003, we do not anticipate an increase
  in the number of employees that we may retain  We currently have no employees
  other than our directors and officers.

### Item 7. Financial Statements.

Our financial statements are stated in United States Dollars (US$) and are
  prepared in accordance with United States Generally Accepted Accounting Principles.



---

### 

### Nation Energy, Inc.
  As of March 31, 2002 and for the
  Years Ended March 31, 2002 and 2001




#### Table of Contents

PageReport of Independent Auditors
      15Balance Sheet
      16Statements of Operations
      17Statement of Changes in Stockholders' Equity
      18Statements of Cash Flows
      19Notes to Financial Statements
      20-25


---

#### REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
  Nation Energy, Inc.

We have audited the accompanying balance sheet of Nation Energy, Inc. as of
  March 31, 2002, and the related statements of operations, changes in stockholders'
  equity, and cash flows for the years ended March 31, 2002 and 2001. These financial
  statements are the responsibility of the Company's management. Our responsibility
  is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
  in all material respects, the financial position of Nation Energy, Inc. as of
  March 31, 2002, and the results of its operations, and its cash flows for the
  years ended March 31, 2002 and 2001, in conformity with accounting principles
  generally accepted in the United States of America.

As disclosed in Note 8 to the financial statements, the Company has restated
  the financial statements as of March 31, 2001 to correct for an error in recording
  contributed services and an asset impairment.

Stark Winter Schenkein & Co., LLP

Denver, Colorado
  June 28, 2002

---

Nation
          Energy, Inc.Balance
          SheetMarch
          31, 2002ASSETSCurrent
          assets:Cash
      
      
      
      
      $
            1,385,254Prepaid
          expenses
      
      
      
      
      5,1181,390,372Unproved
          oil and gas properties - full cost method
      
      
      1,743,518$
            3,133,890LIABILITIES
          AND STOCKHOLDERS' EQUITYCurrent
          liabilities:Accounts
          payable
      
      
      
      
      $
                13,733Accounts
          payable - related party
      
      
      
      
      13,82727,560Stockholders'
          equity:Preferred
          stock, $.001 par value; 5,000,000shares
          authorized; none outstanding
      
      
      
      
      -Common
          stock, $.001 par value; 50,000,000shares
          authorized; 16,020,000 shares issuedand
          outstanding
      
      
      
      
      16,020Additional
          paid-in capital
      
      
      
      
      6,868,380Accumulated
          (deficit)
      
      
      
      
      (3,778,070)3,106,330$
            3,133,890 The accompanying notes are an integral part of the financial
    statements


---

Nation
          Energy, Inc.Statements
          of OperationsFor
          the Year EndedMarch
          31, 2001March
          31, 2002
      
      (restated)Revenue:
      
      
      
      $
                           -
      
      $
                           -Costs
          and expenses:General,
          selling and administrative
      
      
      
      194,154
      
      107,520Stock
          compensation expense
      
      
      
      1,250,000
      
      -Write
          down of unproved oil and gas properties
      
      
      
      1,370,678
      
      738,675Total
          costs and expenses
      
      
      
      2,814,832
      
      846,195Other
          income (expense)Interest
          income
      
      
      
      35,701
      
      -Net
          (loss)
      
      
      
      $
               (2,779,131)
      
      $
                  (846,195)Per
          share information:Weighted
          average number of commonshares
          outstanding - basic and diluted
      
      
      
      11,184,384
      
      8,127,240Net
          (loss) per common share - basic and diluted
      
      
      
      $
                       (0.25)
      
      $
                       (0.10) The accompanying notes are an integral part of the financial
    statements


---

Nation
          Energy, Inc.Statement
          of Changes in Stockholders' EquityCommon
          Stock
      
      Additional
      
      Common
      
      
      
      TotalNumber
          of
      
      
      
      Paid-in
      
      Stock
      
      Accumulated
      
      Stockholders'Shares
      
      Amount
      
      Capital
      
      Subscriptions
      
      (Deficit)
      
      EquityBalance
          March 31, 2000
      
      
      7,170,000
      
      $
           7,170
      
      $
            762,230
      
      $
           3,500,000
      
      $
            (152,744)
      
      $
           4,116,656Common
          stock subscribedfor
          at $1.00 per share
      
      
      -
      
      -
      
      -
      
      350,000
      
      -
      
      350,000Contribution
          of services byrelated
          party
      
      
      -
      
      -
      
      15,000
      
      -
      
      -
      
      15,000Issuance
          of common stocksubscribed
          for
      
      
      3,850,000
      
      3,850
      
      3,846,150
      
      (3,850,000)
      
      -
      
      -Net
          (loss) for the year
      
      
      -
      
      -
      
      -
      
      -
      
      (846,195)
      
      (846,195)Balance
          March 31, 2001
      
      
      11,020,000
      
      11,020
      
      4,623,380
      
      -
      
      (998,939)
      
      3,635,461Issuance
          of common stockat
          $0.45 per share
      
      
      5,000,000
      
      5,000
      
      2,245,000
      
      -
      
      -
      
      2,250,000Net
          (loss) for the year
      
      
      -
      
      -
      
      -
      
      -
      
      (2,779,131)
      
      (2,779,131)Balance
          March 31, 2002
      
      
      16,020,000
      
      $16,020
      
      $6,868,380
      
      $
                      -
      
      $(3,778,070)
      
      $
           3,106,330 The accompanying notes are an integral part of the financial
    statements


---

Nation
          Energy, Inc.Statements
          of Cash FlowsFor
          the Year EndedMarch
          31, 2001March
          31, 2002
      
      (restated)Cash
          flows from operating activities:Net
          (loss)
      
      
      
      
      $
               (2,779,131)
      
      $
                  (846,195)Adjustments
          to reconcile net (loss) to net cashprovided
          by (used in) operating activities:Contribution
          of services recorded as additional paid-in capital
      
      -
      
      15,000Stock
          compensation expense
      
      
      
      
      1,250,000
      
      -Write
          down of unproven oil and gas properties
      
      
      
      
      1,370,678
      
      738,675Decrease
          (increase) in prepaid expenses
      
      
      
      
      (5,118)
      
      100,632Increase
          in accounts payable
      
      
      
      
      1,403
      
      3,127Increase
          (decrease) in accounts payable - related party
      
      
      
      
      (1,400)
      
      15,227Net
          cash provided by (used in) operating activities
      
      
      
      
      (163,568)
      
      26,466Cash
          flows from investing activities:Purchase
          of unproved oil and gas properties
      
      
      
      
      (1,743,518)
      
      (1,978,475)Net
          cash (used in) investing activities
      
      
      
      
      (1,743,518)
      
      (1,978,475)Cash
          flows from financing activities:Proceeds
          from common stock issuances
      
      
      
      
      1,000,000
      
      350,000Net
          cash provided by financing activities
      
      
      
      
      1,000,000
      
      350,000Net
          (decrease) in cash
      
      
      
      
      (907,086)
      
      (1,602,009)Beginning
          cash
      
      
      
      
      2,292,340
      
      3,894,349Ending
          cash
      
      
      
      
      $
                1,385,254
      
      $
                2,292,340Supplemental
          cash flow information:Cash
          paid for interest
      
      
      
      
      $
                           -
      
      $
                           -Cash
          paid for income taxes
      
      
      
      
      $
                           -
      
      $
                           - The accompanying notes are an integral part of the financial
    statements


---

Nation Energy, Inc.
  Notes to Financial Statements
  March 31, 2002

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization The Company was incorporated on April 19, 1988, in the State of Florida as
    Excalibur Contracting, Inc.  The Company was reincorporated as a Delaware
    corporation and changed its name to Nation Energy, Inc. in February 2000. 
    The Company is an oil and gas drilling company in the exploration stage and
    currently has no operations. Fair Value of Financial Instruments Fair value estimates discussed herein are based upon certain market assumptions
    and pertinent information available to management as of March 31, 2002. 
    The respective carrying value of certain on-balance-sheet financial instruments
    approximated their fair values.  These financial instruments include
    cash and accounts payable.  Fair values were assumed to approximate carrying
    values for these financial instruments because they are short term in nature
    and their carrying amounts approximate fair values or they are payable on
    demand. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with a
    maturity of three months or less to be cash equivalents. Net (Loss) per Common Share The Company follows Statement of Financial Accounting Standards (SFAS) 128,
    "Earnings Per Share."  Basic earnings (loss) per common share calculations
    are determined by dividing net income (loss) by the weighted average number
    of shares of common stock outstanding during the year.  Diluted earnings
    (loss) per common share calculations are determined by dividing net income
    (loss) by the weighted average number of common shares and dilutive common
    share equivalents outstanding.  During the periods when they are anti-dilutive,
    common stock equivalents, if any, are not considered in the computation. Impairment of Long-Lived Assets The Company periodically reviews the carrying amount of property, plant and
    equipment and its identifiable intangible 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 judgment is necessary to estimate the fair value of assets; accordingly,
    actual results could vary significantly from such estimates.  Assets
    to be disposed of are carried at the lower of their financial statement carrying
    amount or fair value less costs to sell.


Unproved Oil and Gas Properties The Company follows the full cost method of accounting for oil
    and gas operations whereby all costs associated with the exploration for and
    development of oil and gas reserves, whether productive or unproductive, are
    capitalized.  Such expenditures include land acquisition costs, drilling,
    exploratory dry holes, geological and geophysical costs not associated with
    a specific unevaluated property, completion and costs of well
    equipment.  Internal costs are capitalized only if they can be directly
    identified with acquisition, exploration, or development activities. 
    As of March 31, 2002, the Company has not capitalized any internal costs. Expenditures that are considered unlikely to be recovered are written
    off.  On a quarterly basis the Board of Directors assesses whether or
    not there is an asset impairment.  The current oil and gas exploration
    and development activities are considered to be in the pre-production stage. Segment Reporting The Company follows SFAS 131, "Disclosure about Segments of an Enterprise
    and Related Information".  Certain information is disclosed, per SFAS
    131, based on the way management organizes financial information for making
    operating decisions and assessing performance.  The Company currently
    operates in one business segment and will evaluate additional segment disclosure
    requirements as it expands operations. Estimates The preparation of the Company’s financial statements in conformity
    with accounting principles generally accepted in the United States of America
    requires the Company’s management to make estimates and assumptions
    that affect the amounts reported in these financial statements and accompanying
    notes.  Actual results could differ from those estimates. Stock-Based Compensation The Company accounts for stock based compensation in accordance with SFAS
    123, "Accounting for Stock-Based Compensation." The provisions of SFAS 123
    allow companies to either expense the estimated fair value of stock options
    or to continue to follow the intrinsic value method set forth in Accounting
    Principles Board Opinion 25, "Accounting for Stock Issued to Employees" (APB
    25) but disclose the pro forma effects on net income (loss) had the fair value
    of the options been expensed. The Company has elected to continue to apply
    APB 25 in accounting for its stock option incentive plans. During 2001 the Company adopted a stock option plan.  The Company has
    reserved a total of 2,500,000 shares of common stock related to their stock
    option plan.  As of March 31, 2002, the Company had granted 225,000 stock
    options. The Company has issued its common stock as compensation to non-employees. 
    The Company measures the amount of stock-based compensation as of the earlier
    of (1) the date at which an agreement is reached with the non-employee as
    to the number of shares to be issued for performance, or (2) the date at which
    the non-employees performance is complete. Recent Pronouncements In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS
    141, Business Combinations, and SFAS 142, Goodwill and Intangible
    Assets.  SFAS 141 is effective for all business combinations completed
    after June 30, 2001.  SFAS 142 is effective for the year beginning January
    1, 2002; however certain provisions of that Statement apply to goodwill and
    other intangible assets acquired between July 1, 2001, and the effective date
    of SFAS 142.  The Company has applied the provisions of both SFAS
    141 and 142 to the financial statements for the year ended March 31, 2002. 
    The adoption of SFAS 141 and 142 did not have a material effect on the Company’s
    financial position or results of operations. In July 2001, the FASB issued SFAS 143, Accounting for Asset Retirement
    Obligations.  This statement addresses financial accounting and reporting
    for obligations associated with the retirement of tangible long-lived assets
    and the associated asset retirement costs.  This Statement applies to
    all entities.  It applies to legal obligations associated with the retirement
    of long-lived assets that result from the acquisition, construction, development
    and (or) the normal operation of a long-lived asset, except for certain obligations
    of lessees.  This Statement is effective for financial statements issued
    for fiscal years beginning after June 15, 2002.  The Company is evaluating
    the impact of the adoption of this standard and has not yet determined the
    effect of adoption on its financial position and results of operations. In August 2001, the FASB issued SFAS 144, Accounting for the Impairment
    or Disposal of Long-Lived Assets.  This statement addresses financial
    accounting and reporting for the impairment or disposal of long-lived assets
    and supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets
    and for Long-Lived Assets to Be Disposed Of.  The provisions of the
    statement are effective for financial statements issued for fiscal years beginning
    after December 15, 2001.  The Company is evaluating the impact of the
    adoption of this standard and has not yet determined the effect of adoption
    on its financial position and results of operations. Changes in Presentation of Comparative Financial Statements The accompanying financial statements for the year ended March 31, 2001 have
    been restated to reflect certain reclassifications to be consistent with current
    year presentation. Note 2.  UNPROVED OIL AND GAS PROPERTIES On November 21, 2001, the Company entered into a farm-in agreement with Olympia
    Energy Inc. (the "Farm-in") under which the Company will share the development
    costs and revenues for a natural gas project in the smoky area near Grande
    Prairie, Alberta, Canada (the "Bolton Prospect").  Under the terms of
    the Farm-in the Company will fund 25% of the cost to drill and complete a
    4,800 meter well in the Bolton Prospect and will earn a 15% interest after
    payout in the Bolton Prospect.  Following is a summary of the costs incurred
    on unproved oil and gas properties as of March 31, 2002: Development costs
      $1,743,518 Drilling costs for the Bolton Prospect are estimated to be $7,000,000. 
    Drilling on an initial well began on November 13, 2001, and was expected to
    take approximately 120 days.  The well was drilled to a total depth of
    4,830 meters in March 2002 and has been logged.  The well is currently
    undergoing completion and testing.  The Company has not ascertained the
    status of any oil and gas reserves, which may be recoverable from the well. 
    As of March 31, 2002, the Company had advanced a total of $1,743,518 under
    the Farm-in agreement with Olympia Energy, Inc. towards the drilling and development
    costs of the initial well at the Bolton Prospect. The Company was actively involved in one project during the year ended March
    31, 2001, in the Greater Trona Prospect located in southeastern Wyoming. 
    Following is a summary of the costs incurred on unproved oil and gas properties
    as of March 31, 2001: Acquisition of unproved properties
      $    401,290Exploration costs
      830,621Development costs
      944,442Less asset impairments:  2000
      (  67,000)Less asset impairments:  2001
      (738,675)$ 1,370,678 The initial principal activity for the Company was 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.  The Company elected to proceed with the joint venture. As of December 31, 2000 the Company had participated in the drilling of 23
    wells in the Greater Trona area. During February 2001, the Company hired an
    independent engineer to evaluate the Greater Trona project.  Based on
    the recommendations in this report, the Company negotiated a sale of its interests
    in the Greater Trona area to VRD Inc. This agreement was signed on February
    28 2001. The Company attempted to obtain the approval of the shareholders
    of the transactions contemplated in the Purchase and Sale Agreement with VRD,
    Inc.  The Company obtained clearance from the SEC to distribute the Schedule
    14A to the shareholders on September 26, 2001; however, by the time of the
    SEC clearance, the Purchase and Sale Agreement had expired in accordance with
    its terms and VRD, Inc. was unwilling to proceed with the transaction. The Board of Directors concluded that as of March 31, 2001 there
    was an asset impairment related to the unproved oil and gas properties related
    to drilling activities within the Greater Trona Area.  For the year ended
    March 31, 2001 the Company wrote down drilling costs of $738,675 (See Note 8). The Company entered into a Quitclaim, Release and Assumption Agreement, dated
    December 6, 2001, with VRD, Inc. and Saurus Resources, pursuant to which the
    Company disposed of any and all interests that it held in the oil and gas
    leases located in the Greater Trona Area of Sweetwater County, Wyoming. 
    As a result, the Company wrote off the remaining value, $1,370,678, of the
    properties during the year ended March 31, 2002. Note 3.  CONCENTRATIONS OF CREDIT RISK The Company’s funds in U.S. banks are federally insured up to $100,000. 
    As of March 31, 2002, the funds deposited exceed this insured amount by $290,963. 
    In addition, the Company has deposits in a Canadian bank of $994,291 at March
    31, 2002. Note 4.  STOCKHOLDERS’ EQUITY The Company began a private placement on March 1, 2000.  The private
    placement offered 4,500,000 shares of common stock at a price of $1.00 per
    share.  The private placement closed on January 22, 2001 with a total
    of 3,850,000 shares subscribed.  The subscribed shares were also issued
    during January 2001. The Company has received services from a related party with an estimated
    value of $15,000 for the year ended March 31, 2001.  The Company has
    recorded the value of the services received as a charge to operations and
    as additional paid-in capital. On March 20, 2002, the Company issued 5,000,000 shares of its common
    stock at a price of $0.20 per share through a private placement.  The
    fair market value of the stock on that date was $0.45.  The difference
    between the fair market value and the issue price was recorded as stock compensation
    expense of $1,250,000. Note 5.  STOCK BASED COMPENSATION The Company has a compensatory stock option plan. Under the plan, the Company
    may grant options for up to 2,500,000 shares of common stock. The exercise
    price of each option shall be determined by the Compensation Committee or
    by the CEO with reference to factors such as current fair market value of
    the common stock, net book value per share, regular or other remuneration
    already being received by the optionee. The maximum term of the options is
    five years and they vest on the date granted.  As of March 31, 2002,
    225,000 options have been granted to employees. Summarized information relative to the Company’s stock option plan
    is as follows: Number of
      Weighted AverageShares
      Exercise PriceOutstanding at March 31, 2001
      -
      $      -Granted
      225,000
      1.00Exercised
      -
      -Forfeited
      -
      -Outstanding at March 31, 2002
      225,000
      $1.00 The option for 225,000 shares expires in 2006. The effect of applying SFAS No. 123 pro forma net (loss) is not necessarily
    representative of the effects on reported net income (loss) for future years
    due to, among other things, the vesting period of the stock options and the
    fair value of additional stock options in future years.  The fair values
    of the options granted during the year ended March 31, 2002, are estimated
    at $0.30 on the date of grant using the Black-Scholes option pricing model
    with the following assumptions: no dividend yield, volatility of 30%, a risk-free
    interest rate of 5.0%, and expected lives of 5 years from date of vesting. For purpose of pro forma disclosure, the estimated fair value of the options
    is charged to expense in the year that the options were granted.  The
    Company’s pro forma information is as follows: Pro forma net (loss)
      $(2,847,000)Pro forma (loss) per share –Basic and diluted
      $(0.25) Note 6.  INCOME TAXES The Company accounts for income taxes under SFAS 109, "Accounting for Income
    Taxes", which requires use of the liability method.  SFAS 109 provides
    that deferred tax assets and liabilities are recorded based on the differences
    between the tax bases of assets and liabilities and their carrying amounts
    for financial reporting purposes, referred to as temporary differences. 
    Deferred tax assets and liabilities at the end of each period are determined
    using the currently enacted tax rates applied to taxable income in the periods
    in which the deferred tax assets and liabilities are expected to be settled
    or realized. The types of temporary differences between the tax basis of assets and their
    financial reporting amounts that give rise to a significant portion of the
    deferred tax asset are as follows: ReconcilingItem
      Tax EffectNet operating loss carryforward
      $3,778,000
      $1,284,500 The net operating loss carryforward will expire through 2022.  The deferred
    tax asset has been fully reserved at March 31, 2002.  The change in the
    valuation allowance during the year ended March 31, 2002 was $944,900. The provision for income taxes differs from the amount computed by applying
    the statutory federal income tax rate of 34% to income before income taxes
    due to the effect of the net operating loss.  The net operating loss
    negates any provision for income taxes. Note 7. RELATED PARTY TRANSACTIONS During the year ended March 31, 2001, the Company incurred expenses of $5,000
    on quarterly basis for administrative services provided by a related party. 
    The Company recorded $15,000, as additional paid-in capital related to this
    agreement.  In January 2001, the Company entered into a verbal agreement
    with the related party to receive administrative services on a month to month
    basis for monthly payments of $3,000 plus reimbursement of direct costs. 
    At March 31, 2002 the Company has accrued $13,827 of expense related to this
    agreement. In March 2002, the Company entered into a verbal agreement with a related
    party in which the related party will provide management services on a month
    to month basis for $1,200. The Company had a subscription for 3,000,000 shares of its common stock at
    $1.00 per share from a company of which an officer and director of Nation
    Energy is also a director. The subscription was converted into common stock
    during January 2001. Note 8. CORRECTION OF AN ERROR The accompanying financial statements for the year ended March 31, 2001 have
    been restated to correct an error in recording services contributed by a related
    party and an asset impairment related to the Company’s unproved oil
    and gas properties.  The value of the services provided by the related
    party was estimated at $15,000.  The asset impairment was estimated to
    be $738,675.  The effect of the restatement was to decrease net income
    by $753,675.  The effect on net (loss) per common share was to increase
    net (loss) per common share from $(0.01) to $(0.10).




---

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

Not applicable.

## PART III

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

Directors and Executive Officers

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

As at June 21, 2002, our directors and executive officers, their ages, positions
  held, and duration of such, are as follows:

Name
      Position Held with our Company
      Age
      Date First
          Elected or AppointedDonald A. Sharpe
      President, Chief Executive Officer and Director
      44
      June 4, 1999John R. Hislop
      Chairman of the Board, Vice-President, Chief Financial
          Officer, Secretary and Director
      49
      June 4, 1999


Business Experience

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

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

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

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

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

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

Committees of the Board

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

Family Relationships

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

Involvement in Certain Legal Proceedings

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

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

Section 16(a) Beneficial Ownership Compliance

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

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

### Item 10. Executive Compensation.

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

|                                                  |      | Annual Compensation | Long Term
        Compensation(1) | Pay-
        outs                                     
|------------------------------------------------- | ---- | ------------------- | --------------------------------- | ------------------------------------------------------
|Name and Principal
        Position               | Year | Salary              | Bonus                             | Other
        Annual
        Compen-
        sation(2)
|Donald Sharpe
        President, CEO and Director | 2002 | $Nil                | Nil                               | $1,255(1)                                             

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

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

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

Employment/Consulting Agreements

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

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



Stock Options/SAR Grants

The following grants of stock options or stock appreciation rights were made
  during the fiscal year ended March 31, 2002 to our named executive officers:

OPTIONS GRANTED TO OUR NAMED EXECUTIVE OFFICER
  IN THE YEAR ENDED MARCH 31, 2002

Name
      Number of Shares
          of Common Stock
          Underlying Options
          Granted
      % of Total
          Options
          Granted(1)
      Exercise
          or Base Price
          ($/Share)
      Expiration DateDonald Sharpe
      150,000
      60%
      $1.00
      July 20, 2006John Hislop
      75,000
      40%
      $1.00
      July 20, 2006


(1)The
  total number of options to purchase common shares granted to employees/consultants/officers/directors
  during the fiscal year ended March 31, 2002 was 225,000.

VALUE OF THE OPTIONS GRANTED IN THE YEAR ENDED MARCH 31, 2002

Name
      Shares
          Acquired on
          Exercise (#)
      Value
          Realized
          ($)
      Number of Shares
          of Common Stock
          Underlying
          Unexercised
          Options as
          March 31, 2002
          Exercisable/
          Unexercisable
      Value of
          Unexercised
          In-the-Money
          Options at
          March 31, 2002
          Exercisable /
          Unexercisable(1)Donald Sharpe
      Nil
      Nil
      150,000 exercisable
      NilJohn Hislop
      Nil
      Nil
      75,000 exercisable
      Nil


(1) The closing price on March 31, 2002 was $0.85.

Long-Term Incentive Plans

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

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

Directors Compensation

We reimburse our directors for expenses incurred in connection with attending
  board meetings but did not pay director's fees or other cash compensation for
  services rendered as a director in the year ended March 31, 2002.

No cash compensation was paid to any of our directors for the director's services
  as a director during the fiscal year ended March 31, 2002.  We have no
  standard arrangement pursuant to which our directors are compensated for their
  services in their capacity as directors except for the granting from time to
  time of incentive stock options.  The board of directors may award special
  remuneration to any director undertaking any special services on behalf of our
  company other than services ordinarily required of a director.  Other than
  indicated below, no director received and/or accrued any compensation for his
  services as a director, including committee participation and/or special assignments.

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

Principal Stockholders

The following table sets forth, as of March 31, 2002, certain information with
  respect to the beneficial ownership of our common stock by each stockholder
  known by us to be the beneficial owner of more than 5% of our common stock,
  as well as by each of our current directors and executive officers.  Each
  person has sole voting and investment power with respect to the shares of common
  stock, except as otherwise indicated.  Beneficial ownership consists of
  a direct interest in the shares of common stock, except as otherwise indicated.

Name and Address of Beneficial Owner
      Amount and Nature of
          Beneficial Ownership(1)
      Percentage
          of Class(1)Jeffrey L. Taylor
          500 N. Rainbow Blvd., Suite 300
          Las Vegas, NV  89107
      2,512,800
      16.7%Cubix Investments Ltd.(2)
          Suite 1100, 609 West Hastings Street
          Vancouver, BC  Canada  V6B 4W4
      5,000,000
      31.2%Sextan Capital, Inc.(2)
          Suite 1100, 609 West Hastings Street
          Vancouver, BC  Canada  V6B 4W4
      3,000,000
      18.7%Donald Sharpe
      150,000
      1.0%John Hislop
      75,000
      0.6%Directors and Executive Officers as a Group
      250,000
      1.6%


(1)Based on 16,020,000 shares
  of common stock issued and outstanding as of March 31, 2002.  Except as
  otherwise indicated, we believe that the beneficial owners of the common stock
  listed above, based on information furnished by such owners, have sole investment
  and voting power with respect to such shares, subject to community property
  laws where applicable.  Beneficial ownership is determined in accordance
  with the rules of the SEC and generally includes voting or investment power
  with respect to securities.  Shares of common stock subject to options
  or warrants currently exercisable, or exercisable within 60 days, are deemed
  outstanding for purposes of computing the percentage ownership of the person
  holding such option or warrants, but are not deemed outstanding for purposes
  of computing the percentage ownership of any other person.

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

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

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

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

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

Reports of Form 8-K

On November 29, 2001, we filed a current report on Form 8-K announcing that
  we had entered into the Farm-in Agreement with Olympia Energy, Inc. pursuant
  to which we will share the development costs and profits in a new natural gas
  project in the Smoky area of Alberta.  We finalized the agreement on November
  27, 2001.

On December 5, 2001, we filed a current report on Form 8-K announcing a private
  placement of 5,000,000 shares at $0.20 per share for total proceeds of $1,000,000.

On March 26, 2002, we filed a current report on Form 8-K announcing an update
  on the Meota Olympia et al Bolton well located at 09-09-59-02-W6M.

Financial Statements Filed as Part of the Annual Report

The following Financial Statements pertaining to Nation Energy are filed as
  part of this annual report:

> Independent Auditors' Report 
>     Balance Sheet
>     Statements of Operations
>     Statement of Changes in Stockholders' Equity
>     Statements of Cash Flows
>     Notes to the Financial Statements

Exhibits Required by Item 601 of Regulation S-B

Exhibit Number and Description

(2)          Plan of Purchase,
  Sale, Reorganization, Arrangement, Liquidation or Succession

2.1         Purchase and Sale Agreement
  dated February 28, 2001 (incorporated by reference from our Consent Solicitation
  Statement on Schedule 14A filed with the SEC on April 26, 2001)

(3)          Articles of Incorporation/Bylaws

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

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

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

(10)          Material Contracts

10.1         Joint Operating Agreement
  with Saurus Resources, Inc. dated December 1, 1999 (incorporated by reference
  from our Registration Statement on Form 10-SB filed with the SEC on March 31,
  2000) 10.2         1999 Stock Option Plan
  (incorporated by reference from our Registration Statement on Form 10-SB filed
  with the SEC on March 31, 2000)
10.3         Quitclaim Release and
  Assumption Agreement with Saurus Resources, Inc. and VRD, Inc., dated December
  6, 2001 (incorporated by reference from our Quarterly Report on Form 10-QSB
  filed with the SEC on  February 14, 2002).
10.4         Farm-in Agreement with
  Olympia Energy Inc., dated November 21, 2001 (incorporated by reference from
  our Quarterly Report on Form 10-QSB filed with the SEC on February 14, 2002).
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
  caused this report to be signed on its behalf by the undersigned, thereunto
  duly authorized.
NATION ENERGY, INC.
  a Delaware corporation
/s/ Donald Sharpe
  ______________________________
  By: Donald Sharpe, President, CEO
  and Director
Date: June 29, 2002
In accordance with the Exchange Act, this report has been signed below by the
  following persons on behalf of the registrant and in the capacities and on the
  dates indicated.
Signatures
/s/ Donald Sharpe
  _____________________________________
  Donald Sharpe, President,
  Chief Executive Officer and Director
Date: June 29, 2002
/s/ John Hislop
  _____________________________________
  John Hislop,  Chairman of the Board,
  Chief Financial Officer and Director
Date: June 29, 2002