SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

                          FORM 10-KSB/A

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

           For the fiscal year ended:   June 30, 2001

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

             COMMISSION FILE NUMBER:   000 - 30254.

              SHANNON INTERNATIONAL RESOURCES INC.
(Exact name of small business issuer as specified in its charter)

         Nevada                             98-02049656
   (State or other jurisdiction                 (IRS Employer
          of incorporation)                Identification No.)

      4020 7th Street, S.W., Calgary, Alberta      T2G 2Y8
  (Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:(403) 543-0970

Securities registered under Section 12(b) of the Exchange Act:
NONE.

 Securities registered under Section 12(g) of the Exchange Act:

                  Common Stock, $.001 par value
                        (Title of class)

    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 No __X___

    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. [X]

     State issuer's revenues for its most recent fiscal year.$-0-

    As of June 30, 2001, 10,050,000 shares of Common Stock of the
Registrant were deemed outstanding.  (See Item 11).  The
aggregate market value of the voting and non-voting common equity
stock held by non-affiliates of the registrant as of October 15,
2001: $391,500 (See Item 5)

          Documents incorporated by reference:   None.

Transitional Small Business Disclosure Format (check one): YES
NO X

Exhibit index on consecutive page 24          Page 1 of 38 Pages


                            GLOSSARY


The following is a glossary of oil and gas terms used in this
Annual Report:

alluvial, fluvial and lacustrine strata Sedimentary rock
deposits.

basin                                   A synclinal
                                        structure, roughly
                                        circular in its
                                        outcrop pattern, in
                                        which beds dip gently
                                        toward the center
                                        from all directions.

bituminous coal                         A   soft  grade  of
                                        coal commonly mined
                                        for  use  by  coal-
                                        fired, electric
                                        power generation
                                        plants.

borehole data                           Geological data
                                        compiled by
                                        exploratory
                                        drilling.

carboniferous period                    The period spanning a
                                         time interval of 70
                                        million years, from
                                        360 million to 290
                                        million years ago.

carboniferous system                    Rocks that were
                                        formed or deposited
                                        during the
                                        Carboniferous period
                                        including Old Red
                                        Sandstone;
                                        Mountain Limestone;
                                        Millstone Grit and
                                        Shale and the Coal
                                        Measures.

coalification                           The geological
                                        process whereby coal
                                        is formed.

coal measures                           The uppermost
                                        division of the Upper
                                        Carboniferous rocks
                                        consisting of a
                                        repetitive sequence
                                        of marine and
                                        nonmarine strata.
                                        Productive coal
                                        deposits occur in the
                                        marine strata and
                                        consist largely of
                                        soft, bituminious
                                        coal.

coal seam                               Layer of coal
                                        enclosed in other
                                        sedimentary
                                        layers.

fault systems                           Large fractures of
                                        the subsurface rock
                                        strata.

permeabilities                          The   degree    to
                                         which  the  porous
                                        space    can    be
                                        filled with gas or
                                        liquid.

permian period                          The period spanning a
                                        time interval of 50
                                        million years, from
                                        290 million to 240
                                        million years ago.

                                        The rocks of this
                                        period are rich in
                                        deposits of coal,
                                        oil and gas.

porosities                              The molecular open
                                        space within rock.

seismic data                            Geological data
                                        compiled by
                                        measuring
                                        underground
                                        movement caused
                                        by test
                                        explosions.

trending fault systems                  Large fractures of
                                        the subsurface rock
                                        strata.

working interest                        The interest held by
                                        a company in an oil
                                        or natural gas
                                        property, which
                                        bears its
                                        proportionate share
                                        of the costs of
                                        exploration,
                                        development, and
                                        operation as well as
                                        any royalties or
                                        other production
                                        burdens.


                             Part I.

Item 1. DESCRIPTION OF BUSINESS


Shannon International Resources, Inc. (the "Company") was
incorporated on February 17, 1999 under the laws of the
State of Nevada for the purpose of financing and owning oil
and natural gas development properties. During February and
March 1999, the Company sold a total of 8,000,000 shares of
common stock for gross proceeds of $80,000. During March
1999, the Company sold 2,000,000 shares of common stock to
CMB Energy Corp. ("CMB Energy") in exchange for a 25%
working interest in petroleum, natural gas and coalbed
methane leases (Oil and Natural Gas Permit No. 9606)
covering 116,279 acres of Prince Edward Island, Canada (the
"Working Interest"). As a result of the acquisition of the
Working Interest, CMB Energy became the Company's largest
shareholder. See "Item 11. Security Ownership of Certain
Beneficial Owners and Management." Additionally, CMB Energy
owns 25% of the Prince Edward Island working interest. As
the Company's largest shareholder and the owner of 25% of
the Prince Edward Island working interest, at this time CMB
Energy is able to exert
significant influence on the Company.

CMB Energy is a closely held private company located in
Toronto, Ontario, and is owned by the following companies:
Regal Tours Atlantic, Inc. (owned by Laughlin MacLean) and
the Calder Company, Ltd., each owning 25% of CMB Energy,
and Investimo S.A., which owns the remaining 50% of CMB
Energy.

During the quarter ended June 30, 2001, the Company loaned
US$35,000 to
Calgary Chemical, a privately held Alberta corporation. Blair
Coady, the Company's President, is also President of Calgary
Chemical. During October 2000, Calgary Chemical repaid $7,714.
During December 2000, the Company paid Calgary Chemical's invoice
by the Company's cancellation of a note receivable of $24,656
issued for general and administrative expenses.  See Financial
Statements, Note 4.

BUSINESS OF ISSUER

The Company holds a 25% working interest in petroleum, natural
gas and coalbed methane leases in Prince Edward Island, Canada.
See "Item 2. Description of Property."  The Working Interest
acquired from CMB Energy gives the Company the right to receive
25% of any income derived from the property covered in the lease.
In exchange for the right to receive income, the Company has an
obligation to pay 25% of the costs of exploration, development
and production of the property. The agreement between the Company
and CMB Energy granted the Company the option to acquire an
additional 12.5% of the Working Interest by the expenditure of
Cdn.$1,500,000, by October 2000, a second option to acquire a
further 12.5% of the Working Interest by the expenditure of
Cdn.$1,500,000, by October 2001 and the right to enter into a
joint venture agreement with the holder or holders of the
remaining 50% of the Working Interest, by the expenditure of
Cdn.$3,000,000, on the property until August 2002. The agreement
between the Company and CMB Energy was amended on August 18, 2000
to extend the first option to acquire a further 12.5% of the
Working Interest by the expenditure of Cdn. $1,500,000 to August
18, 2001 and to extend the second option to acquire a further
12.5% of the Working Interest by the expenditure of Cdn.
$1,500,000 to August 18, 2002.

The Company did not exercise its first option to acquire
up to an additional 12.5% of the Working Interest from
CMB Energy, for the expenditure of approximately
Cdn.$1,500,000, by August 18, 2001.  Therefore this option, along
with a similar second option expiring on August 18, 2002, were
cancelled.  See:  Item 12, "Acquisition of Working Interest."

At this time, the Company does not have sufficient cash to
fund an exploration project. The Company intends to seek a
joint venture partner to conduct and fund the exploration
and development of the Prince Edward Island property by the
completion of a private placement. CMB Energy
will have to agree to any joint venture partner. The Company
makes no
assurances that a joint venture partner will be found or,
if one is found, that the joint venture will be successful.

The Company intends to raise funds through a private equity
offering in order to fund
the exploration of the Working Interest and its portion
of the ongoing lease payments, described below.  If the Company
is not successful in raising the necessary equity, it will remain
unable to cover these costs.  To
date, the Company has been unable to raise any
significant additional funding and there is no assurance
the Company will be able to raise any additional funds
in the future. Any financing program conducted by the Company
will most likely result in the issuance of additional
shares of common stock which will dilute the ownership
interests of the Company's current shareholders.

The Company and CMB Energy are obligated to maintain the
leases in good standing by the expenditure of Cdn.$5,814
per year. The Company's portion of this obligation is
Cdn.$1,453, the next payment of which was due and paid
on or about July 5, 2001.


The Company has no revenues from operations and essentially
no working capital. Until the Company is able to raise
additional funds for its operating and overhead costs, the
Company will be unable to meet its existing financial
obligations. The Company will have to raise sufficient funds to
conduct an exploration program, of which there are no
assurances. Management believes that the general and
administrative expenses, capital and operating expenditures
related to the implementation of an exploration program is
approximately Cdn.$3,000,000, of which the Company may be
expected to provide up to Cdn.$750,000. As of October 31,
2001 an exploration program has not been formalized. See
"Item 6. Management's Discussion and Analysis or Plan of
Operations."

PRINCIPAL PRODUCTS OR SERVICES AND MARKETS

The Company hopes to locate a joint venture partner and
raise capital to participate in exploration activities to
locate natural gas. The principal
target markets  are
natural gas transmission pipeline companies, utilities and
private end-users, which purchase the natural gas from pipeline
companies.

COMPETITIVE BUSINESS CONDITIONS, COMPETITIVE POSITION
IN THE INDUSTRY AND METHODS OF COMPETITION

The Company's planned petroleum and natural gas exploration
activities in Prince Edward Island will be undertaken in a highly
competitive and speculative business atmosphere. The Company does
not intend to be the operator of the Working Interest and,
therefore, will not be required to own any equipment. The Company
and CMB Energy intend to seek a joint venture partner to provide
the necessary equipment and personnel to begin
exploration of the Working Interest. There is significant
competition in the exploration business and the Company is an
insignificant participant. The Company will have to raise capital
to
participate in an exploration program. There are a significant
number of
companies seeking funding for exploration programs, many which
are more developed than the Company. Given its size, lack of
working capital and the lack of exploration on the Working
Interest, the Company may have difficulty raising additional
capital.

GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL LAWS

As of June 30, 2001, the Company does not offer or
sell any products or services and is not subject to
material government regulations; however it, or any
venture in which it participates, will be required to
obtain permits for drilling oil or gas wells.

Exploration and production activities relating to oil and
gas leases are subject to extensive regulation for the
protection of the environment by the Canadian Federal
Government and the Provincial Government where acreage is
located. The Company must submit exploration and, if
warranted, development plans to the Department of the
Environment for the Province of Prince Edward Island for
approval prior to the execution of such plans. Compliance
with environmental regulation may be expected to result in
Cdn.$50,000, of estimated expenses once an exploration
program is implemented. Environmental protection expenses
are expected to include the cost of site preparation such
as road construction, fencing and earthen berms or
retaining walls to contain potential overflows or spillage
of oil or drilling fluids. If production is begun, the
temporary measures must be made permanent, if production is
not warranted, the temporary measures must be removed and
the land restored to its prior condition.

The Company believes it is presently in compliance with all
applicable environmental laws, rules or regulations;
however, future legislation may have an adverse impact on
the Company's present and contemplated business operations.

The foregoing is a brief summary of the regulations and
legislation to which the Company is subject to by virtue of its
operations and activities.  The Company cannot predict what
impact any future environmental laws, rules or regulations would
have on business operations.  But given that the Company operates
in a highly regulated industry and historically such operations
are of a high profile from the standpoint of environmental
groups, studies and advocates, the impact could be substantial.

RESEARCH AND DEVELOPMENT

As of June 30, 2001, the Company has not spent any money on
research and development.

EMPLOYEES

The Company has no full time employees.  Blair Coady, the sole
officer
and director of the Company, will not be devoting all of his time
to
the affairs of the Company, but will be devoting such time
required to
effectively manage the Company.


Item 2. Description of Property.

The Company holds a 25% working interest in petroleum, natural
gas and coalbed methane leases in Prince Edward Island, Canada.
The portion of the Working Interest acquired from CMB Energy
gives the Company the right to receive 25% of any income derived
from the property covered in the lease. In exchange for the
right to receive income, the Company has an obligation to pay 25%
of the of exploration, development and production costs of the
property. See
"Item 1. Description of Business."

Prince Edward Island, where the Working Interest is located, lies
in the southwestern part of a large, mainly non- marine,
Carboniferous to Permian area called the Maritimes Basin. The
basin
fill consists of fluvial, alluvial, lacustrine and minor marine
strata.
Seismic and borehole data suggest Prince Edward Island is
underlain
by coal measures strata, as estimated by the Geological Survey of
Canada. The
offshore extension of the coal measures basin strata containing
up to 20 to 25 coal seams, ranging in thickness between 0.6 to 3
meters (2 to 10 feet) with a
net coal thickness from 15 to 40 meters (48 to 131 feet). The
coal
rank is bituminous, and calculated theoretical gas capacity
values
for eastern Canadian coals range form 14.4 to 17.08 cubic meters
per
gram of coal. Structural features associated with major northeast
trending
faults systems and salt deposits may have created favorable
permeability
conditions for enhanced coal-bed methane recovery. Source rock
studies
indicate that the early Carboniferous rocks are oil prone with
more than
2% total oil capacity and greater than 5 milligrams per gram of
rock.
Conversely, the upper Carboniferous rocks are mainly gas prone.
In addition,
excess coal gas expelled during coalification may have charged
nearby reservoirs.
Porosities up to 25% and favorable permeabilities have been
reported from the lower
Carboniferous rocks, whereas porosities up to 15% have been
reported for the upper
Carboniferous rocks. The Prince Edward Island property is not
currently producing
oil or gas and has no proven reserves.

UNDEVELOPED ACREAGE

As of June 30, 2000 and June 30, 2001, the Company,
directly or indirectly, held undeveloped acreage as
follows:

                                     June 30, 2000     June 30,
2001
                         __________________  ___________________

Undeveloped Acres:

        Gross                    116,279
116,279

        Net                         29,070
29,070

DRILLING ACTIVITIES

As of June 30, 2001, there are no drilling or
present activities on the Working Interest.

PRINCIPAL OFFICES

The Company's offices are located at #4020, 7 Street S.W.,
Calgary, Alberta T2G 2Y8. The offices are provided by
Calgary Chemical on a month-to-month basis at no cost to
the Company. Blair Coady, the Company's President, is also
the president of Calgary Chemical.


Item 3. Legal Proceedings.

There is no action, suit or proceeding before or by any
court of governmental agency or body, domestic or foreign,
now pending or, to the knowledge of the Company,
threatened, against or affecting the Company, or any of its
properties, business affairs or business prospects of the
Company.


Item 4. Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of security holders during
the
Company's fiscal year ended June 30, 2001, either through the
solicitation of proxies or otherwise.



                               PART II


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's common stock is not listed for sale on any
exchange or trading medium.  The Company intended to seek
the listing of its Common Stock on the OTC Electronic
Bulletin Board upon the effectiveness of its Form 10-SB.
The Form 10-SB was effective on November 5, 1999,
however, as of October 31, 2000 the Company had found no
market maker for the Company's shares and shortly
thereafter, Management abandoned its search temporarily.
Therefore, as of October 15, 2001, there is no public
market for the Company's common stock. As of October 15,
2001 there were approximately 35 holders of the Company's
common stock.  The Company remains committed to obtaining a
listing for its common stock on the OTC Electronic Bulletin
Board.  To this end, the Company intends to undertake a private
placement equity offering in the first half of fiscal 2002.
Thereafter, the Company will again evaluate the viability of
making an application to obtain such a listing to facilitate the
trading of its common stock.

As of October 15, 2001, the aggregate market value of the
voting and non-voting common equity stock held by non-
affiliates of the Company was $391,500. Calculation of this
value is based on an issuance of the Company's common stock
at a value of $0.05 per share in exchange for consulting
services on July 20, 2000. As of October 31, 2000 there
were 7,830,000 shares of common stock held by non-
affiliates of the Company.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.

OVERVIEW

The Company holds a 25% working interest in petroleum,
natural gas and coalbed methane leases in Prince Edward
Island, Canada. See "Item 1. Description of Business."
Until the Company engages in financing activities or finds
a joint venture partner, the Company will be unable to
undertake any exploration of the Working Interest.

The Company intends to follow the full cost method of
accounting for oil and gas properties. Presently, the full
cost method is inapplicable because the Company has not
commenced its oil and gas activities. The Company is deemed
to be in the development stage. Under the full cost method
of accounting for oil and gas properties, all costs
associated with acquisition, exploration and development of
oil and gas reserves, including directly related overhead
costs, are capitalized.

All capitalized costs of oil and gas properties, including
the estimated future costs to develop proved reserves, are
amortized on the unit-of-production method using estimates
of proved reserves. Investments in unproved properties and
major development projects are not amortized until proved
reserves associated with the projects can be determined or
until impairment occurs. If the results of an assessment
indicate that the properties are impaired, the amount of
the impairment is added to the capitalized costs to be
amortized. In addition, the capitalized costs are subject to a
"ceiling test," which basically limits such costs to the
aggregate of the "estimated present value," discounted at
a ten percent interest rate of future net revenues from
proved reserves, based on current economic and operating
conditions, plus the lower of cost or fair market value
of unproved properties.

Sales of proved and unproved properties are accounted for
as adjustments of capitalized costs with no gain or loss
recognized, unless such adjustments would significantly
alter the relationship between capitalized costs and proved
reserves or oil and gas, in which case the gain or loss is
recognized in income.

Abandonment of properties is accounted for as adjustments
of capitalized costs with no loss recognized.

PLAN OF OPERATION

As of June 30, 2001, the Company had current assets of $60
cash.  The Company has not engaged in any exploration activities
on the Working Interest, nor does the Company have the funds
necessary to purchase equipment for exploration. See:  The
Company does not intend to be the operator of the exploration
program and, therefore, it will not have to purchase equipment
for exploration.  The
Company will not be able to satisfy its cash requirements
for the next twelve months and will have to raise
additional funds and find a joint venture partner to engage
in exploration activities of the Working. See "Item
1. Description of Business."

The Company is engaged in discussion concerning the
formation of a joint venture for exploratory drilling.
There is drilling activity in the general area of the
Company's Working Interest, which is expected to create
increased interest in the exploration of the Company's
leases and lead to the formation of a joint venture
exploratory drilling program.
Though no assurances can be given, this program is expected
to provide for the drilling of exploration or test wells to
determine whether there is sufficient reserves of oil or
gas to then develop a program to establish production.
Management believes that sufficient reserves would be such
reserves that the sale of oil and gas from the area at the
current market prices would repay the cost of exploration
and development of the area within a reasonable time as
well as provide profitable production for a period of time
consistent with industry standards. Exploratory data
determining the size and pressures of reserves as well as
the necessary drilling depth and other drilling factors
effecting production cost must first be obtained and then
analyzed before a final determination may be made that
there are "sufficient" reserves to justify production. A
joint venture with another company would most likely result
in the Company paying its proportionate share of the costs and,
most likely, would not result in a significant reduction in the
Company's interest in the
Prince Edward Island property.

Management believes that the general and administrative
expenses, capital and operating expenditures related to the
implementation of such a program is approximately
Cdn.$3,000,000, of which the Company may be expected to
provide up to Cdn.$750,000. The Company intends to raise
this capital through the private placement or public
offering of securities. In the event the Company is unable
to pay its obligations under its existing 25% Working
Interest, its working interest can be proportionally
reduced in favor of whatever working interest partner pays
the delinquent amount. Each working interest partner must
approve the expenditures and provide funding in order to remain a
working interest partner. The Company expects that the
approval for expenditures will set forth the specific costs
for site preparation and drilling for the specific sites
for test wells and that these costs will vary due to
different conditions such as drilling depth and whether
drilling is to be through relatively soft sedimentary
layers or dense rock layers.

The Company believes that no expenditure of funds will be
required until the Company receives an offer to participate in an
exploration program. As of October 31, 2001, the Company has not
received any offers to participate in an exploration program. If
and when the Company receives an offer to participate in an
exploration program, the Company believes its expenditures will
be primarily in paying its proportional share of the cost of a
third party contractor or operator which will conduct an
exploration program. Once all or most of the working interest
holders agree to initiate an exploration program and select the
third party contractor or operator, the Company expects that the
third party contractor will draft a proposed exploration program
and submit a request to approve the necessary expenditures.

The Company filed a Form 10-SB registration statement on
November 5, 1999 in order to establish itself as a fully
reporting company under the Securities Exchange Act of
1934, as amended. On the basis of the public information
provided in the registration statement filed on November
5, 1999, the Company intended to seek a listing of its
common stock on the OTC Electronic Bulletin Board. See
"Item 5. Market for Common Equity and Related Stockholder
Matters." As of October 31, 2000, the Company's stock is
not listed on the OTC Electronic Bulletin Board. It is the
Company's belief that an independent market for its common
stock will be advantageous to the Company by establishing
an objective measure of value for the common stock.

The Company's business plan is to raise additional capital
through private placements or public offerings of its
equity securities and use the capital to pay its
proportional share of the costs of development of its
Working Interest. The Company has not established any
limitations on the amount or price for the Company's
securities if the Company is successful in establishing a
market. The Company does not, however, intend to sell such
securities as would result in a change in voting control
of the Company.

YEAR ENDED JUNE 30, 2001

RESULTS OF OPERATIONS

During the year ended June 30, 2001, the Company recorded a
net loss of $38, 716, a loss of less than $0.01 per common
share. The Company has not yet generated any revenues. The
$43,074 in total expenses consisted of
professional fees in the amount of $15,341 and administrative
expenses in the amount of $27,733.

The Company's current assets at June 30, 2001, consisted of
$60 in cash.  As of June 30,
2001, the Company had working capital of $9,777, compared
to working capital of $26,439 at June 30, 2000.

The Company completed equity financing totaling $80,000
during the period ended June 30, 1999. Of the proceeds
from the offering, $35,000 was loaned to Calgary
Chemical, a portion was used to pay for offering costs
and expenses as described above, and the remainder was
allocated for general working capital.

LIQUIDITY

At present, the Company is not producing revenues and its
main source of funds has been the sale of the Company's
equity securities. The Company had $1,614.45 in cash and
receivables and other current assets as of October 15,
2001. In April and June of 1999, the Company made loans in
the amount of $35,000, to Calgary Chemical, an affiliate.
As of June 30, 2001 the Company had a
loan receivable in the amount of $28,011. During December, 2000,
the Company paid Calgary Chemical by cancellation of the note
receivable,
including partial repayment and unamortized loan discounts.  See
Note 4 to Financial Statements
and "Item 12, Certain Relationships and Related Transactions."

The Company will need to raise additional capital to meet
its ongoing overhead obligations and to finance an
exploration program. Such funding may be obtained through
sale of additional securities. If the Company is unable to
obtain sufficient funds, the Company may seek development
partners and increase funds available to the Company
through the sale of some portion of its Working Interest.
The ability of the Company to sell a portion of the
Working Interest is not a certainty and the proceeds
derived from such sale will be subject to the ongoing
economic viability of the project. Any decision to locate
a development partner or to sell a portion of the Working
Interest must be approved by CMB Energy.


ITEM 7. FINANCIAL STATEMENTS.

Please refer to the pages beginning with F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
        ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE.

There have been no changes in and/or disagreements with the
accountants on any accounting and financial disclosure.

                              PART III

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

The officers and directors of the Company are as follows:

        Blair Coady    President and Director since February 18,
        1999.

Mr. Coady, is the sole officer and director of the Company.
Since June 2001 to present, Mr. Coady has served as an officer
and director of Rally Energy Corporation, a publicly held company
engaged in oil and gas exploration.  See:  Item 12, Certain
Relationships and Related Transactions.  Mr. Coady commits
approximately eighty percent of his time to Rally's operations.
Mr. Coady is elected
to serve until the next annual shareholders' meeting or
until his successors are elected and qualified. Mr. Coady
will hold the office of President until the meeting of the
Board of Directors immediately following the next annual
shareholders' meeting or until removed.

BLAIR COADY (AGE 61): Mr. Coady is the Company's sole
officer and director. He served as the President and
Chairman of the Board of Wolf Industries, Inc., a publicly held
management company with interests in the oil and gas industry,
from August
1996 to April 1998. Since October 1996, Mr. Coady has been
the President and Chief Executive Officer of Calgary
Chemical, a privately-held custom blender of petroleum
production chemicals. Mr. Coady devotes approximately ten percent
of his time to Calgary Chemical's operations.  From May 1999 to
June 2001, Mr. Coady has served
as a director of Autoco.com Inc., a publicly held
corporation. From 1992 to 1995
Mr. Coady served as Chairman of the Board of Earthwhile
Developments Inc., a Canadian corporation involved in waste
management, specifically solvent recycling, bioremediation
and composting.

CONFLICTS OF INTEREST

Blair Coady, the Company's President is associated with
other firms involved in a range of business activities.
Consequently, there are potential inherent conflicts of
interest in his acting as sole officer and director of the
Company. Insofar as Mr. Coady is engaged in other business
activities, he anticipates devoting as much time to the
Company's affairs as is reasonably needed. The Company does
not currently have a right of first refusal pertaining to
opportunities that come to Mr. Coady's attention insofar as
such opportunities may relate to the Company's business
operations.

Mr. Coady, in addition to being President and sole director
of the Company, is also the sole officer and director of
Calgary Chemical. On April 29, 1999, the Company entered
into a loan transaction with Calgary Chemical. See "Item
12. Certain Relationships and Related Transactions."
Accordingly, direct conflicts of interest may arise in the
future with respect to Mr. Coady acting on behalf of the
Company or other entities. Moreover, additional conflicts
of interest may arise with respect to opportunities which
come to the attention of Mr. Coady in the performance of
his duties or otherwise.

Mr. Coady, so long as he is an officer or director of the
Company, is subject to the restriction that all
opportunities contemplated by the Company's plan of operation
which come to his attention, either in the
performance of his duties or in any other manner, will be
considered opportunities of, and be made available to the
Company and the companies that he is affiliated with on an
equal basis. A breach of this requirement will be a breach
of the fiduciary duties of the officer or director. If the
Company or the companies in which Mr. Coady is affiliated
with both desire to take advantage of an opportunity, then
Mr. Coady would abstain from negotiating and voting upon
the opportunity. However, Mr. Coady may still individually
take advantage of opportunities if the Company should
decline to do so. Except as set forth above, the Company
has not adopted any other conflict of interest policy with
respect to such transactions.

PROMOTERS

The Company's sole Director, Blair Coady, is the Company's
founder and promoter. Darrin Campbell, President of CMB
Energy Corp., may also be considered a promoter of the
Company.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons
who own more than 100 of a registered class of the
Company's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Blair Coady and CMB Energy were each required to file an
Initial Statement of Beneficial Ownership of Securities on
Form 3 at the time of the registration of the Company's
securities under Section 12(g) of the Exchange Act
(November 5, 1999). Mr. Coady filed the Form 3 Initial
Statement of Beneficial Ownership on or about April 28,
2000. To the best knowledge and belief of the Company, CMB
Energy has not made a timely filing on Form 3. None of such
persons filed a report on Form 5 for the fiscal year ended June
30, 2001, nor for
June 30, 2000. To the best of the Company's knowledge no
reports have been filed by any persons who owned 10% or
more of the Company's registered equity securities.


ITEM 10.       EXECUTIVE COMPENSATION.

The following table sets forth information for Blair
Coady, the Company's sole executive officer and director
during the fiscal year ended June 30, 2001.

                   SUMMARY COMPENSATION TABLE

              Annual Compensation         Long-Term
                                        Compensation

 Name
 And
Princi
 pal
Positi  Yea
  on    r

 (a)    (b)
                                        Awards     Payou
                                                   ts

                                                            All
             Salary                                        Other
               ($)    Bonus  Other                         Compe
               (c)     ($)                                   n-
                       (d)   Annua                         satio
                               l                             n
                             Compe                          ($)
                             nsati                          (i)
                               on
                              ($)
                              (e)


                                            Secur
                                    Restri  ities
                                     cted   Under   LTIP
                                     Stock  lying  Payou
                                    Award(  Optio    ts
                                      s)     ns/    ($)
                                      ($)    SARs   (h)
                                      (f)    (#)
                                             (g)
Blair
Coady,
CEO,    200    -0-     -0-    -0-    -0-     -0-    -0-     -0-
CFO &   1
Presid
ent
Blair
Coady,
CEO,    200    -0-     -0-    -0-    -0-     -0-    -0-     -0-
CFO &   0
Presid
ent


The Company does not have any employment contracts with
Mr. Coady. At June 30, 2001, Mr. Coady did not hold any
options to acquire shares of the Company's stock.

STOCK OPTION PLANS

The Company has a Stock Option Plan, entitled the "Shannon
International Resources, Inc, 1999 Stock Option Plan" (the
"Plan"). Its purpose is to advance the business and
development of the Company and its shareholders by
affording to the employees, officers, directors and
independent contractors or consultants to the Company, the
opportunity to acquire a proprietary interest in the
Company by the grant of options to such persons under the
Plan's terms. The effective date of the plan was June 1,
1999. Article 3 of the Plan provides that the Board shall
exercise its discretion in awarding options under the Plan,
not to exceed 1,000,000 shares. The per share option price
for the stock subject to each option shall be as the Board
may determine. All options must be granted within ten years
from the effective date of the Plan. There is no express
termination date for the options although the Board may
vote to terminate the Plan. Under the Plan, there have been
no options granted.

EMPLOYMENT AGREEMENTS

Blair Coady, the Company's sole officer and director does
not have an employment agreement and does not presently
draw a salary. The Company expects that as and when
additional funding or revenue is obtained and the time Mr.
Coady devotes to the Company's affairs increases, a salary
and other compensation such as stock options will be
adopted. It is anticipated that Mr. Coady's future
compensation will be determined by an outside director and
will be submitted to the shareholders for approval.

DIRECTORS' COMPENSATION

Blair Coady, the Company's sole officer and director, is
reimbursed for actual expenses incurred in attending
Board meetings.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

The following table sets forth information, as of June 30, 2001,
with respect to the beneficial ownership of the
Company's common stock by each person known by the Company
to be the beneficial owner of more than five percent of the
outstanding Common Stock and by the sole officer and
director of the Company.

NAME AND ADDRESS OF BENEFICIAL     AMOUNT OF SHARES BENEFICIALLY
OWNER
OWNED



CMB Energy
2,220,000 shares
common
stock (1)
McLeod Dixon 1800-121 King
Street W
Toronto, ON M5H 3T9

Blair Coady
-0


Officers and Directors, as a Group
-0

(1 person)

(1) Includes 220,000 shares registered in the name of
Laughlin MacLean, but does not include 200,000 shares held
by Gus MacLean, Laughlin MacLean's uncle in which he
disclaims beneficial ownership. Mr. MacLean is the
beneficial owner of 25% of CMB Energy. Calder Company,
Ltd., a closely held corporation is also a 25% owner of CMB
Energy, and Investimo S.A., a closely held corporation owns
the remaining 50% of CMB Energy.


(2) Based on 10,050,000 shares of common stock
outstanding as of June 30, 2001.


CHANGES OF CONTROL

As of June 30, 2001, there are no arrangements known to
the Company which may at a subsequent date result in a
change of control of the Company .

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The Company's President and sole director, Blair Coady, is
also the Company's founder and promoter. In anticipation
of additional directors, the Company's By-Laws include a
provision regarding related party transactions which
requires that each participant to such transaction
identify all direct and indirect interests to be derived
as a result of the Company's entering into the related
transaction. A majority of the disinterested members of
the Company's Board of Directors must approve any related
party transaction. As ofJune 30, 2001, Mr. Coady, the
Company's sole director, is only accountable to the
shareholders for any related party transaction he may
enter into.
As of June 30, 2001, Mr. Coady served as president and chief
executive officer of Rally Incorporated.  As of October 15, 2001,
Mr. Coady serves as Rally's vice president and director.  Rally
is a Calgary based energy company which holds, as of October 15,
2001, a forty percent working interest in seven exploration
permits covering 642,000 acres located on-shore Prince Edward
Island.  These permits are the same permits in which the Company
maintains an ownership interest.  The permits include full
shallow and deep rights for conventional hydrocarbons and coal
bed methane within the Magdalen Basin.  Rally's business plan
includes developing drilling activities within the permit sites.
Mr. Coady commits approximately eighty percent of his business
time to Rally's endeavors.

On March 31, 1999, the Company issued 750,000 shares of
common stock to Danford Management, Ltd. ("Danford
Management") in consideration for the services of Blair
Coady as the Company's President in the formation of the
Company. Danford Management is a corporation beneficially
owned by the adult sons of Mr. Coady. Mr. Coady is neither
an officer, director or shareholder of Danford Management
and disclaims beneficial ownership in these shares. These
shares were issued to Danford Management as part of Mr.
Coady's estate planning. The Company believes that
compensation paid for Mr. Coady's services was reasonable
and less than the compensation Mr. Coady could have
received for comparable employment for which he is
qualified.

ACQUISITION OF WORKING INTEREST

On or about February 18, 1999, the Company entered into a
Working Interest Acquisition Agreement with CMB Energy.
The Company agreed to purchase a 25% working interest in a
block of petroleum, natural gas and coal bed methane
leases, located on Prince Edward Island of Canada for
consideration of 2,000,000 treasury shares of the Company's
common stock. The shares has an ascribed value of $0.015
per share for a total consideration of $30,000. In addition
to the 25% working interest, the Company was also granted
an option to acquire an additional 12.5% of the Working
Interest by the expenditure of Cdn.$1,500,000, by October
2000, a second option to acquire a further 12.5% of the
Working Interest by the expenditure of Cdn.$1,500,000, by
October 2001 and the right to enter into a joint venture
agreement with the holder or holders of the remaining 50%
Working Interest, by the expenditure of Cdn.$3,000,000, on
the property until August 2002. The agreement between the
Company and CMB Energy was amended on August 19, 2000 to
extend the first option to acquire a further 12.5% of the
Working Interest by the expenditure of Cdn. $1,500,000 to
August 19, 2001 and to extend the second option to acquire
a further 12.5% of the Working Interest by the expenditure
of Cdn. $1,500,000 to August 18, 2002.  As the first option was
not exercised by August 19, 2001, it expired.  Consequently, the
second option to be exercised by August 19, 2002, was cancelled
because it was contingent upon the exercise of the first option.

CMB Energy acquired its interest in the Prince Edward Island
property on or about November 23, 1998 when CMB Energy entered
into a Purchase and Joint Venture Agreement with Prince Edward
Gas Company Inc. ("Prince Edward Gas"). CMB Energy acquired a 50%
interest in the Prince Edward Island property in exchange for
400,000 common shares of Rally Energy Corp. ("Rally") and 400,000
options to purchase common shares of Rally, each option
exercisable to purchase one common share of Rally for Cdn.$1.50
until November 22, 2000. The value of Cdn.$1.50 ascribed to the
Rally shares was based upon the market price for said shares as
then quoted by the Canadian Dealing Network, a Canadian over-the-
counter market. CMB Energy also has the option to earn an
additional 25% interest through the expenditure of Cdn.$3,000,000
on the property on or before November 22, 2001 and a right to
purchase, at any time, an additional 25% interest in the property
for the purchase price of Cdn.$5,000,000.

LOANS MADE TO SHAREHOLDERS/AFFILIATES.

On April 30, 1999, the Company loaned US$30,000 to Calgary
Chemical, an Alberta corporation of which Blair  Coady  is
the  president.  On  June 3, 1999, the Company  loaned  an
additional US$5,000 to Calgary Chemical.

As at June 30, 2000, loans receivable consisted of
unsecured non interest bearing notes which are due on
demand. The first note, dated April 13, 1999 had a
principal balance outstanding of $27,370. The second note,
dated June 3, 1999, had a principal balance outstanding of
$5,000. These loans were repaid during October and December 2000.
See:  Financial Statements, Note 4.  The loans have been
discounted on an imputed
interest rate of 8.5% assuming repayment in one year from
the date of issuance. The loans were made to Calgary
Chemical, an Alberta corporation, of which Blair Coady, the
Company's President, is also the President.

The Company's offices are located at the offices of
Calgary Chemical at 4020 7th St. SE, Calgary, Alberta, T2G 2Y8.

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

(a) Exhibits:

REGULATION             EXHIBIT                        CONSECUTIVE
S-B NUMBER
PAGE

NUMBER
       3.1 Articles of Incorporation(1)
N/A
       3.2 Bylaws(1)
N/A
       4.1 1999 Stock Option Plan (1)
     10.1 Working Interest Acquisition
N/A
             Agreement(1)
     10.2 Purchase and Joint Venture Agreement(1)       N/A


REGULATION
CONSECUTIVE
S-B NUMBER             EXHIBIT
PAGE

NUMBER
10.3       Oil and Natural Gas Permit No. 96-06              N/A
              (1)
10.4      Amendment to Working Interest Acquisition      34
             Agreement (1)
10.5      Promissory Note with 714674 Alberta Ltd.         35
          (April 1999) (1)
10.6     Promissory Note with 714674 Alberta Ltd. (June 36
                             1999) (1)

(1)     Incorporated by reference to the exhibits to the
        Company's registration statement in Form 10-SB
        (file number 000-30254)

(b)    The following reports on Form 8-K were filed during
       the last quarter of the period covered by this
       report:







                         C O N T E N T S

                                                             Page

Independent Accountants' Report                               27

Financial Statements

            Balance Sheets                                    28

     Statement of Operations                                  29

     Statement of Stockholder's Equity                        30

     Statement of Cash Flows                                  32

Notes to Financial Statements                                33 -
                                                              37







              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

                 Independent Accountants' Report


Board of Directors
Shannon International Resources, Inc.



     We  have  audited the accompanying balance sheets of Shannon
International Resources, Inc. (a Development Stage Company) as of
June  30,  2001 and June 30, 2000, and the related statements  of
operations,  stockholders' equity, and cash flows for  the  years
ended  June  30, 2001 and June 30, 2000, and for the period  from
February  17, 1999 (inception) to June 30, 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 audit.

     We conducted our audit in accordance with generally accepted
auditing  standards  in  the United  States  of  America.   Those
standards  require that we plan and perform the audit  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  made  by
management, as well as evaluating the overall financial statement
presentations.  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  Shannon  International Resources, Inc. ( a Development  Stage
Company) as of June 30, 2001 and June 30, 2000 and the results of
its  operations and its cash flows for the years ended  June  30,
2001 and June 30 2000, and for the periods from February 17, 1999
(inception)  to  June  30,  2001, in  conformity  with  generally
accepted accounting principles in the United States of America.

     The  accompanying  financial statements have  been  prepared
assuming  that the Company will continue as a going  concern.  As
described  in  Note 2, the Company has suffered  prior  operating
losses  since inception that raise substantial doubts  about  its
ability to continue as a going concern.  The financial statements
do not include any adjustments that might result from the outcome
of this uncertainty.


/S/ Miller and McCollom

MILLER AND McCOLLOM
4350 Wadsworth Boulevard, Suite 300
Wheat Ridge, Colorado
October 3, 2001
              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

                         Balance Sheets

                             ASSETS

                                            June 30,      June 30,
                                            2001          2000
CURRENT ASSETS
  Cash                                      $    60       $    79
  Loans receivable affiliate net of
discount of $4,359 at                           -        28,011
June 30, 2000
    Total current assets                         60        28,090

OIL AND GAS PROPERTIES
  Unevaluated oil and gas properties
(using the full cost method) (Note 3)      45,000        45,000

    Total assets                            $45,060       $73,090

               LIABILITIES AND STOCKHOLDERS EQUITY

CURRENT LIABILITIES
  Accounts payable                          $ 2,407       $ 1,651
  Shareholder advances                        7,430             -
    Total current liabilities                 9,837         1,651

COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' EQUITY
  Common stock - 200,000,000 shares of
$.001 par value
 authorized; 10,050,000 and 10,000,000     10,050        10,000
shares issued
 and outstanding at June 30, 2001 and
2000
  Additional paid-in capital                 82,749        80,299
  Deficit accumulated during development    (57,576)      (18,860)
stage

      Total stockholders' equity           35,223        71,439

Total liabilities and stockholders' equity  $45,060       $73,090
              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

                    Statements of Operations
For the years ended June 30, 2001 and June 30, 2000, and for the
                             period
       February 17, 1999 (inception) through June 30, 2001


                                                        February
                              For the      For the      7, 1999
                                year        year       (Inception
                               ended        ended      ) to June
                              June 30,    June 30,      30, 2001
                                2001        2000
Expenses
  Administrative costs       $  27,733    $   3,437    $ 36,236
  Professional fees             15,341        4,891      21,340
     Total expenses             43,074        8,328      57,576

Other Income
  Amortization of loan         (4,358)        2,083           -
discount

Net loss                     $  38,716    $  10,411    $ 57,576

Net loss per share           $       *    $       *    $
                                                       (.01)

Weighted number of shares
outstanding                   10,047,2     10,000,000   10,020,
                             60                        985


*  Less than $.01

















              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

               Statements of Stockholders' Equity
For the years ended June 30, 2001 and June 30, 2000, and for the
                             period
       February 17, 1999 (inception) through June 30, 2001

                                               Accumulat
                       Common Shares  Additio     ed
                                        nal     Deficit
                            Shares    paid-in   during    Total
                         Par Value    capital  developme
                                               nt stage
Balance, February            $    -        $          $  $   -
17, 1999              -               -        -
Common stock issued
for cash on                     300                      3,000
February 26, 1999     300,00          2,700    -
                      0
Common stock issued
for cash on    March            300                      3,000
10, 1999              300,00          2,700    -
                      0
Common stock issued
for cash on    March            150                      1,500
22, 1999              150,00          1,350    -
                      0
Common stock issued
for cash on    March            480                      4,800
25, 1999              480,00          4,320    -
                      0
Common stock issued
for cash on    March          1,555                      15,550
28, 1999              1,555,          13,995   -
                      000
Common stock issued
for cash on    March          1,240                      12,400
29, 1999              1,240,          11,160   -
                      000
Common stock issued
for cash on    March          1,320                      13,200
30, 1999              1,320,          11,880   -
                      000
Common stock issued
for services   on                20                        200
March 30, 1999        20,000          180      -
Common stock issued
for cash on    March          1,885                      18,850
31, 1999              1,885,          16,965   -
                      000
Common stock issued
for services   on               750                      7,500
March 31, 1999        750,00          6,750    -
                      0
Common stock issued
for oil and    gas            2,000                      30,000
properties on March   2,000,          28,000   -
31, 1999              000

Offering costs                    -                      (19,7
                      -               (19,701  -         01)
                                      )

Net loss for period
ended                             -                      (8,44
 June 30, 1999        -               -        (8,449)   9)

Balance, June 30,            10,000                      (81,8
1999                  10,000          80,299   (8,449)   50)
                      ,000


Net loss for the
year ended                        -                      (10,4
  June 30, 2000       -               -        (10,411)  11)

Balance, June 30,            10,000                      71,439
2000                  10,000          80,299   (18,860)
                      ,000

Common stock issued
for services   on                50                      2,500
July 20, 2000         50,000          2,450    -
Net loss for the
year ended                        -                      (38,7
 June 30, 2001        -               -        (38,716)  16)

Balance, June 30,            $10,050       $          $  $35,2
2001                  10,050          82,749   (57,576)  23
                      ,000
              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)
                    Statements of Cash Flows

                                                         February 17,
                                                             1999
                             Year Ended    Year ended    (Inception)
                              June 30,      June 30,          to
                                2001          2000         June 30,
                                                             2001
Operating Activities:
  Net loss                     $(38,716)    $(10,411)      $(57,576)
  Reconciling adjustments
   Amortized of discount         (4,358)       2,083              -
  Change in assets and
liabilities
   Accounts payable and            8,186     (1,469)          9,837
advances
   Prepaid expenses                    -          47              -

   Total adjustments               3,828         661          9,837

   Net cash used for            (34,888)     (9,750)       (47,739)
operation activities

Investing activities
  Acquisition of oil and gas           -           -       (15,000)
properties
  Loans receivable                     -           -       (35,000)
   Net cash (used in)                  -           -       (50,000)
investing activities

Financing activities
  Issuance of common stock         2,500           -         74,800
  Offering costs                       -           -       (12,001)
  Receipts from Loans             32,369       2,631         35,000
Receivable
   Net cash provided by
financing                         34,869       2,631         97,799
    activities

Net change in cash and cash         (19)     (7,119)             60
equivalents
Cash at beginning of period           79       7,198              -
Cash at end of period          $      60    $     79       $     60

Supplemental disclosure of cash flow
information

  Cash paid during the
period for:
   Interest                    $       -    $      -       $      -
   Income taxes                $       -    $      -       $      -

Supplemental schedule of
noncash investing
  and financing activities
  Issuance of 770,000 shares
of common      stock for       $       -    $      -       $  7,700
services
  Issuance of 2,000,000
shares of common               $       -    $      -       $ 30,000
stock for oil and gas
properties
  Issuance of 50,000 shares
of common           stock      $   2,500    $      -       $  2,500
for services
              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

                  Notes to Financial Statements
                     June 30, 2001 and 2000


Note 1 - Summary of Significant Accounting Policies

This  summary  of  significant  accounting  policies  of  Shannon
International  Resources,  Inc.,  is  presented  to   assist   in
understanding  the Company's financial statements. The  financial
statements  and  notes  are  representations  of  the   Company's
management   who   is   responsible  for  their   integrity   and
objectivity.  These  accounting  policies  conform  to  generally
accepted  accounting principles in the United States  of  America
and  have  been  consistently applied in the preparation  of  the
financial  statements.  The financial statements  are  stated  in
United States of America dollars. The Company has chosen June  30
as  its  fiscal  year.  Certain changes have  been  made  to  the
statement  of  operations for the year ending June 30,  2000,  to
conform to account classifications.

Organization

The  Corporation was incorporated pursuant to the  provisions  of
the  corporate  charter of the State of Nevada  on  February  17,
1999.

The  Corporation's primary business activity is the  acquisition,
development and production of coalbed methane properties  in  the
province   of  Prince  Edward  Island,  Canada.  Currently,   the
Corporation  only  has  an interest in non-producing  properties.
The Corporation is in the development stage and it has no revenue
from oil and gas activities.

Use of Estimates

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

Cash and Cash Equivalents

For  purposes  of  the  statements of  cash  flows,  the  Company
considers  all  highly liquid debt instruments with  an  original
maturity of three months or less to be cash equivalents.

Earnings (Loss) Per Share

Earnings (loss) per share of common stock are computed based on
weighted average number of common shares outstanding during the
period.

              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

                  Notes to Financial Statements
                     June 30, 2001 and 2000


Notes 1 - Summary of Significant Accounting Policies, Continued

Estimated Fair Value of Financial Instruments

The carrying value of cash, loans receivable, accounts payable,
and shareholder advances reflected in the financial statement
approximates fair value due to the short-term maturity of the
instruments.

 Comprehensive Income

The Company adopted Statement of Financial Accounting Standards
("FAS") No. 130, "Reporting Comprehensive Income".  FAS No. 130
requires that the components and total amounts of comprehensive
income be displayed in the financial statements beginning in
1998.  Comprehensive income includes net income and all changes
in equity during a period that arises from non-owner sources,
such as foreign currency items and unrealized gains and losses on
certain investments in equity securities.  Immaterial amounts of
currency translation have been added to administrative costs.
The Company does not have any components of comprehensive income
other than net income.

Accounting for Oil and Gas Operations

The  Company intends to follow the full cost method of accounting
for  oil and gas properties.  Presently, the full cost method  is
inapplicable because the Company has not commenced  its  oil  and
gas   activities.   Accordingly,  all   costs   associated   with
acquisition,  exploration,  and  development  of  oil   and   gas
reserves,   including  directly  related  overhead   costs,   are
capitalized

All capitalized costs of oil and gas properties, including the
estimated future costs to develop proved reserves, are amortized
on the unit-of-production method using estimates of proved
reserves.  Investments in unproved properties and major
development projects are not amortized until proved reserves
associated with the projects can be determined or until
impairment occurs.  If the results of an assessment indicate that
the properties are impaired, the amount of the impairment is
added to the capitalized costs to be amortized.

In  addition,  the capitalized costs are subject  to  a  "ceiling
test," which basically limits such costs to the aggregate of  the
"estimated  present  value," discounted at a 10-percent  interest
rate  of  future  net  revenues from proved  reserves,  based  on
current economic and operating conditions, plus the lower of cost
or fair market value of unproved properties.

              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

                  Notes to Financial Statements
                     June 30, 2001 and 2000


Accounting for Oil and Gas Operations, Continued

Sales  of  proved  and unproved properties are accounted  for  as
adjustments of capitalized costs with no gain or loss recognized,
unless   such   adjustments   would   significantly   alter   the
relationship between capitalized costs and proved reserves of oil
and gas, in which case the gain or loss is recognized in income.

Abandonment  of  properties is accounted for  as  adjustments  of
capitalized costs with no loss recognized.

Note 2 - Basis of Presentation - Going Concern

The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles in the
United States of America, which contemplates continuation of the
Company as a going concern.  However, the Company has sustained
prior operating losses since inception.  This fact raises
substantial doubt about the Company's ability to continue as a
going concern.  Management is attempting to obtain capital to
develop the properties or locate a business combination
candidate.

Note 3 - Oil and Gas Properties

The  Corporation,  by letter agreement dated February  18,  1999,
acquired a 25% interest in 116,279 acres of non-producing oil and
gas  properties in the province of Prince Edward Island,  Canada.
This  interest  was acquired by the issuance of 2,000,000  common
shares at an agreed value of $0.015 per share ($30,000) and  paid
fees related to the acquisition of $15,000.

Note 4 - Related Party Transactions

During the quarter ended June 30, 1999, the company loaned
Calgary Chemical Company (Calgary) (an Alberta corporation of
which Mr. Coady, the President of Shannon, is also the President)
$32,370 evidenced by non-interest hearing notes which were due on
demand. At June 30, 2000 the notes had outstanding balances of
$32,370, and unamortized discount of $4,358.

During  October  2000,  Calgary Chemical  repaid  $7,714.  During
December 2000, the Company paid Calgary Chemical, by cancellation
of  a  note receivable of $24,656, for general and administrative
expenses  included in the accompany statement  of  operations  as
follows:


     General office            $   4,932
     Administrative                7,890
     Consulting                   11,834
     Total                     $  24,656
              SHANNON INTERNATIONAL RESOURCES, INC.
                  (a Development Stage Company)

                  Notes to Financial Statements
                     June 30, 2001 and 2000


Note 4 - Related Party Transactions, Continued

During March, May and June 2001, a shareholder made advances to
the company of $7,430.

Note 5 - Stock Option Plan

The  Company  has  a  Stock Option Plan,  entitled  the  "Shannon
International  Resources,  Inc.  1999  Stock  Option  Plan"  (the
"Plan").   Its purpose is to advance the business and development
of   the  Company  and  its  shareholders  by  affording  to  the
employees,  officers,  directors and independent  contractors  or
consultants  to  the  Company,  the  opportunity  to  acquire   a
proprietary  interest in the Company by the grant of  options  to
such  persons under the Plan's terms.  The effective date of  the
Plan  was June 1, 1999.  Article 3 of the Plan provides that  the
Board shall exercise its discretion in awarding options under the
Plan, not to exceed 1,000,000 shares.  The per share option price
for  the  stock subject to each option shall be as the Board  may
determine.  All options must be granted within ten years from the
effective date of the Plan.  There is no express termination date
for  the  options  although the Board may vote to  terminate  the
Plan. No options have been granted pursuant to the plan.

Note 6 - Income Taxes

No provision for income taxes has been provided in the
accompanying financial statement. The Corporation has a net
operating loss carryforward of $56,799 of which $6,174 will
expire in 2019, $8,328 will expire in 2020, and $42,297 will
expire in 2021. The tax benefit of the net operating loss
carryforward has not been recognized due to the uncertainty of
realization.

The net deferred tax asset due to loss carryforward is as
follows:

            Deferred tax asset             $ 19,312
            Valuation allowance            (19,312)

                                           $      -


Note 7 - Concentration of Risk

The Company's oil and gas properties are located in Prince Edward
Island, Canada.

Note 8 - Commitments and Contingencies

The  corporation,  by letter agreement dated February  11,  1999,
agreed  to pay $10,000 to counsel upon the initiation of  trading
of its' common stock on the NASD Electronic Bulletin.

                            SIGNATURES

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

SHANNON INTERNATIONAL RESOURCES INC.


Dated: October25, 2001                  By: /s/Blair Coady


                                             Blair Coady,
Director, President,
                              Principal Executive Financial and
                              Accounting Officer

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.

Dated: October25, 2001                    By: /s/Blair Coady

                                                    Blair Coady,
Director, President,
                                Principal Executive Financial and
                                Accounting Officer

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