**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**





(Mark
      One)





x QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      quarter ended **March 31, 2007**





OR





o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      transition period from __________ to ______________





COMMISSION
      FILE NUMBER 333-113726




**RADIAL
                ENERGY
                INC.**(Exact
                name of small business issuer as
                specified in its charter)




NEVADA
            72-1580091(State
                or other jurisdiction
              of
                incorporation or
                organization)
            (I.R.S.
                Employer
              Identification
                No.)




1200
                  SMITH STREET, SUITE 1600, HOUSTON, TEXAS
                  77002(Address
                  of principal executive
                  offices)


Issuer's
      telephone number: (713) 353-4963


****(Former
                  address, if changed since last
                  report)





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).
      Yes
o No x





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d)
      of
      the Securities Exchange Act of 1934 during the preceding 12 months (or for
      such
      shorter period that
      the
      registrant was required to file such reports), and (2) has been subject to
      such
      filing requirements for the
      past
      90 days. Yes x No o





Number
      of
      shares outstanding of Registrant's class of common stock as of May 15,
      2007: **44,585,824**





Page
          1




**FORWARD-LOOKING
      STATEMENTS******




This
      Report on Form 10-QSB contains forward-looking statements within the meaning
      of
      the "safe harbor" provisions of the Private Securities Litigation Reform Act
      of
      1995. Reference is made in particular to the description of our plans and
      objectives for future operations, assumptions underlying such plans and
      objectives, and other forward-looking statements included in this report. Such
      statements may be identified by the use of forward-looking terminology such
      as
      "may," "will," "expect," "believe," "estimate," "anticipate," "intend,"
      "continue," or similar terms, variations of such terms or the negative of such
      terms. Such statements are based on management's current expectations and are
      subject to a number of factors and uncertainties, which could cause actual
      results to differ materially from those described in the forward-looking
      statements. Such statements address future events and conditions concerning,
      among others, capital expenditures, earnings, litigation, regulatory matters,
      liquidity and capital resources and accounting matters. Actual results in each
      case could differ materially from those anticipated in such statements by reason
      of factors such as future economic conditions, changes in consumer demand,
      legislative, regulatory and competitive developments in markets in which we
      operate, results of litigation and other circumstances affecting anticipated
      revenues and costs, and the risk factors set forth below under the heading
      "Risk
      Factors." In our Annual report on Form 10-KSB for the fiscal year ended December
      31, 2006, filed on April 2, 2007.





We
      expressly disclaim any obligation or undertaking to release publicly any updates
      or revisions to any forward-looking statements contained herein to reflect
      any
      change in our expectations with regard thereto or any change in events,
      conditions or circumstances on which any such statement is based.





As
      used
      in this Form 10-QSB, "we," "us" and "our" refer to Radial Energy Inc., which
      is
      also sometimes referred to as the "Company."





**YOU
      SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING** **STATEMENTS**





The
      forward-looking statements made in this report on Form 10-QSB relate only to
      events or information as of the date on which the statements are made in this
      report on Form 10-QSB. Except as required by law, we undertake no obligation
      to
      update or revise publicly any forward-looking statements, whether as a result
      of
      new information, future events or otherwise, after the date on which the
      statements are made or to reflect the occurrence of unanticipated events. You
      should read this report and the documents that we reference in this report,
      including documents referenced by incorporation, completely and with the
      understanding that our actual future results may be materially different from
      what we expect or hope.




AVAILABLE
      INFORMATION





Radial
      Energy Inc. files annual, quarterly and current reports, proxy statements and
      other information with the SEC. You may read and copy documents referred to
      in
      this Report on Form 10-QSB that have been filed with the Commission at the
      Commission's Public Reference Room, 100
      F
      Street, N.E. ,
      Washington, D.C. You may obtain information on the operation of the Public
      Reference Room by calling the SEC at 1-800-SEC-0330. You can also obtain copies
      of our SEC filings by going to the SEC website at
      http://www.sec.gov




Page
          2




**PART
      I - FINANCIAL INFORMATION**








**ITEM
      1. FINANCIAL STATEMENTS**







**Radial
      Energy Inc.**


(A
      Development Stage Company)











**Interim
      Financial Statements**


**March
      31, 2007**


**(Stated
      in US Dollars)**


**(Unaudited)**




Page
          3
 
 **Radial
                    Energy Inc.****(A
                    Development Stage Company)****Interim
                    Balance Sheets****(Stated
                    in US Dollars)****(Unaudited)**
   **March
                    31, 2007**
                
                
                **December
                    31, 2006****ASSETS****Current**Cash
                
                $
                887,672
                
                $
                1,926,251Prepaid
                    expenses and deposit (note 6)
                
                
                91,373
                
                
                97,709979,045
                
                
                2,023,960**Deferred
                    acquisition costs**(note 7)
                
                
                41,801
                
                
                28,667**Equipment,**net
                
                
                8,609
                
                
                3,853**Oil
                    and gas properties**(note
                    3)
                
                
                4,025,240
                
                
                2,650,666$
                5,054,695
                
                $
                4,707,146**LIABILITIES
                    and SHAREHOLDERS' EQUITY****Current**Accounts
                    payable and accrued liabilities (note 6)
                
                $
                1,251,137
                
                $
                541,944Notes
                    payable
                
                
                350,000
                
                
                350,0001,601,137
                
                
                891,944**Convertible
                    debentures,**net
                    of discount****(note
                    4)
                
                
                2,332,676
                
                
                2,215,2683,933,813
                
                
                3,107,212**STOCKHOLDERS'
                    EQUITY**Capital
                    stock (notes 5 and 9) 75,000,000 common stock authorized, $0.001
                    par value44,585,824
                    shares issued and outstanding
                
                
                44,586
                
                
                44,586Additional
                    paid in capital - shares
                
                
                2,250,808
                
                
                2,250,808Additional
                    paid in capital - warrants
                
                
                2,291,552
                
                
                2,291,552Additional
                    paid in capital - convertible debentures
                
                
                860,235
                
                
                860,235Deficit
                    accumulated prior to development stage
                
                
                (194,472
                )
                
                (194,472Deficit
                    accumulated during development stage
                
                
                (4,131,827
                )
                
                (3,652,7751,120,882
                
                
                1,599,934$
                5,054,695
                
                $
                4,707,146
 The
            accompanying notes are an integral part of these financial
            statements.
  Page
                4
 
 **Radial
                          Energy Inc.****(A
                          Development Stage Company)****Interim
                          Statements of Operations****For
                          the Periods Ended****(Stated
                          in US Dollars)****(Unaudited)**
 
  **For
                          the three months ended March
                          31,**
                      
                      
                      **Cumulative
                          from April 1, 2006 (Date of
                          Development Stage)****2007**
                      
                      
                      **2006**
                      
                      
                      **to
                        March 31, 2007****Expenses**Amortization
                      
                      
                      313
                      
                      
                      -
                      
                      
                      600Consulting
                          fees
                      
                      
                      -
                      
                      
                      13,954
                      
                      
                      21,466Executive
                          compensation and benefits (note 6)
                      
                      
                      85,200
                      
                      
                      -
                      
                      
                      1,516,400Filing
                          and transfer fees
                      
                      
                      7,808
                      
                      
                      1,981
                      
                      
                      27,569Interest
                          and bank charges
                      
                      
                      12,225
                      
                      
                      473
                      
                      
                      54,355Interest
                          and financing fees on convertible debentures (note 4)
                      
                      
                      117,408
                      
                      
                      -
                      
                      
                      1,452,011Investor
                          relations
                      
                      
                      50,797
                      
                      
                      10,000
                      
                      
                      199,890Marketing,
                          advertising and promotion
                      
                      
                      20,168
                      
                      
                      -
                      
                      
                      103,298Office
                          and administrative
                      
                      
                      60,406
                      
                      
                      2,713
                      
                      
                      162,633Professional
                          fees
                      
                      
                      61,372
                      
                      
                      6,868
                      
                      
                      293,983Travel
                      
                      
                      61,155
                      
                      
                      5,420
                      
                      
                      182,829Loss
                          before other items
                      
                      
                      (476,852
                      )
                      
                      (41,409
                      )
                      
                      (4,015,034
                      )**Other
                          items**Impairment
                          of oil and gas properties (note 3)
                      
                      
                      (2,200
                      )
                      
                      -
                      
                      
                      (116,793
                      )Gain
                          on note payable forgiven
                      
                      
                      -
                      
                      
                      9,407
                      
                      
                      -Not
                          loss from continuing operations
                      
                      
                      (479,052
                      )
                      
                      (32,002
                      )
                      
                      (4,131,827
                      )Income
                          from discontinued operations
                      
                      
                      -
                      
                      
                      8,500
                      
                      
                      -Not
                          loss for the period
                      
                      $
                      (479,052
                      )
                      $
                      (23,502
                      )
                      $
                      (4,131,827
                      )**Loss
                          per share from continuing operations - basic and
                          diluted**
                      
                      
                      **(0.01**
                      **)**
                      
                      **0.00****Income
                          per share from discontinued operations - basic and
                          diluted**
                      
                      
                      **0.00**
                      
                      
                      **0.00****Weighted
                          Average Shares Outstanding**
                      
                      
                      44,585,824
                      
                      
                      87,910,268
 The
                  accompanying notes are an integral part of these financial
                  statements.
  Page
                      5
 
 **Radial
                                Energy Inc.****(A
                                Development Stage Company)****Interim
                                Statement of Shareholders' Equity (Deficiency)****For
                                the period from April 1, 2006 [Date of Development
                                Stage] to March 31,
                                2007****(Stated
                                in US Dollars)****(Unaudited)**
 
  **Accumulated**
                            
                            
                            **Accumulated****Deficit
                                during**
                            
                            
                            **Deficit
                                Prior to**
                            
                            
                            **Total****Common
                                Stock**
                            
                            
                            **Additional
                                Paid-In
                                Capital**
                            
                            
                            **Development**
                            
                            
                            **Development**
                            
                            
                            **Stockholders'****Shares**
                            
                            
                            **Amount**
                            
                            
                            **Shares**
                            
                            
                            **Warrants**
                            
                            
                            **Debentures**
                            
                            
                            **Stage**
                            
                            
                            **Stage**
                            
                            
                            **Equity****Balance,
                                at inception**
                            
                            
                            -
                            
                            $
                            -
                            
                            $
                            -
                            
                            $
                            -
                            
                            $
                            -
                            
                            $
                            -
                            
                            $
                            -
                            
                            $
                            -Stock
                                issued for cash at $0.0000002
                            
                            
                            122,172,000
                            
                            
                            122,172
                            
                            
                            (121,968
                            )
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            204**Balance,
                                December 31, 2000**
                            
                            
                            122,172,000
                            
                            
                            122,172
                            
                            
                            (121,968
                            )
                            
                            -
                            
                            
                            -
                            
                            
                            -
                            
                            
                            -
                            
                            
                            204Stock
                                issued for cash at $0.0025
                            
                            
                            27,108,400
                            
                            
                            27,108
                            
                            
                            40,663
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            67,771Stock
                                issued for cash at $0.05
                            
                            
                            160,000
                            
                            
                            160
                            
                            
                            7,840
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            8,000Net
                                loss for the year
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (69,885
                            )
                            
                            
                            
                            
                            (69,885
                            )**Balance,
                                December 31, 2001**
                            
                            
                            149,440,400
                            
                            
                            149,440
                            
                            
                            (73,465
                            )
                            
                            -
                            
                            
                            -
                            
                            
                            (69,885
                            )
                            
                            -
                            
                            
                            6,090Stock
                                issued for cash at $0.05
                            
                            
                            480,000
                            
                            
                            480
                            
                            
                            23,520
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            24,000Net
                                loss for the year
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (30,090
                            )
                            
                            
                            
                            
                            (30,090
                            )**Balance,
                                December 31, 2002**
                            
                            
                            149,920,400
                            
                            
                            149,920
                            
                            
                            (49,945
                            )
                            
                            -
                            
                            
                            -
                            
                            
                            (99,975
                            )
                            
                            -
                            
                            
                            -Net
                                income for the year
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            108
                            
                            
                            
                            
                            
                            108**Balance,
                                December 31, 2003**
                            
                            
                            149,920,400
                            
                            
                            149,920
                            
                            
                            (49,945
                            )
                            
                            -
                            
                            
                            -
                            
                            
                            (99,867
                            )
                            
                            -
                            
                            
                            108Net
                                loss for the year
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (36,453
                            )
                            
                            
                            
                            
                            (36,453
                            )**Balance,
                                December 31, 2004**
                            
                            
                            149,920,400
                            
                            
                            149,920
                            
                            
                            (49,945
                            )
                            
                            -
                            
                            
                            -
                            
                            
                            (136,320
                            )
                            
                            -
                            
                            
                            (36,345
                            )Stock
                                issued for conversion of convertible debentures at
                                $0.05
                            
                            
                            1,145,424
                            
                            
                            1,146
                            
                            
                            56,125
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            57,271Net
                                loss for the year
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (34,650
                            )
                            
                            
                            
                            
                            (34,650
                            )**Balance,
                                December 31, 2005**
                            
                            
                            151,065,824
                            
                            
                            151,066
                            
                            
                            6,180
                            
                            
                            -
                            
                            
                            -
                            
                            
                            (170,970
                            )
                            
                            -
                            
                            
                            (13,724
                            )Stock
                                returned to treasury
                            
                            
                            (116,000,000
                            )
                            
                            (116,000
                            )
                            
                            87,000
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (29,000
                            )Stock
                                issued for executive compensation at $0.80
                            
                            
                            1,500,000
                            
                            
                            1,500
                            
                            
                            1,198,500
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            1,200,000Stock
                                issued for loan fee at $0.98
                            
                            
                            20,000
                            
                            
                            20
                            
                            
                            19,580
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            19,600Stock
                                issued for cash at $0.25
                            
                            
                            8,000,000
                            
                            
                            8,000
                            
                            
                            1,087,048
                            
                            
                            904,952
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            2,000,000Finders'
                                fees
                            
                            
                            
                            
                            
                            
                            
                            
                            (147,500
                            )
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (147,500
                            )Convertible
                                debentures (note 4)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            1,386,600
                            
                            
                            860,235
                            
                            
                            
                            
                            
                            
                            
                            
                            2,246,835Net
                                loss for the year
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (23,502
                            )
                            
                            (3,652,775
                            )
                            
                            (3,676,277
                            )**Balance,
                                December 31, 2006**
                            
                            
                            **44,585,824**
                            
                            
                            **44,586**
                            
                            
                            **2,250,808**
                            
                            
                            **2,291,552**
                            
                            
                            **860,235**
                            
                            
                            **(194,472**
                            **)**
                            
                            **(3,652,775**
                            **)**
                            
                            **1,599,934**Net
                                loss for the period
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (479,052
                            )
                            
                            (479,052
                            )**Balance,
                                March 31, 2007**
                            
                            
                            **44,585,824**
                            
                            
                            **44,586**
                            
                            
                            **2,250,808**
                            
                            
                            **2,291,552**
                            
                            
                            **860,235**
                            
                            
                            **(194,472**
                            **)**
                            
                            **(4,131,827**
                            **)**
                            
                            **1,120,882**
  The
                        accompanying notes are an integral part of these financial
                        statements.
  Page
                            6
 
 **Radial
                                      Energy Inc.****(A
                                      Development Stage Company)****Interim
                                      Statements of Cash Flows****For
                                      the Periods Ended****(Stated
                                      in US Dollars)****(Unaudited)**
 
  **For
                                      the three months ended March
                                      31,**
                                  
                                  
                                  **Cumulative
                                      from April 1, 2006 (Date of
                                      Development Stage) to****2007**
                                  
                                  
                                  **2006**
                                  
                                  
                                  **March
                                      31, 2007****Cash
                                      Flows from (used in) Operating Activities**Net
                                      loss from operations
                                  
                                  $
                                  (479,052
                                  )
                                  $
                                  (23,502
                                  )
                                  $
                                  (4,131,827
                                  )Items
                                      not affecting cash:-
                                      amortization
                                  
                                  
                                  313
                                  
                                  
                                  -
                                  
                                  
                                  600-
                                      gain on note payable forgiven
                                  
                                  
                                  -
                                  
                                  
                                  (9,407
                                  )
                                  
                                  --
                                      impairment of oil and gas properties
                                  
                                  
                                  2,200
                                  
                                  
                                  -
                                  
                                  
                                  116,793-
                                      stock issued for executive compensation
                                  
                                  
                                  -
                                  
                                  
                                  -
                                  
                                  
                                  1,200,000-
                                      interest accrued for convertible debentures
                                  
                                  
                                  117,408
                                  
                                  
                                  -
                                  
                                  
                                  1,079,511-
                                      stock issued for financing fee
                                  
                                  
                                  -
                                  
                                  
                                  -
                                  
                                  
                                  19,600Changes
                                      in non-cash working capital balances related
                                      to
                                      operations:
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  --
                                      accounts receivable
                                  
                                  
                                  -
                                  
                                  
                                  1,000
                                  
                                  
                                  --
                                      prepaid expenses and deposits
                                  
                                  
                                  6,336
                                  
                                  
                                  (10,011
                                  )
                                  
                                  (81,362
                                  )-
                                      accounts payable and accrued expenses
                                  
                                  
                                  709,193
                                  
                                  
                                  9,453
                                  
                                  
                                  1,233,656-
                                      unearned revenue
                                  
                                  
                                  -
                                  
                                  
                                  (7,500
                                  )
                                  
                                  -**Cash
                                      Flows - Operating Activities**
                                  
                                  
                                  356,398
                                  
                                  
                                  (39,967
                                  )
                                  
                                  (563,029
                                  )**Cash
                                      flows from (used in) Investing Activities**Acquisition
                                      of equipment
                                  
                                  
                                  (5,069
                                  )
                                  
                                  -
                                  
                                  
                                  (9,209
                                  )Oil
                                      and gas properties
                                  
                                  
                                  (1,376,774
                                  )
                                  
                                  -
                                  
                                  
                                  (4,142,033
                                  )Deferred
                                      acquisition costs
                                  
                                  
                                  (13,134
                                  )
                                  
                                  -
                                  
                                  
                                  (41,801
                                  )**Cash
                                      Flows - Investing Activities**
                                  
                                  
                                  (1,394,977
                                  )
                                  
                                  -
                                  
                                  
                                  (4,193,043
                                  )**Cash
                                      flows from Financing Activities**Proceeds
                                      from notes payable
                                  
                                  
                                  -
                                  
                                  
                                  (20,000
                                  )
                                  
                                  350,000Proceeds
                                      from convertible debentures
                                  
                                  
                                  -
                                  
                                  
                                  -
                                  
                                  
                                  3,500,000Shares
                                      subscribed
                                  
                                  
                                  -
                                  
                                  
                                  250,000
                                  
                                  
                                  -Proceeds
                                      from issue of common stock
                                  
                                  
                                  -
                                  
                                  
                                  -
                                  
                                  
                                  1,602,500**Cash
                                      Flows - Financing Activities**
                                  
                                  
                                  -
                                  
                                  
                                  230,000
                                  
                                  
                                  5,452,500**Net
                                      increase (decrease) in cash**
                                  
                                  
                                  (1,038,579
                                  )
                                  
                                  190,033
                                  
                                  
                                  696,428**Cash,
                                      beginning of period**
                                  
                                  
                                  1,926,251
                                  
                                  
                                  1,211
                                  
                                  
                                  191,244**Cash,
                                      end of period**
                                  
                                  $
                                  887,672
                                  
                                  $
                                  191,244
                                  
                                  $
                                  887,672**SUPPLEMENTAL
                                      NON-CASH DISCLOSURES**Shares
                                      issued for debt
                                  
                                  
                                  -
                                  
                                  
                                  -
                                  
                                  
                                  19,600Shares
                                      issued for executive compensation
                                  
                                  
                                  -
                                  
                                  
                                  -
                                  
                                  
                                  1,200,000Shares
                                      repurchased by the issuance of a promissory
                                      note
                                  
                                  
                                  -
                                  
                                  
                                  29,000
                                  
                                  
                                  -
  The
                              accompanying notes are an integral part of these financial
                              statements.
  Page
                                  7
 
 **Radial
                                  Energy Inc.**
 (A
                                  Development Stage Company)
 Notes
                                  to
                                  Interim Financial Statements
 March
                                  31,
                                  2007
 (Stated
                                  in US Dollars)
 (Unaudited)








**1.**
            **Interim
                reporting**





The
      accompanying unaudited interim financial statements have been prepared by Radial
      Energy Inc. (the “Company”) pursuant to the rules and regulations of the United
      States Securities and Exchange Commission. Certain information and disclosures
      normally included in annual financial statements prepared in accordance with
      accounting principles generally accepted in the United States of America have
      been condensed or omitted pursuant to such rules and regulations. In the opinion
      of management, all adjustments and disclosures necessary for a fair presentation
      of these financial statements have been included. Such adjustments consist
      of
      normal recurring adjustments. These interim financial statements should be
      read
      in conjunction with the Company’s December 31, 2006 audited financial
      statements.





The
      results of operations for the three months ended March 31, 2007 are not
      indicative of the results that may be expected for the full year.





**2.**
            **Nature
                and continuance of
                operations**





The
      Company was incorporated in the State of Nevada, United States of America,
      on
      June 20, 2000 under the name All Printer Supplies.com. On April 17, 2003, the
      Company changed its name to BV Pharmaceutical, Inc., and on March 29, 2006,
      the
      Company changed its name to Radial Energy Inc. In April 2006, the Company
      effected a change in business and commenced concentrating on the acquisition,
      exploration, development and production of American and international oil and
      gas projects. The Company is listed on the Over-the-Counter Bulletin Board
      under
      the symbol RENG.





These
                financial statements have been prepared in accordance with generally
                accepted accounting principles applicable to a going concern, which
                assumes that the Company will be able to meet its obligations and
                continue
                its operations for its next twelve months. Realization values may
                be
                substantially different from carrying values as shown and these financial
                statements do not give effect to adjustments that would be necessary
                to
                the carrying values and classification of assets and liabilities
                should
                the Company be unable to continue as a going concern. At March 31,
                2007,
                the Company had not yet achieved profitable operations, has accumulated
                losses of $4,326,299 since its inception, has a working capital deficiency
                of $622,092 and expects to incur further losses in the development
                of its
                business, all of which casts substantial doubt about the Company’s ability
                to continue as a going concern. The Company’s ability to continue as a
                going concern is dependent upon its ability to generate future profitable
                operations and/or to obtain the necessary financing to meet its
                obligations and repay its liabilities arising from normal business
                operations when they come due.





The
      Company expects to continue to incur substantial losses and will require
      substantial capital to execute its business plan and does not expect to attain
      profitability in the near future. Since its inception, the Company has funded
      operations through short-term borrowings and equity investments in order to
      meet
      its strategic objectives. The Company's future operations are dependent upon
      external funding and its ability to execute its business plan, realize sales
      and
      control expenses. Management believes that sufficient funding will be available
      from additional borrowings and private placements to meet its business
      objectives including anticipated cash needs for working capital, for a
      reasonable period of time. However, there can be no assurance that the Company
      will be able to obtain sufficient funds to continue the development of its
      business operation.




Page
          8
 
 **Radial
          Energy Inc.**
 (A
          Development Stage Company)
 Notes
          to
          Interim Financial Statements
 March
          31,
          2007
 (Stated
          in US Dollars)
 (Unaudited)








**3.**  **Oil
      and gas properties**


March
                  31, 2007
              
              December
                  31, 2006United
                  States
              
              Peru
              
              Colombia
              
              Total
              
              United
                  States
              
              Peru
              
              Colombia
              
              TotalUnproved
                  properties
              
              $
              617,986
              
              $
              2,699,022
              
              $
              825,025
              
              $
              4,142,033
              
              $
              604,693
              
              $
              1,689,653
              
              $
              470,913
              
              $
              2,765,259Less:impairement
              
              
              (116,793
              )
              
              -
              
              
              -
              
              
              (116,793
              )
              
              (114,593
              )
              
              -
              
              
              -
              
              
              (114,593
              )$
              501,193
              
              $
              2,699,022
              
              $
              825,025
              
              $
              4,025,240
              
              $
              490,100
              
              $
              1,689,653
              
              $
              470,913
              
              $
              2,650,666


**a.**
            **Huaya
                Anticline, Peru**





On
      May
      11, 2006, the Company entered into a Joint Operating Agreement (“JOA”) with
      Peruvian and American companies whereby the Company acquired a 20% working
      interest and 18% revenue interest in an oil project located in Peru by funding
      the acquisition of certain equipment, for the shipment of this equipment to
      the
      project site in Peru and for the drilling, testing and evaluation of the first
      exploratory well on the property in the total amount of $1,650,000.





After
      the
      drilling of the first well was complete, the Company had the option whether
      to
      proceed with the project by funding the drilling, testing and evaluation of
      another two wells on the property for an additional $1,650,000. This additional
      investment will also cover the costs to install production facilities, including
      pipeline and loading dock, tank batteries and pumping units as required to
      deliver the produced oil to market. Thereafter, the Company will have the option
      to pay for its 20% working interest share of the development and operation
      of
      the project.





If
      at any
      time during the project the Company and the transacting parties decide not
      to
      proceed with the project, the equipment acquired will be sold and the Company
      will be entitled to 67% of the proceeds.





On
      January 31, 2007, the Company
      acquired an additional 3% working interest in the project for cash consideration
      of $450,000 and amended the buy in price of the second and third wells on the
      property to $900,000 and $650,000, respectively for consideration of the Company
      advancing an additional $100,000 to cover cost overruns on the first
      well.





By
      an
      Amendment Agreement dated March 30, 2007, the buy in consideration for the
      second and third wells on the property are due as follows:





By
                March 30, 2007
            
            $
            350,000
            
            
            (accrued
                and paid subsequent to March 31, 2007)Upon
                spudding of the second well
            
            
            350,000Upon
                completion of surface casing on second well
            
            
            250,000Upon
                decision to proceed with the third well
            
            
            600,000
            
            
            ($50,000
                has been paid
            )$
            1,550,000





During
      the three months ended March 31, 2007, the Company incurred $59,370 in
      exploration costs.




Page
          9


**Radial
        Energy Inc.**
 (A
        Development Stage Company)
 Notes
        to
        Interim Financial Statements
 March
        31,
        2007
 (Stated
        in US Dollars)
 (Unaudited)





**3.**
            **Oil
                and gas properties**-
                (cont’d)





**b.**  **Cherokee
      County, Texas, USA**





By
      an
      assignment agreement dated June 27, 2006 and amended September 29, 2006, the
      Company has agreed to acquire a working interest from a Canadian company in
      three separate exploratory oil and gas prospects located in Cherokee County,
      Texas, under three leasehold assignment agreements with a company in Texas.
      In
      consideration for the assignment, the Company paid $700,000 with the assignor
      retaining a 4% overriding royalty. The payment covers the Company’s share of the
      estimated capital expenditures to drill and complete the first test wells on
      each of the three prospects. The leasehold agreement for all three prospects
      includes a 30% working interest before payout of initial investment of the
      Canadian company and a 22.5% working interest after payout, with payout
      determined on a per project basis. The Company also incurred an additional
      $6,124 in exploration costs.





In
      December 2006, the Company received a refund of $238,673, net of joint operating
      costs, for capital expenditures not incurred on the first well drilled as this
      well was abandoned.





During
      the three months ended March 31, 2007, the Company incurred $1,092 in
      exploration costs.





**c.**  **Bosques
      Block, Columbia**





By
      Letter
      of Intent dated August 23, 2006 and JOA dated December 2, 2006, the Company
      acquired a 20% working interest in the right to explore and develop oil reserves
      and production on the nine hectare property located in the Middle Magdalena
      Valley of Columbia, referred to as Bosques Block.





The
      Company is required to contribute $2,200,000 as follows: i) $350,000 upon
      signing the JOA; ii) $350,000, 60 days following the execution of the JOA,
      and
      $1,500,000 upon receiving cash calls from the operator. The Company will receive
      33.33% participation in distributions until payout of $1,500,000 of its
      investment, after which the Company’s interest will be 20%.





In
      the
      event the Company fails to forward payment to the Operator for cash calls,
      the
      JOA shall be considered terminated and the interest held by the Company will
      revert to the operator.





At
      March
      31, 2007, the Company had not yet disbursed the first and second payments as
      required pursuant to the Joint Operating Agreement due to a delay in the
      operator obtaining the required permits from the Colombian government, but
      has
      recorded this commitment as part of its accrued liabilities. During the three
      months ended March 31, 2007 the Company incurred $4,113 in exploration
      costs.





**4.**
            **Convertible
                debentures**





On
                October 2, 2006, the Company entered into a securities purchase agreement
                to issue up to $5,000,000 of secured convertible debentures. The
                Company
                is to pay the purchaser a commitment fee of 10% of $5,000,000, which
                shall
                be paid proportionately upon each disbursement. In addition, the
                Company
                paid the purchaser a non-refundable fee of $22,500 for structuring
                and due
                diligence in connection with this
                transactions.





On
                October 2, 2006, the Company received $2,000,000, less the 10% fee
                and
                $41,250 for legal and structuring fees, and on November 2, 2006,
                the
                Company received a further $1,500,000 less the 10% fee and $40,000
                for
                legal costs, with the remaining $1,500,000 to be funded within three
                business days after a registration statement for this debenture was
                declared effective by the Securities and Exchange Commission
                (“SEC”).




Page
          10
 
  **Radial
          Energy Inc.**
 (A
          Development Stage Company)
 Notes
          to
          Interim Financial Statements
 March
          31,
          2007
 (Stated
          in US Dollars)
 (Unaudited)








**4.**
            **Convertible
                debentures**-
                (cont’d)





The
      debentures bear interest at 7.0% per annum, are due on October 2, 2009, and
      are
      convertible into the Company's common stock at the option of the purchaser
      at
      any time prior to redemption by the Company. The debentures are convertible
      at a
      conversion price equal to the lesser of $1.0536 or 90% of the lowest volume
      weighted average daily closing price of the Company’s common stock, during the
      15 trading days immediately prior to the conversion date. The debentures contain
      a provision whereby no holder is able to convert any part of the debenture
      into
      shares of the Company’s common stock, if such conversion would result in
      beneficial ownership of the holder and its affiliates of more than 4.99% of
      the
      Company’s then outstanding shares of common stock. The Company has reserved
      27,333,333 common shares for issuance pursuant to debentures issued under the
      Securities purchase agreement. The Company has the right, at its option, to
      redeem a portion or all amounts outstanding under the debentures by paying
      the
      holder the principal amount being redeemed plus a redemption premium of 20
      to
      30%.





Pursuant
      to the securities purchase agreement, the Company entered into a freestanding
      investor registration rights agreement on October 2, 2006. Under the terms
      of
      this agreement, the Company filed a registration statement on November 1, 2006
      for 13,333,333 common shares underlying the debentures and warrants. The Company
      had the obligation to use their best efforts to have the registration statement
      declared effective by the SEC by March 1, 2007. Further, the Company had the
      continuing obligation to keep the registration statement continuously effective
      for a period of two years or until all of the securities had been sold by the
      purchaser. Failure to meet this obligation would result in the Company incurring
      liquidated damages in the amount of 1% of the liquidated value of the debentures
      for each 30 day period after the scheduled effective date. In no event shall
      the
      liquidated damages exceed 20% of the aggregate purchase price for the
      purchaser.





The
      Company evaluated the free-standing investor registration rights agreement
      and
      concluded that it meets the definition of a derivative instrument under SFAS
      133
“Accounting for Derivative Instruments and Hedging Activities”. The fair value
      of this derivative liability is immaterial based on a probability-weighted
      cash
      flow evaluation of its terms.





The
      debentures are secured by the assets of the Company and a pledge of common
      stock
      which shall include common stock held by the Company’s officers and directors
      and certain shareholders delivered in the form of a stock certificate in the
      name of the Company, to be held in escrow. Accordingly, 7,672,000 shares or
      common stock have been pledged and are held in escrow.





Pursuant
      to the securities purchase agreement, the Company issued to the purchaser
      3,333,333 stock purchase warrants exercisable at $0.75 per share, 2,500,000
      stock purchase warrants exercisable at $1.00 per share and 2,333,333 stock
      purchase warrants exercisable at $1.50 per share. These warrants expire on
      October 2, 2011. The Company is obligated to issue to the purchaser an
      additional 1,000,000 stock purchase warrants exercisable at $1.50 per share
      when
      the final funding is received, exercisable for a term of five years from the
      date of issuance.




Page
          11
 
  **Radial
          Energy Inc.**
 (A
          Development Stage Company)
 Notes
          to
          Interim Financial Statements
 March
          31,
          2007
 (Stated
          in US Dollars)
 (Unaudited)








**4.**
            **Convertible
                debentures**-
                (cont’d)





The
      Company has the option to force the purchaser to exercise some of the warrants
      within five days following a forced exercise notice assuming that there is
      sufficient number of shares of common stock to cover the underlying amount
      of
      warrants to be exercised and the daily Volume Weighted Average Price of the
      common stock for each of the five consecutive trading days prior to the forced
      exercised notice date is above the exercise price by a stated amount between
      35-60%. The forced exercise notice shall be limited to 1/5 of the trading volume
      during the five day period. Any allowable forced exercise notice shall be
      reduced by any warrant amounts exercised by the purchaser during the preceding
      five day period.





An
      amount of $860,235 has been recorded in additional paid-in capital at December
      31, 2006, for the fair value of the beneficial conversion feature of the
      debentures and $860,235 has been amortized into income as interest on
      convertible debentures. The convertible debentures are presented net of a
      discount of $1,279,517 at March 31, 2007, representing the unamortized relative
      fair value of the detachable warrants issued in connection with the $2,000,000
      debenture. This discount is being amortized to interest expense over the stated
      term of the debenture. During the three months ended March 31, 2007, the Company
      accreted $56,996 of the discount in relation to the debentures.





On
      March
      1, 2007, the Company announced it was negotiating an agreement to redeem the
      $3,500,000 convertible debentures at a redemption premium of 18% of the
      principal amount, and will be canceling the remaining $1,500,000 debenture.
      Under the terms of the proposed agreement, the purchaser would have the right
      to
      retain the share purchase warrants issued in connection with this financing
      and
      the Company would have no obligation to pay liquidating damages under the
      investor registration rights agreement. Final terms of the cancellation are
      subject to a definitive agreement.





At
      March
      31, 2007, the Company was in default under the registration rights agreement
      as
      it had withdrawn its registration statement on Form SB-2 filed on November
      1,
      2006, and amended on February 21, 2007.





**5.**
            **Capital
                stock**





Effective
      on January 5, 2001, the Company forward split its issued common stock on the
      basis of 1,500 new for one old.





On
      May
      25, 2004, the Company amended its authorized capital stock to 75,000,000 common
      shares with a par value of $0.001 per share. The number of authorized shares
      and
      the par value per share as referred to in these financial statements has been
      restated wherever applicable to give retroactive effect to this
      amendment.





Effective
      on February 20, 2006, the Company forward split its issued common stock on
      the
      basis of four new for one old. The number of shares referred to in these
      financial statements has been restated wherever applicable to give retroactive
      effect on the forward stock splits. There was no effect on the Company’s
      authorized share capital.




Page
          12
 
  **Radial
          Energy Inc.**
 (A
          Development Stage Company)
 Notes
          to
          Interim Financial Statements
 March
          31,
          2007
 (Stated
          in US Dollars)
 (Unaudited)








**5.**
            **Capital
                stock**-
                (cont’d)





Stock
      Purchase Warrants:





At
      March
      31, 2007, 16,166,666 warrants were outstanding, as follows:


#
                  of Warrants Issued
              
              Expiry
              
              Weighted
                  Average Exercise Price
              
              Number
                  Outstanding as at December 31, 2006 and March 31, 2007
              
              Weighted
                  Average Remaining Contractual Life (in years)Issued,
                  July 21, 2006
              
              
              8,000,000
              
              
              4-Aug-08
              
              $
              0.30
              
              
              8,000,000
              
              
              1.35Issued,
                  October 2, 2006
              
              
              3,333,333
              
              
              1-Oct-11
              
              $
              0.75
              
              
              3,333,333
              
              
              4.51Issued,
                  October 2, 2006
              
              
              2,500,000
              
              
              1-Oct-11
              
              $
              1.00
              
              
              2,500,000
              
              
              4.51Issued,
                  October 2, 2006
              
              
              2,333,333
              
              
              1-Oct-11
              
              $
              1.50
              
              
              2,333,333
              
              
              4.5116,166,666
              
              
              
              
              $
              0.67
              
              
              16,166,666
              
              
              2.95





**6.**
            **Related
                party transactions**





During
      the three months ended March 31, 2007, the Company incurred $85,200 (2006:
      $nil)
      in executive compensation and benefits to directors of the Company.





Included
      in prepaid expenses and deposit at March 31, 2007 is $29,219 (December 31,
      2006:
      $33,400) paid to directors of the Company for prepaid salaries and for advances
      for expenses to be incurred on behalf of the Company.





Included
                in accounts payable at March 31, 2007 is $23,004 (December 31, 2006:
                $6,762) due to directors of the Company for expenses incurred on
                behalf of
                the Company.





**7.**
            **Commitments
                -**Notes
                3, 4, 5 and 9





On
      March
      2, 2007, the Company entered into a Memorandum of Understanding (“MOU”) whereby
      the Company would acquire all the issued and outstanding shares of Rancho
      Hermoso S.A., a privately held Columbian corporation engaged in the exploration
      and production of oil and gas within the republic of Columbia. The terms of
      the
      acquisition are subject to the parties entering into a definitive Share Purchase
      Agreement. At March 31, 2007, the Company had incurred related acquisition
      costs
      totaling $41,801;





**8.**
            **Comparative
                Figures**





Certain
      of the prior year period’s comparative figures for the three months ended March
      31, 2007 and for the period from April 1, 2006 (date of Development Stage)
      to
      March 31, 2007 have been reclassified to conform to the presentation adopted
      in
      the current period.




Page
          13
 
  **Radial
            Energy Inc.**
 (A
            Development Stage Company)
 Notes
            to
            Interim Financial Statements
 March
            31,
            2007
 (Stated
            in US Dollars)
 (Unaudited)








**9.**
            **Subsequent
                Events**





On
      April
      20, 2007, the Company engaged Knight Capital Markets LLC to act as the Company’s
      exclusive advisor and placement agent in connection with the private placement
      of the Company’s securities until April 20, 2008. The placement is to be
      completed on a best effort basis and be comprised of equity, debt and/or other
      securities of the Company for gross proceeds of not less than $5,000,000.
      Pursuant to the terms of the engagement, Knight Capital Markets LLC will receive
      a cash consideration of 6% of gross proceeds of the offering and a two-year
      agent’s warrant to purchase 6% of the number of shares issued under the
      placement. In addition, Knight Capital Markets LLC will be entitled to further
      consideration of 1% of the gross proceeds of the offering in cash and two year
      warrants to purchase 1% of the number of shares issued under a lead placement
      arrangement. A non-refundable payment of $10,000 is due upon execution of this
      agreement.




Page
          14




**ITEM
      2. MANAMEGMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**




**GENERAL**





Our
      company was incorporated in the State of Nevada on June 20, 2000, under the
      name
      of "All Printer Supplies.com." On April 17, 2003, we changed our name to "BV
      Pharmaceuticals, Inc." and became a provider of information and services in
      the
      areas of personal DNA collection, analysis, profiling, banking and DNA profile
      database maintenance. Effective as of March 29, 2006, through a statutory merger
      with our wholly owned subsidiary in which we were the surviving corporation,
      we
      changed our name to "Radial Energy Inc.", and we also changed our business
      plan
      as discussed below.





In
      March
      2006, we began a new business plan concentrating on the acquisition,
      exploration, development, and production of domestic and international oil
      and
      gas projects. Radial Energy's primary focus is on identifying previously drilled
      but subsequently abandoned wells that encountered and/or tested live oil or
      natural gas indicating the presence of marketable hydrocarbons, reservoir,
      and
      trap. Radial Energy identifies, evaluates, acquires and develops oil and natural
      gas reserves in investor-friendly countries in the Americas, initially targeting
      overlooked or under-developed reserves that are under the radar of the majors
      and out of the reach of the small independents and, with the establishment
      of
      operating infrastructure in each country, transitioning to the development
      of
      higher reward, company-operated exploration and development opportunities.





Radial
      Energy focuses on historically productive regions and on situations where known
      oil and gas reserves are being underexploited. In certain regions of the
      Americas, we will bring North American drilling techniques, specialized
      technology and operational expertise to fully exploit those resources. We
      operate in a niche business environment between large multinational oil
      companies and under-funded, unqualified independent companies.





During
      the fiscal year ended December 31, 2006, we acquired working interests in
      projects in South America and in Texas and are continuing to explore other
      opportunities in North America and Latin America.





**Block
      100, Huaya Anticline, Peru**




Pursuant
      to a Letter of Intent dated April 19, 2006, and a related Joint Operating
      Agreement effective as of May 11, 2006, we acquired rights to a 20% working
      interest and 18% revenue interest in the Huaya Anticline Project, Block 100
      oil
      prospect located in the Ucayali Basin, Peru. The project encompasses a
      structural closure of approximately 500 acres, with the potential for up to
      41
      well locations. We acquired the interest in the Block 100 project from
      Ziegler-Peru, Inc., an American company based in Texas, which sold the interest
      to us and retains a 10 percent interest. The majority interest is owned by
      the
      concession-holder, Compania Consultora de Petroleo, S.A., a well-known
      consulting company based in Lima, Peru. While Compania Consultora is the
      operator of record for the concession, Ziegler-Peru will act as contract driller
      and operator for the block. As consideration for this interest, which is only
      for one well, we agreed to pay a total of $1,650,000, which funds also cover
      the
      acquisition of certain equipment to be used for drilling, testing, and
      evaluation of the first well. As of the date of the filing of this report,
      we
      have paid in full our total financial obligation for the first well. On January
      31, 2007 the Company entered into an agreement with Compania Consultora de
      Petroleo, S.A. and Zeigler-Peru, Inc., which modified certain terms in the
      Letter of Intent dated April 19, 2006 and the Joint Operating Agreement dated
      May 11, 2006. According to the January 2007 agreement, the Company will advance
      an additional $450,000 to increase the working interest to 23% and revenue
      interest to 20.7%. The Company has now advanced a total of $2,699,000 towards
      the drilling, testing, and completion of the first well.





After
      drilling of the first well is complete, we will have the option to proceed
      with
      the project by funding the drilling, testing and evaluation of another two
      wells
      on the property for an additional $1,550,000, which funds are expected to cover
      the acquisition and installation of all production facilities required to bring
      the hydrocarbons produced to market. Thereafter, we will have the option to
      pay
      for our 23% working interest share of the development and operation of the
      project. In the event Radial Energy and the other participating parties decide
      that the project is not feasible, the equipment acquired will be sold and we
      will be entitled to 67% of the proceeds.





A
      third-party geological assessment conducted by Gustavson Associates of Boulder,
      Colorado, a consultant contracted by Radial Energy, estimates that the Block
      100
      project, if successful, may have recoverable in place reserves between 15.3
      and
      29.5 million barrels of oil (MMBO). While management believes the prospect
      is a
      low-risk opportunity to discover and develop a field with production potential,
      there can be no assurance the prospect will achieve such potential. The first
      well is currently being drilled, with production anticipated by year
      end.





Page
          15


Drilling
      Activities





In
      November 2006, drilling of the Huaya 100-1X well commenced, and reached a depth
      of 235 feet before experiencing mechanical problems. Upon completion of repairs,
      drilling resumed in February 2007 and the Company announced that the Huaya
      100-1X well reached final total depth of 926 feet on March 17 th ,
      2007,
      and was logged by Schlumberger on March 18, 2007. The operator intends on casing
      the Huaya 100-1X well upon arrival of 4 1⁄2 casing pipe with a production test
      following shortly thereafter.





On
      April
      27, 2007 drilling of the Huaya 100-2X well commenced, and reached a total depth
      of 305.1 meters on May 3, 2007. Resistivity
      and Neutron-Density logs were run from 302.5 to 61.7 meters and Gamma Ray to
      surface. The target Vivian formation was found at 255.1 meters, 3.7 meters
      above
      the oil-water contact established in the Huaya 100-1X and 4X wells. The
      Huaya
      100-2X well was cased and cemented on May 4, 2007 and a production test is
      expected to commence shortly.





**Cherokee
      County, Texas**




Pursuant
      to an Assignment Agreement dated June 27, 2006, we acquired all of the rights
      and obligations of Pin Petroleum Partners Ltd., a Canadian company, under three
      leasehold assignment agreements to properties located in Cherokee County, Texas
      (collectively, the "Cherokee Agreements") with Skyline Energy LLC, a company
      based in Texas. The prospects involve three separate exploratory oil and gas
      prospects, known as the Junction Prospect, the Northwest Jacksonville Prospect,
      and the Highway 79 Prospect. As consideration for the assignment, we agreed
      to
      pay Pin Petroleum Partners a total of $700,000 by October 25, 2006 along with
      a
      four percent overriding royalty interest from our share of net revenue interest.
      On September 29, 2006, we entered into an amendment to the Assignment Agreement
      with Pin Petroleum Partners extending the payment date to November 17, 2006.
      On
      November 20, 2006, the Company paid the full amount of $700,000 owed to PIN
      Petroluem Partners Ltd. Prior to the assignment, Pin Petroleum Partners had
      provided to the operator of the prospects, MLC Operating, LP, $443,790 to cover
      the original estimates for the drilling and completion costs for the initial
      well on each of the three prospects. This pre-payment by Pin Petroleum Partners
      was assigned to Radial Energy pursuant to the Assignment Agreement dated June
      27 th ,
      2006.
      The funds will cover our share of the estimated capital expenditures to drill
      the first test wells on each of the three prospects. If one or more of these
      initial wells results in a successful discovery, the operator may request
      additional funds to cover completion costs if the original funds do not cover
      the current costs of completion. For each of the three prospects, we hold a
      30%
      working interest before payout of initial investment, and a 22.5% working
      interest after payout, with payout determined on a project basis.





In
      November 2006 Freedom Resources, Inc., which owns a majority working interest
      in
      all three exploratory wells, notified us that they do not intend to drill the
      remaining two prospects. We requested reimbursement of the prepaid drilling
      expenses paid to the operator and received the remaining balance of $238,672.52
      on November 30 th ,
      2007.





The
      Junction Prospect is located in northwestern Cherokee County, approximately
      five
      miles southwest of Jacksonville, Texas. This oil and natural gas prospect's
      leasehold covers approximately 500 acres. The Northwest Jacksonville Prospect
      leasehold covers approximately 350 acres located in northern Cherokee County.
      The Highway 79 Prospect is located in northwestern Cherokee County, one mile
      west of Jacksonville, Texas, and the prospect leases cover approximately 340
      net
      acres. While calculations based on preliminary geological analysis, reservoir
      studies and interpretation estimate that the prospects have oil and natural
      gas
      production potential, there is no assurance that any such potential will be
      achieved. We have begun drilling and testing in the prospects. Our drilling
      and
      testing in the Highway 79 Prospect resulted in an unsuccessful test, and we
      will
      not continue to explore in that prospect. We intend to continue to explore
      in
      the Junction Prospect and the Jacksonville Prospect.




**Bosques
      Block, Middle Magdalena Valley, Colombia**




By
      Letter
      of Intent dated August 23, 2006 and JOA dated December 2, 2006, the Company
      acquired a 20% working interest in the right to explore and develop oil reserves
      and production on the nine hectare property located in the Middle Magdalena
      Valley of Columbia, referred to as Bosques Block.





The
      Company is required to contribute $2,200,000 as follows: i) $350,000 upon
      signing the JOA; ii) $350,000, 60 days following the execution of the JOA,
      and
      $1,500,000 upon receiving cash calls from the operator. The Company will receive
      33.33% participation in distributions until payout of $1,500,000 of its
      investment, after which the Company’s interest will be 20%.





In
      the
      event the Company fails to forward payment to the Operator for cash calls,
      the
      JOA shall be considered terminated and the interest held by the Company will
      revert to the operator.





At
      March
      31, 2007, the Company has not disbursed the first payment, has accrued for
      the
      second payment and has incurred $121,398 in exploration costs.




Page
          16




**RESULTS
      OF OPERATIONS**





The
      following discussion of the plan of operation, financial condition, results
      of
      operations, cash flows and changes in financial position of the Company should
      be read in conjunction with our audited consolidated financial statements and
      notes included in our Annual Report on Form 10-KSB for the fiscal year ended
      December 31, 2006 filed on April 2, 2007.





**Limited
      Operating History**




There
      is
      limited historical financial information about our company upon which to base
      an
      evaluation of our future performance. Our company has yet to generate revenues
      from operations. We cannot guarantee that we will be successful in our business.
      We are subject to risks inherent in a fast growing company, including limited
      capital resources, possible delays in product development and manufacturing,
      and
      possible cost overruns due to price and cost increases. There is no assurance
      that future financing will be available to our company on acceptable terms.
      Additional equity financing could result in dilution to existing
      shareholders.





As
      discussed above, in 2006, we effected a change in our business focus to the
      exploration and development of oil and gas assets, from DNA sampling and banking
      services. Due to the significant changes, part of our results for the year
      ended
      December 31, 2006 and 2005 are being reported as discontinued operations, and
      we
      believe that a comparison of results of operations for the quarter ended March
      31, 2007 and March 31, 2006 should not be relied on as an indication of future
      performance.





We
      have
      financed our operations since inception primarily through private sales of
      securities. As of March 31, 2007, we had $887,672 in cash, and working
      capital deficit of $622,092.





**Three
      month period ended March 31, 2007**


**Expenses**Corporate
                  development and promotion
              
              
              20,168Executive
                  compensation
              
              
              85,200Exploration
                  costs
              
              
              2,200Financing
                  and finder's fees
              
              
              117,408Professional
                  fees
              
              
              61,372Other,
                  general and administrative
              
              
              192,704Loss
                  from continuing operations
              
              
              479,052Loss
                  (income) from discontinued operations
              
              
              -**Net
                  loss**
              
              
              **479,052**




***Revenues***





For
      the
      quarter ended March 31, 2007, we had no revenues from our continuing operations.
      We expect to start earning revenues in the second half of 2007, once we have
      successfully drilled and tested the Block 100 project in Peru. Our future
      revenues will depend not only on successful drilling activities, but also on
      our
      ability to identify and acquiring producing properties.




***Exploration
      costs***




In
      October 2006, the Company entered
      into a letter of intent to
      participate in an Acreage Earning Agreement with a third party on acres of
      federal Wasatch/Mesa Verde formation leasehold interests which are located
      in
      Uintah County, Utah. After
      assessing certain risks and economic variables related to the Wasatch/Mesa
      Verde formation and
      the
      general area geologically as a potential investment for ongoing potential
      hydrocarbon development, as well as taking into consideration Management's
      focused agenda to develop assets with high reward potential, Management elected
      to allow the letter of intent to lapse. The
      Company has written-off the $114,593 in finders’ fees and geological consulting
      fees it incurred during the year ended December 31, 2006, and another $2,200
      during the quarter ended March 31, 2007.





Page
          17


***Expenses
      and general and administrative expenses***





During
      the quarter ended March 31, 2007, the Company incurred total expenses from
      continuing operations of $479,052. These expenses were related mainly to
      executive compensation and to financing activities, such as $117,408 in interest
      and accretion of discount related to convertible debentures. Other expenses
      were
      incurred in relation to activities associated with maintaining a public listing,
      such as communication with shareholders, legal and accounting fees, as well
      as
      corporate development and promotion.





The
      anticipated expenditures for the Company are described elsewhere. Readers should
      not assume that expenses or other cash flows in this period are indicative
      of
      future periods as the Company is in the early exploration stage.





***Discontinued
      Operations***





During
      the quarter ended March 31, 2007, no revenue (2006 - $8,500) were reported
      in
      discontinued operations. Amounts related to discontinued operations included
      in
      prior period financial statements presented herein have been reclassified to
      conform to the current period presentation.





***Development
      stage***





The
      Company complies with Financial Accounting Standard Board Statement No. 7 the
      Securities and Exchange Commission Act Guide 7 for its characterization of
      the
      Company as a Development Stage Company. For the purpose of providing cumulative
      amounts for the statements of operations and cash flows, these amounts consider
      only those losses for the period from the Company’s new exploration stage
      activity effective April 1, 2006.




***Net
      Loss***





Our
      net
      loss was $479,052 for the quarter ended March 31, 2007, as compared to $23,502
      in 2006. The net loss reflects our expenses relating to our financings, cost
      of
      communication with shareholders, legal and accounting fees, corporate
      development and promotion, as well as executive compensation and office
      expenses. These expenses have been incurred ahead of our ability to recognize
      revenues from our new strategy.




**Liquidity
      and Capital Resources**




As
      of
      March 31, 2007, we had cash of $887,672, and working capital deficiency of
      $622,092. During the quarter ended March 31, 2007, we funded our operations
      from
      the proceeds of private sales of equity and convertible debentures, which took
      place in the last quarter of fiscal 2006. We believe our current financing
      activities will provide sufficient working capital to fund our operations for
      at
      least the next 9 months. Changes in our operating plans, increased expenses,
      additional acquisitions, or other events, may cause us to seek additional
      equity or debt financing in the future.





For
      the
      quarter ended March 31, 2007, we had positive cash flows from operations of
      $356,398. Net cash from operating activities reflected $6,336 in prepaid
      expenses and deposits and an increase in accounts payable of $709,193.
      Investment activities used $1,394,977 of cash during the quarter, which was
      primarily related to the acquisition of oil and gas assets.





We
      had no
      financing activities during the quarter ended March 31, 2007.




Our
      current cash requirements are significant due to the exploration and development
      of our current prospects. During the second quarter of our fiscal year 2007,
      we
      expect to need significant cash as we will be required to advance additional
      funds to complete the development of the Block 100 prospect in Peru.
      Accordingly, we expect to continue to use cash to fund operations for at least
      fiscal 2007 as we expand our asset base and fund exploration of our properties.





***Recent
      Financings***




*Notes
      payable*




On
      July
      12, 2006, the Company received $250,000 pursuant to a promissory note. The
      note
      is unsecured, bears interest at 12% per annum and is due July 12, 2007. At
      March
      31, 2007, $21,534 in interest was accrued in relation to this note.




On
      July
      31, 2006, the Company received $100,000 pursuant to a promissory note. The
      note
      is unsecured, bears interest at 12% per annum and is due July 31, 2007. The
      Company paid a loan fee by the issuance of 20,000 shares of common stock, valued
      at $19,600. At March 31, 2007, $7,989 in interest was accrued in relation to
      this note.





Page
          18


*Convertible
      debentures*




On
      October 2, 2006, the Company entered into a securities purchase agreement to
      issue up to $5,000,000 of secured convertible debentures.





On
      October 2, 2006, the Company received $2,000,000, less the 10% fee and $41,250
      for legal and structuring fees, and on November 2, 2006, the Company received
      a
      further $1,500,000 less the 10% fee and $40,000 for legal costs.





The
      debentures bear interest at 7.0% per annum, are due on October 2, 2009, and
      are
      convertible into the Company's common stock at the option of the purchaser
      at
      any time prior to redemption by the Company.





At
      March
      31, 2007, the Company accrued $112,575 in interest in relation to the
      debentures.





The
      Company determined that the free-standing investor registration rights agreement
      meet the definition of a derivative instrument under SFAS 133 “Accounting for
      Derivative Instruments and Hedging Activities”. The fair value of this
      derivative liability is immaterial based on a probability-weighted cash flow
      evaluation of its terms.





The
      debentures are secured by the assets of the Company and a pledge of common
      stock
      which shall include common stock held by the Company’s officers and directors
      and certain shareholders delivered in the form of a stock certificate in the
      name of the Company, to be held in escrow. Accordingly, 7,672,000 shares or
      common stock have been pledged and are held in escrow.





Pursuant
      to the securities purchase agreement, the Company issued to the purchaser
      3,333,333 stock purchase warrants exercisable at $0.75 per share, 2,500,000
      stock purchase warrants exercisable at $1.00 per share and 2,333,333 stock
      purchase warrants exercisable at $1.50 per share. These warrants expire on
      October 2, 2011.





An
      amount
      of $860,235 has been recorded in additional paid-in capital at December 31,
      2006, for the fair value of the beneficial conversion feature of the debentures
      and $860,235 was amortized into income as interest on convertible debentures.
      The convertible debentures are presented net of a discount of $1,279,517 at
      March 31, 2007, representing the unamortized relative fair value of the
      detachable warrants issued in connection with the $2,000,000 debenture. This
      discount is being amortized to interest expense over the stated term of the
      debenture. At March
      31,
      2007 ,
      the
      Company accreted $107,083 of the discount in relation to the
      debentures.





On
      March
      1, 2007, the Company announced it was negotiating an agreement to redeem the
      $3,500,000 convertible debentures at a redemption premium of 18% of the
      principal amount, and will be canceling the remaining $1,500,000 debenture.
      The
      Company would have no obligation to pay liquidating damages under the investor
      registration rights agreement. Final terms of the cancellation are subject
      to a
      definitive agreement.





At
      March
      31, 2007, the Company is in default under the registration rights agreement
      as
      it has withdrawn its registration statement on Form SB-2 filed on November
      1,
      2006, and amended on February 21, 2007.




**Critical
      Accounting Policies**




The
      preparation of financial statements in conformity with United States generally
      accepted accounting principles requires management of our company to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities, the disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting periods.




Our
      management routinely makes judgments and estimates about the effects of matters
      that are inherently uncertain. As the number of variables and assumptions
      affecting the probable future resolution of the uncertainties increase, these
      judgments become even more subjective and complex. Our significant accounting
      policies are discussed in Note 2 to our consolidated financial statements
      for the fiscal year ended December 31, 2006 included in this Report. We have
      identified the following accounting policies, described below, as the most
      important to an understanding of our current financial condition and results
      of
      operations.




*Development
      Stage*


The
      Company complies with Financial Accounting Standard Board Statement (“SFAS”) No.
      7 for its characterization of the Company as a Development Stage Company. The
      Company is devoting substantially all of its present efforts to establish a
      new
      business and none of its planned principal operations have commenced. For the
      purpose of providing cumulative amounts for the statements of operations and
      cash flows, these amounts consider only those losses for the period from the
      Company’s new development stage activity effective April 1, 2006.




Page
          19




*Oil
      and Gas Properties*




The
      Company follows the full cost method of accounting for oil and gas operations
      whereby all costs of exploring for and developing oil and gas reserves are
      initially capitalized on a country-by-country (cost centre) basis. Such costs
      include land acquisition costs, geological and geophysical expenses, carrying
      charges on non-producing properties, costs of drilling and overhead charges
      directly related to acquisition and exploration activities.





Costs
      capitalized, together with the costs of production equipment, are depleted
      and
      amortized on the unit-of-production method based on the estimated gross proved
      reserves. Petroleum products and reserves are converted to a common unit of
      measure, using 6 MCF of natural gas to one barrel of oil.





Costs
      of
      acquiring and evaluating unproved properties are initially excluded from
      depletion calculations. These unevaluated properties are assessed periodically
      to ascertain whether impairment has occurred. When proved reserves are assigned
      or the property is considered to be impaired, the cost of the property or the
      amount of the impairment is added to costs subject to depletion calculations.





If
      capitalized costs, less related accumulated amortization and deferred income
      taxes, exceed the “full cost ceiling” the excess is expensed in the period such
      excess occurs. The “full cost ceiling” is determined based on the present value
      of estimated future net revenues attributed to proved reserves, using current
      prices less estimated future expenditures plus the lower of cost and fair value
      of unproven properties within the cost centre.





Proceeds
      from a sale of petroleum and natural gas properties are applied against
      capitalized costs, with no gain or loss recognized, unless such a sale would
      alter the relationship between capitalized costs and proved reserves of oil
      and
      gas attributable to a cost centre. Royalties paid net of any tax credits
      received are netted with oil and gas sales.





*Impairment
      of Long-lived Assets*


In
      accordance with SFAS No. 144, *Accounting
      for the Impairment or Disposal of Long-lived Assets* ,
      the
      carrying value of intangible assets and other long-lived assets are reviewed
      on
      a regular basis for the existence of facts or circumstances that may suggest
      impairment. The Company recognizes impairment when the sum of the expected
      undiscounted future cash flows is less than the carrying amount of the asset.
      Impairment losses, if any, are measured as the excess of the carrying amount
      of
      the asset over its estimated fair value. Oil and gas properties accounted for
      using the full cost method of accounting, a method utilized by the Company,
      is
      excluded from this requirement, but will continue to be subject to the ceiling
      test limitations.





*Accounting
      for Convertible Instruments*


When
      the
      Company issues convertible instruments with detachable instruments, the proceeds
      of the issuance are allocated between the convertible instrument and other
      detachable instruments based on their relative fair values pursuant to Emerging
      Issues Task Force (“EITF”) Issue No. 00-27 “Application of Issue No. 98-5 to
      Certain Convertible Instruments”. The resulting discount of the convertible
      instrument is amortized into income as interest expense over the term of the
      convertible instrument.





When
      the
      Company issues convertible debt securities with a non-detachable conversion
      feature that provides for an effective rate of conversion that is below market
      value on the commitment date, it is known as a beneficial conversion feature
      (“BCF”) and pursuant to EITF Issue No. 98-5 “Accounting for Convertible
      Securities with Beneficial Conversion Features or Contingently Adjustable
      Conversion Ratios” and EITF Issue No. 00-27, the conversion feature of the
      security that has characteristics of an equity instrument is measured at its
      intrinsic value at the commitment date and is recorded as additional paid in
      capital. A portion of the proceeds of the security issued is allocated to the
      conversion feature equal to its intrinsic value to a maximum of the amount
      allocated to the convertible instrument. The resulting discount of the debt
      instrument is amortized into income as interest expense over the conversion
      feature’s vesting period.




**Plan
      of Operation**




Our
      future operations are dependent upon the identification and successful
      completion of additional long-term or permanent equity financing, the support
      of
      creditors and shareholders, and, ultimately, the achievement of profitable
      operations. There can be no assurances that we will be successful, which would
      in turn significantly affect our ability to roll out our business plan. If
      not,
      we will likely be required to reduce operations or liquidate assets. We will
      continue to evaluate our projected expenditures relative to our available cash
      and to seek additional means of financing in order to satisfy our working
      capital and other cash requirements.





We
      continue to operate with very limited administrative support, and our current
      officers and directors continue to be responsible for many duties to preserve
      our working capital.




Page
          20




***Projected
      Expenditures Over The Next 12 Months***





The
      following chart provides an overview of our budgeted expenditures by major
      area
      of activity, for the next 12 months





**General
                and Administration Expenses**
            $1,200,000**Block
                100 - Peru**
            $3,000,000**Bosques
                Block - Colombia**
            $1,500,000**Cherokee
                County - Texas**
            $1,000,000**Repayment
                of Cornell Capital Partners, LP Debenture**
            $4,500,000





The
      amounts noted above reflect our current cash resources and assume that we will
      raise, through equity or other financing, approximately $10,000,000 in the
      next
      12 months. There can be no assurance that the Company will be successful in
      raising these additional funds and, if the Company is unsuccessful in raising
      these additional funds, its plans for expanding operations and business
      activities may have to be curtailed.





Other
      than as detailed above, we do not anticipate making any major purchases of
      capital assets in the next 6 months, or conducting any large-scale research
      and
      development. We believe we have sufficient cash resources to satisfy our needs
      over the next twelve months. Our ability to satisfy cash requirements thereafter
      will determine whether we achieve our business objectives, including but not
      limited to drilling of the block 100 well in Peru and the closing of the
      intended acquisition of Rancho Hermoso S.A. in Bogota, Colombia. Should we
      require additional cash in the future, there can be no assurance that we will
      be
      successful in raising additional debt or equity financing on terms acceptable
      to
      our company, if at all.




**Off-Balance
      Sheet Arrangements**




We
      do not
      have any off-balance sheet arrangements, as defined in Item 303(c)(2) of
      Regulation S-B.




**ITEM
      3. CONTROLS AND PROCEDURES**





**Evaluation
      of Disclosure Controls and Procedures.**




Our
      management, with the participation of our chief executive officer and chief
      financial officer, evaluated the effectiveness of our disclosure controls and
      procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934
      as
      amended (the "Exchange Act"). In designing and evaluating the disclosure
      controls and procedures, management recognized that any controls and procedures,
      no matter how well designed and operated, can provide only reasonable assurance
      of achieving the desired control objectives. In addition, the design of
      disclosure controls and procedures must reflect the fact that there are resource
      constraints and that we are required to apply our judgment in evaluating the
      benefits of possible controls and procedures relative to our costs.





Based
      on
      that evaluation, our chief executive officer and chief financial officer
      concluded that, as of December 31, 2006, our disclosure controls and procedures
      are effective to provide reasonable assurance that information required to
      be
      disclosed by us in the reports that we file or submit under the Exchange Act
      (i)
      is accumulated and communicated to our management, including our chief executive
      officer and chief financial officer, as appropriate, to allow timely decisions
      regarding required disclosure, and (ii) is recorded, processed, summarized
      and
      reported within the time periods specified in the Securities and Exchange
      Commission rules and forms.





**Changes
      in Internal Control Over Financial Reporting.**





There
      were no changes in our internal control over financial reporting that occurred
      during the period covered by this Report on Form 10-QSB that have materially
      affected, or are reasonably likely to materially affect, our internal control
      over financial reporting.





Page
          21


**PART
      II - OTHER INFORMATION**




**ITEM
      6.     EXHIBITS.**




**Exhibit
      Index**





10.1
            Huaya
                Lote 100 - Agreement with Compania Consultora de Petroleo, S.A. and
                Zeigler-Peru, inc., dated January 31, 2007, amending Joint Operating
                Agreement dated May 11, 2006. (Incorporated by reference to Exhibit
                10.1
                of Radial Energy Inc.'s Current Report on Form 8-K filed on February
                6,
                2007).





31.1
            Section
                302 Certification - Chief Executive
                Officer





31.2
            Section
                302 Certification - Chief Financial
                Officer





32.1
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 - Chief Executive
                Officer.





32.2
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002 - Chief Financial
                Officer.





Page
          22




**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized, on this 15 th day of
      May, 2007.





**Radial
                Energy, Inc.**Date:
                May 15, 2007By:
            ***/s/
                Gregory Leigh Lyons***Gregory
                Leigh LyonsPresident/CEO(Principal
                Executive, Financial and Accounting
                Officer)





Page
          23