**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 **June 30, 2007**
 
 OR
 
 oTRANSITION
        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 (I.R.S. Employer





incorporation
      or organization) 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 xNo o





Number
      of
      shares outstanding of Registrant's class of common stock as of August 14,
      2007: **44,585,824**







**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."
 
 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**
 **June
        30, 2007**
 **(Stated
        in US Dollars)**
 **(Unaudited)**
  Page
            3
 
 **Radial
        Energy Inc.**
 **(A
        Development Stage Company)**
 **Interim
        Balance Sheets**
 **(Stated
        in US Dollars)**
 **(Unaudited)**
 
 **June 30, 2007**
              
              **December 31, 2006****ASSETS****Current**Cash
              
              $
              7,509
              
              $
              1,926,251Prepaid
                  expenses and deposit (note 6)
              
              
              97,151
              
              
              97,709Current
                  portion of deferred finance costs (note 4)
              
              
              75,000
              
              
              -179,660
              
              
              2,023,960**Deferred
                  acquisition costs**(note 7)
              
              
              -
              
              
              28,667**Deferred
                  finance costs**(note 4)
              
              
              135,000
              
              
              -**Equipment,
                  net**
              
              
              8,148
              
              
              3,853**Oil
                  and gas properties**(note 3)
              
              
              5,305,441
              
              
              2,650,666$
              5,628,249
              
              $
              4,707,146**LIABILITIES
                  and SHAREHOLDERS' EQUITY****Current**Accounts
                  payable and accrued liabilities (note 6)
              
              $
              5,354,773
              
              $
              541,944Notes
                  payable (note 9)
              
              
              486,536
              
              
              350,000Current
                  portion of convertible notes
              
              
              425,000
              
              
              -6,266,309
              
              
              891,944**Convertible
                  notes**(note 4)
              
              
              776,499
              
              
              2,215,2687,042,808
              
              
              3,107,212**STOCKHOLDERS'
                  EQUITY (DEFICIENCY)**Capital
                    stock (notes 4, 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
              
              
              1,099,786
              
              
              860,235Deficit
                  accumulated prior to development stage
              
              
              (194,472
              )
              
              (194,472
              )Deficit
                  accumulated during development stage
              
              
              (6,906,819
              )
              
              (3,652,775
              )(1,414,559
              )
              
              1,599,934$
              5,628,249
              
              $
              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**
                **June 30,**
              
              **For the six months ended**
                **June 30,**
              
              
              **Cumulative from**
                **April 1, 2006 (Date**
                **of Development**
                **Stage) to June 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**
              
              
              **2007****Expenses**Amortization
              
              
              460
              
              
              -
              
              
              773
              
              
              -
              
              
              1,060Consulting
                  fees
              
              
              -
              
              
              15,564
              
              
              -
              
              
              29,518
              
              
              21,466Executive
                  compensation and benefits (note 6)
              
              
              150,817
              
              
              1,259,800
              
              
              236,017
              
              
              1,259,800
              
              
              1,667,217Filing
                  and transfer fees
              
              
              6,265
              
              
              4,585
              
              
              14,073
              
              
              6,566
              
              
              33,834Interest
                  and bank charges
              
              
              16,249
              
              
              914
              
              
              28,474
              
              
              1,387
              
              
              70,604Interest
                  and financing fees on convertible debentures (note 4)
              
              
              1,562,497
              
              
              -
              
              
              1,679,905
              
              
              -
              
              
              3,014,508Investor
                  relations
              
              
              110,368
              
              
              31,657
              
              
              161,165
              
              
              41,657
              
              
              310,258Marketing,
                  advertising and promotion
              
              
              19,767
              
              
              29,150
              
              
              39,935
              
              
              29,150
              
              
              123,065Office
                  and administrative
              
              
              99,689
              
              
              25,884
              
              
              160,095
              
              
              28,597
              
              
              262,322Professional
                  fees
              
              
              49,924
              
              
              18,544
              
              
              111,296
              
              
              25,412
              
              
              343,907Redemption
                  fee (note 4)
              
              
              655,942
              
              
              -
              
              
              655,942
              
              
              -
              
              
              655,942Travel
              
              
              55,746
              
              
              10,431
              
              
              116,901
              
              
              15,851
              
              
              238,575Loss
                  before other items
              
              
              (2,727,724
              )
              
              (1,396,529
              )
              
              (3,204,576
              )
              
              (1,437,938
              )
              
              (6,742,758
              )**Other
                  items**Deferred
                  acquisition costs written-off (note 7)
              
              
              (47,268
              )
              
              -
              
              
              (47,268
              )
              
              -
              
              
              (47,268
              )Impairment
                  of oil and gas properties (note 3)
              
              
              -
              
              
              -
              
              
              (2,200
              )
              
              -
              
              
              (116,793
              )Gain
                  on note payable forgiven
              
              
              -
              
              
              -
              
              
              -
              
              
              9,407
              
              
              -Not
                  loss from continuing operations
              
              
              (2,774,992
              )
              
              (1,396,529
              )
              
              (3,254,044
              )
              
              (1,428,531
              )
              
              (6,906,819
              )Income
                  from discontinued operations
              
              
              -
              
              
              8,500
              
              
              -
              
              
              8,500
              
              
              -Not
                  loss for the period
              
              
              (2,774,992
              )
              
              (1,388,029
              )
              
              (3,254,044
              )
              
              (1,420,031
              )
              
              (6,906,819
              )**Loss
                  per share from continuing operations - basic and diluted**
              
              
              **(0.06**
              **)**
              
              **(0.04**
              **)**
              
              **(0.07**
              **)**
              
              **(0.02**
              **)****Income
                  per share from discontinued operations - basic and
                  diluted**
              
              
              **0.00**
              
              
              **0.00**
              
              
              **0.00**
              
              
              **0.00****Weighted
                  Average Shares Outstanding**
              
              
              44,585,824
              
              
              35,065,824
              
              
              44,585,824
              
              
              60,701,183
 
 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 June 30,
        2007**
 **(Stated
        in US Dollars)**
 **(Unaudited)**
  **Accumulated**
              
              **Accumulated**
              
              **Total****Common Stock**
              
              **Additional Paid-In Capital**
              
              **Deficit during**
              
              **Deficit Prior to**
              
              **Stockholders'****Shares**
              
              **Amount**
              
              **Shares**
              
              **Warrants**
              
              **Debentures**
              
              **Development Stage**
              
              **Development 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**Convertible
                  note (note 4)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              239,551
              
              
              
              
              
              
              
              
              239,551Net
                  loss for the period
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (3,254,044
              )
              
              (3,254,044
              )**Balance,
                  June 30, 2007**
              
              
              **44,585,824**
              
              
              **44,586**
              
              
              **2,250,808**
              
              
              **2,291,552**
              
              
              **1,099,786**
              
              
              **(194,472**
              **)**
              
              **(6,906,819**
              **)**
              
              **(1,414,559**
              **)**
 
 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 six months ended June 30,**
              
              **Cumulative from April 1,**
                **2006 (Date of Development****2007**
              
              **2006**
              
              **Stage) to June 30,**2007**Cash
                  Flows from (used in) Operating Activities**Net
                  loss from operations
              
              $
              (3,254,044
              )
              $
              (1,420,031
              )
              $
              (6,906,819
              )Items
                  not affecting cash:-
                  amortization
              
              
              773
              
              
              -
              
              
              1,060-
                  gain on note payable forgiven
              
              
              -
              
              
              (9,407
              )
              
              --
                  deferred acquisition costs written-off
              
              
              47,268
              
              
              -
              
              
              47,268-
                  impairment of oil and gas properties
              
              
              -
              
              
              -
              
              
              114,593-
                  stock issued for executive compensation
              
              
              -
              
              
              -
              
              
              1,200,000-
                  interest and fees accrued for convertible debentures
              
              
              2,578,391
              
              
              -
              
              
              3,540,494-
                  stock issued for financing fee
              
              
              -
              
              
              -
              
              
              19,600Changes
                  in non-cash working capital balances related to operations:
              
              
              
              
              
              
              
              
              --
                  accounts receivable
              
              
              -
              
              
              -
              
              
              --
                  prepaid expenses and deposits
              
              
              558
              
              
              (39,535
              )
              
              (87,140
              )-
                  accounts payable and accrued expenses
              
              
              302,764
              
              
              765,750
              
              
              827,227(324,290
              )
              
              (703,223
              )
              
              (1,243,717
              )Income
                from
                discontinued operations
              
              
              -
              
              
              (8,500
              )
              
              -Cash
                  provided by other discontinued operating activities
              
              
              -
              
              
              2,000
              
              
              -**Cash
                  Flows - Operating Activities**
              
              
              (324,290
              )
              
              (709,723
              )
              
              (1,243,717
              )**Cash
                  flows from (used in) Investing Activities**Acquisition
                  of equipment
              
              
              (5,068
              )
              
              (1,015
              )
              
              (9,208
              )Oil
                  and gas properties
              
              
              (2,654,775
              )
              
              (2,144,814
              )
              
              (5,420,034
              )Deferred
                  acquisition costs
              
              
              (18,601
              )
              
              -
              
              
              (47,268
              )Deferred
                  finance costs
              
              
              (210,000
              )
              
              -
              
              
              (210,000
              )**Cash
                  Flows -Investing Activities**
              
              
              (2,888,444
              )
              
              (2,145,829
              )
              
              (5,686,510
              )**Cash
                  flows from Financing Activities**Proceeds
                  from notes payable
              
              
              93,992
              
              
              (20,000
              )
              
              443,992Proceeds
                  from convertible debentures
              
              
              1,200,000
              
              
              -
              
              
              4,700,000Shares
                  subscribed
              
              
              -
              
              
              1,710,000
              
              
              -Due
                  to related parties
              
              
              -
              
              
              1,219,600
              
              
              -Proceeds
                  from issue of common stock
              
              
              -
              
              
              -
              
              
              1,602,500**Cash
                  Flows - Financing Activities**
              
              
              1,293,992
              
              
              2,909,600
              
              
              6,746,492**Net
                  increase (decrease) in cash**
              
              
              (1,918,742
              )
              
              54,048
              
              
              (183,735
              )**Cash,
                  beginning of period**
              
              
              1,926,251
              
              
              1,211
              
              
              191,244**Cash,
                  end of period**
              
              $
              7,509
              
              $
              55,259
              
              $
              7,509**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
 June
        30,
        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 and six month periods ended June 30,
        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 June 30, 2007, the Company had not yet achieved profitable
        operations, has accumulated losses of $7,101,291 since its inception, has
        a
        working capital deficiency of $6,086,649 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
 
 **3.**
              **Oil
                  and gas properties**
  June 30, 2007
                
                December 31, 2006United States
                
                Peru
                
                Colombia
                
                Total
                
                United States
                
                Peru
                
                Colombia
                
                TotalUnproved
                    properties
                
                $
                617,985
                
                $
                3,945,065
                
                $
                859,184
                    $
                
                $
                5,422,234
                
                $
                604,693
                
                $
                1,689,653
                
                $
                470,913
                
                $
                2,765,259Less:impairment
                
                
                (116,793
                )
                
                -
                
                
                -
                
                
                (116,793
                )
                
                (114,593
                )
                
                -
                
                
                -
                
                
                (114,593
                )$
                501,192
                
                $
                3,945,065
                
                $
                859,184
                
                $
                5,305,441
                
                $
                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. In
        addition, excess costs incurred by the drilling operator that are documented,
        reasonable and necessary for the wells to be drilled, completed and tested
        will
        be paid by the Company, proportionate to its interest, out of the 10% of
        the
        revenues net to its total interest once production begins. The Company intends
        to enter into a formal agreement whereby it will pay for 50% of the excess
        costs
        in monthly installments, up to a maximum of $280,000.
 
 By
        an
        Amendment Agreement dated March 30, 2007, the buy in consideration for the
        second and third wells on the property are as follows:
 
 By
                  March 30, 2007
              
              $
              350,000Upon
                  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$
              1,550,000
              
              
              (all amounts paid atJune 30, 2007)
 
 During the six
        month period ended June 30, 2007, the Company incurred $154,019 in exploration
        costs.
  Page
            9
  **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. During the fiscal year ended December
        31,
        2006, the Company also incurred $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 six months ended June 30, 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. During the fiscal year ended December 31, 2006, the
        Company incurred $117,285 in exploration costs.
 
 At
        June
        30, 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 six
        months ended June 30, 2007 the Company incurred $38,270 in exploration
        costs.
 
 **4.**
              **Convertible
                  debentures**
 
 **a.**
              **Issued
                  October 2, 2006**
 
 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 paid
        the
        purchaser a commitment fee of 10% the principal amount of the debentures,
        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 transaction.
 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”).
 
 Material
          terms of the private placement is noted in the Company’s audited financial
          statements for the year ended December 31, 2006.
 
 On
          May
          17, 2007, the Company entered into a Securities Amendment Agreement (“Amendment
          Agreement”) with the purchaser of the debentures which
          terminated the transaction documents in connection with our October 2006
          private
          placement secured convertible debentures and provided certain terms as
          described
          below.
 
 The
          Amendment Agreement provides that, effective May 17, 2007:
 
 1.
                The
                    securities purchase agreement shall be terminated and no longer
                    have any
                    force or effect;
  2.
                The
                    Company shall have no further obligation to issue to the purchaser,
                    and
                    the purchaser shall have no further obligation to purchase from
                    the
                    Company, a convertible debenture in the principal amount of $1,500,000,
                    and the Company shall have no further obligation to issue to
                    the purchaser
                    the D warrants;
  3.
                The
                    Company has no obligations whatsoever to the purchaser in respect
                    of the
                    liquidated damages set forth in the registration rights
                    agreement;
  4.
                The
                    lock-up agreements shall be terminated and no longer have any
                    force or
                    effect;
  5.
                The
                    pledge and escrow Agreement shall be terminated and no longer
                    have any
                    force or effect;
  6.
                As
                    per the term of the Amendment Agreement, the purchaser will retain
                    the
                    8,166,667 stock purchase warrants that were issued pursuant to
                    the
                    securities purchase agreement. 3,333,333 of the stock purchase
                    warrants
                    are exercisable at $0.75 per share, 2,500,000 stock purchase
                    warrants are
                    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.  Accordingly, the Company has reserved 8,166,667 common shares
                    for issuance pursuant to these warrants;
  7.
                The
                    Company shall register the shares underlying the warrants in
                    a
                    “piggy-back” registration for the benefit of the
                    purchaser;
  8.
                The
                    purchaser shall waive any penalties and liabilities related to
                    the
                    Company’s obligations under the investor registration rights
                    agreement;
  9.
                The
                    Company shall redeem the outstanding secured convertible debentures
                    from
                    the purchaser by paying the purchaser an amount equal to the
                    principal
                    amount of the outstanding debentures (an aggregate of $3,500,000),
                    plus a
                    redemption premium equal to 18% of the principal amount being
                    redeemed
                    ($655,942), and accrued interest, within 90 days of the date
                    of the
                    Amendment Agreement;
 
 The
          debentures accrued interest at 7.0% per annum, were due on October 2, 2009,
          and
          were convertible into the Company's common stock at the option of the purchaser
          at any time prior to redemption by the Company. An
          amount
          of $860,235 was 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.


Prior
        to
        redemption, the convertible debentures were recorded net of a discount of
        $1,245,646 at May 17, 2007, representing the unamortized relative fair value
        of
        the detachable warrants issued in connection with the $2,000,000 debenture.
        This
        discount was amortized to interest expense over the stated term of the
        debenture. During the period from January 1, 2007 to May 17, 2007, the Company
        accreted $90,867 of the discount in relation to the debentures.
 
 The
        Company has reserved 26,333,333 common shares for issuance pursuant to
        debentures issued under the securities purchase agreement.
 
 At
        June
        30, 2007, the Company has accrued $144,123 in interest payable and $655,942
        in
        redemption fees. These amounts, in addition to the principal sum of the
        convertible debentures, are included in accrued liabilities at June 30, 2007.
  Page
            10
  **b.**
              **Issued
                  June 11, 2007**
 
 On
        June
        11, 2007, the Company entered into a Note Purchase Agreement (“NPA”), which
        provides for the sale of secured convertible promissory notes for an aggregate
        purchase price of $1,400,000.
 
 On
        June
        11, 2007, the first secured convertible promissory note in the principal
        amount
        of $1,200,000 (the “Note”) was issued. The Note is payable upon demand at
        any time on or after the Company closes a financing of at least $6 million.
        The
        Note is subject to a 2% interest to be accrued and payable on a monthly basis.
        The Company may prepay the loan at any time without penalty.
 
 The
        Note
        holder has the option to convert the outstanding principal under the loan
        into
        shares of the Company’s common stock at the lower of $1.0536 per share or the
        price equal to 90% of the daily volume weighted average price during the
        15
        trading days immediately preceding the conversion date.
 
 The
        principal will be repaid in 27 consecutive monthly payments of $42,500 each,
        and
        the remaining balance of $52,500 on the 28 th month.
        In
        the event that the Company is in default of the payment schedule for the
        outstanding principal, a default fee equal to 1% of the then outstanding
        principal balance will be accrued to the outstanding principal amount, which
        fee
        will accrue monthly until the default is cured.  The Note (and a $200,000
        note received subsequent to June 30, 2007) are secured by all of the Company’s
        interests in the Huaya Anticline Project, located in Block 100,
        Peru.
 
 The
        Company incurred a $210,000 commitment and restructuring fee in relation
        to the
        NPA, which is payable in monthly payments of $7,500 commencing September
        2007.
 
 The
        $200,000 note, when issued, will have substantially the same terms as the
        Note,
        except that the payment schedule and amount will be different due to the
        different principal amount. The Company has granted the Note holder piggy-back
        registration rights for the shares to be issued upon conversion of the notes
        issued as per the NPA.
 
 At
        June
        30, 2007, an amount of $239,551 has been recorded in additional paid-in capital
        for the fair value of the beneficial conversion feature, and $1,499 in interest
        payable in relation to this Note.
 
 **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
            11
  Stock
        Purchase Warrants:
 
 At
        June
        30, 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
                  June 30, 2007
                
                Weighted
                  Average
                  Remaining
                  Contractual Life
                  (in years)Issued, July 21,
                    2006
                
                
                8,000,000
                
                
                4-Aug-08
                
                $
                0.30
                
                
                8,000,000
                
                
                1.10Issued,
                    October 2, 2006
                
                
                3,333,333
                
                
                1-Oct-11
                
                $
                0.75
                
                
                3,333,333
                
                
                4.26Issued,
                    October 2, 2006
                
                
                2,500,000
                
                
                1-Oct-11
                
                $
                1.00
                
                
                2,500,000
                
                
                4.26Issued,
                    October 2, 2006
                
                
                2,333,333
                
                
                1-Oct-11
                
                $
                1.50
                
                
                2,333,333
                
                
                4.2616,166,666
                
                
                
                
                $
                0.67
                
                
                16,166,666
                
                
                2
                    .69
  On
        April
        20, 2007, the Company engaged an 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,
        the agent 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, the agent 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 was paid upon execution
        of this
        agreement.
 
 **6.**
              **Related
                  party transactions**
 
 During
        the three and six month periods ended June 30, 2007, the Company incurred
        $90,195 and $175,395 respectively, (three and six month periods ended June
        30,
        2006: $1,259,800) in executive compensation and benefits to directors of
        the
        Company.
 
 Included
        in prepaid expenses and deposit at June 30, 2007, is $12,814 (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 June 30, 2007 is $3,600 (December 31, 2006: $6,762)
        due
        to directors of the Company for expenses incurred on behalf of the
        Company.
 
 
 **7.**
              **Commitments
                  -**Notes
                  3, 4 and 5
 
 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 June 30, 2007, the Company had incurred related acquisition
        costs
        totaling $47,268.
 
 On
        June
        1, 2007, the Company entered into an agreement with a publicly-traded Canadian
        company to complete the purchase of 100% of the shares of Rancho Hermoso
        S.A.
        Under the new terms of the MOU, the partners have been granted an extension
        to
        June 22, 2007 to sign a formal Share Purchase Agreement ("SPA") and deposit
        an
        escrow in favor of Rancho Hermoso. The closing date for the transaction is
        set
        for July 31, 2007. This Canadian company would provide 100% of the escrow
        and
        would pay 100% of the acquisition. In return, the Company would earn, after
        closing, a 10% working interest in a joint venture company holding 100% of
        Rancho Hermoso shares.
 
 On
        August
        1, 2007, the Company’s agreement with this Canadian company effectively lapsed.
        The Company does not intend to pursue the acquisition of the shares of Rancho
        Hermoso. As a result, deferred acquisition costs of $47,268 have been
        written-off.
  Page
            12
  **8.**
                **Comparative****Figures**
 
 Certain
        of the prior year period’s comparative figures for the three and six month
        period ended June 30, 2007 and for the period from April 1, 2006 (date of
        Development Stage) to June 30, 2007 have been reclassified to conform to
        the
        presentation adopted in the current period.
 
 
 **9.** **Notes
        Payable**
 
 June 30,
              
              December 31,2007
              
              2006On
                  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 June 30, 2007, $29,014 in interest was accrued
                  (December
                  31, 2006, $14,137 in accounts payable). This note has
                  lapsed.
              
              $
              279,014
              
              $
              250,000On
                  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 June 30, 2007, $10,981
                  in
                  interest was accrued (December 31, 2006, $5,030 in accounts payable).
                  This
                  note has lapsed.
              
              
              110,981
              
              
              100,000On
                  May 9, 2007, the Company received $93,992 pursuant to a promissory
                  note.
                  The note is unsecured, bears interest at 18% per annum and is due
                  on
                  demand. At June 30, 2007, $2,549 in interest was accrued.
              
              
              96,541
              
              
              -$
              486,536
              
              $
              350,000
  Page
            13
  **ITEM
        2. MANAGEMENT’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 has advanced
        an additional $450,000 to increase the working interest to 23% and revenue
        interest to 20.7%.
 
 The
        Company has optioned 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.
 
 The
        Company has now advanced a total of $3,750,000 towards the drilling, testing,
        and completion of the first, second and third well.
  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 Company
        has drilled the Huaya 100-1X and Huaya 100-2X well to total depth and is
        currently assessing the location of the Huaya 100-5X well,
  Page
            14
  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 to
        complete the Huaya 100-1X well with 4-1/2 casing once the material arrive
        at the
        drilling site
 
 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. The operator preformed
        production tests on two separate formations in the Huaya 100-2X well from
        June
        13 th to June
        19, 2007. The first formation was perforated between 276 and 275 meters and
        flowed approximately 300 barrels of water per day. The second formation was
        perforated between 255.2 and 258.8 meters and flowed a total of 108 barrels
        of
        fresh water and 1.3 gallons of 35.6
°
        API oil. The operators was ceased production tests on the Huaya 100-2X well
        and
        will determine the next step upon analyzing the results.
 
 The
        operator is currently working with the government to move the drilling permit
        of
        the Huaya 100-5X well to a new location. The operator plans on doing a number
        of
        rock sampling tests around the new proposed location in order to determine
        whether the proposed location is higher than the Huaya 100-1X and Huaya 100-2X
        wells. The Company has approved the rock sampling and expects rock sampling
        will
        begin shortly. Drilling of the Huaya 100-5X well is expected to be completed
        shortly after receiving the proper permits.
  **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
        on
        November 30 th ,
        2006.
 
 The
        Company received an authorization of expenditure for the Junction Prospect
        and
        is currently analyzing whether it will participate in the drilling of this
        prospect. The Company may have to seek additional financing to complete the
        drilling of this prospect.
 
 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.
  Page
            15
  **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
        June
        30, 2007, the Company has not disbursed the first payment, has accrued for
        the
        second payment and has incurred $155,556 in exploration costs.
 
 
 **RESULTS
        OF OPERATION**
 
 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 quarters ended
        June
        30, 2007 and June 30, 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 June 30, 2007, we had $7,509 in cash, and working
        capital deficit of $6,086,649..
 
 **Three
        and six month periods ended June 30, 2007**
 
 Three month
                ended June 30,
                2007
              
              Six month
                ended June 30,
                2007**Expenses**Amortization
              
              $
              460
              
              $
              773Consulting
                  fees
              
              
              -
              
              
              -Deferred
                  acquisition costs written-off
              
              
              47,268
              
              
              47,268Executive
                  compensation and benefits
              
              
              150,817
              
              
              236,017Filing
                  and transfer fees
              
              
              6,265
              
              
              14,073Interest
                  and bank charges
              
              
              16,249
              
              
              28,474Interest
                  and financing fees on convertible debentures
              
              
              1,562,497
              
              
              1,679,905Investor
                  relations
              
              
              110,368
              
              
              161,165Marketing,
                  advertising and promotion
              
              
              19,767
              
              
              39,935Office
                  and administrative
              
              
              99,689
              
              
              160,095Professional
                  fees
              
              
              49,924
              
              
              111,296Redemption
                  fee
              
              
              655,942
              
              
              655,942Travel
              
              
              55,746
              
              
              116,901Impairment
                  of oil and gas properties
              
              
              -
              
              
              2,200**Net
                  loss**
              
              **$**
              **2
                  ,774,992**
              
              **$**
              **3,254,044**
  Page
            16
 
 ***Revenues***
 
 For
        the
        quarter ended June 30, 2007, we had no revenues from our continuing operations.
        We expect to start earning revenues towards the end of fiscal 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, $nil during the
        three
        month period ended June 30, 2007 and $2,200 during the six month period ended
        June 30, 2007.
 
 ***Expenses
        and general and administrative expenses***
 
 During
        the three and six month periods ended June 30, 2007, the Company incurred
        total
        expenses from continuing operations of $2,774,992 and $3,254,044, respectively.
        These expenses were related mainly to executive compensation and to financing
        activities, such as $2,218,439 in interest, accretion of discount and loss
        on
        extinguishment of the convertible debentures issued in October 2006. 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.
 
 During
        the three month period ended June 30, 2007, the Company wrote off $47,268
        of
        deferred acquisition costs in relation to the intended acquisition of Rancho
        Hermoso, since the Company no longer intends to pursue the acquisition of
        the
        shares of Rancho Hermoso. As a result, deferred acquisition costs of $47,268
        have been written-off.
 
 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 three and six month periods ended June 30, 2007, no revenue (2006 - $nil
        and
        $8,500, respectively) 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 development stage
        activity effective April 1, 2006.
 
 ***Net
        Loss***
 
 Our
        net
        loss was $2,774,992 and $3,254,044, respectively, for the three and six month
        periods ended June 30, 2007, as compared to $1,388,029 and $1,420,031 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
        June 30, 2007, we had cash of $7,509, and working capital deficiency of
        $ 6,086,649 .
        During
        the six month period ended June 30, 2007, we funded our operations from the
        proceeds of private sales of equity and convertible debentures. We are currently
        completing a further financing and we believe that this will provide sufficient
        working capital to fund our operations for at least the next 12 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.
  Page
            17
 
 For
        the
        six month period ended June 30, 2007, we used $324,290 in cash for operations..
        Net cash used in operating activities reflected $558 in prepaid expenses
        and
        deposits and an increase in accounts payable of $302,764. Investment activities
        used $2,888,444 of cash during the quarter, which was primarily related to
        the
        acquisition of oil and gas assets.
 
 We
        raised
        $1,200,000 during the six month period ended June 30, 2007 from the proceeds
        of
        a convertible note, and another $93,992 from a loan.
  Our
        current cash requirements are significant due to the exploration and development
        of our current prospects. During the third 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. $29,014
        in interest has been accrued in relation to this note as at June 30, 2007.
  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. $10,981 in interest has been accrued in relation to this note
        as at
        June 30, 2007.
 
 *Convertible
        debentures issued October 2006*
 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”).
 
 Material
        terms of the private placement is noted in the Company’s audited financial
        statements for the year ended December 31, 2006.
 
 On
        May
        17, 2007, the Company entered into a Securities Amendment Agreement (“Amendment
        Agreement”) with the purchaser of the debentures which
        terminated the transaction documents in connection with our October 2006
        private
        placement secured convertible debentures and provided certain terms as described
        below.
 
 The
        Amendment Agreement provides that, effective May 17, 2007:
 
 1.
              The
                  securities purchase agreement shall be terminated and no longer
                  have any
                  force or effect;
 2.
              The
                  Company shall have no further obligation to issue to the purchaser,
                  and
                  the purchaser shall have no further obligation to purchase from
                  the
                  Company, a convertible debenture in the principal amount of $1,500,000,
                  and the Company shall have no further obligation to issue to the
                  purchaser
                  the D warrants;
 3.
              The
                  Company has no obligations whatsoever to the purchaser in respect
                  of the
                  liquidated damages set forth in the registration rights
                  agreement;
 4.
              The
                  lock-up agreements shall be terminated and no longer have any force
                  or
                  effect;
 5.
              The
                  pledge and escrow Agreement shall be terminated and no longer have
                  any
                  force or effect;
 6.
              As
                  per the term of the Amendment Agreement, the purchaser will retain
                  the
                  8,166,667 stock purchase warrants that were issued pursuant to
                  the
                  securities purchase agreement. 3,333,333 of the stock purchase
                  warrants
                  are exercisable at $0.75 per share, 2,500,000 stock purchase warrants
                  are
                  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.
                  Accordingly, the Company has reserved 8,166,667 common shares for
                  issuance
                  pursuant to these warrants;
 7.
              The
                  Company shall register the shares underlying the warrants in a
                  “piggy-back” registration for the benefit of the
                  purchaser;
 8.
              The
                  purchaser shall waive any penalties and liabilities related to
                  the
                  Company’s obligations under the investor registration rights
                  agreement;
 9.
              The
                  Company shall redeem the outstanding secured convertible debentures
                  from
                  the purchaser by paying the purchaser an amount equal to the principal
                  amount of the outstanding debentures (an aggregate of $3,500,000),
                  plus a
                  redemption premium equal to 18% of the principal amount being redeemed
                  ($655,942), and accrued interest, within 90 days of the date of
                  the
                  Amendment Agreement;
  Page
            18
 
 The
        debentures accrued interest at 7.0% per annum, were due on October 2, 2009,
        and
        were convertible into the Company's common stock at the option of the purchaser
        at any time prior to redemption by the Company. An
        amount
        of $860,235 was 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.
 
 Prior
        to
        redemption, the convertible debentures were recorded net of a discount of
        $1,245,646 at May 17, 2007, representing the unamortized relative fair value
        of
        the detachable warrants issued in connection with the $2,000,000 debenture.
        This
        discount was amortized to interest expense over the stated term of the
        debenture. During the period from January 1, 2007 to May 17, 2007, the Company
        accreted $90,867 of the discount in relation to the debentures.
 
 The
        Company has reserved 26,333,333 common shares for issuance pursuant to
        debentures issued under the securities purchase agreement.
 
 At
        June
        30, 2007, the Company has accrued $144,123 in interest payable and $655,942
        in
        redemption fees. These amounts, in addition to the principal sum of the
        convertible debentures, are included in accrued liabilities at June 30, 2007.
  *Convertible
        note issued June 11, 2007*
 On
        June
        11, 2007, the Company entered into a Note Purchase Agreement (“NPA”), which
        provides for the sale of secured convertible promissory notes for an aggregate
        purchase price of $1,400,000.
 
 On
        June
        11, 2007, the first secured convertible promissory note in the principal
        amount
        of $1,200,000 (the “Note”) was issued. The Note is payable upon demand at
        any time on or after the Company closes a financing of at least $6 million.
        The
        Note is subject to a 2% interest to be accrued and payable on a monthly basis.
        The Company may prepay the loan at any time without penalty.
 
 The
        Note
        holder has the option to convert the outstanding principal under the loan
        into
        shares of the Company’s common stock at the lower of $1.0536 per share or the
        price equal to 90% of the daily volume weighted average price during the
        15
        trading days immediately preceding the conversion date.
 
 The
        principal will be repaid in 27 consecutive monthly payments of $42,500 each,
        and
        the remaining balance of $52,500 on the 28 th month.
        In
        the event that the Company is in default of the payment schedule for the
        outstanding principal, a default fee equal to 1% of the then outstanding
        principal balance will be accrued to the outstanding principal amount, which
        fee
        will accrue monthly until the default is cured.  The Note (and a $200,000
        note received subsequent to June 30, 2007) are secured by all of the Company’s
        interests in the Huaya Anticline Project, located in Block 100,
        Peru.
 
 The
        Company incurred a $210,000 commitment and restructuring fee in relation
        to the
        NPA, which is payable in monthly payments of $7,500 commencing September
        2007.
 
 The
        $200,000 note, when issued, will have substantially the same terms as the
        Note,
        except that the payment schedule and amount will be different due to the
        different principal amount. The Company has granted the Note holder piggy-back
        registration rights for the shares to be issued upon conversion of the notes
        issued as per the NPA.
 
 At
        June
        30, 2007, an amount of $239,551 has been recorded in additional paid-in capital
        for the fair value of the beneficial conversion feature, and $1,499 in interest
        payable in relation to this Note.
  **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. 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.
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            20
 
 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.
 
 ***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 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"). 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
              
              Note
                  Purchase Agreement by and between the Companyand
                  Coach Capital LLC dated June 11, 2007.(Incorporated
                  by reference to Exhibit 10.1 of Radial Energy Inc.'s Current Report
                  on
                  Form 8-K/a filed on June 22, 2007).10.2
              
              Secured
                  Convertible Promissory Note in the Principal Amount of $1,200,000
                  Issued
                  to Coach Capital LLC dated June 11, 2007.(Incorporated
                  by reference to Exhibit 10.2 of Radial Energy Inc.'s Current Report
                  on
                  Form 8-K/a filed on June 22, 2007).10.3
              
              Termination
                  Agreement by and between the Company and Coventry Capital LLC dated
                  June
                  11, 2007.(Incorporated
                  by reference to Exhibit 10.3 of Radial Energy Inc.'s Current Report
                  on
                  Form 8-K/a filed on June 22, 2007).10.4
              
              Master
                  Securities Amendment Agreement dated as of May 17, 2007 by and
                  between the
                  Company and Cornell Capital Partners, L.P. (Incorporated by reference
                  to
                  Exhibit 10.1 of Radial Energy Inc.’s Current Report on Form 8-K filed on
                  May 21, 2007.31.1
              
              Section
                  302 Certification - Chief Executive Officer31.2
              
              Section
                  302 Certification - Chief Financial Officer32.1
              
              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 14 th day of
        August , 2007.
 
 **Radial
                  Energy, Inc.**Date:
                  August 14, 2007By:
              ***/s/
                  Gregory Leigh Lyons***Gregory
                  Leigh LyonsPresident/CEO(Principal
                  Executive, Financial and Accounting
                  Officer)
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            23