**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549 **

----

**FORM      10-QSB**

| **(Mark                one)** |   |                                                                                                                           |
|-------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|
| **x**                         |   | **QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                OF 1934.** |

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

**OR**

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

**For      the transition period      from                                  to                       **

**Commission      File No. 000-50906**

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**ETERNAL      ENERGY CORP.**

| **Nevada**                                                                                 |   | **20-0237026**                                                    |
|--------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|
| (State                or Other Jurisdictionof                Incorporation orOrganization) |   | (I.R.S.                EmployerIdentification                No.) |

**2120      West Littleton Blvd., Suite 300**

**Littleton,      Colorado**

**(303)      385-1230**

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| **TITLE                OF CLASS**              |   | **NUMBER                OF SHARES****OUTSTANDING** |
|------------------------------------------------|--------|----------------------------------------------------|
| Common                Stock, $0.001 par value. |   | 42,550,000                                         |

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**PART      I. FINANCIAL INFORMATION**

**Item      1. Financial Statements**

**Eternal      Energy Corp.**

**(A      Company in the Development Stage)**

**Financial      Statements**

***As      of March 31, 2007 and***

***For      Each of the Three-Month Periods Ended March 31, 2007 and 2006      and***

***For      the Period From July 25, 2003 (Inception) to March 31,      2007***

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Index        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31,        2007***

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| Financial                Statements of Eternal Energy Corp.:                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                        | Balance                  Sheet as of March 31, 2007                                                                                                                                                                                                 | F-1 |
|                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                |   |
|                                                                                                                                                                                                                                                                                        | Statements                  of Operations For Each of the Three-Month Periods Ended March 31,                  2007 and                  2006 and for the Period from July 25, 2003 (Inception) to March                  31,                  2007 | F-2 |
|                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                |   |
|                                                                                                                                                                                                                                                                                        | Statements                  of Cash Flows For Each of the Three-Month Periods Ended March 31,                  2007 and                  2006 and for the Period From July 25, 2003 (Inception) to March                  31,                  2007 | F-3 |
|                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                |   |
|  Notes                  to the Financial Statements as of March 31, 2007 and For Each of                  the                  Three-Month Periods Ended March 31, 2007 and 2006 and for the Period                  From                  July 25, 2003 (Inception) to March 31, 2007 | F-5                                                                                                                                                                                                                                                 |

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**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Balance        Sheet**

***March        31, 2007***

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| *ASSETS*                                                                                                                             |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                 |   |   |   |
| Current                assets:                                                                                                       |   |   |   |
| Cash                                                                                                                                 |   | $ | 1,891,133 |   |
| Equipment                and leasehold improvements, net of accumulated depreciation and                amortization of $972         |   |   | 21,780 |   |
| Oil                and gas properties                                                                                                |   |   | 1,620,808 |   |
| Deposits                                                                                                                             |   |   | 3,004,410 |   |
|                                                                                                                                 |   |   |   |   |
| **Total                assets**                                                                                                      |   | **$** | **6,538,131** |   |
|                                                                                                                                 |   |   |   |   |
| *LIABILITIES                AND STOCKHOLDERS' EQUITY*                                                                                |
|                                                                                                                                 |
| Current                liabilities:                                                                                                  |   |   |   |   |
| Accounts                payable and accrued liabilities                                                                              |   | $ | 201,557 |   |
| Accrued                compensation                costs                                                                             |   |   | 15,337 |   |
|                                                                                                                                 |   |   |   |   |
| **Total                current liabilities**                                                                                         |   |   | **216,894** |   |
|                                                                                                                                 |   |   |   |   |
| Commitments                and contingencies                                                                                         |   |   |   |   |
| Stockholders'                equity:                                                                                                 |   |   |   |   |
| Common                stock, $.001 par value, 875,000,000 shares authorized, 42,550,000                shares issued and outstanding |   |   | 42,550 |   |
| Additional                paid-in capital                                                                                            |   |   | 7,591,846 |   |
| Deficit accumulated                during the development stage                                                                 |   |   | (1,313,159 | ) |
|                                                                                                                                 |   |   |   |   |
| **Total                stockholders' equity**                                                                                        |   |   | **6,321,237** |   |
|                                                                                                                                 |   |   |   |   |
| **Total                liabilities and stockholders' equity**                                                                        |   | **$** | **6,538,131** |   |

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**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Statements        of Operations**

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

|                                                                                                   |   |                                            |           |                          |   | For                the        |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|----------------|-------------------------------|--------|-------------------------------|--------|
|                                                                                                   |   |                                            |           |                          |   | Period                From    |   |
|                                                                                                   |   |                                            |           |                          |   | July                26, 2003  |   |
|                                                                                                   |   | For                the Three-Month Period Ended |           | (Inception)                to |   |
|                                                                                                   |   | March                31, 2007                   |           | March                31, 2006 |   | March                31, 2007 |   |
| Operating                expenses:                                                                     |   |                                            |           |                          |   |                          |   |
| Exploration                costs                                                                       |   |                                            | -              |                          |   | -                             |   | $ | 164,764 |   |
| General                and administrative                                                              |   |                                            | 133,909        |                          | $      | 87,222                        |   |   | 822,226 |   |
| Professional                fees                                                                       |   |                                            | 29,610         |                          |   | 1,355                         |   |   | 371,419 |   |
| Loss                (gain)                on warrant derivative                                        |   |                                            | -              |                          |   | 3,918,832                     |   |   | (4,021,112 | ) |
| Total                operating (income) loss                                                           |   |                                            | 163,519        |                          |   | 4,007,409                     |   |   | (2,662,703 | ) |
|  Interest                (income)                                                                 |   |                                            | (15,285        | )                             |   | -                             |   |   | (45,250 | ) |
| (Income)                loss before cumulative effect                of change in accounting principal |   |                                            | 148,234        |                          |   | 4,007,409                     |   |   | (2,707,953 | ) |
| Cumulative                effect of the change in accounting                principal                  |   |                                            | (4,021,112     | )                             |   | -                             |   |   | (4,021,112 | ) |
|  **Net                loss**                                                                      |   | **$**                                           | **(4,169,346** | **)**                         | **$**  | **(4,007,409**                | **)**  | **$** | **(1,313,159** | **)** |
| **Net                loss****per common share, basic and diluted**                                     |   | **$**                                           | **(0.10**      | **)**                         | **$**  | **(0.13**                     | **)**  | **$** | **(0.03** | **)** |
| **Weighted                average number of shares outstanding****,                basic and diluted** |   |                                            | **42,550,000** |                          |   | **29,970,956**                |   |   | **51,100,273** |   |

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Statements        of Cash Flows**

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31,        2007***

----

|                                                                                                                              |   |                                            |         |                          |   | For                the        |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------------|-------------------------------|--------|-------------------------------|--------|
|                                                                                                                              |   |                                            |         |                          |   | Period                From    |   |
|                                                                                                                              |   |                                            |         |                          |   | July                25, 2003  |   |
|                                                                                                                              |   | For                the Three-Month Period Ended |         | (Inception)                to |   |
|                                                                                                                              |   | March                31, 2007                   |         | March                31, 2006 |   | March                31, 2007 |   |
| *Cash                flows provided by (used in) operating activities:*                                                           |   |                                            |         |                          |   |                          |   |
| Income                (loss) before cumulative effect                of change in accounting principal                            |   | $                                               | (148,234     | )                             | $      | (4,007,409                    | )      | $ | 2,707,953 |   |
| Adjustments                to reconcile net income                (loss) to net cash used                by operating activities: |   |                                            |         |                          |   |                          |   |   |   |   |
| Non                cash transactions:                                                                                             |   |                                            |         |                          |   |                          |   |   |   |   |
| Stock-based                compensation                                                                                           |   |                                            | 46,045       |                          |   | 12,288                        |   |   | 158,872 |   |
| Depreciation                and amortization                                                                                      |   |                                            | 972          |                          |   | -                             |   |   | 972 |   |
| Loss                (gain) on derivatives                                                                                         |   |                                            | -            |                          |   | 3,918,832                     |   |   | (4,021,112 | ) |
| Changes                in operating assets and liabilities:                                                                       |   |                                            |         |                          |   |                          |   |   |   |   |
| Decrease                in prepaid compensation                                                                                   |   |                                            | -            |                          |   | 20,625                        |   |   | - |   |
| Decrease                in                prepaid rent                                                                            |   |                                            | 12,828       |                          |   | -                             |   |   | - |   |
| Increase                (decrease) in accounts                payable and accrued                liabilities                      |   |                                            | (5,874       | )                             |   | 32,216                        |   |   | 201,557 |   |
| Increase                (decrease) in accrued                officer's payroll                                                    |   |                                            | (183         | )                             |   | (9,273                        | )      |   | 15,337 |   |
| **Net                cash used in operating****activities**                                                                       |   |                                            | **(94,446**  | **)**                         |   | **(32,721**                   | **)**  |   | **(936,421** | **)** |
| *Cash                flows used in investing activities:*                                                                         |   |                                            |         |                          |   |                          |   |   |   |   |
| Increase                in drilling deposits                                                                                      |   |                                            | -            |                          |   | (3,000,000                    | )      |   | (3,004,410 | ) |
| Equipment                and leasehold                improvements                                                                |   |                                            | (5,632       | )                             |   | -                             |   |   | (22,752 | ) |
| Additions                to oil and gas properties                                                                                |   |                                            | (375,599     | )                             |   | (75,000                       | )      |   | (1,554,833 | ) |
| **Net                cash used in investing****activities**                                                                       |   |                                            | **(381,231** | **)**                         |   | **(3,075,000**                | **)**  |   | **(4,581,995** | **)** |

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Statements        of Cash Flows**

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

|                                                                                  |   |                                            |          |                          |   | For                the        |   |
|---------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------------|-------------------------------|--------|-------------------------------|--------|
|                                                                                  |   |                                            |          |                          |   | Period                From    |   |
|                                                                                  |   |                                            |          |                          |   | July                25, 2003  |   |
|                                                                                  |   | For                the Three-Month Period Ended |          | (Inception)                to |   |
|                                                                                  |   | March                31, 2007                   |          | March                31, 2006 |   | March                31, 2007 |   |
| *Cash                flows provided by financing activities:*                         |   |                                            |          |                          |   |                          |   |
| Net                proceeds from issuance of common                stock and warrants |   |                                            | -             |                          | $      | 5,937,975                     |   | $ | 7,209,549 |   |
| Proceeds                from the exercise of warrants                                 |   |                                            | -             |                          |   | -                             |   |   | 200,000 |   |
| **Net                cash provided by financing activities**                          |   |                                            | **-**         |                          |   | **5,937,975**                 |   |   | **7,409,549** |   |
|  **Net                increase in cash**                                         |   | **$**                                           | **(475,677**  | **)**                         |   | **2,830,254**                 |   |   | **1,891,133** |   |
| **Cash                - beginning of period**                                         |   |                                            | **2,366,810** |                          |   | **117,259**                   |   |   | **-** |   |
|                                                                                  |   |                                            |          |                          |   |                          |   |   |   |   |
| **Cash                - end of period**                                               |   | **$**                                           | **1,891,133** |                          | **$**  | **2,947,513**                 |   | **$** | **1,891,133** |   |

| *Supplemental                Disclosure of Cash Flow Information*                                                                   |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                |   |   |   |   |   | For                the |   |
|                                                                                                                                |   |   |   |   |   | Period                From |   |
|                                                                                                                                |   |   |   |   |   | July                25, 2003 |   |
|                                                                                                                                |   | For                the Three-Month Period Ended, |   | (Inception)                to |   |
|                                                                                                                                |   | March                31, 2007 |   | March                31, 2006 |   | March                31, 2007 |   |
| Cash                paid for:                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                                                                            |   |   | - |   |   | - |   |   | - |   |
| Income                taxes                                                                                                         |   |   | - |   |   | - |   |   | - |   |
| Fair                value of common sharesissued                in connection with oil and                gas property acquisitions |   |   | - |   |   | - |   | $ | 65,975 |   |

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

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**1.             **
**Interim      Presentation**

**2.             **
**Description      of Business and Development Stage Operations**

**3.             **
**Summary      of Significant Accounting Policies**

*Basis      of Presentation*

*Development      Stage Operations*

*Accounting      and Reporting by Development Stage Enterprises*

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

**3.             **
**Summary      of Significant Accounting Policies, Continued**

*Concentration      of Credit Risk*

*Oil      and Gas Properties*

*Fair      Value of Financial Instruments*

*Disclosures      about Fair Value of Financial Instruments*

*Accounting      for Stock-Based Employee Compensation*

*Share-Based      Payment*
*Accounting      for Stock-Based Compensation*
*Accounting      for Stock Issued to Employees*

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

**3.             **
**Summary      of Significant Accounting Policies, Continued**

*Accounting      for Stock-Based Employee Compensation, Continued*

|                                                                                                                                                                                                          |   |                                            |        |                          |   | For                the        |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|-------------|-------------------------------|--------|-------------------------------|--------|
|                                                                                                                                                                                                          |   |                                            |        |                          |   | Period                From    |   |
|                                                                                                                                                                                                          |   |                                            |        |                          |   | July                25, 2003  |   |
|                                                                                                                                                                                                          |   | For                the Three-Month Period Ended |        | (Inception)                to |   |
|                                                                                                                                                                                                          |   | March                31, 2007                   |        | March                31, 2006 |   | March                31, 2007 |   |
| Net                loss, as reported                                                                                                                                                                          |   | $                                               | (4,169,346) |                          | $      | (4,007,409)                   |   | $ | (1,313,159) |   |
| Total                stock-based employee compensation                expense determined                under fair value based                method for all awards, net                of related tax effect |   |                                            | (15,605     | )                             |   | (15,605                       | )      |   | (87,184 | ) |
| Pro                forma net loss                                                                                                                                                                             |   | $                                               | (4,184,951  | )                             | $      | (4,023,014                    | )      | $ | (1,400,343 | ) |
| Loss                per share:                                                                                                                                                                                |   |                                            |        |                          |   |                          |   |   |   |   |
| Basic                and diluted - as reported                                                                                                                                                                |   | $                                               | (0.10       | )                             | $      | (0.13                         | )      | $ | (0.03 | ) |
| Basic                and diluted - pro forma                                                                                                                                                                  |   | $                                               | (0.10       | )                             | $      | (0.14                         | )      | $ | (0.03 | ) |

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

**3.             **
**Summary      of Significant Accounting Policies, Continued**

*Stock      Split*

*Basic      and Diluted Loss Per Share*

*Income      Taxes*

*Use      of Estimates and Assumptions*

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

| **4.** |   | **Change                of Accounting                Principal** |
|--------|--------|------------------------------------------------------------------|

*Accounting      for Registration Rights Payment Arrangements*

| **5.** |   | **Oil                and Gas Properties** |
|--------|--------|-------------------------------------------|

*Big      Sand Spring Valley Prospect*

*North      Sea Quad 14*

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

| **5.** |   | **Oil                and Gas Properties,                Continued** |
|--------|--------|---------------------------------------------------------------------|

*North      Sea Quad 41 and 42*

| **6.** |   | **Deferred                Income Taxes** |
|--------|--------|------------------------------------------|

| **7.** |   | **Commitments                and Contingencies** |
|--------|--------|--------------------------------------------------|

*Financial      Results, Liquidity and Management's Plan *

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

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| **7.** |   | **Commitments                and Contingencies,                Continued** |
|--------|--------|----------------------------------------------------------------------------|

*Litigation      *

*Drilling      Cost Obligations*

*Employment      Agreement*

| **8.** |   | **Share-Based                Payment** |
|--------|--------|----------------------------------------|

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

| **8.** |   | **Share-Based                Payment, Continued** |
|--------|--------|---------------------------------------------------|

|                                                                 |   | For                the        |                         |
|----------------------------------------------------------------------|--------|-------------------------------|------------------------------|
|                                                                 |   | Period                From    |                         |
|                                                                 |   | July                25, 2003  |                         |
|                                                                 |   | (Inception)                to |                         |
|                                                                 |   | March                31, 2007 |                         |
| Risk-free                interest rate                               |   |                          | 4.41%                to 4.32 | % |
| Expected                volatility of common stock                   |   |                          | 101                          | % |
| Dividend                yield                                        |   | $                             | 0.00                         |   |
| Expected                life of options                              |   |                          | 3                years       |   |
| Weighted                average fair market value of options granted |   | $                             | 0.50                         |   |

----

**Eternal        Energy Corp.**

**(A        Company in the Development Stage)**

**Notes        to the Financial Statements**

***As        of March 31, 2007 and***

***For        Each of the Three-Month Periods Ended March 31, 2007 and 2006        and***

***For        the Period From July 25, 2003 (Inception) to March 31, 2007***

----

| **9.** |   | **Equity                Transactions** |
|--------|--------|----------------------------------------|

*Sale      of Equity Units*

*Exercise      of Warrants*

*Shares      Reserved for Future Issuance*

| Options                                    |   |   | 2,093,800      |   |
|--------------------------------------------|--------|--------|----------------|--------|
| Warrants                                   |   |   | 14,050,000     |   |
|                                       |   |   |           |   |
| **Total                at March 31, 2007** |   |   | **16,143,800** |   |

----

**Item      2. Management’s Discussion and Analysis or Plan of      Operation**

THE      FOLLOWING PRESENTATION OF OUR MANAGEMENT'S DISCUSSION AND ANALYSIS SHOULD BE      READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL      INFORMATION INCLUDED ELSEWHERE IN THIS REPORT.

*A      Note About Forward-Looking Statements*

*Results      of Operations for the Three-Month Period Ended March 31, 2007 and      2006*

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| ·   | Consulting                fees increased $6,414 to $9,114, as we expanded our activities, both                in                evaluating possible energy prospects and in developing our infrastructure                necessary to support our increased                activities. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                commenced investor relation activities after March 31, 2006. We incurred                $12,375 of these costs during the three-month period ended March                31,                2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                occupied new office space during the three-month period ended March                31,                2007 and our rent expense for that period increased $15,828 to 18,828                for                that period. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Stock                based compensation increased $33,758 to $46,045 as we recorded three                month’s amortization of the value of options granted during February and                December 2006. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Professional                fees increased $28,255 to 29,610 in the 2007 three-month period,                primarily                due to legal and accounting fees related to the change in accounting                principal described above and the Registration Statement that became                effective in 2007. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We                realized $15,285 in interest income during the three-month period                in 2007                which resulted from the amounts earned on the proceeds of our private                offering in the second quarters of                2006. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Liquidity      and Capital Resources*

*Plan      of Operation for the Next 12 Months*

----

*Off-Balance      Sheet Arrangements*

**Item      3. Controls and Procedures**

----

**PART      II. OTHER INFORMATION**

**Item      6. Exhibits**

| **Exhibit** |   | **Description                  of Exhibit**                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3(i).1      |   | Articles                  of Incorporation filed with the Nevada Secretary of State on July                  25,                  2003. (Incorporated by reference to Exhibit 3.1 of our Form 10-SB                  filed                  August 18, 2004.)                                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3(i).2      |   | Certificate                  of Change filed with the Nevada Secretary of State effective November                  7,                  2005. (Incorporated by reference to Exhibit 3(i).2 of our Current                  Report                  on Form 8-K filed November 9, 2005.)                                                                                                                                                      |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3(i).3      |   | Articles                  of Merger filed with the Nevada Secretary of State effective November                  7,                  2005. (Incorporated by reference to Exhibit 3(i).3 of our Current                  Report                  on Form 8-K filed November 9, 2005.)                                                                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3(ii).1     |   | Bylaws,                  adopted July 18, 2003. (Incorporated by reference to Exhibit 3.2                  of our                  Form 10-SB filed August 18, 2004.)                                                                                                                                                                                                                                                                        |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3(ii).2     |   | Amendment                  No. 1 to Bylaws, adopted November 4, 2005. (Incorporated by reference                  to                  Exhibit 3(ii) of our Current Report on Form 8-K filed November                  9,                  2005.)                                                                                                                                                                                             |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1        |   | Agreement                  and Plan of Merger between Golden Hope Resources Corp. (renamed                  Eternal                  Energy Corp.) and Eternal Energy Corp., filed with the Nevada Secretary                  of                  State effective November 7, 2005. (Incorporated by reference to                  Exhibit                  10.1 of our Current Report on Form 8-K filed November 9,                  2005.) |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2        |   | Purchase                  and Sale Agreement between Eternal Energy Corp. and Merganser Limited,                  dated November 7, 2005. (Incorporated by reference to Exhibit 10.2                  of our                  Current Report on Form 8-K filed November 9, 2005.)                                                                                                                                                            |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.3        |   | Form                  of Subscription Agreement for November 2005 private placement.                  (Incorporated by reference to Exhibit 10.3 of our Current Report                  on Form                  8-K filed November 9, 2005.)                                                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.4        |   | Form                  of Common Stock Purchase Warrant for November 2005 private placement.                  (Incorporated by reference to Exhibit 10.4 of our Current Report                  on Form                  8-K filed November 9, 2005.)                                                                                                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.5        |   | Registration                  Rights Agreement for November 2005 private placement. (Incorporated                  by                  reference to Exhibit 10.5 of our Current Report on Form 8-K filed                  November                  9, 2005.)                                                                                                                                                                                |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.6        |   | Letter                  Agreement by and between Eternal Energy Corp. and International                  Frontier                  Resources Corporation. (Incorporated by reference to Exhibit 10.1                  of our                  Current Report on Form 8-K filed December 5, 2005.)                                                                                                                                            |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.7        |   | Employment                  Agreement by and between Eternal Energy Corp. and Bradley M. Colby.                  (Incorporated by reference to Exhibit 10.1 of our Amended Current                  Report                  on Form 8-K/A filed June 29, 2006).                                                                                                                                                                              |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.8        |   | First                  Amendment to Employment Agreement by and between Eternal Energy                  Corp. and                  Bradley M. Colby (Incorporated by reference to Exhibit 10.1(a)                  of our                  Current Report on Form 8-K filed December 8, 2006).                                                                                                                                               |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.9        |   | Letter                  Agreement by and between Eternal Energy Corp. and International                  Frontier                  Resources Corporation Relating to Quad 41 and Quad 42 dated January                  30,                  2006. (Incorporated by reference to Exhibit 10.1 of our Current                  Report on                  Form 8-K filed February 3, 2006.)                                                   |

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| 10.10  |   | Amended                  and Restated Letter Agreement by and between Eternal Energy Corp.                  and                  International Frontier Resources Corporation Relating to Quad 14                  dated                  January 30, 2006. (Incorporated by reference to Exhibit 10.2 of                  our                  Current Report on Form 8-K filed February 3, 2006.)                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.11  |   | Finder’s                  Fee Agreement by and between Eternal Energy Corp. and Taverham                  Company                  Ltd. dated January 30, 2006. (Incorporated by reference to Exhibit                  10.3 of                  our Current Report on Form 8-K filed February 3, 2006.)                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.12  |   | Form                  of Subscription Agreement for March 2006 private placement. (Incorporated                  by reference to Exhibit 10.1 of our Current Report on Form 8-K                  filed March                  8, 2006.)                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.13  |   | Form                  of Common Stock Purchase Warrant for March 2006 private placement.                  (Incorporated by reference to Exhibit 10.2 of our Current Report                  on Form                  8-K filed March 8, 2006.)                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.14  |   | Form                  of Registration Rights Agreement for March 2006 private placement.                  (Incorporated by reference to Exhibit 10.1 of our Amended Current                  Report                  on Form 8-K/A filed March 29, 2006.)                                                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.15  |   | Letter                  Agreement between us and Eden Energy Corp. dated April 14, 2006                  (Incorporated by reference to Exhibit 10.1 our Current Report on                  Form 8-K                  filed April 21, 2006).                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.16  |   | Letter                  Agreement effective as of May 19, 2006, by and among Eternal Energy                  Corp.,                  International Frontier Resources Corporation, Palace Exploration                  Company                  Limited, Oilexco Incorporated, and Challenger Minerals (North Sea)                  Limited                  (Incorporated by reference to Exhibit 10.1 of our Current Report                  on Form                  8-K filed May 23, 2006). |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.17  |   | Letter                  Agreement dated October 15, 2006, by and among Eternal Energy Corp.,                  Fairway Exploration, LLC, Prospector Oil, Inc., and 0770890 B.C.                  Ltd.**                  (Incorporated by reference to Exhibit 10.17 of our Registration                  Statement                  on Form 10-KSB filed April 16, 2007).                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.18  |   | Letter                  Agreement dated October 26, 2006, by and among Eternal Energy Corp.,                  Fairway Exploration, LLC, Prospector Oil, Inc., 0770890 B.C. Ltd.,                  and                  Rover Resources Inc.** (Incorporated by reference to Exhibit 10.18                  of our                  Registration Statement on Form 10-KSB filed April 16,                  2007).                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.19  |   | Letter                  Agreement dated February 28, 2007, by and among Eternal Energy                  Corp.,                  Pebble Petroleum Inc., Emerald Bay Holdings Ltd., and Heartland                  Resources                  Inc. (Incorporated                  by reference to Exhibit 10.19 of our Registration Statement on                  Form 10-KSB                  filed April 16, 2007).                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 31.1*  |   | Certification                  pursuant to Section 302 of the Sarbanes-Oxley Act                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 31.2*  |   | Certification                  pursuant to Section 906 of the Sarbanes-Oxley                  Act                                                                                                                                                                                                                                                                                                                                                                                           |

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**SIGNATURES**

| ETERNAL                ENERGY CORP. |                                                                                                               |   |
|-------------------------------------|--------------------------------------------------------------------------------------------------------------------|--------|
|                                |                                                                                                               |   |
| (Registrant)                        |                                                                                                               |   |
|                                |                                                                                                               |   |
| May                15, 2007         | /s/                Bradley                M. Colby                                                                 |   |
|                                | Bradley                M. Colby                                                                                    |   |
|                                | President,                Chief Executive Officer, Secretary,Treasurer, and Chief Financial                Officer |   |
|                                |                                                                                                               |   |
|                                |                                                                                                               |   |

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