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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-KSB

x  ANNUAL
  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended **December 31, 2004**

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

For the transition period from _________ to ___________

Commission file number 0-28305

FAIRCHILD INTERNATIONAL CORPORATION
  
  (Name of small business issuer in its charter)

|Nevada                                                               | 91-1880015                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation
      or organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|Suite 600                                                            |                                     
|595 Hornby Street                                                    |                                     
|Vancouver, British Columbia                                          | V6C 1A4                             
|(Address of principal executive offices)                             | (Zip Code)                          

Issuer's telephone number 604. 646-5611

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

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

Common Stock 
  (Title of class)

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

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

State issuer's revenues for its most recent fiscal year. $40,463

The aggregate value of the voting stock held by non-affiliates
  of the registrant, computed by reference to the price at 
  which the common equity was sold as of April 13, 2004 was approximately $11,004,016.

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

34,387,550 common shares, $0.001 par value outstanding
  as of April 14, 2005

Transitional Small Business Disclosure Format (Check one):   Yes  ̈    
  No x

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INDEX

|           |                                                                                                                       | PAGE
|---------- | --------------------------------------------------------------------------------------------------------------------- | ----
|           |                                                                                                                       |     
|PART I     |                                                                                                                       |     
|           |                                                                                                                       |     
|Item 1     | Description of Business                                                                                               | 3   
|           |                                                                                                                       |     
|Item 2     | Description of Property                                                                                               | 11  
|           |                                                                                                                       |     
|Item 3     | Legal Proceedings                                                                                                     | 11  
|           |                                                                                                                       |     
|Item 4     | Submission Of Matters
      to a Vote of Security Holders                                                             | 11  
|           |                                                                                                                       |     
|PART II    |                                                                                                                       |     
|           |                                                                                                                       |     
|Item 5     | Market for Common Equity
      And Related Stockholder Matters                                                        | 12  
|           |                                                                                                                       |     
|Item 6     | Management's Discussion
      and Analysis or Plan of Operation                                                       | 13  
|           |                                                                                                                       |     
|Item 7     | Financial Statements                                                                                                  | 17  
|           |                                                                                                                       |     
|Item 8     | Changes in and Disagreements with Accountants
      on Accounting and Financial Disclosure                            | 19  
|           |                                                                                                                       |     
|           |                                                                                                                       |     
|Item 8A    | Controls and Procedures                                                                                               | 19  
|           |                                                                                                                       |     
|           |                                                                                                                       |     
|PART III   |                                                                                                                       |     
|           |                                                                                                                       |     
|           |                                                                                                                       |     
|Item 9     | Directors, Executive Officers, Promoters
      and Control Persons; Compliance with Section 16(a) of the Exchange Act | 19  
|           |                                                                                                                       |     
|Item 10    | Executive Compensation                                                                                                | 21  
|           |                                                                                                                       |     
|Item 11    | Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder Matters                  | 25  
|           |                                                                                                                       |     
|Item 12    | Certain Relationships and Related Transactions                                                                        | 26  
|           |                                                                                                                       |     
|Item 13    | Exhibits and Reports on Form 8K                                                                                       | 27  
|           |                                                                                                                       |     
|Item 14    | Principal Accountant Fees and Services                                                                                | 29  
|           |                                                                                                                      
|           |                                                                                                                      
|Signatures | 29                                                                                                                   

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PART I

FORWARD-LOOKING STATEMENTS

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

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

As used in this annual report, the terms "we", "us", "our", and "Fairchild" mean Fairchild International Corporation, unless otherwise indicated.

All dollar amounts refer to US dollars unless otherwise indicated.

Item 1.      Description of Business

Corporate History

Fairchild was incorporated on June 20, 1997 under the laws of the State of Nevada under the name Goanna Resources, Inc. On June 24, 1999 we changed our name to Fairchild International Corporation.

Business Development

Tehama County, California

On April 15, 2002, we entered into a Farmout Agreement with Whittier Energy Company (formerly Olympic Resources (Arizona) Ltd.) wherein we have the right to earn from Whittier an assignment of Whittier's interest in oil and gas leasehold interests
in certain lands located in Tehama County, California. Pursuant to the Farmout Agreement, upon payment of a fee of $15,000 for each test well, representing payment for a 3.75% interest in the information and data relating to each test well, and
5% of the costs of drilling and completion as set forth in the Farmout Agreement, we could earn and Whittier would assign a 3.75% undivided interest in five test wells. We had the right to earn a reduced 2.025% interest in a further test well upon
payment of 2.7% of the drilling and completion costs and payment of a fee of $8,100 for a 2.025% interest in the data and information with respect to such well. During the year ended December 31, 2002, we acquired a 3.75% undivided interest in
four test wells, and incurred net expenditures under the Farmout Agreement of $102,107, which figure includes the allocation to Patch Energy Inc. ("Patch") of its 20% working interest in our 3.75% interest. For the year ended December 31, 2004,
we have earned a total of $4,618 in revenue from our interest in the four test wells. On December 15, 2004, Patch relinquished its right granted in 2002 to a 20% interest in Fairchild’s interests in the Tehama County lands.

Saskatchewan, Canada

On June 25, 2002, we entered into a participation agreement with Patch to participate in a sixty well drilling program. The oil field is located in Saskatchewan, Canada in the area known as the Kerrobert in the Viking Formation near the
Alberta-Saskatchewan Border.Under this participation agreement, we had the right to earn a 12.5% interest in certain drilled wells by incurring, subject to financing, 15.625% of the costs associated with a 10 test well drilling program. This
interest represents one-half of the interest which was otherwise then held by Patch under a farmout agreement with True Energy Inc., a Toronto Stock Exchange listed company, as operator. We subsequently entered into a new agreement with Patch to
reduce our participation.

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On December 2, 2002 we entered into a new participation agreement with Patch which replaced the agreement of June 25, 2002. Pursuant to the terms of a farmout and joint operating agreement dated May 1, 2002 between Patch, True Energy Inc. and
Arsenal Energy Inc., Patch had the right to earn a 12.5% interest in the Farmout Lands (as defined in the Farmout Agreement) by incurring 15.625% of the costs (the "Initial Costs") associated with the Test Wells (as defined in the Farmout
Agreement). In 2005, Fairchild conveyed all of its interests in the Kerrobert area to Patch in consideration for Patch’s assumption of certain debts owed by Fairchild.

Pursuant to the terms of the participation agreement, Fairchild had the right to earn up to a one-third (1/3) share of the Interest (the "Partial Interest"), being a 4.167% interest in the 10 Test Wells in consideration of incurring an equal portion
of the costs to a maximum of 5.208% of the costs associated with the Test Wells. In order for Fairchild to earn a Partial Interest, it was to pay for costs otherwise to be incurred by Patch pursuant to the terms of the Farmout Agreement, equal to
the amount of the Partial Interest to be earned by Fairchild (the "Partial Costs") and Fairchild was to pay such Partial Costs as and when requested by Patch in order that Patch might fulfil its obligations under the Farmout Agreement in respect of
the Partial Costs provided that, if Fairchild failed to make such payments, its right to earn the Partial Interest would cease and the agreement was to be terminated. We have earned the 4.167% interest and, in connection therewith, incurred
$87,938 as our share of the costs associated with the Test Wells as of December 31, 2003. For the year ended December 31, 2004, we earned $26,453 in revenue from our interest in the 10 test wells. Fairchild’s interests in these wells
were conveyed to Patch in 2005.

On February 10, 2003, we entered into another participation agreement with Patch in order to earn a partial interest in a further 9 well drill program (the "Second Program"). The Second Program is now complete. We have earned our 1.75% interest,
being a one-sixth share of the interest of Patch in the Second Program. For the year ended December 31, 2004 we expended $506 representing our 2.5% portion of the costs associated with the Second Program and earned a total of $9,392 in
revenue from our interest in the Second Program. Fairchild conveyed all its interest in the Second Program to Patch in 2005.

On April 3, 2003, we entered into an amendment agreement (the "Amendment Agreement") to the participation agreement dated February 10, 2003 with Patch. Patch has confirmed with Fairchild that its ability to continue to earn a 12.5% interest in any
wells drilled on certain lands located in the Kerrobert Area of Saskatchewan, Canada, under the terms of a Farmout and Joint Operation Agreement with Arsenal Energy and True Energy, as operator, is contingent upon Patch paying 15.625% of the costs
associated with such wells. The Amendment Agreement provides that Fairchild was obligated to incur 2.5% of the costs associated with the second 9 well drill program on the Farmout Lands in order to earn a 1.75% interest in such wells, as opposed to
incurring 1.75% of the costs as the original participation agreement provided for, reflecting the increased costs to which Patch is subject.

On November 5, 2003, we entered into a participation agreement with Patch in order to earn a 6.75% working interest in future oil wells in the Kerrobert drilling program in consideration of incurring 8.4375% of the costs associated with any such
subsequent wells. No further wells have been drilled on the Farmout Lands subsequent to the entering into of this agreement. Fairchild no longer has any interest in the Kerrobert lands.

Manahuilla Creek, Texas, USA

On November 6, 2003 we entered into a participation agreement with Patch to participate in an oil and gas prospect located in Goliad County, Texas. Patch holds an agreement with PB Energy USA, Inc. ("PB") whereby Patch has a right to acquire a 3.75%
participating working interest in a test well and the oil and gas lands leased by PB in Goliad County by paying 5% of the acquisition costs ($15,000), 5% of the costs of the test well and 3.75% of the costs relating to the development of the oil
and gas lands. Under our agreement with Patch (the "Sub-Participation Agreement") we have a right to earn one-half of Patch's interest (1.875%) by paying one-half of Patch's costs. As at December 31, 2004, we have paid Patch $7,500 being
one-half of the $15,000 previously paid by Patch on account of the acquisition costs and $25,751 for costs incurred.

On February 23, 2004, we entered into an assignment agreement whereby we agreed to assign to Habanero Resources Inc. one-fifth (1/5) of our interest in the Sub-Participation Agreement, being the right to earn a .375% interest in the test well and
the program lands in consideration of Habanero assuming an equal share (1/5) of our costs under the Sub-Participation Agreement. As at December 31, 2004, Habanero has advanced to us $6,650, and owes an additional $227 for costs incurred.

As well, on February 23, 2004, we entered into an assignment agreement whereby we agreed to assign to Micron Enviro Systems Inc. one-fifth (1/5) of our interest in the Sub-Participation Agreement, being the right to earn a .375% interest in the test
well and the program lands in consideration of Micron assuming an equal share (1/5) of

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our costs under the Sub-Participation Agreement. As at December 31, 2004, Micron has advanced to us $6,650, and owes an additional $227 for costs incurred. The balance of our interest in the Goliad County was transferred to Patch on April
15, 2005.

Naftogaz, Ukraine

On November 7, 2003 we entered into an agreement with Patch whereby Patch agreed to negotiate with us so as to give Fairchild the opportunity to participate in any venture Patch may become involved in as a result of its relationship with NAFTOGAZ,
the Ukranian State oil company. To date no such ventures have been finalized.

Acquisition

On April 8, 2005, Fairchild International Corp. completed the acquisition of Syngas Energy Corp. (“Syngas”), a developer of advanced integrated gasification production system technologies that produce energy in the form or methane and
natural gas as well as electricity. Concurrent with the acquisition, all oil and gas interests were disposed of, along with all associated liabilities.

Syngas was a private company in the business of the development and commercialization of methods to produce energy such as electricity, and synthetic. Syngas’ underlying strategy is to provide a viable alternative to burying or sea dumping our
waste and consequently poisoning our land, lakes and oceans. Syngas’s business strategy is to produce, sell, lease and maintain the energy generators. It is also Sygas’ strategy to retain an ownership portion of the co-generated energy,
electricity, and synthesized gases, such as methane, being produced.

Syngas intends to focus on developing and marketing the current process while researching new methods of clean energy production. Syngas intends to subcontract fabrication to outside sources that have a proven track record of efficiency, reliability
and competitive quality and pricing. Syngas is in the process of upgrading a model unit that demonstrates the application of the technology.

General

On January 21, 2003, we filed a Form S-8 Registration Statement to register 925,000 shares of our common stock in connection with Stock Option Agreements with George Tsafalas, David Stadnyk, Byron Cox, Winston Cabell and David Jeffery, each dated
January 9, 2003. Mr. Tsafalas was issued 325,000 options, Mr. Stadnyk was issued 350,000 options, Mr. Cox was issued 75,000 options, Mr. Cabell was issued 125,000 options and Mr. Jeffery was issued 50,000 options, to purchase common shares in the
capital of our company at an exercise price of $0.09 per share until January 9, 2006.

Pursuant to the Management Agreement dated April 1, 2003 with George Tsafalas our company's President, we agreed to pay to Mr. Tsafalas a monthly salary of $4,500 commencing April 1, 2003 and ending March 31, 2006, representing an annual salary
of $54,000 for a three year term. Pursuant to the terms of this agreement we may satisfy our obligations in respect of payment of the salary to Mr. Tsafalas in any month during the term of the agreement by the issuance of such number of shares
of our common stock at a deemed price equal to the average bid price of our common stock on the OTC Bulletin Board for the last five trading days of such month as having a value equal to the salary then otherwise payable. For the year ended December
31, 2004, we had issued 2,512,677 shares of our common stock to Mr. Tsafalas in lieu of salary otherwise payable to him. Also, 7,230,861 shares were issued to him under a new consulting agreement.

Pursuant to the Management Agreement dated April 1, 2003 with David Stadnyk, we agreed to pay to Mr. Stadnyk a monthly salary of $4,000 commencing April 1, 2003 and ending March 31, 2006, representing an annual salary of $48,000 for a three
year term Pursuant to the terms of this agreement we may satisfy our obligations in respect of payment of the salary to Mr. Stadnyk in any month during the term of the agreement by the issuance of such number of shares of our common stock at a
deemed price equal to the average bid price of our common stock on the OTC Bulletin Board for the last five trading days of such month as having a value equal to the salary then otherwise payable. For the year ended December 31, 2004, we had issued
3,133,491 shares of our common stock to Mr. Stadnyk in lieu of salary otherwise payable to him. Also, 7,230,861 shares were issued to him under a new consulting agreement.

Pursuant to the Management Agreement dated April 1, 2003 with Winston Cabell, we agreed to pay to Mr. Cabell a monthly salary of $1,000 commencing April 1, 2003 and ending March 31, 2004, representing an annual salary of $12,000 Pursuant to
the terms of this agreement we may satisfy our obligations in respect of payment of the salary to

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Mr. Cabell in any month during the term of the agreement by the issuance of such number of shares of our common stock at a deemed price equal to the average bid price of our common stock on the OTC Bulletin Board for the last five trading days of
such month as having a value equal to the salary then otherwise payable. For the year ended December 31, 2004, we had issued 98,242 shares of our common stock to Mr. Cabell in lieu of salary otherwise payable to him.

Pursuant to the Management Agreement dated April 22, 2003 with Byron Cox, our company's Secretary and Treasurer, we agreed to pay to Mr. Cox a monthly salary of $1,000 commencing May 1, 2003 and ending April 30, 2004, representing an annual
salary of $12,000. Pursuant to the terms of this agreement we may satisfy our obligations in respect of payment of the salary to Mr. Cox in any month during the term of the agreement by the issuance of such number of shares of our common stock
at a deemed price equal to the average bid price of our common stock on the OTC Bulletin Board for the last five trading days of such month as having a value equal to the salary then otherwise payable. For the year ended December 31, 2004, we had
issued 158,282 shares of our common stock to Mr. Cox in lieu of salary otherwise payable to him.

On February 18, 2004 we entered into a letter agreement with Praxis Pharmaceuticals Inc. ("Praxis") wherein we agreed to be bound by the terms of the original Termination of License and Research and Development Agreement (the "License Agreement")
dated February 28, 2001. The letter agreement confirms that all amendments to such License Agreement are no longer in force and effect. As a result, Praxis will retain the common shares of Fairchild assigned to it under the terms of the License
Agreement and Praxis will pay to us 30% of the Net Revenues in the License Agreement to a maximum of $250,000 over the first three years of sale; provided that we have received $59,423 from Praxis.

On February 24, 2004 we granted incentive stock options to purchase up to an aggregate of 2,100,000 shares of our common stock at a price of $0.03 per share, of which 900,000 are exercisable to February 24, 2005 and 1,200,000 are exercisable to
February 24, 2009. During the year ended December 31, 2004, 1,050,000 of these stock options were exercised for proceeds of $31,500, and the remaining 1,050,000 were cancelled without exercise. On April 23, 2004, we granted options to purchase
400,000 shares at an exercise price of $0.025 per share. All of these options were exercised during the year ended December 31, 2004 for proceeds of $10,000.

On November 15, 2004, the incumbent Board of Directors resigned and were replaced by Anish Somani and Margaret Patricia Hunt. Mr. Somani was appointed President to fill the vacancy created by the resignation of Mr. Tsafalis as President.

On November 22, 2004, the Board of Directors approved the consolidation of the authorized, issued and outstanding common shares at a ratio of 25:1.

On December 31, 2004, shareholders of the Company ratified the 25:1 share consolidation.

January 27, 2005, the 25:1 share consolidation was effected. As a result, the Company’s outstanding shares equaled roughly 2,000,000, down from 50,000,000.

On February 10, 2005, the Company began trading under its new symbol, FCHL.

On March 9, 2005, we filed a Form S-8 Registration Statement to register 8,200,000 shares of our common stock, issuable pursuant to our 2005 Stock Option Plan.

Plan of Operation

Fairchild intends to develop the business of Syngas and to cease further investment in oil and gas drilling activities. As of April 15, 2005, the only remaining wells in which we have an interest are located in Tehama County, California. We intend
to sell these interests in order to cover debts we have incurred related to these wells.

We intend to focus on the development of Syngas. We intend to maintain Syngas’s current model of commercializing its proprietary process to produce energy using environmentally friendly methods. We also intend to expand Syngas’s product
offerings in terms of the type of energy produced and the methodologies used to produce these energies.

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We will be primarily dependent upon proceeds from the sale of our securities for the near future, until such time as Syngas begins to develop revenues. . We anticipate that for Fairchild and Syngas to implement our business plan, we will require
approximately $250,000 over the twelve months ending December 31, 2005 for general and administrative costs, as well as to upgrade Syngas’s prototype model. We also anticipate we will need approximately a further $250,000 to fund
Syngas’s intended research and development and sales activities. We anticipate that Syngas will generate revenues within the next eighteen months from sales of Syngas’ proprietary teachnologies. If we are successful in generating such
revenues, we plan to apply them towards the anticipated general and administrative expenses of Syngas. There are no assurances that we will receive any revenues or that such revenues will be sufficient to cover our expenses.

To the extent that we consider acquisitions as a means to expand, or if we decide to commence with the manufacture of applications of Syngas’s technology, we will require additional funds. There is no assurance that we will be able to obtain
such additional funds on favorable terms, if at all. Our inability to raise sufficient funds could prevent us from implementing our business plan.

Employees

Besides the two directors, Anish Somani and Patricia Hunt, Fairchild’s wholly owned subsidiary, Syngas Energy Corp. has two employees, Mr. Wilf Ouellette and Mrs. Gloria Porter. Both employees of the subsidiary have experience in the energy
industry.

Subsidiaries

Fairchild currently owns one wholly owned subsidiary called Syngas Energy Corp.

Patents and Trademarks

The Company’s wholly owned subsidiary Syngas Energy Corp. currently owns proprietary technology, processes and products that management may consider for patent and trademark protection.

Competition

Although relatively new, the alternative energy industry will likely face increasing competition in the future due to the natural decline in fossil fuel discovery rates and depletion of known reserves. Numerous individuals and companies, including
many major oil and gas companies, which have substantially greater technical, financial and operational resources and staffs than Syngas will pose a competitive threat should they decide to enter the market.

Fluctuating Price and Demand

The marketability of alternative energy resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in energy pricing and demand, the proximity and
availability of raw fuel markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors
cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Government Regulations

Although alternative energy is not now a regulated industry, there is precedent set that once an energy source becomes more readily available, more demanded by the consumer and more acceptable to the public, operations could become subject to
federal, state, and local laws relating to the protection of the environment. Alternative energy operations could also become subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating
the design and use of drilling methods and equipment.

Environmental Regulations

In general, the energy industry is subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay
the commencement or continuance of a given operation. Compliance with these laws and

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regulations has not had a material effect on our operations or financial condition to date, nor do we expect it to as our processes meet and exceed all current environmental regulation. Generally, environmental requirements do not appear to affect
us any differently or to any greater extent than other companies in the industry.

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

RISK FACTORS

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

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

Our shares of common stock are considered speculative while we proceed with our commitments to develop and market our proprietary Syngas process and our commitment to expand our product offering or while we continue our search for new business
opportunities. Prospective investors should consider carefully the risk factors set out below.

Lack of Experience

Management lacks technical training in the commercialized alternative energy industry. This lack of technical training and experience might cause us to miss opportunities that more technically experienced managers would recognize and take advantage
of. Although management is actively looking to recruit an advisory board to compliment their skills, with no direct training or experience in these areas, our management may not be fully aware of many of the specific requirements related to working
in this industry. Their decisions and choices may not be well thought out and our operations and earnings and ultimate financial success may suffer irreparable harm.

Limited Operating History and History of Losses

We have no operating history in the energy markets and therefore have no history of earnings in the sector. We have a limited oil and gas operating history and therefore have a limited history of earnings in this sector. We started our oil and gas
operations in early 2002 with the acquisition of our interest in our current properties, along with their subsequent divestiture. We started our alternative energy operations on January 1, 2005. To date, we have incurred substantial net losses as a
result of our operations to date. As of December 31, 2004, we had a cumulative deficit of $2,765,073. Our ability to generate significant revenues is uncertain. In order for us to make a profit, our revenues will need to increase significantly.

Lack of Financial Resources

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

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

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Failure to obtain such additional financing could result in delay or indefinite postponement of further research and development of our projects with the possible loss of the opportunity to commercialize such projects.

Going Concern Qualification

There is substantial doubt about our ability to continue as a going concern due to the losses incurred since inception, our stockholders' deficiency, and lack of revenues.

We anticipate that we may require financing from unrelated third parties in order to continue seeking a suitable business opportunity or business combination. We anticipate that we will have sufficient capital to fund our ongoing operations until
that time. However, we may be required to raise additional financing for a particular business combination or business opportunity. We would likely seek to secure any additional financing necessary through private placements of our common stock.

There can be no assurance that, if required, any such financing will be available upon terms and conditions acceptable to us, if at all. Our inability to obtain additional financing in a sufficient amount when needed and upon terms and conditions
acceptable to us could have a materially adverse effect upon our company. Although we believe that we have access to funds sufficient to meet our immediate needs, we may require further funds to finance the development of any business opportunity
that we acquire or that our research suggests warrants further investigation. There can be no assurance that such funds will be available or available on terms satisfactory to us. If additional funds are raised by issuing equity securities, further
dilution to existing or future shareholders is likely to result. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of any business opportunity that we acquire.
Inadequate funding could also impair our ability to compete in the marketplace, which may result in the dissolution of our company.

Inherent Risks

We have not produced a commercial sized economic process, but because our prototype has been in use we believe this is simply a case of scale. However, this is as yet an unproven statement.

Currency Fluctuations

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

Need to Manage Growth

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

Dependence on Key Personnel/Employees

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

Due to the fact that our processes are proprietary and innovative, it is uncertain at this time whether we will sell outright the processes or products with the purchaser of the energy responsible for operations or retain ownership and operate the
Syngas processes and/or product offering with Syngas responsible for their operation. In either case, Syngas will be dependent upon training new staff to monitor and maintain the processes and products.

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

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

Possible Volatility of Share Prices

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

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

Indemnification of Directors, Officers and Others

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

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

Future Dilution

Our constating documents authorize the issuance of 100,000,000 shares of common stock, each with a par value of $0.001 and 1,000,000 shares of preferred stock, par value $0.01. In the event that we are required to issue any additional shares
or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such
securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control.

Anti-Takeover Provisions

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

---

Risks Relating to the Industry

Alternate Energy

Economically viable sources of alternate energy are subject to a number of risk factors. While the rewards to an investor can be substantial if an economically viable discovery is made, few of the technologies that are explored are ultimately
developed into revenue generating sources.

Potential Profitability of Alternative Energy Depends Upon Factors Beyond the Control of Our Company

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

Associated Risks

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

Although we can predict from the prototype, there is no way to conclusively state in advance of putting the proprietary Syngas Process into use whether it will yield energy (gas or electricity) in sufficient quantities to cover research and
development or completion costs or to be economically viable. The prototype data, other technologies and the study of current alternative energy producing projects do not enable us to know conclusively prior to completion that sufficient energy will
be present, or if present, if it is in commercial quantities. We cannot assure that the analogies that we draw from available data will be applicable to our commercially viable prospects.

Government Regulation/Administrative Practices

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

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

Item 2.      Description of Property.

Our principal executive office is located at Suite 600, 595 Hornby Street, Vancouver, British Columbia. We occupy the Vancouver premises on a proportional cost basis for office rent and administration services and expenses, month to month.

Item 3.      Legal Proceedings.

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

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

The following resolutions were submitted to a vote of our security holders, and passed by Special Resolution, during the fourth quarter of the fiscal year ended December 31, 2004:

---

|1. | That all of the authorized 50,000,000 common shares with a par value
      of $0.0001, of which 50,000,000 common shares are issued and outstanding
      be consolidated into 2,000,000 common shares with a par value of $0.001,
      of which 2,000,000 common shares will be issued and outstanding, every twenty
      five common shares with a par value of $0.001 prior to such consolidation
      being consolidated into one common shares with a par value of $0.001
      after consolidation, with any fractional shares arising as a result of such
      consolidation being adjusted to the next whole shares.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | That the authorized share capital of 2,000,000 common shares with a par
      value of $0.001 be increased to 100,000,000 common shares with a par
      value of $0.001 by creating an additional authorized capital of 98,000,000
      common shares with a par value of $0.001.                                                                                                                                                                                                                                                                                                                                             
|  
|3. | That upon receipt of shareholder approval Fairchild be authorized to
      file Articles of Amendment with the Nevada Secretary of State to reflect
      the change in the authorized capital of Fairchild.                                                                                                                                                                                                                                                                                                                                                                                                                    

PART II

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

Our common stock is quoted on the OTC Bulletin Board under the symbol "FCHL". Our common stock began quotation on the OTC Bulletin Board on July 8, 1998 to December 2, 1999 and since November 30, 2000. On February 10, 2005 our trading symbol changed
from “FRCD” to “FCHL”. From December 2, 1999 to November 30, 2000 our common stock was quoted on the "pink sheets". The following quotations reflect the high and low bids for our common stock based on inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual transactions. The high and low prices of our common stock (obtained from Canada Stockwatch) for the periods indicated below are as follows:

|Quarter Ended      | High   | Low   
|------------------ | ------ | ------
|March 31, 2003     | $0.165 | $0.042
|June 30, 2003      | $0.096 | $0.03 
|September 30, 2003 | $0.085 | $0.04 
|December 31, 2003  | $0.085 | $0.03 
|March 31, 2004     | $0.675 | $0.675
|June 30, 2004      | $0.725 | $0.625
|September 30, 2004 | $0.375 | $0.375
|December 31, 2004  | $0.275 | $0.25 

Our shares of common stock are issued in registered form. American Registrar and Transfer Co., 342 East 900 South, Salt Lake City, Utah 84111 (Telephone: 801.363.9065, facsimile 801.363.9066) is the registrar and transfer agent for our shares of
common stock.

As of April 14, 2005, we had 34,435,050 shares of common stock outstanding and approximately 59 stockholders of record. This number of stockholders does not include stockholders who hold our securities in street name.

Dividend Policy

We have not declared or paid any cash dividends since inception. We intend to retain future earnings, if any, for use in the operation and expansion of our business and do not intend to pay any cash dividends in the foreseeable future.

---

Although there are no restrictions that limit our ability to pay dividends on our shares of common stock, we intend to retain future earnings for use in our operations and the expansion of our business.

Recent Sales of Unregistered Securities

During the year ended December 31, 2004, the Company issued a total of 778,577
  common stock for management services of $390,735.

On November 15, 2004 we entered into a consulting agreement with David Stadnyk relating to management services regarding the change of control of the company. In accordance with the terms of the agreement, we issued 320,001 post-consolidated shares
of our common stock at a deemed price of $0.15 per share. These shares were issued in reliance upon Regulation S of the Securities Act of 1933.

On November 15, 2004 we entered into a consulting agreement with George Tsafalas, the former president of the company, relating to management services regarding the change of control of the company. In accordance with the terms of the agreement, we
issued 346,001 post-consolidated shares of our common stock at a deemed price of $0.15 per share. These shares were issued in reliance upon Regulation S of the Securities Act of 1933.

On June 25, 2002, we entered into a subscription agreement with Lura Osborne (the "Agreement"). In accordance with the terms of the Agreement, we elected to redeem Lura Osborne's right to receive Series A preferred shares under the Agreement, which
right was assigned to 627239 B.C. Ltd., for 200% of the purchase price therefore, or a total of $40,000. As a result, on March 13, 2003, we elected to issue 1,000,000 shares of our common stock at a deemed price of $0.04 per share, being the
closing bid price of our common shares on March 14, 2003, less 20%. These shares were issued in reliance upon Regulation S of the Securities Act of 1933.

On June 25, 2002, we entered into a subscription agreement with Orthence Cabell. In accordance with the terms of the agreement, effective March 24, 2003 we elected to redeem Mr. Cabell's right to receive Series A preferred shares under the agreement
for the purchase price of $10,000 and the issuance of 142,857 shares of our common stock at a deemed price of $0.035 per share. These shares were issued in reliance upon Regulation S of the Securities Act of 1933.

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

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

General

Through Syngas, our wholly owned subsidiary, we intend to research and develop advanced gasification systems and products. Once we have completed development of an advanced gasification unit prototype, we will attempt to sell our advanced
gasification units to potential customers. We will then manufacture the unit in accordance with the orders we receive from our customers.

Through the agreements with Whittier Energy Company and Patch Energy Inc., we have earned, or have the right to earn, interests in certain oil and gas exploration and development properties.

---

Oil and Gas Operations

|                                                                                    |   | 2004         |   |   | 2003     |  
|----------------------------------------------------------------------------------- | - | ------------ | - | - | -------- | -
|                                                                                    |   |              |   |   |          |  
|OIL AND GAS INTERESTS – SUCCESSFUL EFFORTS METHOD                                   |   |              |   |   |          |  
|Balance beginning of the year                                                       | $ | 72,844       |   | $ | 89,747   |  
|Expenditures                                                                        |   | 13,627       |   |   | 69,602   |  
|Depletion, amortization and impairment charge                                       |   | (79,171      | ) |   | (86,505  | )
|Dry well and abandoned interests                                                    |   | -            |   |   | -        |  
|Balance end of the year                                                             | $ | 7,300        |   | $ | 72,844   |  
|                                                                                    |   |              |   |   |          |  
|Represented by:                                                                     |   |              |   |   |          |  
|California, U.S.A.                                                                  |   |              |   |   |          |  
|Producing interests subject to depletion and amortization                           | $ | 78,191       |   | $ | 78,191   |  
|Accumulated depletion and impairment valuation                                      |   | (78,191      | ) |   | (71,343  | )
|                                                                                    |   | -            |   |   | 6,848    |  
|Texas, U.S.A.                                                                       |   |              |   |   |          |  
|Non-producing interests                                                             |   | 20,631       |   |   | 10,000   |  
|Accumulated impairment valuation                                                    |   | (20,631      | ) |   | -        |  
|                                                                                    |   | -            |   |   | 10,000   |  
|                                                                                    |   |              |   |   |          |  
|Saskatchewan, Canada                                                                |   |              |   |   |          |  
|Producing interests subject to depletion and amortization                           |   | 131,370      |   |   | 128,374  |  
|Accumulated depletion and impairment valuation                                      |   | (124,070     | ) |   | (72,378  | )
|                                                                                    |   | 7,300        |   |   | 55,996   |  
|                                                                                    | $ | 7,300        |   | $ | 72,844   |  
|                                                                                    |   |              |   |   |          |  
|                                                                                    |   |              |   |   |          |  
|CAPITALIZED COSTS RELATING TO OIL AND                                               |   |              |   |   |          |  
|GAS PRODUCING ACTIVITIES                                                            |   | DECEMBER 31, |  
|                                                                                    |   | 2004         |   |   | 2003     |  
|                                                                                    |   |              |   |   |          |  
|Proved oil and gas properties and related equipment –
      California, U.S.A.      | $ | 78,191       |   | $ | 78,191   |  
|Proved oil and gas properties and related equipment –
      Saskatchewan, Canada    |   | 131,370      |   |   | 128,374  |  
|Non-producing oil and gas properties – Texas, U.S.A.                                |   | 20,631       |   |   | 10,000   |  
|Non-producing oil and gas properties – Saskatchewan,
      Canada                   |   | -            |   |   | -        |  
|                                                                                    |   |              |   |   |          |  
|Sub-total                                                                           |   | 230,192      |   |   | 216,565  |  
|Accumulated depreciation, depletion and amortization and valuation
      allowances |   | (222,892     | ) |   | (143,721 | )
|                                                                                    |   |              |   |   |          |  
|                                                                                    | $ | 7,300        |   | $ | 72,844   |  

|COSTS INCURRED IN OIL AND GAS ACQUISITION,        |   | YEAR ENDED   |  
|------------------------------------------------- | - | ------------ | -
|EXPLORATION AND DEVELOPMENT ACTIVITIES            |   | DECEMBER 31, |  
|                                                  |   | 2004         |  
|                                                  |   |              |  
|Acquisition of properties                         |   |              |  
|Proved – California, U.S.A.                       | $ | -            |  
|Proved – Saskatchewan, Canada                     |   | 2,996        |  
|Unproved                                          |   | 10,631       |  
|                                                  |   |              |  
|RESULTS OF OPERATIONS FROM PRODUCING ACTIVITIES - |   |              |  
|CALIFORNIA, U.S.A.                                |   |              |  
|                                                  |   | 2004         |  
|                                                  |   |              |  
|Oil and gas sales                                 | $ | 4,618        |  
|Production costs                                  |   | (4,535       | )
|Depletion and impairment valuation provision      |   | (6,848       | )
|                                                  |   |              |  
|Net income (loss) from producing activities       | $ | (6,765       | )

---

|RESULTS OF OPERATIONS FROM PRODUCING ACTIVITIES
      - |   |         |   |   |         |  
|------------------------------------------------------- | - | ------- | - | - | ------- | -
|SASKATCHEWAN, CANADA                                    |   |         |   |   |         |  
|                                                        |   | 2004    |   |   | 2003    |  
|                                                        |   |         |   |   |         |  
|Oil and gas sales                                       | $ | 35,845  |   | $ | 47,330  |  
|Production costs                                        |   | (8,745  | ) |   | (10,877 | )
|Depletion, accretion and impairment valuation provision |   | (37,617 | ) |   | (30,133 | )
|                                                        |   |         |   |   |         |  
|Net income (loss) from producing activities             | $ | (10,517 | ) | $ | 6,320   |  
|Oil and Gas Interests – California, USA                 |   |         |   |   |         |  

The Company has a 5% working interest in three wells and a 2.7% working interest in a fourth well in Tehama County, California. During the fiscal year ended December 31, 2002, the Company borrowed $70,000 from a company with a common officer for
the acquisition of oil and gas interests in Tehama County, California. The Company conveyed to the lender, as additional consideration for granting the loan, 20% of its interest in the prospect and a right of refusal to participate as to 50% in
future oil and gas prospects undertaken by the Company. By an agreement dated December 15, 2004, Patch returned the interest to the Company and a gain on relinquishment of debt was recognized in the amount of $15,215.

Oil and Gas Interests – Saskatchewan, Canada

Under a participation agreement entered into in 2002, the Company has a 4.167% working interest in the first set of ten wells drilled in Kerrobert, Saskatchewan. During the year ended December 31, 2003, the Company entered into a second
participation agreement to earn a 1.75% interest in a second set of nine additional wells drilled. The agreements are with a Company with a common officer. The Company has an option to acquire a 6.75% working interest in future oil wells in the
Kerrobert drilling program.

Oil and Gas Interests – Texas, USA

The Company entered into an agreement dated November 6, 2003 to earn a 1.875% interest in a test well by incurring 1.875% of the costs associated with the acquisition of the interest. The agreement is with a Company with a common officer.

The Company entered into assignment agreements dated February 23, 2004 pursuant to the terms of a sub-participation agreement dated November 6, 2003 between the Company and Patch International Inc. (formerly Patch Energy Inc.) (“Patch”),
where the Company was granted the right to earn a 1.875% interest in the Test Well and the Program Lands, being a one-half share of the interest, in consideration of incurring an equal percentage of the costs associated with the acquisition of the
Interest. The Company has assigned two fifths of its interest in the sub-participation agreement, being the right to earn an interest of 0.375 of 1% in the Test Well and the Program Lands, in consideration of the assumption of an equal share (2/5)
of the Company’s costs under the sub-participation agreement. The costs of the test well were written down due to an impairment valuation.

Oil and Gas Interest – Naftogaz, Ukraine

The Company entered into a memorandum of understanding with a company with a common officer, dated November 7, 2003, under which the Company may participate in negotiations to undertake petroleum and natural gas exploration and development
activities in the Ukraine. To date, no agreements have been entered into.

Drilling Expenditures

In order for the Company to maintain its interest in its oil and gas prospects, it will be required to pay its proportionate share of the ongoing program expenditures.

Present Activities

There are currently no activities being undertaken on any of our projects.

Results of Operations

Fiscal Year Ended December 31, 2004 Compared to Fiscal Year Ended December 31, 2003

We incurred a net loss of $588,903 for the fiscal year ended December
  31, 2004 compared to a net loss of $363,927 for the year ended December
  31, 2003. The increase in the loss is due primarily a significant increase in
  consulting expenses, general and administrative expenses and professional fees.
  We have generated a cumulative loss since

---

inception of $2,7795,772. Due to our continued losses and lack of revenues
  there is substantial doubt about our ability to continue as a going concern.

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

Lack of Revenues

At this time, our ability to generate any significant revenues continues to be uncertain. The auditor's report on our December 31, 2004 financial statements contains an additional explanatory paragraph which identifies issues that raise substantial
doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Expenses

Total expenses for the year ended December 31, 2004 were $629,366 compared
  to total expenses of $476,896 for the year ended December 31, 2003. The
  expenses were substantially made up of administration and consulting costs as
  well as professional fees.

Liquidity and Capital Resources

These financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our company has suffered recurring losses and has not
generated profitable operations since inception. The continuance of our company as a going concern is dependent on obtaining financing from third parties.

We are currently relying on our existing cash reserves to fund our continuing operating expenses and to fund our interests in certain oil and gas exploration and development properties. As of December 31, 2004 and December 31, 2003, our cash and
cash equivalent balances were $4,198 and $5,012, respectively. We would likely seek to secure any additional financing necessary through a private placement of our shares of common stock in order to fund our interests in certain oil and gas
exploration and development properties.

Plan of Operation for the 12 Months ending December 31, 2005

We intend to discontinue our existing oil and gas interests and look at new opportunities in the oil and gas industry. We intend to focus on developing alternative energy technologies through our wholly owned subsidiary Syngas. We intent to sell
stock to finance Syngas. We will be primarily dependent upon proceeds from the sale of our securities for the near future. We anticipate that we will require approximately $250,000 over the twelve months ending December 31, 2004 for general and
administrative expenses and approximately a further $500,000 to fund Syngas’s research and development activities. Revenues received for our existing oil and gas interests will be applied towards our anticipated general and administrative
expenses although there are no assurances that such revenues will continue to be received or be sufficient to cover our expenses. We do not expect Syngas to generate any revenues over the twelve months ending December 31, 2004. To the extent that we
obtain sales contracts, we will require additional funds to fund the manufacture of units for sale. There is no assurance that we will be able to obtain such additional funds on favorable terms, if at all. Our inability to raise sufficient funds
could cause us to lose the existing oil and gas interests and any work conducted and/or payments made on the properties and could preclude us from participating in other exploration opportunities or fulfilling potential sales orders obtained by
Syngas.

Cash Requirements

There is substantial doubt about our ability to continue as a going concern due to the losses incurred since inception, our stockholders' deficiency, and lack of revenues.

We anticipate that we may require financing from unrelated third parties in order to continue seeking a suitable business opportunity or business combination. We anticipate that we will have sufficient capital to fund our ongoing operations until
that time. However, we may be required to raise additional financing for a particular business combination or business opportunity. We would likely seek to secure any additional financing necessary through a private placement of our common stock.

---

Product Research and Development

We anticipate that our subsidiary Syngas will expend $250,000 on research and development over the next twelve months.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment through December 31, 2005, unless we identify a suitable business opportunity or business combination that may require us to invest in such equipment.

Employees

Over the twelve months ending December 31, 2005, we anticipate an increase in the number of employees we retain only if Syngas completes its prototype gasification unit and begin the sales cycle. Such an increase on the number of employees may
significantly increase our monthly burn rate and such increase in the monthly burn rate depends on the number of employees Syngas ultimately retains, if any.

Item 7.      Financial Statements.

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

The following financial statements pertaining to Fairchild are filed as part of this annual report:

Fairchild International Corporation (audited)

Independent Auditors' Report, dated March 11, 2005,
  except as to Note 9(e) which is April 8, 2005 (Morgan and Company)

Balance Sheets as at December 31, 2004 and 2003

Statements of Operations for the years ended December
  31, 2004 and 2003

Statements of Changes in Stockholders' Equity for the
  years ended December 31, 2004 and 2003

Statements of Cash Flow for the years ended December
  31, 2004 and 2003

Notes to the Financial Statements

---

Fairchild International Corporation
  December 31, 2004

|                                                   | Index
|-------------------------------------------------- | -----
|                                                   |      
|Auditors’ Report                                   | F-1  
|                                                   |      
|Balance Sheets                                     | F-2  
|                                                   |      
|Statements of Operations                           | F-3  
|                                                   |      
|Statement of Changes in Stockholders’
      Equity | F-4  
|                                                   |      
|Statements of Cash Flows                           | F-6  
|                                                   |      
|Notes to the Financial Statements                  | F-7  

---

MORGAN & COMPANY





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of
  Fairchild International Corporation

We have audited the accompanying balance sheets of Fairchild International
  Corporation as of December 31, 2004 and 2003, and the related statements of
  operations, shareholders’ equity (deficit), and cash flows for the years
  ended December 31, 2004 and 2003. These financial statements are the responsibility
  of the Company's management. Our responsibility is to express an opinion on
  these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
  in all material respects, the financial position of the Company as at December
  31, 2004 and 2003, and the results of its operations and its cash flows for
  the years ended December 31, 2004 and 2003, in conformity with United States
  generally accepted accounting principles.

These financial statements have been prepared assuming that the Company will
  continue as a going concern. As discussed in Note 1 to the financial statements,
  unless the Company attains future profitable operations and/or obtains additional
  financing, there is substantial doubt about the Company’s ability to continue
  as a going concern. Management’s plans in regards to these matters are
  discussed in Note 1. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.

|Vancouver, Canada                                 | “Morgan & Company”                  
|------------------------------------------------- | ------------------------------------
|                                                  |                                     
|March 11, 2005                                    | Chartered Accountants               
|(except for note 9E which is as of April 8, 2005) |                                     
|Tel: (604) 687-5841                               | P.O. Box 10007 Pacific Centre       
|Fax: (604) 687-0075                               | Suite 1488 – 700 West Georgia Street
|www.morgan-cas.com                                | Vancouver, BC V7Y 1A1               

F-1

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FAIRCHILD INTERNATIONAL CORPORATION

Balance Sheets 
  (Expressed in US dollars)

|                                                                        | December 31, |   | December 31, |  
|----------------------------------------------------------------------- | ------------ | - | ------------ | -
|                                                                        | 2004         |   | 2003         |  
|                                                                        | $            |   | $            |  
|Assets                                                                  |              |   |              |  
|                                                                        |              |   |              |  
|Current Assets                                                          |              |   |              |  
|                                                                        |              |   |              |  
|Cash
      and cash equivalents                                         | 4,198        |   | 5,012        |  
|Accounts receivable                                                     | -            |   | 4,533        |  
|Prepaid
      expenses and other                                        | 454          |   | -            |  
|Due from affiliated companies                                           | -            |   | 16,119       |  
|                                                                        |              |   |              |  
|Total Current Assets                                                    | 4,652        |   | 25,664       |  
|                                                                        |              |   |              |  
|Oil and Gas Interests, successful efforts method (Note 3)               | 7,300        |   | 72,844       |  
|                                                                        |              |   |              |  
|Total Assets                                                            | 11,952       |   | 98,508       |  
|                                                                        |              |   |              |  
|Liabilities and Stockholders' (Deficit) Equity                          |              |   |              |  
|                                                                        |              |   |              |  
|Current Liabilities                                                     |              |   |              |  
|                                                                        |              |   |              |  
|Accounts payable and
      accrued liabilities                          | 44,231       |   | 22,183       |  
|Accounts payable -
      related parties (Note 4)                       | 1,230        |   | 31,370       |  
|Loans payable                                                           | 16,200       |   | -            |  
|                                                                        |              |   |              |  
|Total Current Liabilities                                               | 61,661       |   | 53,553       |  
|                                                                        |              |   |              |  
|Long-term Liabilities                                                   |              |   |              |  
|                                                                        |              |   |              |  
|Asset retirement obligation                                             | 5,625        |   | 5,000        |  
|                                                                        |              |   |              |  
|Total Liabilities                                                       | 67,286       |   | 58,553       |  
|                                                                        |              |   |              |  
|Stockholders' (Deficit) Equity                                          |              |   |              |  
|                                                                        |              |   |              |  
|Preferred Stock                                                         |              |   |              |  
|Authorized: 1,000,000
      shares, with a $0.01 par value; none issued | -            |   | -            |  
|                                                                        |              |   |              |  
|Common Stock (Note 5)                                                   |              |   |              |  
|Authorized: 2,000,000
      shares, with a $0.001 par value;            |              |   |              |  
|Issued: 2,000,000 shares
      (December 31, 2003 – 1,163,423 shares)   | 2,000        |   | 1,163        |  
|                                                                        |              |   |              |  
|Additional Paid-In Capital                                              | 2,678,672    |   | 2,229,661    |  
|                                                                        |              |   |              |  
|Common Stock to be Issued (Note 6)                                      | 43,766       |   | -            |  
|                                                                        |              |   |              |  
|Deficit                                                                 | (2,779,772   | ) | (2,190,869   | )
|                                                                        |              |   |              |  
|Total Stockholders’ (Deficit) Equity                                    | (55,334      | ) | 39,955       |  
|                                                                        |              |   |              |  
|Total Liabilities And Stockholders’ (Deficit) Equity                    | 11,952       |   | 98,508       |  

The accompanying notes are an integral part of these financial
  statements. 
  F-2

---

FAIRCHILD INTERNATIONAL CORPORATION

Statements of Operations 
  (Expressed in US dollars)

|                                                              | Years Ended  |  
|------------------------------------------------------------- | ------------ | -
|                                                              | December 31, |  
|                                                              | 2004         |  
|                                                              | $            |  
|                                                              |              |  
|Revenues                                                      |              |  
|                                                              |              |  
|Oil and gas                                                   | 40,463       |  
|                                                              |              |  
|Expenses                                                      |              |  
|                                                              |              |  
|Consulting                                                    | 179,113      |  
|Depletion and accretion                                       | 19,954       |  
|Exploration expenses                                          | 446          |  
|Financing costs                                               | -            |  
|Gain on relinquishment
      of oil and gas property interest | (9,307       | )
|Impairment of oil and
      gas properties                    | 59,842       |  
|Investor relations                                            | 32,565       |  
|General and administrative                                    | 17,000       |  
|Management fees                                               | 43,000       |  
|Oil and gas operating                                         | 13,280       |  
|Professional fees                                             | 51,473       |  
|Related Party                                                 |              |  
|Administration fees                                           | 222,000      |  
|Consulting                                                    | -            |  
|                                                              |              |  
|                                                              | 629,366      |  
|                                                              |              |  
|Net loss before discontinued operations                       | (588,903     | )
|Less; discontinued operations                                 |              |  
|License Royalties                                             | -            |  
|                                                              |              |  
|Net Loss                                                      | (588,903     | )
|                                                              |              |  
|Net Loss Per Share – Basic and Diluted                        | (0.44        | )
|                                                              |              |  
|Weighted Average Shares Outstanding                           | 1,343,000    |  

The accompanying notes are an integral part of these financial
  statements.
  F-3

---

FAIRCHILD INTERNATIONAL CORPORATION

Statements of Changes in Stockholders’ Equity 
  (Expressed in US dollars)

|                                  |              |         | Additional |            |                     |          |  
|--------------------------------- | ------------ | ------- | ---------- | ---------- | ------------------- | -------- | -
|                                  | Common Stock | Paid in |            |            | Total Stockholders’ |         
|                                  | Shares       | Amount  | Capital    | Deficit    |                     | Equity   |  
|                                  |              |         |            |            |                     |          |  
|                                  |              | $       | $          | $          |                     | $        |  
|Stockholders’ equity (deficit) at |              |         |            |            |                     |          |  
|December 31, 2002                 | 906,041      | 906     | 1,804,796  | (1,826,942 | )                   | (21,240  | )
|                                  |              |         |            |            |                     |          |  
|Issued for cash stock options     |              |         |            |            |                     |          |  
|                                  |              |         |            |            |                     |          |  
|@ $.50/Share                      | 28,000       | 27      | 13,973     | -          |                     | 14,000   |  
|@ $.75/Share                      | 16,000       | 16      | 11,984     | -          |                     | 12,000   |  
|@ $1.125/Share                    | 8,000        | 8       | 8,992      | -          |                     | 9,000    |  
|@ $1.50/Share                     | 6,000        | 6       | 8,994      | -          |                     | 9,000    |  
|@ $1.875/Share                    | 13,618       | 14      | 25,519     | -          |                     | 25,533   |  
|                                  |              |         |            |            |                     |          |  
|Issued for financing cost         |              |         |            |            |                     |          |  
|                                  |              |         |            |            |                     |          |  
|@ $.875/Share                     | 5,714        | 6       | 4,994      | -          |                     | 5,000    |  
|@ $1.00/Share                     | 20,000       | 20      | 19,980     | -          |                     | 20,000   |  
|                                  |              |         |            |            |                     |          |  
|Issued for related party services |              |         |            |            |                     |          |  
|                                  |              |         |            |            |                     |          |  
|@ $.925/Share                     | 10,326       | 10      | 9,490      | -          |                     | 9,500    |  
|@ $1.025/Share                    | 9,223        | 9       | 9,491      | -          |                     | 9,500    |  
|@ $1.10/Share                     | 14,524       | 15      | 15,985     | -          |                     | 16,000   |  
|@ $1.175/Share                    | 16,928       | 17      | 19,983     | -          |                     | 20,000   |  
|                                  |              |         |            |            |                     |          |  
|Issued for short-term debt        |              |         |            |            |                     |          |  
|                                  |              |         |            |            |                     |          |  
|@ $1.00/Share                     | 20,000       | 20      | 19,980     | -          |                     | 20,000   |  
|@ $1.125/Share                    | 52,667       | 53      | 59,197     | -          |                     | 59,250   |  
|@ $1.875/Share                    | 4,382        | 4       | 8,213      | -          |                     | 8,217    |  
|@ $2.25/Share                     | 32,000       | 32      | 71,968     | -          |                     | 72,000   |  
|                                  |              |         |            |            |                     |          |  
|Stock-based compensation          | -            | -       | 116,122    | -          |                     | 116,122  |  
|                                  |              |         |            |            |                     |          |  
|Net loss for the year             | -            | -       | -          | (363,927   | )                   | (363,927 | )
|                                  |              |         |            |            |                     |          |  
|                                  | 257,382      | 257     | 424,865    | (363,927   | )                   | 61,195   |  
|Stockholders’ equity (deficit) at |              |         |            |            |                     |          |  
|December 31, 2003                 | 1,163,423    | 1,163   | 2,229,661  | (2,190,869 | )                   | 39,955   |  

The accompanying notes are an integral part of these financial
  statements. 
  F-4

---

FAIRCHILD INTERNATIONAL CORPORATION

Statements of Changes in Stockholders’ Equity 
  (Expressed in US dollars)

|                                  |              |         | Additional   |              |            |                     |          |  
|--------------------------------- | ------------ | ------- | ------------ | ------------ | ---------- | ------------------- | -------- | -
|                                  | Common Stock | Paid in | Common Stock |              |            | Total Stockholders’ |         
|                                  | Shares       | Amount  | Capital      | To be Issued | Deficit    |                     | Equity   |  
|                                  |              | $       | $            | $            | $          |                     | $        |  
|Stockholders’ equity (deficit) at |              |         |              |              |            |                     |          |  
|December 31, 2003                 | 1,163,423    | 1,163   | 2,229,661    | -            | (2,190,869 | )                   | 39,955   |  
|                                  |              |         |              |              |            |                     |          |  
|Issued for cash stock options     |              |         |              |              |            |                     |          |  
|                                  |              |         |              |              |            |                     |          |  
|@ $0.625/Share                    | 16,000       | 16      | 9,984        | -            | -          |                     | 10,000   |  
|@ $0.75/Share                     | 42,000       | 42      | 31,458       | -            | -          |                     | 31,500   |  
|                                  |              |         |              |              |            |                     |          |  
|Issued for related party services |              |         |              |              |            |                     |          |  
|                                  |              |         |              |              |            |                     |          |  
|@ $0.50/Share                     | 578,469      | 578     | 288,656      | -            | -          |                     | 289,234  |  
|@ $0.20/Share                     | 42,500       | 42      | 8,458        | -            | -          |                     | 8,500    |  
|@ $0.325/Share                    | 26,154       | 26      | 8,474        | -            | -          |                     | 8,500    |  
|@ $0.375/Share                    | 22,973       | 23      | 8,477        | -            | -          |                     | 8,500    |  
|@ $0.475/Share                    | 17,526       | 18      | 8,482        | -            | -          |                     | 8,500    |  
|@ $0.625/Share                    | 43,951       | 44      | 27,456       | -            | -          |                     | 27,500   |  
|@ $0.675/Share                    | 14,179       | 14      | 9,486        | -            | -          |                     | 9,500    |  
|@ $0.825/Share                    | 12,651       | 13      | 10,487       | -            | -          |                     | 10,500   |  
|@ $0.90/Share                     | 11,538       | 12      | 10,488       | -            | -          |                     | 10,500   |  
|@ $1.10/Share                     | 8,636        | 9       | 9,491        | -            | -          |                     | 9,500    |  
|                                  |              |         |              |              |            |                     |          |  
|Common stock to be issued         | -            | -       | -            | 43,766       | -          |                     | 43,766   |  
|                                  |              |         |              |              |            |                     |          |  
|Stock-based compensation          | -            | -       | 17,613       | -            | -          |                     | 17,613   |  
|                                  |              |         |              |              |            |                     |          |  
|Net loss for the year             | -            | -       | -            | -            | (588,903   | )                   | (588,903 | )
|                                  |              |         |              |              |            |                     |          |  
|                                  | 836,577      | 837     | 449,011      | 43,766       | (588,903   | )                   | (95,290  | )
|                                  |              |         |              |              |            |                     |          |  
|Stockholders’ equity (deficit) at |              |         |              |              |            |                     |          |  
|December 31, 2004                 | 2,000,000    | 2,000   | 2,678,672    | 43,766       | (2,779,772 | )                   | (55,335  | )

The number of shares issued and outstanding has been restated to give retroactive
  effect for a reverse stock split on the basis of one new share in exchange for
  25 old shares approved by the directors of the Company on November 22, 2004.
  The stock split occurred subsequent to year end.

The accompanying notes are an integral part of these financial
  statements.
  F-5

---

FAIRCHILD INTERNATIONAL CORPORATION

Statements of Cash Flows
  (Expressed in US dollars)

|                                                          | Years Ended  |  
|--------------------------------------------------------- | ------------ | -
|                                                          | December 31, |  
|                                                          | 2004         |  
|                                                          | $            |  
|                                                          |              |  
|Cash Flows From Operating Activities                      |              |  
|Net loss for the year                                     | (588,903     | )
|Items not involving
      cash:                           |              |  
|Depletion and accretion                                   | 19,954       |  
|Financing costs                                           | -            |  
|Gain on relinquishment of oil and gas property interest   | (9,307       | )
|Impairment of oil and gas properties                      | 59,842       |  
|Liability to issue shares for services                    | 43,766       |  
|Issue of shares for services                              | 390,734      |  
|Stock-based compensation                                  | 17,613       |  
|Changes in operating
      assets and liabilities:        |              |  
|Decrease in accounts receivable                           | 4,533        |  
|(Increase) in prepaid expenses and other                  | (454         | )
|Decrease in due from affiliated companies                 | 3,670        |  
|Increase in accounts payable and accrued liabilities      | 12,435       |  
|(Decrease) increase in accounts payable - related parties | 1,230        |  
|                                                          |              |  
|Net Cash (Used in) Provided By Operating Activities       | (44,887      | )
|                                                          |              |  
|Investing Activities                                      |              |  
|Oil and gas property costs                                | (13,627      | )
|                                                          |              |  
|Net Cash (Used In) Investing Activities                   | (13,627      | )
|                                                          |              |  
|Financing Activities                                      |              |  
|Proceeds from (repayment
      of) loans payable          | 16,200       |  
|Repayments to related
      parties                       | -            |  
|Common stock issued for cash                              | 41,500       |  
|                                                          |              |  
|Net Cash Provided By (Used in) Financing Activities       | 57,700       |  
|                                                          |              |  
|(Decrease) Increase in Cash and Cash Equivalents          | (814         | )
|                                                          |              |  
|Cash and Cash Equivalents, beginning of year              | 5,012        |  
|                                                          |              |  
|Cash and Cash Equivalents, end of year                    | 4,198        |  
|                                                          |              |  
|Non-Cash Financing Activities                             |              |  
|                                                          |              |  
|Stock issued for financing
      costs                    | -            |  
|Stock issued for services                                 | 390,734      |  
|Stock issued on settlement of short-term
      debt       | -            |  
|                                                          |              |  
|Supplemental Disclosures                                  |              |  
|                                                          |              |  
|Cash paid for taxes                                       | -            |  
|Cash paid for interest                                    | -            |  

The accompanying notes are an integral part of these financial
  statements.
  F-6

---

|1. | Nature of Operations and Going Concern Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The Company was incorporated in the State of Nevada, U.S.A.
      on June 20, 1997. The Company’s principal business was the exploration
      for and production of natural gas and oil in the United States, Canada,
      and the Ukraine. Subsequent to December 31, 2004, the Company entered into
      an agreement to dispose of its remaining interest in the oil and gas properties
      located in the Province of Saskatchewan, Canada. The Company is focusing
      its efforts on acquiring a new business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | As of December 31, 2004, the Company had not reached a level
      of operations, which would finance day-to-day activities. These financial
      statements have been prepared on the assumption that the Company is a going
      concern, meaning it will continue in operation for the foreseeable future
      and will be able to realize assets and discharge liabilities in the ordinary
      course of operations. Different bases of measurement may be appropriate
      when a company is not expected to continue operations for the foreseeable
      future. The Company incurred losses from operations of $588,903 and
      $363,927 for the years ended December 31, 2004 and 2003. The Company
      had working capital deficiencies of $57,010 and $27,889 as of December
      31, 2004 and 2003 respectively. The Company’s continuation as a going
      concern is dependent upon its ability to identify and successfully acquire
      a business or assets that will attain profitable operations or raise additional
      capital sufficient to meet current and future obligations. Management plans
      to seek additional capital through private placements and public offerings
      of its common stock. There is no guarantee that the Company will be able
      to complete any of these objectives. These factors raise substantial doubt
      about the Company’s ability to continue as a going concern.
|  
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-7

---

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------
|  
|   | c)                                                    
|  
|   |                                                       
|  
|   | d)                                                    
|  
|   |                                                       
|  
|   | e)                                                    
|  
|   |                                                       
|  
|   | f)                                                    
|  
|   |                                                       
|  
|   | g)                                                    
|  
|   |                                                       
|  
|   |                                                       
|  
|   | h)                                                    
|  
|   |                                                       

F-8

---

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------
|  
|   | i)                                                    
|  
|   |                                                       
|  
|   |                                                       
|  
|   | j)                                                    
|  
|   |                                                       

F-9

---

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------
|  
|   | k)                                                    
|  
|   |                                                       
|  
|3. | Oil and Gas Interests                                 

| |                                                                 |   | 2004     |   |   | 2003    |  
| | --------------------------------------------------------------- | - | -------- | - | - | ------- | -
| |                                                                 |   |          |   |   |         |  
| | OIL AND GAS INTERESTS – SUCCESSFUL
      EFFORTS METHOD         |   |          |   |   |         |  
| | Balance beginning of the year                                   | $ | 72,844   |   | $ | 89,747  |  
| | Expenditures                                                    |   | 13,627   |   |   | 69,602  |  
| | Depletion, amortization and impairment charge                   |   | (79,171  | ) |   | (86,505 | )
| | Dry well and abandoned interests                                |   | -        |   |   | -       |  
| | Balance end of the year                                         | $ | 7,300    |   | $ | 72,844  |  
| |                                                                 |   |          |   |   |         |  
| | Represented by:                                                 |   |          |   |   |         |  
| | California, U.S.A.                                              |   |          |   |   |         |  
| | Producing interests subject to depletion and amortization       | $ | 78,191   |   | $ | 78,191  |  
| | Accumulated depletion and impairment valuation                  |   | (78,191  | ) |   | (71,343 | )
| |                                                                 |   | -        |   |   | 6,848   |  
| | Texas, U.S.A.                                                   |   |          |   |   |         |  
| | Non-producing interests                                         |   | 20,631   |   |   | 10,000  |  
| | Accumulated impairment valuation                                |   | (20,631  | ) |   | -       |  
| |                                                                 |   | -        |   |   | 10,000  |  
| |                                                                 |   |          |   |   |         |  
| | Saskatchewan, Canada                                            |   |          |   |   |         |  
| | Producing interests subject to depletion
      and amortization |   | 131,370  |   |   | 128,374 |  
| | Accumulated depletion and impairment valuation                  |   | (123,670 | ) |   | (72,378 | )
| |                                                                 |   | 7,300    |   |   | 55,996  |  
| |                                                                 | $ | 7,300    |   | $ | 72,844  |  

F-10

---

|3. | Oil and Gas Interests (continued)
|-- | ---------------------------------

| | CAPITALIZED COSTS RELATING TO OIL AND                                               |   |              |   |   |          |  
| | ----------------------------------------------------------------------------------- | - | ------------ | - | - | -------- | -
| | GAS PRODUCING ACTIVITIES                                                            |   | DECEMBER 31, |  
| |                                                                                     |   | 2004         |   |   | 2003     |  
| |                                                                                     |   |              |   |   |          |  
| | Proved oil and gas properties and related
      equipment – California, U.S.A.      | $ | 78,191       |   | $ | 78,191   |  
| | Proved oil and gas properties and related equipment –
      Saskatchewan, Canada    |   | 131,370      |   |   | 128,374  |  
| | Non-producing oil and gas properties –
      Texas, U.S.A.                          |   | 20,631       |   |   | 10,000   |  
| | Non-producing oil and gas properties – Saskatchewan,
      Canada                   |   | -            |   |   | -        |  
| |                                                                                     |   |              |   |   |          |  
| | Sub-total                                                                           |   | 124,070      |   |   | 216,565  |  
| | Accumulated depreciation, depletion and
      amortization and valuation allowances |   | (208,192     | ) |   | (143,721 | )
| |                                                                                     |   |              |   |   |          |  
| |                                                                                     | $ | 7,300        |   | $ | 72,844   |  

| | COSTS INCURRED IN OIL AND GAS ACQUISITION, |   | YEAR ENDED   | 
| | ------------------------------------------ | - | ------------ | 
| | EXPLORATION AND DEVELOPMENT ACTIVITIES     |   | DECEMBER 31, | 
| |                                            |   | 2004         | 
| |                                            |   |              | 
| | Acquisition of properties                  |   |              | 
| | Proved
      – California, U.S.A.          | $ | -            | 
| | Proved
      – Saskatchewan, Canada        |   | 2,996        | 
| | Unproved                                   |   | 10,631       | 

| | RESULTS OF OPERATIONS FROM PRODUCING ACTIVITIES - |   |        |   |   |         |  
| | ------------------------------------------------- | - | ------ | - | - | ------- | -
| | CALIFORNIA, U.S.A.                                |   |        |   |   |         |  
| |                                                   |   | 2004   |   |   | 2003    |  
| |                                                   |   |        |   |   |         |  
| | Oil and gas sales                                 | $ | 4,618  |   | $ | 49,520  |  
| | Production costs                                  |   | (4,535 | ) |   | (14,117 | )
| | Depletion and impairment valuation provision      |   | (6,848 | ) |   | (14,127 | )
| |                                                   |   |        |   |   |         |  
| | Net income (loss) from producing activities       | $ | (6,765 | ) | $ | 21,276  |  

| | RESULTS OF OPERATIONS FROM PRODUCING ACTIVITIES -             |   |         |   |   |         |  
| | ------------------------------------------------------------- | - | ------- | - | - | ------- | -
| | SASKATCHEWAN, CANADA                                          |   |         |   |   |         |  
| |                                                               |   | 2004    |   |   | 2003    |  
| |                                                               |   |         |   |   |         |  
| | Oil and gas sales                                             | $ | 35,845  |   | $ | 47,330  |  
| | Production costs                                              |   | (8,745  | ) |   | (10,877 | )
| | Depletion, accretion and impairment valuation
      provision |   | (37,617 | ) |   | (30,133 | )
| |                                                               |   |         |   |   |         |  
| | Net income (loss) from producing activities                   | $ | (10,517 | ) | $ | 6,320   |  

F-11

---

|3. | Oil and Gas Interests (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Oil and Gas Interests – California, USA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | The Company has a 5% working interest in three wells and a
      2.7% working interest in a fourth well in Tehama County, California. During
      the fiscal year ended December 31, 2002, the Company borrowed $70,000
      from a company with a common officer for the acquisition of oil and gas
      interests in Tehama County, California. The Company conveyed to the lender,
      as additional consideration for granting the loan, 20% of its interest in
      the prospect and a right of refusal to participate as to 50% in future oil
      and gas prospects undertaken by the Company. By an agreement dated December
      15, 2004, Patch returned the interest to the Company and a gain on relinquishment
      of debt was recognized in the amount of $9,307.                                                                                                                                                                                   
|  
|   | Oil and Gas Interests – Saskatchewan, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | Under a participation agreement entered into in 2002, the Company
      has a 4.167% working interest in the first set of ten wells drilled in Kerrobert,
      Saskatchewan. During the year ended December 31, 2003, the Company entered
      into a second participation agreement to earn a 1.75% interest in a second
      set of nine additional wells drilled. The agreements are with a Company
      with a common officer. The Company has an option to acquire a 6.75% working
      interest in future oil wells in the Kerrobert drilling program. Refer to
      Note 8.                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | Oil and Gas Interests – Texas, USA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | The Company entered into an agreement dated November 6, 2003
      to earn a 1.875% interest in a test well by incurring 1.875% of the costs
      associated with the acquisition of the interest. The agreement is with a
      Company with a common officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | The Company entered into assignment agreements dated February
      23, 2004 pursuant to the terms of a sub- participation agreement dated November
      6, 2003 between the Company and Patch International Inc. (formerly Patch
      Energy Inc.) (“Patch”), where the Company was granted the right
      to earn a 1.875% interest in the Test Well and the Program Lands, being
      a one-half share of the interest, in consideration of incurring an equal
      percentage of the costs associated with the acquisition of the Interest.
      The Company has assigned two fifths of its interest in the sub-participation
      agreement, being the right to earn an interest of 0.375 of 1% in the Test
      Well and the Program Lands, in consideration of the assumption of an equal
      share (2/5) of the Company’s costs under the sub- participation agreement.
      The costs of the test well were written down due to an impairment valuation.
|  
|   | Oil and Gas Interest – Naftogaz, Ukraine                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | The Company entered into a memorandum of understanding with
      a company with a common officer, dated November 7, 2003, under which the
      Company may participate in negotiations to undertake petroleum and natural
      gas exploration and development activities in the Ukraine. To date, no agreements
      have been entered into.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|4. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-12

---

|4. | Related Party Transactions (continued)                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | d)                                                                                                                                                                             
|  
|   | e)                                                                                                                                                                             
|  
|5. | Common Stock                                                                                                                                                                   
|  
|   | a.                                                                                                                                                                             
|  
|   |                                                                                                                                                                                
|  
|   | b.                                                                                                                                                                             
|  
|   | During the year ended December 31, 2004, the Company issued
      a total of 778,577 common stock for management services of $390,735.                                         
|  
|   | During the year ended December 31, 2003, a total of 185,764
      shares of common stock were issued for non-cash consideration totalling
      an aggregate value of $239,467.
|  
|   | c.                                                                                                                                                                             
|  
|   |                                                                                                                                                                                
|  
|   |                                                                                                                                                                                

| |  |                            | December 31, 2004 |   | December 31, 2003
| |  | -------------------------- | ----------------- | - | -----------------
| |  |                            |                   |   | Weighted         
| |  |                            | Number of         |   | average          
| |  |                            | shares            |   | exercise price   
| |  |                            |                   |   |                  
| |  | Balance, beginning of year | 53,133            |   | $2.43            
| |  | Options granted            | 100,000           |   | 0.73             
| |  | Options exercised          | (58,000           | ) | 0.72             
| |  | Options expired            | (12,000           | ) | 6.25             
| |  | Options cancelled          | (83,133           | ) | 1.03             
| |  |                            |                   |   |                  
| |  | Balance, end of year       | -                 |   | -                

| |  | The fair value of the options granted during the year was estimated at
      the date of grant using the Black-Scholes option pricing model with the
      following weighted average assumptions: risk free interest rate of 1.02%,
      expected volatility of 150%, an expected option life of 1 year and no expected
      dividends. The weighted average fair value of options granted was $0.50
      per share. Had the Company determined compensation cost based on the fair
      value at the date of grant for its employee stock options, the net loss
      would have increased by $13,535 for the year ended December 31, 2004
      (2003 - $81,132). During the year ended December 31, 2004, the Company
      recognized stock-based compensation in the amount of $17,613 (2003 -
      $116,122).
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-13

---

|5. | Common Stock (continued)
|-- | ------------------------
|   |                         
|   | c.                      
|   |                         
|   |                         

| |  |                                                            | Years ended  |  
| |  | ---------------------------------------------------------- | ------------ | -
| |  |                                                            | December 31, |  
| |  |                                                            | 2004         |  
| |  |                                                            | $            |  
| |  |                                                            |              |  
| |  | Net loss — as reported                                     | (588,903     | )
| |  | Add: Stock-based compensation expense included in net      |              |  
| |  | loss — as reported                                         | 17,613       |  
| |  | Deduct: Stock-based compensation expense determined        |              |  
| |  | under fair value method                                    | (31,148      | )
| |  |                                                            |              |  
| |  | Net loss — pro forma                                       | (602,038     | )
| |  |                                                            |              |  
| |  | Net loss per share (basic and diluted) —
      as reported | (0.44        | )
| |  | Net loss per share (basic and diluted) — pro forma         | (0.45        | )

|6. | Commitment
      On February 11, 2005, the Company issued 87,532 shares of common stock
        at $0.50 per share pursuant to two consulting services agreements
        dated November 15, 2004 for an aggregate of $43,766. Refer to Note
        9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|7. | License
      In 2000, the Company entered into a Research, Development and License
        Agreement to acquire an exclusive license to make, use and sell certain
        pharmaceutical products. The Company issued 104,000 common shares and
        paid $137,520 of its total research and development funding obligation
        of $250,000 as consideration for the license. On February 28, 2001,
        the parties terminated the Research, Development and License Agreement.
        As consideration for efforts made, shares issued and cash paid, the Company
        was entitled to a 30% net revenue royalty from licensed products to a
        maximum of $250,000 during the first three years of product sales.
      Effective January 15, 2002, the parties agreed to place 94,200 of the
        shares in a voluntary pool and that the Company would be entitled to two-thirds
        of the proceeds from the sale of the shares until it had received $175,000.
        At that time, the net revenue royalty obligation would be considered satisfied.
        Insufficient proceeds were received from the sale of the shares to satisfy
        the Company’s net revenue royalty entitlement.
      Due to the inability of the Company to predict the timing of payments,
        the amounts are being recognized on a collected or collectible basis.
      The Company entered into a letter of agreement dated February 18, 2004
        with Patch International Inc. (formerly Praxis Pharmaceuticals Inc.) (“Patch
        International”) where the Company and Patch International have agreed
        to be bound by the terms of the original Termination of License and Research
        and Development Agreement (the “License Agreement”) dated
        February 28, 2001. The letter agreement confirms that all amendments to
        such License Agreement are no longer in force and effect. As a result,
        Patch International will retain the common shares of the Company assigned
        to it under the terms of the License Agreement and that Patch International
        will pay to the Company 30% of the net revenues in the License Agreement
        to a maximum of $250,000 over the first three years of sale; given
        that the Company has received $59,423 from Patch International.

F-14

---

|8. | Income Taxes
      Potential benefits of income tax losses are not recognized in the accounts
        until realization is more likely than not. The Company has incurred net
        operating losses of $2,020,000, which commence expiring in 2013. Pursuant
        to SFAS No. 109 the Company is required to compute tax asset benefits
        for net operating losses carried forward. Potential benefit of net operating
        losses have not been recognized in these financial statements because
        the Company cannot be assured it is more likely than not it will utilize
        the net operating losses carried forward in future years.
      The components of the net deferred tax asset at December 31, 2004 and
        2003, and the statutory tax rate, the effective tax rate and the elected
        amount of the valuation allowance are indicated below:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                       | 2004     |   | 2003      |  
|---------------------- | -------- | - | --------- | -
|                       | $        |   | $         |  
|                       |          |   |           |  
|Net Operating Loss     | 482,000  |   | 1,538,000 |  
|                       |          |   |           |  
|Statutory Tax Rate     | 34%      |   | 34%       |  
|                       |          |   |           |  
|Effective Tax Rate     | -        |   | -         |  
|                       |          |   |           |  
|Deferred Tax Asset     | 163,880  |   | 522,920   |  
|                       |          |   |           |  
|Valuation Allowance    | (163,880 | ) | (522,920  | )
|                       |          |   |           |  
|Net Deferred Tax Asset | -        |   | -         |  

|9. | Subsequent Events
|-- | -----------------
|  
|   | a.               
|  
|   | b.               
|  
|   | c.               
|   |                  
|   | d.               
|   |                  
|   | e.               

F-15

---

|10. | Schedule of Supplementary Information on Oil and Gas Operations                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | RESERVE QUANTITY INFORMATION (UNAUDITED)                                                                                                                                                                                                                                                                   
|   
|    | The estimated quantities of proved oil and gas reserves disclosed in
      the table below are based upon estimates prepared for the operator of the
      Company’s oil and gas interests. Such estimates are inherently imprecise
      and may be subject to substantial revisions.                     
|   
|    | Revisions may occur because current prices of oil and gas and current
      costs of operating are subject to fluctuations, past performance of wells
      does not necessarily guarantee future performance and rates used to estimate
      decline of reserves could vary from that which is projected.
|   
|    | All quantities shown in the table are proved reserves and are located
      within the United States and Canada.                                                                                                                                                                                           

| | STANDARDIZED MEASURE OF DISCOUNTED FUTURE                                   |   |              |   |   |         |  
| | --------------------------------------------------------------------------- | - | ------------ | - | - | ------- | -
| | NET CASH FLOWS RELATING TO PROVED OIL                                       |   | YEAR ENDED   |  
| | AND GAS RESERVES (UNAUDITED)                                                |   | DECEMBER 31, |  
| |                                                                             |   | 2004         |   |   | 2003    |  
| |                                                                             |   | GAS          |   |   | GAS     |  
| |                                                                             |   | (MCF)        |   |   | (MCF)   |  
| | Proved, developed and undeveloped reserves
      (California)               |   |              |   |   |         |  
| |                                                                             |   |              |   |   |         |  
| | Balance beginning of the period                                             |   | 3,280        |   |   | 16,380  |  
| | Discoveries                                                                 |   | -            |   |   | -       |  
| | Production                                                                  |   | (3,280       | ) |   | (13,100 | )
| |                                                                             |   |              |   |   |         |  
| | Balance end of the period                                                   |   | -            |   |   | 3,280   |  
| |                                                                             |   |              |   |   |         |  
| | Standardized Measure of Discounted Future
      Net Cash Flows (California) |   |              |   |   |         |  
| |                                                                             |   |              |   |   |         |  
| | Future cash flows                                                           | $ | -            |   | $ | 18,770  |  
| | Future operating expenses                                                   |   | -            |   |   | (4,748  | )
| |                                                                             |   |              |   |   |         |  
| |                                                                             |   | -            |   |   | 14,022  |  
| | 10% annual discount for estimated timing
      of cash flows                |   | -            |   |   | (701    | )
| |                                                                             |   |              |   |   |         |  
| | Standardized measure of discounted future
      net cash flows              | $ | -            |   | $ | 13,321  |  
| |                                                                             |   |              |   |   |         |  
| | Proved, developed and undeveloped reserves
      (Saskatchewan)             |   |              |   |   |         |  
| |                                                                             |   |              |   |   |         |  
| | Balance beginning of the period                                             |   | 4,563        |   |   | -       |  
| | Adjustments                                                                 |   | 35,337       |   |   | -       |  
| | Discoveries                                                                 |   | -            |   |   | 51,567  |  
| | Production                                                                  |   | (34,900      | ) |   | (47,004 | )
| |                                                                             |   |              |   |   |         |  
| | Balance end of the period                                                   |   | 5,000        |   |   | 4,563   |  
| |                                                                             |   |              |   |   |         |  
| | Standardized Measure of Discounted Future Net Cash Flows (Saskatchewan)     |   |              |   |   |         |  
| |                                                                             |   |              |   |   |         |  
| | Future cash flows                                                           | $ | 190,000      |   | $ | 107,687 |  
| | Future operating expenses                                                   |   | (179,700     | ) |   | (53,074 | )
| |                                                                             |   |              |   |   |         |  
| |                                                                             |   | 10,300       |   |   | 54,613  |  
| | 10% annual discount for estimated timing of cash flows                      |   | 3,000        |   |   | (3,617  | )
| |                                                                             |   |              |   |   |         |  
| | Standardized measure of discounted future net cash flows                    | $ | 7,300        |   | $ | 50,996  |  

F-16

---

|10. | Schedule of Supplementary Information on Oil and Gas Operations (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | RESERVE QUANTITY INFORMATION (UNAUDITED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | Future cash flows are computed by applying fiscal period end prices of
      natural gas and oil to period end quantities of proved natural gas and oil
      reserves. Future operating expenses and development costs are computed primarily
      by the Company’s petroleum engineers by estimating the expenditures
      to be incurred in developing and producing the Company’s proved natural
      gas and oil reserves at the end of the period, based on period end costs
      and assuming continuation of existing economic conditions.                                                                                                                                                                                                                                             
|   
|    | Future income taxes are based on period end statutory rates, adjusted
      for tax basis and applicable tax credits. A discount factor of ten percent
      was used to reflect the timing of future net cash flows. The standardized
      measure of discounted future net cash flows is not intended to represent
      the replacement cost of fair value of the Company’s natural gas and
      oil properties. An estimate of fair value would also take into account,
      among other things, the recovery of reserves not presently classified as
      proved, anticipated future changes in prices and costs, and a discount factor
      more representative of the time value of money and the risks inherent in
      reserve estimate of natural gas and oil producing operations.

F-17

---

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

Not applicable.

Item 8A.   Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation
  of the effectiveness of the design and operation of our disclosure controls
  and procedures as of December 31, 2004, being the date of our fiscal year end
  covered by this Annual Report. This evaluation was carried out under the supervision
  and with the participation of our Chief Executive Officer, Anish Somani and
  Chief Financial Officer, Margaret Hunt upon that evaluation, our Chief Executive
  Officer and Chief Financial Officer concluded that our disclosure controls and
  procedures are effective in timely alerting management to material information
  relating to us required to be included in our periodic SEC filings. There have
  been no significant changes in our internal controls or in other factors that
  could significantly affect internal controls subsequent to the date we carried
  out our evaluation.

Disclosure controls and procedures are controls and other procedures that
  are designed to ensure that information required to be disclosed in our reports
  filed or submitted under the Exchange Act is recorded, processed, summarized
  and reported, within the time periods specified in the Securities and Exchange
  Commission's rules and forms. Disclosure controls and procedures include, without
  limitation, controls and procedures designed to ensure that information required
  to be disclosed in our reports filed under the Exchange Act is accumulated and
  communicated to management, including our Chief Executive Officer and Chief
  Financial Officer, to allow timely decisions regarding required disclosure.

During our fiscal year ended December 31, 2004, there were no changes in our
  internal control over financial reporting that have materially affected, or
  are reasonably likely to affect, our internal control over financial reporting.

The term "internal control over financial reporting" is defined as a process
  designed by, or under the supervision of, the registrant's principal executive
  and principal financial officers, or persons performing similar functions, and
  effected by the registrant's board of directors, management and other personnel,
  to provide reasonable assurance regarding the reliability of financial reporting
  and the preparation of financial statements for external purposes in accordance
  with generally accepted accounting principles and includes those policies and
  procedures that:

| | (1) | Pertain to the maintenance of records that in reasonable detail accurately
      and fairly reflect the transactions and dispositions of the assets of the
      registrant;                                                                                                                                                                                             
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) | Provide reasonable assurance that transactions are recorded as necessary
      to permit preparation of financial statements in accordance with generally
      accepted accounting principles, and that receipts and expenditures of the
      registrant are being made only in accordance with authorizations of management
      and directors of the registrant; and
|
| | (3) | Provide reasonable assurance regarding prevention or timely detection
      of unauthorized acquisition, use or disposition of the registrant's assets
      that could have a material effect on the financial statements.                                                                                                                                              

PART III

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

Directors and Executive Officers

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

---

As at April 14, 2005 our directors and executive officers, their ages, positions
  held, and duration of such, are as follows:

|Name          | Position Held with our Company                                                        | Age | Date First Elected or Appointed
|------------- | ------------------------------------------------------------------------------------- | --- | -------------------------------
|Anish Somani  | President, Chief Executive Officer, Chief 
      Financial Officer and
      Director | 37  | Nov 15, 2004                   
|Margaret Hunt | Secretary, Treasurer and
      Director                                               | 57  | Nov 15, 2004                   

Business Experience

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

Anish Somani, President, Chief Executive Officer and Director

Mr. Somani was appointed our President, Chief Executive Officer, Chief Financial
  Officer and a director on Nov 15, 2004. From November, 1998 to November 2004,
  he worked in project marketing with Sutton Realty and Focus. Mr. Somani has
  senior project management experience in the real estate and development industry,
  as well as in the import and export sectors. He has been active in a number
  of business enterprises in particular helping to arrange and secure financing.
  Mr Somani is a resident of Vancouver BC and hold a BA (Econ & I.R.) from
  the University of British Columbia.

Margaret Hunt, Secretary and Treasurer

Margaret Hunt has over thirty years experience in administration and accounting.
  From July, 2001 to the present, she has worked at Coast West Manufacturing as
  a general accountant. From 2000 to 2001 she worked at S. Michals as its chief
  accountant. Ms. Hunt has worked for a defense contractor in the research and
  development of various technology that required Department of National Defense
  classified security clearance. This included work with Simon Fraser University.
  Margaret also has extensive management and administrative experience that includes
  10 years in real estate management and 11 years in the industrial manufacturing
  sector.

Committees of the Board

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

Family Relationships

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

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control persons have
  been involved in any of the following events during the past five years:

1.      any bankruptcy petition
  filed by or against any business of which such person was a general partner
  or executive officer either at the time of the bankruptcy or within two years
  prior to that time;

2.      any conviction in a
  criminal proceeding or being subject to a pending criminal proceeding (excluding
  traffic violations and other minor offenses);

---

3.      being subject to any
  order, judgment, or decree, not subsequently reversed, suspended or vacated,
  of any court of competent jurisdiction, permanently or temporarily enjoining,
  barring, suspending or otherwise limiting his involvement in any type of business,
  securities or banking activities; or

4.      being found by a court
  of competent jurisdiction (in a civil action), the Commission or the Commodity
  Futures Trading Commission to have violated a federal or state securities or
  commodities law, and the judgment has not been reversed, suspended, or vacated.

Code of Ethics

We have not adopted a code of conduct. Companies whose equity securities are
  listed for trading on the OTCBB are not currently required to do so.

Section 16(a) Beneficial Ownership Compliance

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

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

Item 10.    Executive Compensation.

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

|                                                                 |                   | Annual Compensation         | Long Term Compensation (pre- consolidated)(1) | Pay-  outs                             
|---------------------------------------------------------------- | ----------------- | --------------------------- | --------------------------------------------- | ---------------------------------------
|Name and Principal  Position                                     | Year              | Salary                      | Bonus                                         | Other  Annual  Compen- 
      sation(2)
|Anish Somani,  
      President, CEO and  
      Director        | 2004              | Nil                         | Nil                                           | Nil                                    
|Margaret Hunt,  
      Secretary, Treasurer and  
      Director | 2004              | Nil                         | Nil                                           | Nil                                    
|George Tsafalas  
      President, CEO and  
      Director(1)   | 2003  
      2004 | $64,500(2)
      $47,250(4) | Nil  
      Nil                               | Nil  
      Nil                        
|Byron Cox  
      CFO, Secretary,  
      Treasurer and Director | 2003  
      2004 | $8,000(6)
      $4,000      | Nil  
      Nil                               | Nil  
      Nil                        

---

(1) Mr. Tsafalas was appointed as President and a director
  on June 6, 2002 and resigned November 15, 2004.

(2) Mr. Tsafalas was paid $47,250 as consulting fees from January
  1, 2004 to and including November 15, 2004. Pursuant to the Management Agreement
  dated November 15, 2004 with George Tsafalas our company's President, we agreed
  to pay to Mr. Tsafalas 346,000 shares of post-consolidated stock, of which 289,234
  shares were issued during the year, in connection with the change of control
  of the Company and termination of George Tsafalas as our company’s president.
  Pursuant to the terms of this Management agreement in effect prior to November
  15, 2004, Mr. Tsafalas in any month during the term of the agreement may have
  been compensated by the issuance of such number of shares of our common stock
  at a deemed price equal to the average bid price of our common stock on the
  OTC Bulletin Board for the last five trading days of such month as having a
  value equal to the salary then otherwise payable. For the year ended December
  31, 2004, we had issued 400,000 shares of our common stock to Mr. Tsafalas in
  lieu of salary otherwise payable to him. In January 2004, we issued 102,272
  shares of pre-consolidated common stock to Mr. Tsafalas in lieu of salary otherwise
  payable to him for the month of December 2003. The Management Agreement dated
  April 1, 2003 was terminated November 15, 2004.

(3) Incentive stock options entitling the holder to purchase up
  to an aggregate of: (i) 325,000 common shares at a price of $0.09 exercisable
  until January 9, 2006; and (ii) 950,000 common shares at a price of $0.045
  exercisable until March 24, 2006. In addition, Mr. Tsafalas exercised incentive
  stock options of 400,000 common shares at a price of $0.03 per share during
  the year.

(4) Pursuant to a management agreement entered into with our company,
  Mr. Tsafalas was paid $4,500 per month from January 1, 2004 to and including
  November 14, 2004.

(6) Pursuant to the Management Agreement dated April 22, 2003 with
  Byron Cox, our company's Secretary and Treasurer, we agreed to pay to Mr. Cox
  a monthly salary of $1,000 commencing May 1, 2003 and ending April 30, 2004,
  representing an annual salary of $12,000. Pursuant to the terms of this
  agreement we may satisfy our obligations in respect of payment of the salary
  to Mr. Cox in any month during the term of the agreement by the issuance of
  such number of shares of our common stock at a deemed price equal to the average
  bid price of our common stock on the OTC Bulletin Board for the last five trading
  days of such month as having a value equal to the salary then otherwise payable.
  For the year ended December 31, 2003, we had issued 116,834 shares of our common
  stock to Mr. Cox in lieu of salary otherwise payable to him. In January 2004,
  we issued 22,727 shares of our common stock to Mr. Cox in lieu of salary otherwise
  payable to him for the month of December 2003.

(7)Incentive stock options entitling him to purchase up to an
  aggregate of: (i) 75,000 common shares at a price of $0.09 per share exercisable
  until January 9, 2006; and (ii) 200,000 common shares at a price of $0.045
  exercisable until March 24, 2006. He also holds incentive stock options entitling
  him to purchase up to 100,000 common shares at a price of $0.03 exercisable
  until February 24, 2009.

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

Employment/Consulting Agreements

Pursuant to the Management Agreement dated April 1, 2003 with George Tsafalas
  our company's President, we agreed to pay to Mr. Tsafalas a monthly salary of
  $4,500 commencing April 1, 2003 and ending March 31, 2006, representing
  an annual salary of $54,000 for a three year term.. Pursuant to the terms
  of this agreement we may satisfy our obligations in respect of payment of the
  salary to Mr. Tsafalas in any month during the term of the agreement by the
  issuance of such number of shares of our common stock at a deemed price equal
  to the average bid price of our common stock on the OTC Bulletin Board for the
  last five trading days of such month as having a value equal to the salary then
  otherwise payable. For the year ended December 31, 2004, we had issued 2,512,677
  shares of our common stock to Mr. Tsafalas in lieu of salary otherwise payable
  to him. In January 2004, we issued 102,272 (pre-consolidated)

---

shares of our common stock to Mr. Tsafalas in lieu of salary otherwise payable
  to him for the month of December 2003. The Management agreement between Mr.
  Tsafalas and the Company was terminated on November 15, 2004. Pursuant to the
  Management Agreement dated November 15, 2004. Mr. Tsafalas agreed to provide
  services to the company pursuant to the change of control of the Company, we
  agreed to pay Mr. Tsafalas 346,000 shares of restricted common stock (post consolidated).

Pursuant to the Management Agreement dated April 1, 2003 with David Stadnyk,
  we agreed to pay to Mr. Stadnyk a monthly salary of $4,000 commencing April
  1, 2003 and ending March 31, 2006, representing an annual salary of $48,000
  for a three year term Pursuant to the terms of this agreement we may satisfy
  our obligations in respect of payment of the salary to Mr. Stadnyk in any month
  during the term of the agreement by the issuance of such number of shares of
  our common stock at a deemed price equal to the average bid price of our common
  stock on the OTC Bulletin Board for the last five trading days of such month
  as having a value equal to the salary then otherwise payable. For the year ended
  December 31, 2004, we had issued 3,133,491 shares of our common stock to Mr.
  Stadnyk in lieu of salary otherwise payable to him. The Management agreement
  between Mr. Tsafalas and the Company was terminated on November 15, 2004. Pursuant
  to the Management Agreement dated November 15, 2004. Mr. Stadnyk agreed to provide
  services to the company pursuant to the change of control of the Company, we
  agreed to pay Mr. Stadnyk 320,000 shares of restricted common stock. (post consolidated)

Pursuant to the Management Agreement dated April 1, 2003 with Winston Cabell,
  we agreed to pay to Mr. Cabell a monthly salary of $1,000 commencing April
  1, 2003 and ending March 31, 2004, representing an annual salary of $12,000
  Pursuant to the terms of this agreement we may satisfy our obligations in respect
  of payment of the salary to Mr. Cabell in any month during the term of the agreement
  by the issuance of such number of shares of our common stock at a deemed price
  equal to the average bid price of our common stock on the OTC Bulletin Board
  for the last five trading days of such month as having a value equal to the
  salary then otherwise payable. For the year ended December 31, 2003, we had
  accrued $9,000 in unpaid management fees to Mr. Cabell.

Pursuant to the Management Agreement dated April 22, 2003 with Byron Cox,
  our company's Secretary and Treasurer, we agreed to pay to Mr. Cox a monthly
  salary of $1,000 commencing May 1, 2003 and ending April 30, 2004, representing
  an annual salary of $12,000. Pursuant to the terms of this agreement we
  may satisfy our obligations in respect of payment of the salary to Mr. Cox in
  any month during the term of the agreement by the issuance of such number of
  shares of our common stock at a deemed price equal to the average bid price
  of our common stock on the OTC Bulletin Board for the last five trading days
  of such month as having a value equal to the salary then otherwise payable.
  For the year ended December 31, 2003, we had issued 116,834 (pre-consolidated)
  shares of our common stock to Mr. Cox in lieu of salary otherwise payable to
  him. In January 2004, we issued 22,727 (pre-consolidated) shares of our common
  stock to Mr. Cox in lieu of salary otherwise payable to him for the month of
  December 2003.

On September 2, 2003 we entered into an agreement with David Lane to assist
  our company in seeking out new oil and gas investment opportunities. The agreement
  is for a one year term and we have granted to Mr. Lane as consideration for
  his services incentive stock options entitling him to purchase up to an aggregate
  of 400,000 (pre-consolidated) shares in our capital stock at a price of $0.03
  per share.

Fairchild is currently negotiating management compensation contracts with
  Anish Somani, our President, and Margaret Hunt, our Secretary and Treasurer.

On January 1, 2005 we entered into an agreement with Robert Jarva to assist
  our company in seeking out new investment opportunities. The agreement is for
  a six month term and we have agreed to compensate Mr. Jarva up to 2,000,000
  (post-consolidated) shares to a maximum of 10% of the total amount of any shares
  issued by the Company after the acquisition has been consummated.

On January 1, 2005 we entered into an agreement with Aarif Jamani to assist
  our company in seeking out new investment opportunities. The agreement is for
  a six month term and we have agreed to compensate Mr. Jamani up to 2,000,000
  (post-consolidated) shares to a maximum of 10% of the total amount of any shares
  issued by the Company after the acquisition has been consummated.

Other than as disclosed above, we have not entered into any employment or
  consulting agreements with any of our current officers, directors or employees.

There are no arrangements or plans in which we provide pension, retirement
  or similar benefits for directors or executive officers, except that our directors
  and executive officers may receive stock options at the discretion of our board
  of directors. Other than the management agreements discussed above, we do not
  have any material bonus or

---

profit sharing plans pursuant to which cash or non-cash compensation is or
  may be paid to our directors or executive officers, except that stock options
  may be granted at the discretion of our board of directors.

Stock Options/SAR Grants

The following grants of stock options or stock appreciation rights were made
  during the fiscal year ended December 31, 2004 to our named executive officers:

OPTIONS GRANTED TO OUR NAMED EXECUTIVE OFFICERS
  IN THE YEAR ENDED DECEMBER 31, 2004

|Name            | Number of Shares of Common Stock Underlying Options Granted | % of Total Options Granted(1) | Exercise or Base Price ($/Share) | Expiration Date      
|--------------- | ----------------------------------------------------------- | ----------------------------- | -------------------------------- | ---------------------
|George Tsafalas | 400,000(2)                                                  | 18.2                          | $0.03                            | November 15, 2004 (3)
|Byron Cox       | 100,000(2)                                                  | 4.5                           | $0.03                            | November 15, 2004 (3)

(1)The total number of options to purchase common shares granted
  to employees/consultants/officers/directors during the fiscal year ended December
  31, 2004 was 2,200,000 pre-consolidated shares.

(2)None of these options were exercised during the fiscal year
  ended December 31, 2004 and they expired November 15, 2004.

(3) These options originally had an expiry date of February 24, 2009 but they
  expired on November 15, 2004, when Mr. Tsafalas and Mr. Cox resigned as directors
  and officers of Fairchild.

AGGREGATED OPTION/SAR EXERCISES IN THE YEAR ENDED DECEMBER
  31, 2004

|Name            | Shares Acquired on Exercise (#) | Value Realized ($) | Number of Shares of Common Stock Underlying Unexercised Options as December 31, 2004 Exercisable/ Unexercisable | Value of Unexercised In-the-Money Options at December 31, 2004 Exercisable/ Unexercisable(1)
|--------------- | ------------------------------- | ------------------ | --------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------
|George Tsafalas | 2,512,677                       | 49,500             | Nil                                                                                                             | Nil                                                                                         
|Byron Cox       | 158,282                         | 5,000              | Nil                                                                                                             | Nil                                                                                         

Long-Term Incentive Plans

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

We have no plans or arrangements in respect of remuneration received or that
  may be received by our executive officers to compensate such officers in the
  event of termination of employment (as a result of resignation, retirement,

---

change of control) or a change of responsibilities following a change of control,
  where the value of such compensation exceeds $60,000 per executive officer.

Directors Compensation

We reimburse our directors for expenses incurred in connection with attending
  board meetings but did not pay director's fees or other cash compensation for
  services rendered as a director in the year ended December 31, 2004.

No cash compensation was paid to any of our directors for the director's services
  as a director during the fiscal year ended December 31, 2004. We have no standard
  arrangement pursuant to which our directors are compensated for their services
  in their capacity as directors except for the granting from time to time of
  incentive stock options. The board of directors may award special remuneration
  to any director undertaking any special services on behalf of our company other
  than services ordinarily required of a director. Other than indicated below,
  no director received and/or accrued any compensation for his services as a director,
  including committee participation and/or special assignments.

During the year ended December 31, 2004 we granted the following options to
  purchase shares of our common stock to the following director:

|Optionee      | Amount  | Exercise Price | Expiry Date      
|------------- | ------- | -------------- | -----------------
|John Thornton | 200,000 | $0.03          | February 24, 2004

Item 11.    Security Ownership of Certain Beneficial Owners
  and Management and Related Stockholder Matters.

Principal Stockholders

The following table sets forth, as of March 31, 2005, certain information
  with respect to the beneficial ownership of our common stock by each stockholder
  known by us to be the beneficial owner of more than 5% of our common stock,
  as well as by each of our current directors and executive officers. Each person
  has sole voting and investment power with respect to the shares of common stock,
  except as otherwise indicated. Beneficial ownership consists of a direct interest
  in the shares of common stock, except as otherwise indicated.

|Name and Address of Beneficial Owner                                                               | Amount and Nature of Beneficial Ownership(1) | Percentage of Class(2)
|-------------------------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------
|Wilf Ouellette (3)  Suite 78 Belleville
      Avenue Sprice Grove Alberta  Canada T7A 1H8          | 10,000,000 (4)                               | 29%                   
|Draycott Investments Ltd.  Loyalist Plaza
      Don Mackay Blvd Marsh Harbour  Abaco Bahamas 20377 | 10,000,000 (5)                               | 29%                   
|Nilufar Jamani 2982 Corona Drive Burnaby  British Columbia Canada V3J 1B8                          | 10,000,000                                   | 29%                   
|Anish Somani (6)  301- 1508 West Broadway 
      Vancouver, BC, Canada V6J 1W8                     | Nil                                          | 0                     
|Margaret Hunt (7)  18090 – 58A Avenue,
      Unit B  Surrey, B.C. Canada V3S 1N6                   | Nil                                          | 0                     
|Directors and Executive Officers as a Group                                                        | Nil                                          | 29%                   

---

|(1)Except as otherwise indicated, we
      believe that the beneficial owners of the common stock listed above, based
      on information furnished by such owners, have sole investment and voting
      power with respect to such shares, subject to community property laws where
      applicable. Beneficial ownership is determined in accordance with the rules
      of the SEC and generally includes voting or investment power with respect
      to securities. Shares of common stock subject to options or warrants currently
      exercisable, or exercisable within 60 days, are deemed outstanding for purposes
      of computing the percentage ownership of the person holding such option
      or warrants, but are not deemed outstanding for purposes of computing the
      percentage ownership of any other person.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(2)Based on 34,387,550 shares of common
      stock issued and outstanding as of March 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(3) Wilf Ouellette is a Director and the Chief Executive
      Officer of Syngas, our wholly owned subsidiary since April 8, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(4) 10,000,000 shares are held by 975110 Alberta
      Ltd., a company of which Mr. Ouellette is a director and has voting power
      and investment control.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(5) Lawrence Collie is the sole director of Draycott
      Investments Ltd. and may, therefore, be deemed to have voting and investment
      power with respect to all shares of record held by Draycott.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(6) Anish Somani is a Director and the President,
      Chief Executive Officer and Chief Financial Officer of the Company. Anish
      Somani is also the President of Syngas, our wholly owned subsidiary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(7) Margaret Hunt is a Director and the Secretary
      and Treasurer of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Item 12. Certain
      Relationships and Related Transactions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Except as otherwise indicated below, we have not
      been a party to any transaction, proposed transaction, or series of transactions
      in which the amount involved exceeds $60,000, and in which, to its knowledge,
      any of its directors, officers, five percent beneficial security holder,
      or any member of the immediate family of the foregoing persons has had or
      will have a direct or indirect material interest.                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|We share office facilities and have common management
      and directorships with a number of public and private corporate related
      parties. We are charged for office rentals and administrative services on
      a shared cost basis. Related parties include directors and officers and
      companies with common management and directorships. Related party accounts
      are unsecured with no fixed terms of interest or repayment.                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Management agreements were entered into for administration
      fees with directors and officers aggregating $5,500 per month commencing
      April 1, 2003 and May 1, 2003. During the year ended December 31, 2004,
      the Company incurred administration fees of $49,000 (2003 - $74,900),
      These management agreements were terminated effective November 15, 2004,
      upon a complete change of directorship and management in the Company.                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|The Company entered into consulting agreements dated
      November 15, 2004 with the former President and a consultant to provide
      consulting services for a 2 month period, effective on the date of the 25:1
      share consolidation (completed January 27, 2005). Included in related party
      administration fees is $173,000 relating to the agreement with the former
      President. Effective the date of the agreement, a total of 578,469 post-consolidated
      shares at $0.50 per share were issued to these individuals, and the
      company is committed to issuing another 87,531 shares, represented by a
      liability to issue shares of $43,766. Also, 200,000 shares are to be
      issued upon the completion of the 25:1 share consolidation.                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|The Company entered into a share exchange agreement
      dated January 28, 2005 with the three controlling shareholders of Syngas
      Energy Inc. whereby the Company issued from its treasury 30,000,000 shares
      of its capital stock in exchange for 30,000,000 shares of Syngas Energy
      Inc. Anish Somani, our president, is also the president of Syngas Energy
      Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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

Exhibits

|(3)  | Articles of Incorporation/Bylaws                                                                                                                                                                                             
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                              
|3.1  | Articles of Incorporation (incorporated by reference from our Registration
      Statement on Form 10-SB filed on November 30, 1999)                                                                                         
|     |                                                                                                                                                                                                                              
|3.2  | Bylaws (incorporated by reference from our Registration Statement on Form
      10-SB filed on November 30, 1999)                                                                                                            
|     |                                                                                                                                                                                                                              
|3.3  | Certificate of Amendment (incorporated by reference from our Report of
      Form 8-K filed on February 24, 2005)                                                                                                            
|     |                                                                                                                                                                                                                              
|(10) | Material Contracts                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                              
|10.1 | Assignment Agreement dated February 23, 2004 between Fairchild and Habanero
      Resources Inc. (incorporated by reference from our Annual Report on Form
      10-KSB filed on April 16, 2004)                             
|     |                                                                                                                                                                                                                              
|10.2 | Assignment Agreement dated February 23, 2004 between Fairchild International
      Corporation and Micron Enviro Systems Inc. (incorporated by reference from
      our Annual Report on Form 10-KSB filed on April 16, 2004)
|     |                                                                                                                                                                                                                              
|10.3 | Management Agreement dated November 15, 2004 between Fairchild and David
      Stadnyk (incorporated by reference from our Report on Form 8-k filed on
      February 24, 2005)                                              
|     |                                                                                                                                                                                                                              
|10.4 | Management Agreement dated November 15, 2004 between Fairchild and George
      Tsafalas (incorporated by reference from our Report on Form 8-k filed on
      February 24, 2005)                                            
|     |                                                                                                                                                                                                                              
|10.5 | Share exchange agreement dated January 28, 2005 between Fairchild and
      shareholders of Syngas Energy Corp. (incorporated by reference from our
      Report on Form 8-k filed on April 14, 2005)                        
|     |                                                                                                                                                                                                                              
|10.6 | Share exchange agreement dated January 28, 2005 between Fairchild and
      shareholders of Syngas Energy Corp. (incorporated by reference from our
      Report on Form 8-k filed on April 15, 2005)                        
|     |                                                                                                                                                                                                                              
|10.7 | Assignment and relinquishment of Oil and gas interests agreement dated
        January 28, 2005 between Fairchild and Patch.                                                                                                 
|     |                                                                                                                                                                                                                              
|(31) | Certifications                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                              
|31.1 | Certification of Chief Executive Officer and
      Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
      of 2002                                                                                   
|     |                                                                                                                                                                                                                              
|(32) | Certifications                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                              
|32.1 | Certification of Chief Executive Officer and
      Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002                                    



---

Reports of Form 8-K

8K On April 8, 2005 Fairchild completed the closing of two share exchange
  agreements, and acquired 100% of the outstanding capital stock of Syngas in
  exchange for the issuance of 30,047,500 common shares of Fairchild. As a result
  of the issuance, the five prior shareholders of Syngas now hold approximately
  87% of the outstanding common stock of Fairchild. The consideration exchanged
  in connection with this transaction was determined through negotiation by the
  parties.

Syngas is a company incorporated in British Columbia, Canada and its primary
  asset is an integrated gasification production system technology that combines
  modern gasification with gas turbine technologies to produce synthetic gas,
  hydrogen or electricity. Syngas intends to further develop the technology to
  make it commercially viable and intends to then sell or license the technology.

None of the Syngas shareholders were shareholders of Fairchild immediately
  prior to completion of the closing of the Agreement. None of the Fairchild’s
  executive officers or directors has changed as a result of this transaction
  and no change in the executive officers or directors of Fairchild is required
  under the terms of the Agreement.

8K February 24, 2005

Fairchild entered into consulting agreements with each of David Stadnyk and
  George Tsafalas wherein such individuals were engaged to provide advice and
  services to Fairchild in connection with the proposed Reorganization. Such consulting
  agreements shall be for a term of two months and shall provide for consideration
  to each of Messrs. Stadnyk and Tsafalas of 100,000 shares of Fairchild issued
  on the first day of the first month. In each instance the shares are to be issued
  on a "post-consolidated" basis and the consulting agreements will commence immediately
  following the completion of a 25 for 1 consolidation of the shares of Fairchild.
  Effective November 15, 2004 the existing management agreements with each of
  Messrs. Stadnyk and Tsafalas dated May 14, 2003 were terminated. Effective November
  15, 2004, George Tsafalas, Winston Cabell and John Thornton resigned as directors
  and/or officers of the Corporation and were replaced with Anish Somani and Margaret
  Patricia Hunt. Mr. Somani was appointed as the Corporation's President to fill
  the vacancy created by the resignation of Mr. Tsafalas.

On November 22, 2004 the board of directors of Fairchild approved the consolidation
  of the authorized, issued and outstanding common shares at a ratio of 25 to
  1 and an increase in the authorized share capital to 100,000,000 (the "Amendment").
  Shareholder approval to the Amendment was sought and received at a shareholders'
  meeting held December 31, 2004 and was effected with the Nevada Secretary of
  State on January 27, 2005 by the filing of Articles of Amendment. As a result,
  all of the authorized 50,000,000 common shares with a par value of $0.001,
  of which 50,000,000 common shares are issued and outstanding were consolidated
  into 2,000,000 common shares with a par value of $0.001, of which 2,000,000
  common shares are issued and outstanding, every twenty-five (25) common shares
  with a par value of $0.001 prior to such consolidation being consolidated
  into one (1) common share with a par value of $0.001 after consolidation,
  with any fractional shares arising as a result of such consolidation being adjusted
  to the next whole share. The authorized share capital of 2,000,000 common shares
  with a par value of $0.001 was increased to 100,000,000 common shares with
  a par value of $0.001 by the creation of an additional authorized 98,000,000
  common shares with a par value of $0.001. The Amendment took effect with
  the OTC Bulletin Board at the opening for trading on February 10, 2005 under
  the new stock symbol FCHL. Fairchild’s new CUSIP number is 303719 30 6.

8K Dated February 27, 2004

Fairchild entered into a letter agreement with Praxis Pharmaceuticals Inc.
  ("Praxis") dated February 18, 2004 wherein the parties agreed to be bound by
  the terms of the original Termination of License and Research and Development
  Agreement (the "License Agreement") dated February 28, 2001. The letter agreement
  confirmed that all amendments to such License Agreement are no longer in force
  and effect. As a result, Praxis will retain the common shares of Fairchild assigned
  to it under the terms of the License Agreement and that Praxis will pay to Fairchild
  30% of the Net Revenues in the License Agreement to a maximum of $250,000
  over the first three years of sale; provided that Fairchild has received $59,423
  from Praxis.

---

Item 14.    Principal Accountant Fees and Services.

The aggregate fees billed for the two most recently completed fiscal years
  ended December 31, 2004 for professional services rendered by the principal
  accountant for the audit of our company's annual financial statements and review
  of the financial statements included our Annual Report on Form 10-KSB and services
  that are normally provided by the accountant in connection with statutory and
  regulatory filings or engagements for these fiscal periods were as follows:

|                         | Year Ended       
|------------------------ | -----------------
|                         | December 31, 2004
|Audit Related Fees       | 5900             
|Tax Fees                 | ____-            
|All Other Fees           | 1150             
|Total  December 31, 2004 | 7050             

SIGNATURES

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

|FAIRCHILD INTERNATIONAL CORPORATION | 
|----------------------------------- | 
|a Nevada corporation                | 
|                                    | 
|                                    | 
|/s/ Anish Somani                    | 
|By: Anish Somani, President, CEO    | 
|and Director                        | 
|                                    | 
|Date: April 15, 2005                | 

In accordance with the Exchange Act, this report has been signed below by
  the following persons on behalf of the registrant and in the capacities and
  on the dates indicated.

|Signatures                                                    | 
|------------------------------------------------------------- | 
|                                                              | 
|                                                              | 
|                                                              | 
|                                                              | 
|/s/ Anish Somani                                              | 
|Anish Somani, President,                                      | 
|Chief Executive Officer, Chief Financial Officer and Director | 
|                                                              | 
|Date: April 15, 2004                                          | 
|                                                              | 
|                                                              | 
|                                                              | 
|                                                              | 
|/s/ Margaret Patricia Hunt                                    | 
|Margaret Patricia Hunt , Secretary, Treasurer                 | 
|and Director                                                  | 
|                                                              | 
|Date: April 15, 2005                                          | 

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