U. S. Securities 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 No. 0-29129

                            SOURCE ENERGY CORPORATION
               (Name of Small Business Issuer in its Charter)

           UTAH                                      87-0370820
        ---------                                     ----------
State or Other Jurisdiction of               (I.R.S. Employer I.D. No.)
incorporation or organization)

                   3040 Granite Meadow Lane, Sandy Utah 84092
                          ----------------------------
                    (Address of Principal Executive Offices)

                    Issuer's Telephone Number: (801) 943-5490


                                       N/A
                                       ---
          (Former Name or Former Address, if changed since last Report)


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

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

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.

(1)   Yes X    No     (2)   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 Item 13 of this
Form 10-KSB or any amendment to this Form 10-KSB. [ ]
<PAGE>

State Issuer's revenues for its most recent fiscal year: December 31, 2004 -
$64,618.

     State  the  aggregate  market  value of the  common  voting  stock  held by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days.

     March 15, 2004 - $88,926.  There are approximately 104,619 shares of common
voting  stock of the  Registrant  held by  non-affiliates.  On March 1, 2005 the
average bid price was $0.85.

                   (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                          DURING THE PAST FIVE YEARS)

     None; Not Applicable.


                    (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

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

                                 March 1, 2005

                                     404,451
                                    ---------

DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents Incorporated by Reference" is contained in Item 13
of this Report.

Transitional Small Business Issuer Format   Yes     No  X
                                                ---     ---
<PAGE>

                                     PART I

Item 1.  Description of Business.
--------------------------------

Business Development
--------------------

     Source was originally  incorporated under the name Exit, Inc. in accordance
with the laws of the State of Utah on January 30,  1981.  In April of 1984,  the
Company  changed its name to Parker Energy  Technology,  Inc. From its inception
until  May  20,  1997,  the  Company  had  been in the  business  of oil and gas
exploration and production activities.  Currently, the Company has one producing
well, located in Grand County, Utah.

     On May 20, 1997,  the Company  effected a reverse split of its  outstanding
shares from 81,637,100 to 1,632,742.  Simultaneous  thereto, the Company entered
into an agreement with a T.R. Kraft and Point Source Energy  ("Point") to engage
in the business of distillate  fuel systems process  plants,  issued  12,305,800
shares of common stock in connection  with the  transaction and changed its name
to Source Energy Corporation.

     Subsequently,  Craig Carpenter, a former officer and director of Source and
a stockholder, filed a shareholder derivative suit in the United States District
Court,  District of Utah, case no.  2:99CV0332K,  against T.R. Kraft, Point, and
Source  alleging that Kraft and Point  committed  fraud to induce  plaintiffs to
enter into the original transaction.

     On March 10, 2000 the District Court issued a judgment and order rescinding
the May 20, 1997  transaction.  The judgment states that Source be returned,  as
nearly as possible,  to its status prior to  consummation  of said  transaction.
This  included  canceling  12,305,800  shares  of  common  stock  issued  in the
transaction to Kraft by Source, reinstating Craig Carpenter, Helen G. Carpenter,
and Kathy  Morrison  as  officers  and  directors  of Source,  and the return of
182,852  shares of Common Stock from Kraft to Carpenter,  which were  originally
sold  directly  by  Carpenter  to Kraft.  Craig  Carpenter  was granted an award
against  Source in the amount of $75,000 to  compensate  him for the  benefit he
conferred on the  stockholders of Source by prosecuting the action against Kraft
and Point. Source was awarded damages against Kraft in the amount of $75,000. In
addition, Source is liable for legal fees and expenses of the suit in the amount
of $15,039. To settle the legal fees and expenses,  Source issued 200,000 shares
of its Common Stock to Mr. Carpenter.  Source intends to pursue its damage award
against  T.R.  Kraft,  but  cannot  predict  at  this  time  whether  it will be
successful in collecting.

     On April 10, 2000,  Source  effected a 1 for 40 reverse split in its issued
and outstanding Common Stock.

     On April 13, 2000, Source Energy Corporation, a Utah corporation ("Source")
acquired Newven Acquisition Corporation, a Nevada corporation ("Newven") through
a stock for stock  exchange.  Immediately  following  the  exchange,  Source and
Newven  entered  into a Plan of Merger  pursuant to which Newven was merged with
and into  Source.  See the exhibit  index for the Current  Report on Form 8-K as
filed with the Securities and Exchange Commission.

     Prior to the  transaction,  Newven  had  500,000  shares  of  common  stock
outstanding,  which were  exchanged for 25,000 shares of the  restricted  common
stock of Source.

Business
--------

Existing operations and plan of operation
-----------------------------------------

     In 1981,  Source  purchased a working  interest in, and became the operator
of, the property  known as Bureau of Land  Management  Federal Oil and Gas Lease
No.  U-14654  consisting of 480 acres.  Located in Grand County,  Utah,  this is
Source's only oil and gas property.  The Company has one producing  well on this
lease.  At the present time the Company  maintains a 68.78% working  interest in
the property.

     Source has previously  drilled two other dry holes on the lease.  We intend
to evaluate the lease for new sites that show a reasonable  chance of success in
drilling  producing  wells.  We will  also  look for  opportunities  to  acquire
additional  oil and gas  properties  for  development  in the states of Utah and
Wyoming.

     Source has been  apprehensive  to pursue  more active  business  operations
during  the past  three  years  because  of the  litigation  resulting  from the
transaction  with  T.R.  Kraft  and  Point  due  to the  unforeseeable  outcome.
Increasing  operations would have required  additional  capital  investment that
would have been  difficult to obtain until  resolution of all legal issues.  The
litigation  was resolved by a judgment  entered in March 2000.  On September 22,
2000, the Securities  and Exchange  Commission  ("SEC") filed a complaint in the
United States District Court, Case No. 2:00CV0757B, naming Source and Timothy R.
Kraft, a former officer and director of Source,  as defendants.  Source filed an
answer to the Courts  complaint and on March 6, 2001 a permanent  injunction was
entered by the Court against Mr. Kraft and the suit was  subsequently  dismissed
against  Source.  On April 22, 2003, the Court required the SEC to show cause as
to why the case against Source should not be dismissed for failure to prosecute.
The SEC failed to file a  responsive  pleading  and on June 3,  2003,  the Court
dismissed the case without prejudice for failure to prosecute the action. Source
was not made aware of this decision until 2004.

     As a result of these  circumstances,  operations  were  limited in the past
four years to  maintaining  production  from our one producing oil well in Grand
County.  Revenue from oil  production in 2004 and 2003 was $64,618  and $46,309,
respectively.  The decrease in revenue from fiscal year 2001 to fiscal year 2002
is attributable primarily to falling oil prices.

     However,  these  resources  are not  sufficient  to embark on new  drilling
activity on our  existing  lease or to acquire and develop any other oil and gas
properties.  Consequently, we intend to seek additional debt or equity financing
over the next year to fund expansion of our operations. However, there can be no
assurance that  additional  funding will be available or, if available,  that it
will be  available on  acceptable  terms or in required  amounts.  If we do find
financing,  there  is no  assurance  that  we  will  succeed  in  expanding  our
operations or remain profitable.

     On November 17, 2004, the Company entered into an Asset Purchase  Agreement
("Agreement") with Energytec, Inc. ("Energytec"), a Nevada corporation. Pursuant
to the  Agreement,  the Company  was to acquire  certain oil and gas and related
assets of Energytec  valued at $21,844,351 as of September 30, 2004  (unaudited)
for approximately 30,861,620 shares of the Company's common stock and assumption
of  approximately  $4,125,014 in liabilities.  Accordingly,  the Company filed a
Form S-4  registration  statement  with the SEC on December 15, 2004. On January
26, 2005,  Energytec presented the Company with a written notice for termination
of the Agreement.  The Company believes that this was a wrongful termination and
is  currently  considering  its options with  respect to the  Agreement.  As the
outcome of the matter is uncertain,  the financial statements do not reflect the
effects of this transaction.

Principal Products or Services and Markets
------------------------------------------

     The Company  will  continue to produce and market oil.  The demand for this
product continues to increase as population and industry conversions expand.

Reserve Analyses
----------------

     The Company has not had an outside  consultant  perform a certified reserve
analysis  on the  Company's  leases.  For  more  information  see the  Notes  to
Financials Statements, attached hereto.

     Reserve  analyses  are at best  speculative,  especially  when  based  upon
limited production and limited access to production records; no assurance can be
given that the reserves  attribute to these leases exist or will be economically
recoverable.  See the Risk Factor entitled  "Uncertainty of Reserve  Estimates,"
herein.

Distribution Methods of Products or Services.
--------------------------------------------

     We sell all of our oil production to Giant Industries at spot prices. Giant
Industries will take all of the oil that we can produce.

     There is no  contract  between  the  Company  and Giant  Industries  as the
current  agreement is under a division order.  Giant  Industries buys crude at a
posted  price  (subject  to change  every  other day) as  shipped.  The  current
arrangement  can be  terminated  by  either  party  at  any  time.  The  current
relationship  has been in place in excess of five years. If the relationship was
terminated  there are multiple crude oil  purchasers  that could be located with
little to no impact on Source.

     Prices for oil and gas are driven  strictly  by supply and  demand.  We can
sell our products to any one of five local  distributors.  Prices among the five
distributors  are nearly equal. We decided to sell to Giant  Industries based on
quality of service and proximity of their delivery point to our lease. We do not
use commodity futures contracts or price swaps in marketing our crude oil.

Status of Any Publicly Announced New Product or Service
-------------------------------------------------------

     The Company  does not have any publicly  announced  new product or service;
nor does it anticipate any in the foreseeable future.

Competitive Business Conditions, Competitive Position in the Industry and
Methods of Competition
----------------------

     The oil and gas  industry  is highly  competitive  in all  phases.  We will
encounter strong  competition from other  independent oil companies in all areas
of  our  business  including   marketing,   production  and  obtaining  external
financing.  Most of our competitors  have financial  resources,  personnel,  and
facilities   substantially  greater  than  ours.  However,  unless  there  is  a
substantial drop in the market for oil and natural gas, we can sell our products
at daily spot prices.

     The prices of the Company's products are controlled by the world oil market
and the United States natural gas market; thus, competitive pricing behaviors in
this regard are  considered  unlikely;  however,  competition in the oil and gas
exploration  industry  exists in the form of  competition  to  acquire  the most
promising   acreage  blocks  and  obtaining  the  most   favorable   prices  for
transporting the product.

Sources and Availability of Raw Materials and Names of Principal Suppliers
--------------------------------------------------------------------------

     The Company's  operations  are not dependent on the  acquisition of any raw
materials.  See  the  caption  "Competitive  Business  Conditions,   Competitive
Position in the Industry and Methods of Competition," above.

Dependence on One or a Few Major Customers
------------------------------------------

     Prices for oil and gas are driven  strictly  by supply and  demand.  We can
sell our products to any one of five local distributors.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts, including Duration
-----------------------------------

     As is  customary  in the oil and gas  industry,  only a  perfunctory  title
examination  is conducted at the time oil and gas leases are acquired.  Prior to
the  commencement  of  drilling  operations,  a thorough  title  examination  is
conducted.  We  believe  the  title to our  lease is good  and  indefeasible  in
accordance with standards  generally  accepted in the oil and gas industry.  Our
existing and future leases may be burdened by customary royalty interests, liens
incident to oil and gas operations,  and liens for taxes and other  governmental
charges as well as encumbrances,  easements and restrictions.  We do not believe
that  any of  these  burdens  will  materially  interfere  with  the  use of the
property.

     Royalty  agreements  relating to oil and gas production are standard in the
industry.  See the caption "Business," above for the amounts of the royalties on
the Company's lease.

Need for Governmental Approval of Principal Products or Services
----------------------------------------------------------------

     None of the principal  products or services  offered by the Company require
governmental   approval.  See  the  caption  "Effect  of  Existing  or  Probable
Governmental Regulations on Business," below.

Effect of Existing or Probable Governmental Regulations on Business
-------------------------------------------------------------------

     All  aspects  of the oil and gas  industry  are  extensively  regulated  by
federal,  state,  and  local  governments.  Regulations  govern  such  things as
drilling  permits,  production  rates,  environmental  protection  and pollution
control,  royalty rates, and taxation rates. These regulations may substantially
increase the cost of doing business and sometimes  prevent or delay the start or
continuation of any given  exploration or development  project.  Regulations are
subject  to future  changes  by  legislative  and  administrative  action and by
judicial decisions, which may adversely affect the petroleum industry.

     We believe  our  operations  comply  with all  applicable  legislation  and
regulations in all material  respects and that the existence of such regulations
has had no more  restrictive  effect on our  method  of  operations  than  other
similar  companies  in the  industry.  Although we do not  believe our  business
operations presently impair environmental quality, compliance wit federal, state
and local  regulations  which  have  been  enacted  or  adopted  regulating  the
discharge of materials  into the  environment  could have an adverse effect upon
our capital expenditures, earnings and competitive position.

     In  the  areas  which  we  conduct  our  operations,  there  are  statutory
provisions  regulating  the  production of oil and natural gas.  These rules may
restrict  the oil and gas  production  rate to below the rate our  existing  and
future wells can produce.  We are also subject to numerous laws and  regulations
governing the discharge of materials into the environment or otherwise  relating
to  environmental  protection.  We may be  required  to  obtain  permits  before
drilling and  operating  our wells.  Also,  we may be subject to  liability  for
pollution that results from our  operations.  It is impossible to predict if and
to what extent these regulations may impact our operations.

     State  regulatory   authorities  have  established  rules  and  regulations
requiring  permits  for  drilling  operations,  drilling  bonds  and/or  reports
concerning  operations.  The state regulatory authorities may also have statutes
and  regulations  concerning  the  spacing of wells,  environmental  matters and
conservation.

     We intend to comply  with all  regulations  pertaining  to our  operations.
However,  future  legislation  and  regulation may have an adverse impact on our
business.

     Exploration  and production  activities  relating to oil and gas leases are
subject to numerous environmental laws, rules and regulations. The federal Clean
Water Act requires the Company to  construct a fresh water  containment  barrier
between the surface of each drilling site and the underlying  water table.  This
involves the  insertion of a  seven-inch  diameter  steel casing into each well,
with  cement on the  outside of the  casing.  The cost of  compliance  with this
environmental regulation is approximately $10,000 per well.

     The Company's operations are also subject to laws and regulations requiring
removal and cleanup of environmental damages under certain  circumstances.  Laws
and regulations  protecting the environment have generally become more stringent
in recent years,  and may in certain  circumstances  impose "strict  liability,"
rendering a  corporation  liable for  environmental  damages  without  regard to
negligence or fault on the part of such  corporation.  Such laws and regulations
may expose the Company to liability  for the conduct of operations or conditions
caused by others,  or for acts of the Company which were in compliance  with all
applicable  laws at the time such  acts  were  performed.  The  modification  of
existing laws or regulations or the adoption of new laws or regulations relating
to  environmental  matters could have a material adverse effect on the Company's
operations.  In addition,  the Company's existing and proposed  operations could
result in  liability  for fires,  blowouts,  oil spills,  discharge of hazardous
materials into surface and subsurface aquifers and other  environmental  damage,
any one of which could result in personal injury,  loss of life, property damage
or destruction or suspension of operations.

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

     The foregoing is only a brief summary of some of the existing environmental
laws,  rules and  regulations  to which the Company's  business  operations  are
subject,  and there are many others,  the effects of which could have an adverse
impact on the Company.  Future legislation in this area will no doubt be enacted
and revisions will be made in current laws. No assurance can be given as to what
effect these  present and future laws,  rules and  regulations  will have on the
Company's current future operations.

Sarbanes-Oxley Act.
-------------------

     On July 30, 2002,  President Bush signed into law the Sarbanes-Oxley Act of
2002 (the  "Sarbanes-Oxley  Act"). The Sarbanes-Oxley Act imposes a wide variety
of new regulatory  requirements on  publicly-held  companies and their insiders.
Many of these requirements will affect us. For example:

     *     Our chief executive officer and chief financial officer must
           now certify the accuracy of all of our periodic reports that
           contain financial statements;

     *     Our periodic reports must disclose our conclusions about the
           effectiveness of our disclosure controls and procedures; and

     *     We may not make any loan to any director or executive officer
           and we may not materially modify any existing loans.

     The Sarbanes-Oxley Act has required us to review our current procedures and
policies to determine  whether they comply with the  Sarbanes-Oxley  Act and the
new  regulations  promulgated  thereunder.  We  will  continue  to  monitor  our
compliance  with all future  regulations  that are adopted  under the  Sarbanes-
Oxley Act and will take whatever  actions are necessary to ensure that we are in
compliance.

Research and Development
-----------------------

     The  Company  has not  expended  any  amount in  research  and  development
activities during the last fiscal year.

Cost and Effects of Compliance with Environmental Laws
------------------------------------------------------

     See the caption "Effect of Existing or Probable Governmental Regulations on
Business" of this Report.

Number of Total Employees and Number of Full-Time Employees
-----------------------------------------------------------

     Source has no employees.  It relies on  independent  contractors to perform
the services required to maintain its producing well.

Risk Factors
-------------

     Limited  Market for Common Stock;  Although the  Company's  common stock is
quoted on the OTC  Bulletin  Board of the  National  Association  of  Securities
Dealers,  Inc.  (the  "NASD"),  the  market  is very  limited;  there  can be no
assurance that it will continue or be maintained. Any market price for shares of
common stock of the Company is likely to be very  volatile,  and factors such as
competition,  governmental  regulation and fluctuations in operating results may
all have a significant  effect.  In addition,  the stock markets  generally have
experienced,  and continue to experience,  extreme price and volume fluctuations
which have affected the market price of many small  capital  companies and which
have often been unrelated to the operating performance of these companies. These
broad market fluctuations, as well as general economic and political conditions,
may  adversely  affect the market price of the Company's  common stock.  See the
caption "Market Price of and Dividends on the Company's  Common Equity and Other
Stockholder Matters," herein.

     Future Capital  Requirements,  Uncertainty of Future  Funding;  The Company
presently has limited operating capital. It will require substantial  additional
funding in order to pursue any operations  outside of operating the one existing
location.  The Company  would need to raise these funds  through  equity or debt
financings,   which  may  be  very  difficult  for  such  a  highly  speculative
enterprise.  There can be no assurance that such additional funding will be made
available to the Company,  or if made available,  that the terms thereof will be
satisfactory  to the  Company.  Furthermore,  any  equity  funding  will cause a
substantial  decrease  in  the  proportional  ownership  interests  of  existing
stockholders.  If such  funding  is not made  available  to the  Company,  it is
doubtful  that the  Company  would be able to expand  operations  outside of its
presently  limited  scope.  See the caption  "Business" and the heading "Plan of
Operation"  of the  caption  "Management's  Discussion  and  Analysis or Plan of
Operation," herein.

     Substantial Capital Requirements;  If revenues were to decrease as a result
of lower oil and gas prices,  decreased production or otherwise, the Company may
have limited ability to continue production,  resulting in a further decrease in
production  and  revenues.  If the  Company's  cash flow from  operations is not
sufficient  to satisfy its  capital  expenditure  requirements,  there can be no
assurance  that  additional  debt or equity  financing will be available to meet
these requirements.

     Replacement of Reserves;  The Company's future success will depend upon its
ability to find,  acquire and develop  additional  oil and gas reserves that are
economically  recoverable.  The proved  reserves of the Company  will  generally
decline as they are  produced,  except to the extent that the  Company  conducts
revitalization activities, or acquires properties containing proved reserves, or
both. The Company currently does not have a plan to increase its reserve base.

     Uncertainty  of Reserve  Estimates;  Oil and gas reserve  estimates and the
present value estimates associated therewith are derived from limited data. As a
result, oil and gas reserve estimates and present value estimates are frequently
revised in subsequent periods to reflect production data obtained after the date
of the original estimate. If reserve estimates are inaccurate,  production rates
may decline more rapidly than anticipated, and future production revenues may be
less  than  estimated.  Moreover,  significant  downward  revisions  of  reserve
estimates  may  adversely  affect the  Company's  ability to borrow funds in the
future or have an adverse impact on other financing arrangements.

     Operating  Hazards;  Oil and gas operations  involve a high degree of risk.
Natural hazards, such as excessive underground  pressures,  may cause costly and
dangerous  blowouts  or  make  further  operations  on  a  well  financially  or
physically  impractical.  Any of the foregoing hazards may result in substantial
losses or liabilities to third parties,  including  claims for bodily  injuries,
reservoir damage,  loss of reserves,  environmental  damage and other damages to
persons or property.

     Future  Sales of Common  Stock;  Craig  Carpenter,  President  and Director
beneficially  owns  209,832  shares  of  the  common  stock  of the  Company  or
approximately 52% of its outstanding voting  securities.  All of his shares Will
have been  beneficially  owned for one year on April 16,  2001,  and  subject to
compliance  with the  applicable  provisions of Rule 144 of the  Securities  and
Exchange  Commission,  Mr.  Carpenter may then commence to sell his  "restricted
securities" in an amount equal to up to 1% of the then outstanding securities of
the  Company,  in any three month  period.  Such sales could have a  substantial
adverse effect on any public market that may then exist in the Company's  common
stock.  Sales of any of these shares by Mr.  Carpenter could severely affect the
ability of the Company to secure the  necessary  debt or equity  funding for the
Company's proposed business operations. Sales of restricted securities by others
could  also have an  adverse  effect on any  market in the  common  stock of the
Company.  See  the  caption  "Recent  Sales  of  Unregistered  Securities."  For
additional  information concerning the present market for shares of common stock
of the Company,  see the caption "Market Price of and Dividends on the Company's
Common Equity and Other Stockholder  Matters," herein. For information regarding
common stock ownership of Mr. Carpenter,  see the caption "Security Ownership of
Certain Beneficial Owners and Management," herein.

     Voting Control;  By virtue of Craig Carpenter's  ownership of approximately
52% of the  Company's  outstanding  voting  securities,  Mr.  Carpenter  has the
ability to elect all of the Company's directors, who in turn elect all executive
officers,  without regard to the votes of other stockholders.  Mr. Carpenter may
be deemed to have  absolute  control  over the  management  and  affairs  of the
Company.  See the caption "Security  Ownership of Certain  Beneficial Owners and
Management," of this Report.

     Competition;  The Company's oil and gas exploration activities are centered
in a highly  competitive  field.  In  seeking  any  other  suitable  oil and gas
properties for acquisition,  or drilling rig operators and related personnel and
equipment,  the  Company  will be  competing  with a number of other  companies,
including  large oil and gas  companies  and other  independent  operators  with
greater  financial  resources.  Management  does not believe that the  Company's
initial  competitive  position in the oil and gas industry will be  significant.
See the caption "Competition" under the heading "Business," herein.

     Dependence  on Key  Employees  and  Technical  Personnel;  The  Company  is
substantially  dependent  upon the  continued  services of Craig  Carpenter  its
President  and  Director.  Mr.  Carpenter  is  in  good  health;   however,  his
retirement,  disability or death would have a significant  adverse impact on the
Company's  business   operations.   To  the  extent  that  his  services  become
unavailable,  the Company will be required to retain other qualified  personnel;
there can be no  assurance  that it will be able to recruit  and hire  qualified
persons upon acceptable terms. See the caption  "Directors,  Executive Officers,
Promoters and Control Persons," herein.

     Similarly,  the  oil  and  gas  exploration  industry  requires  the use of
personnel with substantial  technical expertise.  In the event that the services
of its current technical personnel become unavailable,  the Company will need to
hire qualified  personnel to take their place; no assurance can be given that it
will be able to recruit and hire such persons on mutually acceptable terms.

     Governmental  Regulations;  The  Company is subject to  numerous  state and
federal  regulations,  environmental and otherwise,  that may have a substantial
negative effect on its ability to operate at a profit.  See the captions "Effect
of Existing or Probable  Governmental  Regulations  on Business"  and "Costs and
Effects of Compliance with Environmental Laws," herein.

     General Economic  Risks/Potential  Volatility of Stock Price; The Company's
current and future business plans are dependent,  in large part, on the state of
the general  economy.  Adverse changes in general and local economic  conditions
may cause high  volatility in the market price of the Company's  securities  and
may adversely affect an investment in these  securities.  Oil and gas prices are
extremely volatile and are subject to substantial seasonal,  political and other
fluctuations, all of which are beyond the Company's control.

Indemnification of Officers and Directors
-----------------------------------------

     Section  16-10a-902 of the Utah Code Annotated provides in relevant part as
follows:

     (1) Except as provided in Subsection  (4), a  corporation  may indemnify an
individual made a party to a proceeding because he is or was a director, against
liability incurred in the proceeding if:

          (a) his conduct was in good faith; and

          (b) he reasonably believed that his conduct was in, or not opposed to,
     the corporation's best interests; and

          (c) in the case of any criminal proceeding, he had no reasonable cause
     to believe his conduct was unlawful.

     (4) A corporation may not indemnify a director under this section:

          (a)  in  connection  with  a  proceeding  by or in  the  right  of the
     corporation in which the director was adjudged  liable to the  corporation;
     or

          (b) in connection with any other proceeding charging that the director
     derived an improper  personal  benefit,  whether or not involving action in
     his official  capacity,  in which  proceeding he was adjudged liable on the
     basis that he derived an improper personal benefit.

     (5)  Indemnification  permitted  under this  section in  connection  with a
proceeding  by or in the  right of the  corporation  is  limited  to  reasonable
expenses incurred in connection with the proceeding.

     Section 16-10a-903 of the Utah Code Annotated provides in relevant part as
follows:

     Unless  limited by its  articles  of  incorporation,  a  corporation  shall
indemnify a director  who was  successful,  on the merits or  otherwise,  in the
defense of any proceeding,  or in the defense of any claim,  issue, or matter in
the  proceeding,  to which he was a party because he is or was a director of the
corporation,  against reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.

     Section 16-10a-907 of the Utah Code Annotated provides in relevant part as
follows:

     Unless a corporation's articles of incorporation provide otherwise:

     (1) an officer of the corporation is entitled to mandatory  indemnification
under  Section  16-10a-903,   and  is  entitled  to  apply  for  court-  ordered
indemnification  under Section 16-10a-905,  in each case to the same extent as a
director;

     (2) the  corporation  may  indemnify  and  advance  expenses to an officer,
employee,  fiduciary,  or agent of the  corporation  to the same  extent as to a
director; and

     (3) a corporation  may also  indemnify and advance  expenses to an officer,
employee,  fiduciary, or agent who is not a director to a greater extent, if not
inconsistent  with  public  policy,  and if  provided  for by  its  articles  of
incorporation,  bylaws, general or specific action of its board of directors, or
contract.

     Source's  by-laws provide that it shall indemnify to the full extent of its
power to do so under Utah law, all  directors  and  officers  for any  liability
including  costs of defense  reasonably  incurred in connection with any action,
suit,  or  proceeding  to which  such  person  may be a party by  reason of such
person's  position with Source,  if the officer or director  acted in good faith
and in a manner the  officer or  director  reasonably  believed to be in, or not
opposed to, the best interests of the corporation.  Consequently, Source intends
to  indemnify  its officers  and  directors to the full extent  permitted by the
statute noted above.

Item 2.  Description of Property.
---------------------------------

     In 1981,  Source  purchased a working  interest in, and became the operator
of, the property  known as Bureau of Land  Management  Federal Oil and Gas Lease
No.  U-14654  consisting of 480 acres.  Located in Grand County,  Utah,  this is
Source's only oil and gas property.  The Company has one producing  well on this
lease.  At the present time the Company  maintains a 68.78% working  interest in
the property.

     The remaining  31.22% working  interest on the property not owned by Source
is as follows:  The federal  government  owns 9.3%; John E. Okason Trust owns 5%
and has no other  affiliations  with Source;  and the  Company's  President  Mr.
Carpenter owns 16.92%.

     The Company utilizes the office of its President,  Craig  Carpenter,  at no
expense.

Item 3.  Legal Proceedings.
---------------------------

     On September 22, 2000, the Securities and Exchange Commission ("SEC") filed
a complaint in the United States District Court,  case no. 2:00CV 0757B,  naming
Source and  Timothy R.  Kraft,  a former  officer  and  director  of Source,  as
defendants.

     On May 20, 1997, Source entered into an agreement with Timothy R. Kraft and
Point  Source  Energy  ("Point") to engage in the  business of  distillate  fuel
systems  process  plants,   and  in  connection  with  that  transaction  issued
12,305,800 shares of common stock to Mr. Kraft.

     Subsequently,  Craig Carpenter, a former officer and director of Source and
a stockholder, filed a shareholder derivative suit in the United States District
Court,  District of Utah,  Case No.  2:99CV0332K,  on May 10, 1999,  against Mr.
Kraft, Point, and Source alleging that Kraft and Point committed fraud to induce
plaintiffs to enter into the original transaction ("Carpenter Suit").

     On March 10, 2000 the  District  Court  issued a judgment  and order in the
Carpenter Suit rescinding the May 20, 1997 transaction. The judgment states that
Source be returned,  as nearly as possible,  to its status prior to consummation
of said transaction.  This included canceling  12,305,800 shares of common stock
issued in the transaction to Kraft by Source, reinstating Craig Carpenter, Helen
G.  Carpenter,  and Kathy Morrison as officers and directors of Source,  and the
return of 182,852  shares of Common  Stock from Kraft to  Carpenter,  which were
originally  sold directly by Carpenter to Kraft.  Craig Carpenter was granted an
award against  Source in the amount of $75,000 to compensate him for the benefit
he conferred on the  stockholders  of Source by  prosecuting  the action against
Kraft and  Point.  Source was  awarded  damages  against  Kraft in the amount of
$225,000 of which the Company has not  received any of the funds due nor does it
expect to ever be able to collect.

     During his tenure as an officer and  director of Source,  Mr.  Kraft issued
two press  releases  that the SEC  alleges  are false  and  misleading.  The SEC
further  alleges  that the press  releases  were issued by Kraft in an effort to
manipulate  the public  market  price for Source  common  stock in  violation of
Section 10(b) of the Securities  Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.  The SEC is seeking an order  enjoining  Source from violating these
provisions of the Securities Exchange Act of 1934 in the future.

     In the course of the Carpenter Suit, Mr. Carpenter  informed the SEC of the
conduct of Mr. Kraft, and regularly kept the SEC informed of the progress of the
case and his efforts to remove Mr. Kraft.  Although  Source received no monetary
or other benefit from Mr. Kraft's alleged fraud,  Mr. Kraft was removed from any
position of control over Source by order of the District  Court in the Carpenter
Suit, Mr. Carpenter was reinstated as an officer and director, and Mr. Carpenter
cooperated  fully with the SEC in providing to it  information  on the Carpenter
Suit, the SEC still included Source in its lawsuit against Mr. Kraft  apparently
because the press  releases were issued with Source's name on them.

     On April 22,  2003 the Court  required  the SEC to show cause as to why the
case against  Source should not be dismissed  for failure to prosecute.  The SEC
failed to file a responsive  pleading and on June 3, 2003,  the Court  dismissed
the case without  prejudice for failure to prosecute the action.  Source was not
made aware of this decision until 2004.

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

     None; Not Applicable.

                                     PART II

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

Equity Compensation Plans
-------------------------

     None; Not applicable.

Purchasers of Equity  Securities  by the Small  Business  Issuer and  Affiliated
Purchasers
----------

     None; Not applicable.


Market Information
------------------

     The  Company's  common  stock is  traded on the OTC  Bulletin  Board of the
National Association of Securities Dealers,  Inc. ("NASD");  however, the market
for shares of the Company's common stock is extremely limited.  No assurance can
be given that the present market for the Company's common stock will continue or
will  be  maintained,   and  the  sale  of  the  Company's   "unregistered"  and
"restricted"  common  stock  pursuant to Rule 144 as outlined  under the caption
"Recent Sales of Unregistered  Securities" of this Report may have a substantial
adverse impact on any such public market.  See the Risk Factor entitled  "Future
Sales of Common Stock," herein.

     The high and low bid prices for these shares of common stock of the Company
since that period are as follows:

                                                 Bid

Fiscal Year ending:                     High                Low
------------------                      ----                ---

December 31, 2000                      $2.75                $2.50

December 31, 2001                      $0.45                $0.32

December 31, 2002                      $0.24                $0.19

December 31, 2003                      $0.26                $0.21

December 31, 2004                      $5.20                $0.22

     These bid prices were obtained  from the National  Quotation  Bureau,  Inc.
("NQB") and do not necessarily reflect actual transactions, retail markups, mark
downs or commissions.

Holders
-------

     The number of record  holders of the Company's  common stock as of the year
ended December 31, 2004, was  approximately  2,984; this number does not include
an  indeterminate  number of  stockholders  whose  shares are held by brokers in
street name.

Dividends
---------

     There are no present  material  restrictions  that limit the ability of the
Company  to pay  dividends  on common  stock or that are  likely to do so in the
future. The Company has not paid any dividends with respect to its common stock,
and does not intend to pay dividends in the foreseeable future.

Recent Sales of Unregistered Securities
---------------------------------------

     Source  settled its legal cost  obligation to Craig  Carpenter on April 13,
2000, by issuing to him 200,000  shares of  "restricted"  common stock to cancel
the  $15,039  obligation.  The  legal  costs  were  incurred as a result  of the
derivative  suit as described  under the caption "Legal  Proceedings"  of Item 3
above.

     Also  on  April  13,  2000,   Source  issued  12,500   "unregistered"   and
"restricted" shares to Cletha A. Walstrand and 12,500 shares to MRF Investment &
Consulting  for  the  acquisition  of  Newven  Acquisition  Corporation.  All of
Newven's  outstanding  stock (500,000 shares) was exchanged for 25,000 shares of
the Company's  "restricted" common stock.  Newven's total net assets at the time
of the acquisition was $565, which is the value placed on this purchase. The two
companies then merged.

     On April 20, 2000, Source issued a total of 75,000 shares of "unregistered"
and "restricted" shares of common stock to Cletha A. Walstrand, MRF Investment &
Consulting and Paul Hickey for the completion of the Company's Current Report on
Form 8-K.  These  shares were  valued at $1,500,  which  approximates  the value
assigned to the issuance of shares to purchase Newven.

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

Critical Accounting Estimates

     There are two primary areas in Source's financial  statements which require
management to make estimates  which may have a material impact on the results of
operations and/or the financial condition of the Company,  should such estimates
require change at some future date. They are proved developed reserves, and the
valuation allowance related to the deferred tax asset.

Proved Developed Reserves

     Proved developed reserves are based on a geological report prepared for the
Company  during the time period when the current  operating  oil well  commenced
production.  Since that time,  the well has been  producing for more than twenty
years. The Company's  depletion  method is based on units of production.  At the
conclusion of 2004, the remaining  proved  developed  reserves was 6,617. At the
current rate of production,  the Company's  original estimates could be exceeded
within four years.  Alternatively,  depending on monthly  production amounts and
the price of oil,  further  production could be deemed  economically  unfeasible
prior to the complete  utilization of the original estimate.  Because management
has no way of  determining  precisely  how future  events may impact the reserve
estimate,  Source will  continue  depleting  its oil and gas  properties  at the
existing rate.

Valuation Allowance for Deferred Tax Asset

     Due to significant prior year losses, the Company's accumulated deficit was
$1,168,565  on December  31,  2004.  More  recently,  the Company has  generated
nominal net income amounts from its operations. Because net operating losses can
be carried  forward to offset future income,  a deferred tax asset is calculated
to reflect  anticipated future tax benefits.  The deferred tax asset which would
be  available to Source based on existing net  operating  losses  available  for
carry forward is $149,722.  However,  because  management is uncertain as to the
continued profitability of its operations, a valuation allowance is estimated to
account for this uncertainty.  When operations result in net income, the Company
offsets a portion of the  valuation  allowance  to account for the current  year
income tax benefits.

     Source has been  apprehensive  to pursue  more active  business  operations
during  the past  three  years  because  of the  litigation  resulting  from the
transaction  with  T.R.  Kraft  and  Point  due  to the  unforeseeable  outcome.
Increasing  operations would have required  additional  capital  investment that
would have been  difficult to obtain until  resolution of all legal issues.  The
litigation  was resolved by a judgment  entered in March 2000.  On September 22,
2000, the Securities  and Exchange  Commission  ("SEC") filed a complaint in the
United States District Court, Case No. 2:00CV0757B, naming Source and Timothy R.
Kraft, a former officer and director of Source,  as defendants.  Source filed an
answer to the Courts  complaint and on March 6, 2001 a permanent  injunction was
entered by the Court against Mr. Kraft. On April 22, 2003 the Court required the
SEC to show cause as to why the case  should  not be  dismissed  for  failure to
prosecute.  The SEC failed to file a responsive pleading and on June 3, 2003 the
court dismissed the case without  prejudice for failure to prosecute the action.

Results of Operations
---------------------

     For the fiscal year ended  December 31, 2004,  the Company  received  total
revenues of $64,618 an increase from $46,309 for the previous year. The increase
in revenues resulted from an average per barrel price increased of 39% an annual
barrel sales volume increase of 3%.

     Depletion increased from $11,270 in 2003 to $11,402 in 2004, as a result of
the increase in annual  barrel  volume of 1%. The Company  calculates  depletion
utilizing the units of production method.

     Total general and  administrative  costs and expenses increased from $8,363
in 2003 to $29,131 in 2004. This increased is attributed to incurring additional
legal  expenses  in  connection   with  the  Energytec   transaction   that  has
subsequently been terminated.

     Production  costs  increased  from  $17,062  in 2003 to  $18,536  in  2004,
attributable to increased  costs  associated with the operation of the Company's
oil well.

     For the fiscal year ended  December  31,  2004,  the Company  realized  net
income of $3,601 ($0.01 per share) compared to net income of $17,061 ($0.04 per
share) in the preceding year.

     When operations result in net income,  the Company offsets a portion of the
valuation  allowance  to account  for the  current  year  income  tax  benefits.
Management based their  evaluation on benefits  recognized the past three years,
and an estimate of the  company's  future  profitability,  based on oil reserves
remaining.

Liquidity
---------

     The  Company  estimates  that  it  will be  able  to  adequately  fund  the
above-referenced  development  and production  plans,  with the exception of the
acquisition of additional  properties,  for the next 12 months. Sources of funds
for the  Company  will be revenue  from  operations,  private  placement  of the
Company's unregistered and restricted  securities,  and loans. At this time, the
Company  is in contact  with  several  funding  sources.  However,  this plan of
operation is based upon many variables and estimates, all of which may change or
prove to be other than or different from information relied upon.

     The  Company's  liabilities  are short term.  They are comprised of nominal
trade  obligations  and the liability to the  Company's  President of $75,000 as
outlined  in Item 3,  Legal  Proceedings.  At the  present  time  the  Company's
President has not made demand for payment of the outstanding  debt.  Should such
demand be made during the next twelve  months,  the Company has the resources to
satisfy  the  debt  in  its  entirety.   Operating   cash  would  be  diminished
accordingly,  but  additional  cash flows from  operations  are  estimated to be
sufficient  for current  operations  even after  retiring  all of the  Company's
debts.
<PAGE>

Item 7.  Financial Statements.
------------------------------

            Financial Statements for the years ended December 31, 2004 and 2003

            Report of Independent Certified Public
            Accountants

            Balance Sheet
            Statements of Operations

            Statements of Stockholders' Equity

            Statements of Cash Flows

            Notes to the Consolidated Financial
            Statements

            Unaudited Supplemental Information Concerning Oil and Gas Producing
            Activities



<PAGE>





                            SOURCE ENERGY CORPORATION
               [Formerly known as Parker Energy Technology, Inc.]

             Report of Independent Registered Public Accounting Firm
                            and Financial Statements

                                December 31, 2004

<PAGE>
<TABLE>
<CAPTION>



                            SOURCE ENERGY CORPORATION
               [Formerly known as Parker Energy Technology, Inc.]

                                TABLE OF CONTENTS



                                                                                   Page

<S>                                                                                 <C>
Report of Independent Registered Public Accounting Firm ........................    1

Balance Sheet - December 31, 2004 ..............................................    2

Statements of Operations for the Years Ended December 31, 2004 and 2003 ........    3

Statement of Stockholders' Equity for the Years Ended December 31, 2004 and 2003    4

Statements of Cash Flows for the Years Ended December 31, 2004 and 2003 ........    5

Notes to Financial Statements ..................................................   6 - 11

Unaudited Supplemental Information Concerning Oil and Gas Producing Activities .   12

</TABLE>




<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The Board of Directors and Shareholders
Source Energy Corporation

We have audited the  accompanying  balance sheet of Source  Energy  Corporation,
formerly known as Parker Energy  Technology,  Inc., as of December 31, 2004, and
the related statements of operations,  stockholders'  equity, 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 audit.

We conducted  our audit 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 about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  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 Source  Energy  Corporation,
formerly known as Parker Energy  Technology,  Inc., as of December 31, 2004, and
the  results  of their  operations  and their  cash  flows  for the years  ended
December 31, 2004 and 2003 in conformity  with accounting  principles  generally
accepted in the United States of America.



Mantyla McReynolds
Salt Lake City, Utah
March 15, 2005
<PAGE>

<TABLE>
<CAPTION>

                            Source Energy Corporation
                Formerly known as Parker Energy Technology, Inc.
                                  Balance Sheet
                                December 31, 2004



                           ASSETS


<S>                                                         <C>
 Current Assets

      Cash and cash equivalents ..........................   $   102,083
      Accounts receivable ................................         7,190
      Tax refund receivable ..............................         2,959
                                                             -----------
 Total Current Assets ....................................       112,232
                                                             ===========

 Property and Equipment (Notes 1 & 2)

      Equipment ..........................................        28,633
      Proved oil and gas properties ......................       597,353
                                                             -----------
      Total Property and Equipment .......................       625,986

      Less: Accumulated Depreciation and Depletion .......      (581,693)
                                                             -----------
 Net Property and Equipment ..............................        44,293


 Deferred Tax Asset (Notes 1 & 3) ........................         4,716
                                                             -----------

 Total Assets ............................................   $   161,241
                                                             ===========

            LIABILITIES AND STOCKHOLDERS' EQUITY

 Liabilities
 Current Liabilities
      Accrued liabilities ................................   $     9,751
      Other current liability - related party (Note 5) ...        75,000
                                                             -----------
 Total Current Liabilities ...............................        84,751
                                                             -----------
 Total Liabilities .......................................        84,751

 Stockholders' Equity (Note 1)

      Capital Stock -- 200,000,000 shares authorized having
         a par value of $.00025 per share; 404,451 shares
         issued and outstanding ..........................           101
      Additional Paid-in Capital .........................     1,244,954
      Accumulated Deficit ................................    (1,168,565)
                                                             -----------
 Total Stockholders' Equity ..............................        76,490
                                                             -----------
 Total Liabilities and Stockholders' Equity ..............   $   161,241
                                                             -----------

</TABLE>


                 See accompanying notes to financial statements

                                     Page 5

<PAGE>
<TABLE>
<CAPTION>

                            Source Energy Corporation
                Formerly known as Parker Energy Technology, Inc.
                             Statement of Operations
                 For the Years Ended December 31, 2004 and 2003

                                                           2004               2003
                                                     ----------------   ----------------

<S>                                                         <C>                <C>
 Revenues from Oil and Gas Activities                       $ 64,618           $ 46,309

 Oil and Gas Producing Expense:
       Production costs                                       18,536             17,062
       Depletion (Note 2)                                     11,402             11,270
                                                     ----------------   ----------------
 Total Oil and Gas Producing Expense                          29,938             28,332
                                                     ----------------   ----------------

 Income from Oil and Gas Activities                           34,680             17,977

 General and administrative expense                           29,131              8,363
                                                     ----------------   ----------------

 Net Income from Operations                                    5,549              9,614

 Other Income/(Expense):
       Interest income                                           423                561
                                                     ----------------   ----------------
                                                     ----------------   ----------------
 Total Other Income/(Expense)                                    423                561
                                                     ----------------   ----------------

 Net Income before income tax                                  5,972             10,175

 Income Tax Benefit (Provision) (Notes 1 & 3)                 (2,371)             6,886
                                                     ----------------   ----------------

 Net Income                                                  $ 3,601           $ 17,061
                                                     ================   ================

 Earnings per Share                                           $ 0.01             $ 0.04
                                                     ================   ================

 Weighted Average Shares Outstanding                         404,451            404,451
                                                     ================   ================

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                            Source Energy Corporation
                Formerly known as Parker Energy Technology, Inc.
                        Statement of Stockholders' Equity
                 For the Years Ended December 31, 2004 and 2003

                                                                                                              Net
                                  Common                          Additional Paid        Accumulated     Stockholders'
                                  Shares        Common Stock        in Capital            Deficit           Equity
----------------------------------------------------------------------------------------------------------------------

<S>                             <C>            <C>                <C>                  <C>            <C>
Balance, December 31, 2002       404,451        $       101        $ 1,244,954          $(1,189,227)   $    55,828

Net income for the period
ended December 31, 2003 ..             -                  -                                  17,061         17,061
                              -------------    ---------------     --------------        ------------   ------------
Balance, December 31, 2003       404,451                101          1,244,954           (1,172,166)        72,889
                              -------------    ---------------     --------------        ------------   ------------
Net income for the period
ended December 31, 2004 ..             -                  -                                   3,601          3,601
                              -------------    ---------------     --------------       -------------
Balance, December 31, 2004       404,451        $       101        $ 1,244,954          $(1,168,565)   $    76,490
                              =============    ===============     ==============       =============  =============



</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                            Source Energy Corporation
                Formerly known as Parker Energy Technology, Inc.
                            Statements of Cash Flows
                 For the Years Ended December 31, 2004 and 2003

                                                                  2004                    2003
                                                           -------------------     ------------------
<S>                                                        <C>                    <C>
 Cash Flows From Operating Activities
      Net Income                                                      $ 3,601               $ 17,061
      Adjustments to reconcile net income to
      net cash provided by operating activities:
      Depreciation and depletion                                       14,840                 13,757
      (Increase)/decrease in accounts receivable                       (3,832)                  (209)
      (Increase)/decrease in tax refund receivable                       (487)                  (478)
      (Increase)/decrease in deferred tax asset                         2,271                 (6,987)
      Increase/(decrease) in current liabilities                        6,863                  2,534
                                                           -------------------     ------------------
 Net Cash From Operating Activities                                    23,256                 25,678
 Cash Flows From Investing Activities
      Purchase of fixed assets                                        (12,682)                     -
                                                           -------------------     ------------------
 Net Cash From Investing Activities                                   (12,682)                     -
 Cash Flows From Financing Activities                                       -                      -
 Net Increase in Cash                                                  10,574                 25,678
 Beginning Cash Balance                                                91,509                 65,831
                                                           -------------------     ------------------
                                                           -------------------     ------------------
 Ending Cash Balance                                                $ 102,083               $ 91,509
                                                           ===================     ==================

 Supplemental Disclosures
      Income taxes paid                                                 $ 100                  $ 100
      Interest paid                                                       $ -                    $ -


</TABLE>
<PAGE>


                            Source Energy Corporation
                Formerly known as Parker Energy Technology, Inc.
                        Notes to the Financial Statements
                                December 31, 2004


Note 1   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)      Organization

The Company was originally  incorporated under the name Exit, Inc. in accordance
with the laws of the State of Utah on January 30,  1981.  In April of 1984,  the
Company  changed its name to Parker Energy  Technology,  Inc. From its inception
until  May  20,  1997,  the  Company  had  been in the  business  of oil and gas
exploration and production activities.  Currently, the Company has one producing
well,  located in Grand County,  Utah. On May 20, 1997,  the Company  effected a
reverse  split  of  its   outstanding   shares  from  81,637,100  to  1,632,742.
Simultaneous  thereto,  the Company entered into an agreement with an individual
to engage in the business of distillate  fuel systems process plants and changed
its  name to  Source  Energy  Corporation  (Source).  On March  10,  2000 a U.S.
district  court judge  rescinded the May 20, 1997 agreement and ordered that the
Company be returned,  as nearly as possible, to its status prior to consummation
of said agreement.  This included  canceling  12,305,800  shares of common stock
issued in the  transaction.  As nearly as possible,  these financial  statements
have been prepared in accordance with the court's order.

The financial  statements  of the Company have been prepared in accordance  with
U.S. generally accepted accounting principles. The following summarizes the more
significant of such policies.

(b)  Revenue Recognition

Revenues  associated  with  sales of crude oil and gas are  recorded  when title
passes  to  the  customer,  net  of  royalties,  discounts  and  allowances,  as
applicable.

(c)  Accounts Receivable

Accounts  receivable are stated at amounts owed to the Company from its customer
(see Note 4). Based on historical  experience  with its customer,  the Company's
management does not consider an allowance for doubtful accounts to be necessary.

(d)  Proved Oil and Gas Properties

The Company utilizes the successful efforts method of accounting for its oil and
gas producing activities.  This method of accounting requires the capitalization
of exploration and development  activities related to the discovery of producing
properties  and the expensing of costs related to the discovery of  unsuccessful
exploration efforts.
<PAGE>

Note 1   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [continued]

(d)  Proved Oil and Gas Properties [continued]

Depletion  of oil and gas  properties  is  provided  by  utilizing  the units of
production method.  The cost of the property  ($597,353) is divided by the total
estimated  reserves  (128,740  barrels)  resulting in a unit depletion amount of
$4.64.

Effective  January 1, 2003, the company adopted Financial  Accounting  Standards
Board Statement No. 143,  "Accounting  for Asset  Retirement  Obligations"  (FAS
143), in which the fair value of a liability for an asset retirement  obligation
associated  with the  retirement  of a  long-lived  asset and the  amount can be
reasonably estimated. The company does not believe that there is a liability for
asset  retirements  in  excess  of  salvageable  assets,  should  the  company's
operating well lose its economic feasibility.

(e)  Property and Equipment

Equipment is stated at cost.  Depreciation  is provided using the  straight-line
and  double-declining  balance methods over a five year period.  Maintenance and
repair costs are charged to expense as incurred.

(f)  Income Taxes

The  Company  applies  the  provisions  of  Statement  of  Financial  Accounting
Standards No. 109 [the  Statement],  Accounting for Income Taxes.  The Statement
requires an asset and liability approach for financial  accounting and reporting
for income taxes, and the recognition of deferred tax assets and liabilities for
the temporary differences between the financial reporting basis and tax basis of
the  Company's  assets and  liabilities  at enacted tax rates  expected to be in
effect when such amounts are realized or settled. Accounting for income taxes is
further described in Note 3.

(g)      Net Income Per Common Share

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  128,
"Earnings Per Share," basic loss per common share is computed using the weighted
average  number of common  shares  outstanding.  Diluted  earnings  per share is
computed  using weighted  average  number of common shares plus dilutive  common
share equivalents outstanding during the period using the treasury stock method.
During the years ended  December  31,  2004 and 2003 there were no common  share
equivalents outstanding.

<PAGE>

Note 1   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [continued]

(h)  Cash and Cash Equivalents

For purposes of the  statements  of cash flows,  the Company  considers  cash on
deposit in the bank and in its money market account to be cash.

(i)  Use of Estimates in Preparation of Financial Statements

The  preparation  of financial  statements  in  conformity  with U.S.  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the  reported  amounts  of  assets  and  liabilities,
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  and the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Actual results could differ from those estimates.

Note 2   PROPERTY AND EQUIPMENT

Oil and Gas Producing Activities

During  1981,  the  Company  purchased  a working  interest  in,  and became the
operator of, the property known as Bureau of Land Management Federal Oil and Gas
Lease No. U-14654 consisting of 480 acres.  Located in Grand County,  Utah, this
is the Company's  only oil and gas property.  The Company has one producing well
on this lease.  At the  present  time the  Company  maintains  a 68.78%  working
interest in the property.

Information on capitalized costs relating to oil and gas producing activities is
presented below:
<TABLE>

<S>                                                                          <C>
 Proved Oil and Gas Properties                                               $          597,353
 Accumulated Depletion ($11,402 during 2004 and $11,270 during 2003)                   (566,670)
                                                                            --------------------
 Net Capitalized Costs                                                       $           30,683
                                                                            ====================


Other Property and Equipment

 Equipment at Cost                                                           $           28,633
 Accumulated Depreciation ($3,440 during 2004 and $2,487 during 2003)                   (15,023)
                                                                            --------------------
 Net Property and Equipment                                                  $           13,610
                                                                            ====================
</TABLE>

<PAGE>

Note 3   INCOME TAXES

The tax effects of temporary  differences that give rise to significant portions
of the deferred  tax asset at December 31, 2004 have an impact on the  financial
position of the  Company.  A  valuation  allowance  is provided  when it is more
likely  than not  that  some  portion  of the  deferred  tax  asset  will not be
realized.  In prior years, the Company has established a valuation allowance for
all future  deductible  temporary  differences due to a lack of taxable earnings
history.  Based on the  Company  having  taxable  income  the past  four  years,
management  reevaluated the valuation  allowance and determined a portion may be
realizable.  Management based this evaluation on benefits  recognized during the
past four years, and an estimate of the Company's future profitability, based on
estimated oil reserves remaining.  Should the Company not remain profitable, the
benefit from the deferred asset recorded could be lost.
<TABLE>

<S>                                                <C>           <C>       <C>
 Deferred Tax Asset                                   Balance      Rate        Tax

 Federal loss carryforward (expires through 2020)      $ 404,065  various     $137,382
 State loss carryforward (expires through 2015)        $ 246,801    5%          12,340
 Valuation allowance                                                          (145,006)

       Deferred tax asset                                                      $ 4,716
</TABLE>



The valuation  allowance has decreased  $16,900 from $161,906 in the prior year.
The  deferred  tax asset  decreased  $2,271 from  $6,987 in the prior year.  The
current year income tax provision represents an adjustment for future realizable
benefits less the minimum franchise tax due to the State of Utah.

The effective tax rate for continuing  operations differs from the statutory tax
rate as follows:
<TABLE>

                                                     Years ended December 31,
                                                      2004             2003
                                                  -------------    -------------
<S>                                                        <C>              <C>
 Federal Statutory income tax rate                         15%              15%
 State income taxes                                         5%               5%

 Change in valuation allowance, Federal and State         -20%             -20%

 Effective income tax rate                                  0%               0%
                                                  =============    =============

</TABLE>



<PAGE>

Note 4   SIGNIFICANT CONCENTRATIONS OF CREDIT RISK

The Company's  primary  operations have been located in the geographic region of
Grand County, Utah. The accounts receivable of the Company are unsecured. Should
the primary customer of the Company,  a wholesale oil purchaser,  default on its
payment,  the Company would be required to seek relief as an unsecured creditor.
This customer accounts for 100% of the company's  operating revenues for a total
of $64,618 and $46,309 for 2004 and 2003, respectively. If the current purchaser
of the Company's oil  production  were to cease to do business with the Company,
it is reasonably certain that other purchasers would be readily available in the
market place.

The Company has cash in excess of FDIC federally  insured  limits  ($100,000 per
bank institution) in the amount of $2,083 as of December 31, 2004. The Company's
Management does not believe that this involves any significant risk.

Note 5   RELATED-PARTY TRANSACTIONS

The  president  of the  Company  (also a  shareholder)  is also a 16.9%  working
interest owner in the Company's lease located in Grand County, Utah.

The Company has recorded a liability as part of a legal settlement (see Note 6).
The $75,000 is due to a shareholder  and officer of the Company.  The balance is
non-interest bearing and payable on demand.

Note 6   LEGAL SETTLEMENT

On March 10,  2000,  a U.S.  district  court  judge  rescinded  the May 20, 1997
agreement  referenced  in Note 1, and ordered that the Company be  returned,  as
nearly as possible,  to its status prior to consummation of said agreement.  The
Court further ordered that the Company pay the plaintiff in the legal action his
attorney's  fees in the amount of $15,039 and an award of $75,000 to  compensate
him for the benefit  conferred  on Source  Energy  Corporation  shareholders  in
prosecuting this action. The attorney's fees, of $15,039, were paid in 2000; the
award of  $75,000  is still  due and  payable.  The  plaintiff  in this case was
returned by the Court to the presidency of Source Energy Corporation, a position
he held prior to the May 20, 1997 agreement.

<PAGE>

Note 7   ACQUISITION / MERGER

On April 13, 2000, the Company acquired Newven Acquisition Corporation, A Nevada
Corporation  ("Newven"),   through  a  stock  for  stock  exchange.  Immediately
following  the  exchange,  the Company and Newven  entered into a Plan of Merger
pursuant  to  which  Newven  was  merged  with  the  Company.  All  of  Newven's
outstanding  stock  (500,000  shares)  was  exchanged  for 25,000  shares of the
Company's  restricted  common stock.  Newven's  assets at the time of the merger
were $565 in cash; there were no liabilities. The acquisition has been accounted
for as a purchase.  Newven has had minimal  operations;  all  activity  has been
combined and presented since the acquisition date.

Note 8   OTHER LEGAL MATTER

On September 22, 2000, the Securities  and Exchange  Commission  ("SEC") filed a
complaint in the United States District Court, naming Source Energy Corporation,
with  the  intent  of  disqualifying   the  Company  from  the  availability  of
Regulations  A and D.  The  Company  has  responded  to  the  SEC  opposing  the
complaint.  On April 22, 2003 the Court required the SEC to show cause as to why
the case should not be  dismissed  for failure to  prosecute.  The SEC failed to
file a  responsive  pleading  and on June 3, 2003 the court  dismissed  the case
without prejudice for failure to prosecute the action.

Note 9   CURRENT AND SUBSEQUENT EVENTS

On November  17, 2004,  the Company  entered  into an Asset  Purchase  Agreement
("Agreement") with Energytec, Inc. ("Energytec"), a Nevada corporation. Pursuant
to the  Agreement,  the Company  was to acquire  certain oil and gas and related
assets of Energytec  valued at $21,844,351 as of September 30, 2004  (unaudited)
for approximately 30,861,620 shares of the Company's common stock and assumption
of  approximately  $4,125,014 in liabilities.  Accordingly,  the Company filed a
Form S-4  registration  statement  with the SEC on December 15, 2004. On January
26, 2005,  Energytec presented the Company with a written notice for termination
of the Agreement.  The Company believes that this was a wrongful termination and
is  currently  considering  its options with  respect to the  Agreement.  As the
outcome of the matter is uncertain,  the financial statements do not reflect the
effects of this transaction.


<PAGE>
<TABLE>
<CAPTION>

                            Source Energy Corporation
                Formerly known as Parker Energy Technology, Inc.
      Unaudited Supplemental Information - Oil and Gas Producing Activities
                                December 31, 2004

                    Reserve Quantity Information (Unaudited)

<S>                         <C>
 Proved Developed Reserves:

        Beginning of year     9,074
        Production .......   (2,457)
                             ------
        End of  year .....    6,617
                             ======

</TABLE>

Note: The Company has previously  drilled two other dry holes on the lease where
these proved reserves are located. Since there are no additional known reserves,
the Company has not estimated proved undeveloped reserves.

<TABLE>

  Standardized Measure of Discounted Future Net Cash Flows and Changes Therein
    Relating to Proved Oil and Gas Reserves at December 31, 2004 (Unaudited)

<S>                                                        <C>
Future cash inflows * ..................................   $ 183,291

Future production and development costs* ...............     (49,892)

Future income tax expenses** ...........................        --
                                                           ---------
Future net cash flows ..................................     133,399

10% annual discount for estimated timing of cash flows .     (53,642)

Standardized measure of discounted future net cash flows   $  79,757
                                                           =========
</TABLE>


Note: There have been no principal sources of change for the year ended December
31, 2004.


*    Future net cash flows were computed  using year-end  prices and costs,  and
     year-end  statutory  tax rates that related to existing  proved oil and gas
     reserves in which the Company has mineral interests.

**   Due to large net  operating  loss carry  forwards,  the Company  (under its
     present  organizational  structure) does not anticipate paying income taxes
     on the subject reserves.



                                                                Page 12








<PAGE>


Item 8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------

     None;  the Company  continues to use Mantyla  McReynolds as the auditor for
the Company and audited the financial statements that accompany this Report.


                                    PART III

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

Identification of Directors and Executive Officers
--------------------------------------------------

     The  following  table sets  forth the names of all  current  directors  and
executive  officers  of the  Company.  These  persons  will serve until the next
annual  meeting  of  stockholders  (to be  held at such  time  as the  Board  of
Directors  shall  determine) or until their  successors are elected or appointed
and qualified, or their prior resignation or termination.

<TABLE>
<CAPTION>
                                              Date of         Date of
                             Positions        Election or     Termination
  Name                        Held            Designation (1) or Designation

<S>                           <C>               <C>               <C>

Craig Carpenter               Director,         3/10/00           *
3040 Granite Meadow Lane,     President
Sandy Utah 84092

Helen Carpenter               Director,         3/10/00           *
3040 Granite Meadow Lane      Vice President
Sandy Utah 84092

Kathleen L. Morrison          Director,         3/10/00           *
4685 Highland Dr., #202       Secretary
Salt Lake City, UT  84117

</TABLE>

     *  These persons presently serve in the capacities indicated opposite their
        respective names.

Term of Office
--------------

     The term of office of the current directors shall continue until the annual
meeting  of  stockholders,  which  is to be held at such  time as the  Board  of
Directors  shall  determine.  The  annual  meeting  of the  Board  of  Directors
immediately  follows the annual meeting of  stockholders,  at which officers for
the coming year are elected.

Business Experience
-------------------

     Craig Carpenter, Director and President, age 61 was born and raised in Salt
Lake City, Utah, where he attended East High School.  Aside from his involvement
in Source, Mr. Carpenter has been retired for the past eight years.

     Helen G. Carpenter,  Director and Vice President,  age 54, recently retired
after 30 years at US West Communications.  The last position she held at US West
was Manager of Computer Operations.

     Kathleen L. Morrison,  Director and  Secretary,  age 48, has spent the past
nine years as the office manger for two entities.  For seven years, she was the
editor of "Super Group," a vertical market computer  magazine  targeting  HP3000
users.  Mrs.  Morrison  received a B.A. degree from Colorado State University in
1978.

     The directors of Source hold no other  directorship  in any other reporting
company,  except for  Kathleen L.  Morrison  who has served  since March 1999 to
March 2005 as a director  and  secretary  of Cardiff  International,  a Colorado
corporation  and from  May 2001 to  September  2003 as  secretary/treasurer  and
director of Brenex Oil  Corporation,  a Utah  Corporation.  All  directors  hold
office until the next annual meeting of stockholders  and until their successors
are duly elected and qualified.

Committees
----------

     There are no established committees.  Since there is not currently an audit
committee the Company has not sought out a financial expert to serve.

Family Relationships
--------------------

     Helen Carpenter and Craig Carpenter are Husband and Wife.

Involvement in Certain Legal Proceedings
----------------------------------------

     Except as indicated  below and to the knowledge of  management,  during the
past five years,  no present or former  director,  person  nominated to become a
director, executive officer, promoter or control person of the Company:

     (1) Was a general  partner  or  executive  officer  of any  business  by or
against  which any  bankruptcy  petition was filed,  whether at the time of such
filing or two years prior thereto;

     (2) Was  convicted  in a  criminal  proceeding  or named the  subject  of a
pending  criminal  proceeding  (excluding  traffic  violations  and other  minor
offenses);

     (3) Was the  subject of any order,  judgment  or decree,  not  subsequently
reversed,  suspended  or  vacated,  of  any  court  of  competent  jurisdiction,
permanently  or  temporarily  enjoining  him  from or  otherwise  limiting,  the
following activities:

          (i)  Acting  as a futures  commission  merchant,  introducing  broker,
     commodity trading advisor,  commodity pool operator, floor broker, leverage
     transaction merchant,  associated person of any of the foregoing,  or as an
     investment adviser,  underwriter,  broker or dealer in securities, or as an
     affiliated person,  director or employee of any investment  company,  bank,
     savings  and loan  association  or  insurance  company,  or  engaging in or
     continuing any conduct or practice in connection with such activity;

          (ii) Engaging in any type of business practice; or

          (iii) Engaging in any activity in connection with the purchase or sale
     of any security or commodity or in connection with any violation of federal
     or state securities laws or federal commodities laws;

     (4) Was the  subject of any order,  judgment  or decree,  not  subsequently
reversed,  suspended  or  vacated,  of any federal or state  authority  barring,
suspending or otherwise  limiting for more than 60 days the right of such person
to engage in any activity  described  above under this Item, or to be associated
with persons engaged in any such activity;

     (5) Was found by a court of competent  jurisdiction in a civil action or by
the  Securities  and Exchange  Commission  to have violated any federal or state
securities  law,  and the  judgment  in such  civil  action  or  finding  by the
Securities  and  Exchange   Commission  has  not  been  subsequently   reversed,
suspended, or vacated; or

     (6) Was found by a court of competent  jurisdiction in a civil action or by
the  Commodity   Futures  Trading   Commission  to  have  violated  any  federal
commodities  law,  and the  judgment  in such  civil  action or  finding  by the
Commodity  Futures  Trading  Commission  has  not  been  subsequently  reversed,
suspended or vacated.

Code of Ethics.
---------------

     The  Company  is in the  process  of  adopting  a Code  of  Ethics  for our
executive  officers.  We expect to adopt such a Code of Ethics at our next Board
of Directors meeting.

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

     The Company's directors, executive officers and 10% stockholders have filed
statements  of  beneficial  ownership of  securities  under Section 16(a) of the
Exchange Act.

Item 10. Executive Compensation.
-------------------------------

Cash Compensation
-----------------

     None of the current Officers and Directors received any compensation during
the year ended December 31, 2004.

Employment Contracts
--------------------

     There are  presently  no  employment  contracts  relating  to any member of
management;  however,  depending upon the Company's operations and requirements,
the Company may offer long term  contracts to directors,  executive  officers or
key employees in the future.

Termination of Employment and Change of Control Arrangement
------------------------------------------------------------

     None; not applicable.

Item 11. Security Ownership of Certain Beneficial Owners and Management.
------------------------------------------------------------------------

Security Ownership of Certain Beneficial Owners
-----------------------------------------------

     The  following  tables  set  forth  the  share  holdings  of the  Company's
directors and  executive  officers and those persons who own more than 5% of the
Company's  common stock as of the date  hereof,  with these  computations  being
based upon 404,451 shares of common stock being outstanding.

                 Directors and Executive Officers

<TABLE>
<CAPTION>

                                                                    Number of Shares        Percent of Class
Name and Address(1)                          Title                                         Beneficially Owned
-------------------                          -----                  ----------------       ------------------
<S>                                         <C>                     <C>                         <C>
Craig Carpenter                             President                       209,832             51.8
3040 Granite Meadow Lane                    and Director
Sandy Utah 84092


Helen G. Carpenter*                         Vice President                      -0-               -0-
3040 Granite Meadow Lane                    and Director
Sandy Utah 84092

Kathleen L. Morrison                        Secretary                           -0-               -0-
4685 Highland Dr., Suite 202                and Director
Salt Lake City, UT
84117

All Officers &                                                              209,832              51.8
Directors
as a group
beneficially
own

</TABLE>

     *Helen Carpenter is the spouse of Craig Carpenter,  so she may be deemed to
have shared voting and  investment  control with respect to the shares of Common
Stock owned by Craig Carpenter.
<PAGE>

                    Five Percent Stockholders

<TABLE>
<CAPTION>

                                                         Number of Shares        Percent
Name and Address                        Title           Beneficially Owned      of Class
<S>                                     <C>              <C>                      <C>

Craig Carpenter                         President                209,831           51.8
3040 Granite Meadow Lane                and Director
Sandy, Utah  84092


</TABLE>

Changes in Control
------------------

     To the  knowledge  of  the  Company's  management,  there  are  no  present
arrangements or pledges of the Company's securities which may result in a change
in control of the Company.  See the foregoing  tables  regarding  "Directors and
Executive Officers" and "Five Percent Stockholders."

     Subequent  to the  date  of  this  report  the  Energytec  transaction  was
terminated and no change of control took place.

Item 12. Certain Relationships and Related Transactions.
--------------------------------------------------------

Transactions with Management and Others
---------------------------------------

     The Company  has  recorded a liability  as part of a legal  settlement  for
$75,000, which is due to a Mr. Craig Carpenter, a shareholder and officer of the
Company. The balance is non-interest bearing and payable on demand.

     The Court  further  ordered that the Company pay the plaintiff in the legal
action his  attorneys  fees in the amount of $15,039  and an award of $75,000 to
compensate  him  for  the  benefit   conferred  on  Source  Energy   Corporation
shareholders in prosecuting this action.

Certain Business Relationships
------------------------------

     Other than the transactions  disclosed in the previous section,  there have
been no  material  transactions,  series of similar  transactions  or  currently
proposed transactions, to which the Company or any of its subsidiaries was or is
to be a party,  in which the amount  involved  exceeds  $60,000 and in which any
director or executive officer or any security holder who is known to the Company
to own of record or beneficially  more than 5% of the Company's common stock, or
any  member of the  immediate  family  of any of the  foregoing  persons,  had a
material interest.

Indebtedness of Management
--------------------------

     Other than the transactions  disclosed in the previous section,  there have
been no  material  transactions,  series of similar  transactions  or  currently
proposed transactions, to which the Company or any of its subsidiaries was or is
to be a party,  in which the amount  involved  exceeds  $60,000 and in which any
director or executive officer or any security holder who is known to the Company
to own of record or beneficially  more than 5%of the Company's  common stock, or
any  member of the  immediate  family  of any of the  foregoing  persons,  had a
material interest.

Parents of the Issuer
---------------------

     Except to the extent that Craig  Carpenter  may be deemed to be a parent of
the  Company  by  virtue  of his  ownership  of a  majority  of its  issued  and
outstanding shares, the Company has no parents.

Transactions with Promoters
---------------------------

     Other than the Note,  there have been no material  transactions,  series of
similar  transactions,  currently  proposed  transactions,  or series of similar
transactions,  to which the Company or any of its subsidiaries was or is to be a
party, in which the amount involved exceeds $60,000 and in which any promoter or
founder or any member of the immediate  family of any of the foregoing  persons,
had a material interest.

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

Reports on Form 8-K
-------------------

  None; Not Applicable.

Exhibits
--------

EX 31.1 Certification of Craig Carpenter,  the Company's President,  pursuant to
        section 302 of the Sarbanes-Oxley Act of 2002

EX 31.2 Certification of Kathleen L. Morrison, the Company's Secretary, pursuant
        to section 302 of the Sarbanes-Oxley Act of 2002

EX 32   Certification  of Craig  Carpenter  and Kathleen  Morrison  pursuant to
        section 906 of the Sarbanes-Oxley Act of 2002

Item 14.  Principal Accounting Fees and Services.
-------------------------------------------------

The Following is a summary of the fees billed to Source Energy by its principal
accountants during the fiscal years ended December 31, 2003 and 2002:
<TABLE>
<S>                                          <C>             <C>

        Fee category                            2004            2003
        ------------                            ----            ----

        Audit fees                            $ 2,500         $ 2,750

        Audited-related fees                  $ 3,606         $ 1,535

        Tax fees                              $   325         $     0

        All other fees                        $    75         $     0
                                                -----           -----
        Total fees                            $ 6,506         $ 4,285
</TABLE>

     Audit Fees.  Consists  of fees for  professional  services  rendered by our
principal  accountants  for  the  audit  of  Source  Energy's  annual  financial
statements and review of the financial  statements  included in Source  Energy's
Forms 10-QSB or services that are normally provided by our principal accountants
in connection with statutory and regulatory filings or engagements.

     Audit-related  fees. Consists of fees for assurance and related services by
our principal  accountants that are reasonably related to the performance of the
audit or review of Source  Energy's  financial  statements  and are not reported
under "Audit fees."

     Tax  fees.  Consists  of fees for  professional  services  rendered  by our
principal accountants for tax compliance, tax advice and tax planning.

     All other fees.  Consists of fees for products and services provided by our
principal  accountants,  other than the services  reported  under "Audit  fees,"
"Audit-related  fees," and "Tax fees" above.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors.
---------------------------------

     The  Company  has not adopted an Audit  Committee,  therefore,  there is no
Audit  Committee  policy in this regard.  However,  the Company does not require
approval in advance of the performance of  professional  services to be provided
to the Company by its principal accountant.  Additionally, all services rendered
by our  principal  accountant  are  performed  pursuant to a written  engagement
letter between us and the principal accountant.

<PAGE>



                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the  Securities  Exchange Act of
1934,  the  Registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                             SOURCE ENERGY CORPORATION

Date: 3-__-05                                    /S/ CRAIG CARPENTER
     ----------------                           ---------------------------
                                                Craig Carpenter, President and
                                                Director

     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:

                                             SOURCE ENERGY CORPORATION


Date: 3-24-05                                    /S/ CRAIG CARPENTER
     ----------------                           ---------------------------
                                                Craig Carpenter, President and
                                                Director

Date: 3-24-05                                    /S/ KATHLEEN L. MORRISON
     ----------------                           ---------------------------
                                                Kathleen L. Morrison, Secretary
                                                and Director