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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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                                   FORM 10-KSB
(Mark One)

[X]  Annual Report Under Section 13 or 15(d) of the  Securities  Exchange Act of
     1934

     For the fiscal year ended: DECEMBER 31, 2003

[ ]  Transition Report Under Section 13 or 15 (d) of the Securities Exchange Act
     of 1934

     For the transition period from ___________ to ____________

                        Commission file number: 000-28025

                               GLOBAL ENERGY INC.
                 (Name of small business issuer in its charter)

                                     NEVADA
         (State or other jurisdiction of incorporation or organization)

                                   86-0951473
                      (I.R.S. Employer Identification No.)

 #1305 - 1090 WEST GEORGIA STREET, VANCOUVER, BRITISH COLUMBIA, CANADA, V6E 3V7
              (Address of principal executive offices)                (Zip code)

                                 (604) 685-9316
                           (Issuer's telephone number)


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

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


                  COMMON STOCK WITH $0.001 PAR VALUE PER SHARE
                                (Title of Class)

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB [ ]

State issuer's revenues for its most recent fiscal year:  $72,563

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 4,650,000 SHARES AS OF APRIL 12, 2004

Documents incorporated by reference:   NONE

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


                                      - 1 -

<PAGE>



                               GLOBAL ENERGY INC.
                          ANNUAL REPORT ON FORM 10-KSB
                                TABLE OF CONTENTS



PART I.........................................................................3
      ITEM 1    - DESCRIPTION OF BUSINESS......................................5
      ITEM 2    - DESCRIPTION OF PROPERTY......................................7
      ITEM 3    - LEGAL PROCEEDINGS...........................................11
      ITEM 4    - SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS..........11


PART II.......................................................................11
      ITEM 5    - MARKET FOR COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS.........................................11
      ITEM 6    - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...11
      ITEM 7    - FINANCIAL STATEMENTS........................................17
      ITEM 8    - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.........................17
      ITEM 8A   - CONTROLS AND PROCEDURES.....................................17


PART III......................................................................18
      ITEM 9    - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                  PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT..18
      ITEM 10   - EXECUTIVE COMPENSATION......................................20
      ITEM 11   - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                  OWNERS AND MANAGEMENT.......................................20
      ITEM 12   - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............21
      ITEM 13   - EXHIBITS AND REPORTS ON FORM 8-K............................22
      ITEM 14   - PRINCIPAL ACCOUNTANT FEES AND SERVICES......................22

      SIGNATURES..............................................................24





                                      - 2 -

<PAGE>



                                     PART I


This report includes  "forward-looking  statements."  All statements  other than
statements of historical  facts  included or  incorporated  by reference in this
report, including, without limitation, statements regarding the Company's future
financial position,  business strategy,  budgets,  projected costs and plans and
objectives of management for future operations, are forward-looking  statements.
In addition,  forward-looking  statements generally can be identified by the use
of  forward-looking  terminology  such as  "may,"  "will,"  "expect,"  "intend,"
"project,"  "estimate,"  "anticipate,"  "believe," or "continue" or the negative
thereof  or  variations  thereon  or similar  terminology.  Although  management
believes that the expectations reflected in such forward-looking  statements are
reasonable,  the Company cannot give any assurance that such  expectations  will
prove to have been correct. Important factors that could cause actual results to
differ  materially  from the Company's  expectations  ("Cautionary  Statements")
include,  but are not limited to,  assumptions about energy markets,  production
levels, reserve levels, operating results,  competitive conditions,  technology,
the availability of capital  resources,  capital  expenditure  obligations,  the
supply and demand for oil and natural  gas,  the price of oil and  natural  gas,
currency exchange rates, the weather,  inflation,  the availability of goods and
services,  drilling risks,  future processing  volumes and pipeline  throughput,
general  economic  conditions  (either  internationally  or nationally or in the
jurisdictions in which the Company is doing business), legislative or regulatory
changes (including changes in environmental regulation,  environmental risks and
liability under federal,  state and foreign environmental laws and regulations),
the  securities or capital  markets and other factors  disclosed  under "Item 6.
Management's Discussion and Analysis or Plan of Operation," "Item 2. Description
of  Property"  and  elsewhere in this report.  All  subsequent  written and oral
forward-looking statements attributable to the Company, or persons acting on its
behalf, are expressly qualified in their entirety by the Cautionary  Statements.
The Company assumes no duty to update or revise its  forward-looking  statements
based on changes in internal estimates or expectations or otherwise.

                                    GLOSSARY


CLASTIC                  Fragments of pre-existing sedimentary rocks.

CRUDE OIL                Mixture of hydrocarbons that exists in the liquid phase
                         in natural underground reservoirs and remains liquid at
                         atmospheric  pressure  after  passing  through  surface
                         separating facilities.

EOCENE                   Early  sub-division  time period of the Tertiary age in
                         geological time.

FLUVIAL                  River-like sediments.

INTER-DELTAIC            Connections  of  alluvial  areas  at the  mouth  of the
                         river.

LAMINATED                Saturated in the deposits.

NATURAL GAS              Mixture  of  hydrocarbons  and  varying  quantities  of
                         non-hydrocarbons  that  exists  either  in the  gaseous
                         phase  or  in   solution   in  crude  oil  in   natural
                         underground reservoirs.

NATURAL GAS  LIQUIDS     Hydrocarbon   components  of  reservoir  gas  that  are
                         liquefied  at the  surface in lease  separators,  field
                         facilities,  or gas processing plants. NGLs include but
                         are not limited to ethane, propane,  butanes,  pentanes
                         plus, natural gasoline, and condensate.

MCF                      One thousand cubic feet.

MIOCENE                  Late  subdivision  time period of the  Tertiary  age in
                         geological time.

MMCF                     One million cubic feet.

NERITIC                  Around the region of shallow seas near a coastline.


                                      - 3 -

<PAGE>




PROVED RESERVES          Proved  reserves of crude oil,  natural gas, or natural
                         gas liquids are estimated  quantities  that  geological
                         and  engineering   data   demonstrate  with  reasonable
                         certainty  to be  recoverable  in the future from known
                         reservoirs under existing economic conditions.

                         Reservoirs   are   considered    proved   if   economic
                         producibility  is  supported  by actual  production  or
                         formation   tests  or  if  core  analysis   and/or  log
                         interpretation demonstrates economic producibility with
                         reasonable   certainty.   The   area  of  a   reservoir
                         considered proved includes (1) that portion  delineated
                         by drilling and defined by fluid contacts,  if any, and
                         (2) the adjoining  portions not yet drilled that can be
                         reasonably  judged as  economically  productive  on the
                         basis of available  geological and engineering data. In
                         the absence of data on fluid contacts, the lowest known
                         structural  occurrence  of  hydrocarbons  controls  the
                         lower proved limit of the  reservoir.  Proved  reserves
                         are estimates of  hydrocarbons  to be recovered  from a
                         given data forward.  They are expected to be revised as
                         hydrocarbons  are produced and  additional  data become
                         available.

                         Proved natural gas reserves comprise non-associated gas
                         and associated/dissolved  gas. An appropriate reduction
                         in gas reserves is required for the expected removal of
                         natural  gas  liquids   and  the   exclusion   of  non-
                         hydrocarbon   gases  if  they   occur  in   significant
                         quantities.

                         Reserves  that can  produced  economically  through the
                         application of established improved recovery techniques
                         are  included in the proved  classification  when these
                         qualifications  are met:  (1)  successful  testing by a
                         pilot project or the operation of an installed  program
                         in that  reservoir  or one with  similar rock and fluid
                         properties   provides   support  for  the   engineering
                         analysis on which the project or program was based, and
                         (2) it is reasonably certain the project will proceed.

PROVED DEVELOPED
RESERVES                 A  subcategory  of  proved  reserves.  They  are  those
                         reserves  that can be expected to be recovered  through
                         existing wells  (including  reserves  behind pipe) with
                         proved  equipment  and  operating   methods.   Improved
                         recovery  reserves  can be  considered  developed  only
                         after an improved recovery project has been installed.

PROVED UNDEVELOPED
RESERVES                 A  subcategory  of  proved  reserves.  They  are  those
                         additional  reserves  that are expected to be recovered
                         from (1) future  drilling of wells,  (2)  deepening  of
                         existing  wells to a  different  reservoir,  or (3) the
                         installation of an improved recovery project.

ROYALTY BURDEN           Payment to the mineral  rights owners from the sales of
                         the produced hydrocarbons as defined in the oil and gas
                         assignment agreement.

TERRIGENOUS              Deposits  formed in the sea from material  derived from
                         erosion.

YEGUA                    Hydrocarbon  bearing sandstone  formation in the Eocene
                         time found in South Texas.




                                      - 4 -

<PAGE>



ITEM 1 - DESCRIPTION OF BUSINESS

SUMMARY

GLOBAL ENERGY INC. (the "Company") was incorporated  under the laws of Nevada on
February  16, 1999,  as Global  Smartcards  Inc. On April 28, 2003,  the Company
changed its name from Global  Smartcards Inc. to Global Energy Inc. The original
Articles  of the  Company  authorized  the  issuance  of  twenty-  five  million
(25,000,000) common shares, par value $0.001 per share.

In connection with its formation,  a total of 2,000,000  shares of the Company's
Common Stock was purchased by the three  founders of the Company on February 18,
1999, for $2,000 in cash, or $0.001 per share.

Between  February 23 and February 28, 1999, the Company sold 1,000,000 shares of
its Common Stock at a price of $0.025 per share to approximately 25 unaffiliated
subscribers.  The offering was  conducted  pursuant to Rule 504 of Regulation D,
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
The Company filed an original Form D with the Securities and Exchange Commission
on or about February 25, 1999.

On August 26, 1999,  the Company  completed a subsequent  offering,  in reliance
upon the exemption from  registration  afforded by Sections 4(2) and 3(b) of the
Securities  Act and  Regulation  D,  promulgated  thereunder.  The Company  sold
1,000,000 shares of Common Stock to 6 additional  unaffiliated  subscribers at a
price of $0.05 per  share.  The total  gross  proceeds  from the  offering  were
$50,000.

On February 4, 2003, the Company sold 600,000  shares of common stock,  to three
unaffiliated  subscribers,  at a price of  $0.05  per  share,  for  total  gross
proceeds of $30,000.  The offering was conducted pursuant to Section 4(2) of the
Securities Act.

In June 2003, the Company issued 50,000 shares of common stock to  Euro-American
Capital Corp.,  at a price of $0.05 per share, as partial  consideration  on the
purchase of certain  working  interests in producing  petroleum  and natural gas
leases. See "Item 2 - Description of Property."

As of March 22, 2004 the Company had four million six hundred and fifty thousand
(4,650,000)  shares of its  $0.001  par value  common  voting  stock  issued and
outstanding  which are held by approximately  thirty-eight  (38) shareholders of
record.

The  Company   originally   planned  to  market   plastic  cards  with  embedded
microprocessors  ("Smart  Cards").  However,  the Company was unable to complete
negotiations  to market  Smart  Cards.  On June 5, 2003,  the Company  purchased
petroleum  and natural  gas  producing  properties,  as  described  in "Item 2 -
Description  of Property",  and commenced  operations as an  independent  energy
company engaged in the acquisition, exploration and development of crude oil and
natural gas properties in the United States. Prior to this date, the Company was
considered a development  stage  enterprise as defined by Statement of Financial
Accounting Standards ("SFAS") No. 7.

SALES AND REVENUE DISTRIBUTION

The Company holds working  interests in two oil and gas leases located in Texas.
See  "Item 2 -  Description  of  Property."  The  Company  sells  its  share  of
petroleum,  natural gas and natural  gas  liquids  produced  from its wells to a
variety of purchasers at the wellhead in the United States. All of its sales are
conducted with unaffiliated  customers.  These purchasers provide a ready market
for all of the Company's  production  and pay the local market price,  which can
fluctuate  based  upon  prevailing  market  conditions.  Due  to the  number  of
purchasers in each area,  management  does not believe that the loss of one or a
number of  purchasers  would pose a  significant  risk to the  continuity of the
Company's operations.  The Company does not maintain significant  inventories of
petroleum or natural gas liquids.



                                      - 5 -

<PAGE>



Total revenues reported for fiscal 2002 and 2003, were as follows:

                                                       YEARS ENDED DECEMBER 31,
                                                      -------------------------
                                                         2003            2002
                                                          $                $
Petroleum and Natural Gas Sales
     - United States                                      72,563              -
                                                      ----------     ----------
                                                          72,563              -
                                                      ----------     ----------
Interest and Other Income
     - United States                                           -              -
     - Canada                                                  -              -
                                                      ----------     ----------
                                                               -              -
                                                      ----------     ----------
Total Revenue                                             72,563              -
                                                      ==========     ==========

COMPETITION

The  Company  competes  with a number of other  companies,  including  major oil
companies and other  independent  operators which are more experienced and which
have  greater  financial  resources.  The  Company  does not hold a  significant
competitive position in the oil and gas industry.

COMPLIANCE WITH GOVERNMENTAL REGULATIONS

In the United  States,  legislation  affecting the oil and gas industry has been
pervasive and is under constant  review for amendment or expansion.  Pursuant to
such  legislation,  numerous  federal,  state and local departments and agencies
have issued extensive rules and regulations  binding on the oil and gas industry
and its  individual  members,  some of which  carry  substantial  penalties  for
failure to comply.  Such laws and regulations  have a significant  impact on oil
and gas drilling, gas processing plants and production activities,  increase the
cost of doing business and, consequently, affect profitability.  Inasmuch as new
legislation  affecting the oil and gas industry is commonplace and existing laws
and regulations are frequently  amended or reinterpreted,  the Company is unable
to  predict  the  future  cost  or  impact  of  complying  with  such  laws  and
regulations.

The Company  considers  the cost of  environmental  protection  a necessary  and
manageable part of its business. Management believes the Company will be able to
plan  for and  comply  with new  environmental  initiatives  without  materially
altering the Company's operating strategies.

EXPLORATION AND PRODUCTION.  The Company's United States  operations are or will
be  subject to  various  types of  regulation  at the  federal,  state and local
levels.  Such regulation  includes  requiring permits for the drilling of wells;
maintaining   bonding   requirements   in  order  to  drill  or  operate  wells;
implementing  spill  prevention  plans;  submitting  notification  and receiving
permits  relating  to  the  presence,  use  and  release  of  certain  materials
incidental to oil and gas operations;  and regulating the location of wells, the
method of  drilling  and casing  wells,  the use,  transportation,  storage  and
disposal of fluids and materials used in connection with drilling and production
activities,  surface usage and the  restoration  of properties  upon which wells
have been drilled,  the plugging and abandoning of wells and the transporting of
production.  The  Company's  operations  are or will be also  subject to various
conservation  matters,  including  the  regulation  of the size of drilling  and
spacing units or proration  units, the number of wells which may be drilled in a
unit, and the unitization or pooling of oil and gas properties.  In this regard,
some states  allow the forced  pooling or  integration  of tracts to  facilitate
exploration  while other states rely on  voluntary  pooling of lands and leases,
which may make it more difficult to develop oil and gas properties. In addition,
state  conservation  laws establish maximum rates of production from oil and gas
wells,  generally  limit the  venting  or flaring  of gas,  and  impose  certain
requirements  regarding the ratable purchase of production.  The effect of these
regulations  is to limit the  amounts of oil and gas the  Company may be able to
produce  from its  wells and to limit the  number of wells or the  locations  at
which the Company may be able to drill.


                                      - 6 -

<PAGE>



ENVIRONMENTAL  AND OCCUPATIONAL  REGULATIONS.  Various federal,  state and local
laws and regulations  concerning the discharge of incidental  materials into the
environment,   the   generation,   storage,   transportation   and  disposal  of
contaminants or otherwise  relating to the protection of public health,  natural
resources,  wildlife  and the  environment,  affect the  Company's  existing and
proposed exploration, development, processing, and production operations and the
costs  attendant  thereto.  These laws and  regulations  increase the  Company's
overall operating expenses.  As of April 12, 2004, the Company does not maintain
any  insurance  for its  operations.  In the  future,  the  Company  may  obtain
insurance,  customary in the industry,  to limit its  financial  exposure in the
event of a substantial environmental claim resulting from sudden,  unanticipated
and accidental  discharges of oil, salt water or other substances.  However, the
Company does not intend to maintain 100% coverage  concerning any  environmental
claim,  and it does not intend to  maintain  any  coverage  with  respect to any
penalty or fine  required to be paid by the Company  because of its violation of
any  federal,  state or local law.  The  Company  is  committed  to meeting  its
responsibilities   to  protect  the   environment   wherever  its  operates  and
anticipates  making increased  expenditures of both a capital and expense nature
as a result of the increasingly stringent laws relating to the protection of the
environment.  The Company cannot predict with any reasonable degree of certainty
its future exposure  concerning such matters.  The Company considers the cost of
environmental  protection  a  necessary  and  manageable  part of its  business.
Management  believes  the  Company  will be able to plan for and comply with new
environmental  initiatives  without materially  altering the Company's operating
strategies.

The Company is are also subject to laws and regulations concerning  occupational
safety and health.  Due to the continued  changes in these laws and regulations,
and the judicial construction of same, the Company is unable to predict with any
reasonable degree of certainty its future costs of complying with these laws and
regulations.  The Company considers the cost of occupational safety and health a
necessary and manageable part of its business.  Management  believes the Company
will be able to plan for and  comply  with new  occupational  safety  and health
initiatives without materially altering its operating strategies.

EMPLOYEES

As of April 12, 2004, the Company had no employees.


ITEM 2 - DESCRIPTION OF PROPERTY

The Company's principal business is in the acquisition of leasehold interests in
petroleum  and natural  gas rights,  and the  exploration  for and  development,
production  and  sale  of  petroleum  and  natural  gas.  All of  the  Company's
properties  are  located in the  continental  United  States.  The  Company is a
minority interest owner in its petroleum and natural gas interests and is not an
operator of any of these properties,  as such, the Company does not have control
over the operation or drilling activities on the properties.

AGREEMENT

On June 5, 2003, the Company finalized an agreement with  Euro-American  Capital
Corp.,  a  private  arm's  length  British  Columbia  company  ("ECC"),  for the
acquisition  of a 6.5%  working  interest  in an oil and gas  lease  in  Wharton
County, Texas (the "Henderson Miocene Field") and a 12.5% working interest in an
oil and gas lease in Live Oak County,  Texas (the "Jackson  Ranch  Field").  The
Henderson  Miocene  Field covers 974.33 acres and the Jackson Ranch Field covers
444.6 acres.  Pursuant to the agreement the Company paid $12,500 cash and issued
50,000 common shares,  at an ascribed  value of $0.05 per share,  to EEC and ECC
transferred to the Company the interests in the Henderson  Miocene Field and the
Jackson Ranch Field together with the same interests in the wells drilled on the
properties. The effective date of the acquisition is January 1, 2003.

PROPERTY DESCRIPTION

The  following   property   descriptions   are  excerpted  from  an  independent
engineering evaluation,  dated April 7, 2004, completed by Petrotech Engineering
Ltd. ("Petrotech"), an independent petroleum consulting firm.


                                      - 7 -

<PAGE>



1.       Henderson Miocene Field, Wharton County, Texas

         Geology

         Wharton  County is located in  District 3 and is defined as Texas Upper
         Gulf Coast by the Texas Railroad Commission.  The subject production is
         from the shallow gas of the Miocene  group.  Miocene  depth varies from
         2,000  feet to 7,000  feet  within  this  district  and is  mostly  gas
         productive.  In this region, the Miocene is quite thick and is composed
         of  terrigenous  clastic  sediments and was  inter-deltaic  area during
         Miocene time. The thickest  section is composed of fine grained neritic
         deposits much of which was brought  there by long- shore  currents from
         the  large  deltas  farther  east;   there  is  rapid  transition  from
         all-marine   deposits;   and  there  are   relatively   few   important
         fluctuations of the shore line.

         Evaluation

         The  Company has  acquired a 6.25%  working  interest  of the  Florence
         Henderson #1 well in the  Henderson  Miocene  Field in Wharton  County,
         Texas as of January 1, 2003.  The total royalty  burden is 23.04%.  The
         lease description is 974.33 acres of land, more or less, in the LP Stem
         Survey,  A-326, Gulf Colorado and Sante Fe Railroad Co., Survey, A-730,
         and the Homer Cryer  Survey,  A-760,  in Wharton  County.  The Florence
         Henderson  #1 well  was  drilled  to a total  depth  of  5,512  feet on
         September  23,  1981.  The well was  completed  in the Miocene  section
         between  2,529 and 2,532 feet.  This is the only single gas well in the
         area.  The cumulative  production  from 1981 to the end of January 2004
         was over  1,186,485 Mcf of gas. The current  operator is Hyquest Energy
         Inc. of Midland, Texas.

2.       Jackson Ranch Field, Live Oak County, Texas

         Geology

         Live Oak County is located in  District 2 and is defined as South Texas
         by the Texas Railroad  Commission.  The subject  production is from the
         Yegua gas of the Eocene sands.

         The Eocene trend extends  southwestward  from the end of the Yegua belt
         in the  Texas  Upper  Gulf  district  to Zapata  County on the  Mexican
         border.  Reservoirs  in  the  Midway  (Poth  sand),  Wilcox  (Carrizo),
         Claiborne  (Yegua),  and Jackson are productive in this belt. Of these,
         the Wilcox is the greatest source of hydrocarbons.

         Prograding Complexes or Low-stand Deltas

         Prograding  complexes  are formed by  deposition of sand and mud at the
         mouth of river  systems  during low stands of relative sea level.  They
         occur in water of shallow to moderate  depth.  In general,  they result
         from point source deltas or fan deltas,  although very strike  elongate
         barrier-bar/strand-plain  sandstones also occur. Substantial amounts of
         slumping  into deeper water are also common.  Most of the larger fields
         to date in the  Expanded  Yegua trend  produce from  sandstones  in the
         prograding complex.

         Rivers make valleys during periods of low sea level.  These valleys are
         the sites of complex  deposition during the ensuring rise in sea level.
         One or more levels of fluvial channel sand are frequently estuarine bay
         head delta,  bay muds,  and barrier bars and spits are also part of the
         bay fill  sequence.  Many  substantial  fields have been found in these
         incised   channel   deposits   and   despite   the   ease  of   seismic
         identification,   more  incised   channel   reservoirs   remain  to  be
         discovered.

         Most of the  production  in the  expanded  Yegua  trend  has been  from
         shallow  marine  deltaic  and  marine  bar   sandstones.   All  of  the
         significant  production has been found within the expansion fault trend
         at the Yegua  shelf  margin.  A series of  highly  productive  normally
         pressured to  over-pressured  gas  reservoirs  have been found with the
         "mid dip"  Yegua.  These  reservoirs  occur in  fluvial  and  estuarine
         sandstones  within the incised valleys that funneled the sand down dip.
         They are  located  either  miles back on the shelf or just updip of the
         expanded trend.  The fields have added some 200 to 300 Bcf to Yegua gas
         reserves,  mostly in the Wharton- Jackson county fairway, but also some
         in Goliad County. Productive sandstones in the established trends range
         from 40 to 800 feet in thickness. They are mostly of very high quality,
         even when they are highly laminated.  Permeabilities  range from 100 to
         1,000  millidarcies  with  porosities  at over 25%. Gas recovery may be
         higher than 1,100 Mcf per acre-foot. The gas is also condensate rich.

                                      - 8 -

<PAGE>



         Yegua Trend

         The Yegua trend in this area occurs as  discreet  sandbars  paralleling
         the  present  Gulf of Mexico  coastline.  The trend is  interrupted  by
         significant down to coast faulting.

         Evaluation

         The Company has acquired a 12.5% working  interest in the Parker #1 and
         #2 wells in the Jackson Ranch Yegua Field in Live Oak County,  Texas as
         of  January  1,  2003.  The total  royalty  burden is 23.0%.  The lease
         description is a tract of land containing a total of 444.6 acres,  more
         or less, out of the 4,152.04 acres "old R. J. Dobie Ranch", situated in
         the  Dinero-Lagarto  Area, Live Oak County,  Texas.  The mineral rights
         only extend to a depth of 6,200 feet below the surface.

         When the new operator (BXP Ltd., of Dallas,  Texas) took over operation
         in the beginning of 2003, they re- arranged the piping  connections and
         instrumentation in both the Parker #1 and Parker #2 wells. As a result,
         the gas  production  in the  Parker #2 well  increased.  This  increase
         caused the pressure of the gas gathering  system to increase.  With the
         increase in pressure of the gas gathering system, Parker #1 well cannot
         deliver  sufficient  pressure,  resulting in a decrease in  production.
         Because the increased gas production in Parker #2 well is a much larger
         amount,  it was  worthwhile to cut back on the gas production in Parker
         #1 well.

         Parker #1 Well

         The  Parker  #1 well was  drilled  to a total  depth  of 5,971  feet on
         November 27,  1982.  The well was  perforated  from 5,275 feet to 5,284
         feet in the Jackson  Ranch Yegua  (5300)  formation  on April 12, 1983.
         This is a single gas well in this formation.  The cumulative production
         from 1983 to the end of January  2004 was over 656,283 Mcf of gas and a
         condensate ratio of over 80 barrels per MMcf of gas.

         Parker #2 Well

         The  Parker  #2 well was  drilled  to a total  depth  of 5,973  feet on
         October 16, 1984. The well was perforated from 5,294 feet to 5,303 feet
         and from 5,333 feet to 5,343 feet in the  Jackson  Ranch  Yegua  (5400)
         formation.  This well  initially  produced oil and was classified as an
         oil well.  On  October  1996,  it was  reclassified  as a gas well with
         perforations  from 5,333 feet to 5,343 feet.  This is also a single gas
         well in this formation.  The cumulative production from 1988 to the end
         of  December  2003 was over  205,683  Mcf of gas and 5,959  barrels  of
         condensate.

OIL AND GAS RESERVES

The Company has not provided any reserve  reports to any federal  authorities or
agencies since January 1, 2003.

The following  tables set forth  information  regarding the Company's  shares of
estimated  proven oil and gas reserve  quantities,  reserve value and discounted
future net revenues.  The reserve  related  information as at December 31, 2003,
was  determined  through an  independent  engineering  evaluation  completed  by
Petrotech.

There are numerous  uncertainties  inherent in  estimating  quantities of proved
reserves and  projecting  future rates of production  and timing of  development
expenditures.  The  following  reserve  information  represents  estimates as at
December 31, 2003 only and should not be construed as being exact:
<TABLE>
<CAPTION>

                                                                                    PRESENT VALUE OF
                                     NET RESERVES                                   ESTIMATED FUTURE
                                    TO THE COMPANY                ESTIMATED            NET REVENUES
                                ----------------------            FUTURE NET        BEFORE INCOME TAXES
                                 GAS              OIL              REVENUES          DISCOUNTED AT 10%
                                (MCFS)           (BBLS)              ($)                   ($)
<S>                           <C>              <C>               <C>                   <C>

Proved developed reserves       63,682           1,264             155,809               105,975
                                ======           =====             =======               =======
</TABLE>

                                      - 9 -

<PAGE>



The constant  prices at December 31, 2003,  were $5.18 per Mcf of gas and $30.71
per barrel of condensate.  The net reserve is the Company's  share of production
after deduction of royalties.

The  estimated  cash flow  values do not  represent  a fair  market  value.  The
abandonment costs of these wells have not been included as the salvage values of
the wellhead, tubing, and facilities are estimated to be the same.

In reviewing  the reserves  estimates  provided  above,  it should be noted that
there  are  inherent  uncertainties  and  limitations  with  both  the  database
available for analysis and the interpretation of such engineering and geological
data.  The judgements  used in assessing the reserves are considered  reasonable
given the  knowledge of the property  reviewed.  Pertinent  information  such as
extent and  character of ownership  and all factual data obtained by the Company
are believed to be true. A field  inspection of the properties was not conducted
due to the available data.

ACREAGE

As of December 31, 2003,  the Company  holds  1,418.93  gross acres  (116.47 net
acres)  of  condensate  and  gas  developed  acreage  in  Texas.  There  are  no
undeveloped leases.

VOLUMES, PRICES AND PRODUCTION COSTS

The following  table sets forth  certain  information  regarding the  production
volumes,  average prices received and average  production  costs associated with
the Company's sale of oil and gas for the year ended December 31, 2003:


                                                               YEAR ENDED
                                                            DECEMBER 31, 2003
                                                       -------------------------
Net production:
     Condensate (bbls)                                             233
     Gas (Mcf)                                                  13,006

Average sales price:
    Condensate (per bbl)                                        $27.60
    Gas (per Mcf)                                                $5.08
Average production cost (Mcf)                                    $1.02

DRILLING ACTIVITY

During  fiscal  2003,  the Company did not  participate  in the  drilling of any
wells.

CURRENT ACTIVITIES

There are no wells currently  being drilled or contemplated  for drilling on any
of the Company's lease interests.

PRODUCTIVE OIL AND GAS WELLS/ACRES

The  following  table sets forth  certain  information  regarding  the Company's
ownership as of April 12, 2004, of productive oil and gas wells and acres in the
areas indicated.

                                                              GROSS        NET
                                                              WELLS       WELLS
                                                             -------     -------
Gas                                                             3         0.3125
                                                             =======     =======

                                                              GROSS        NET
                                                              ACRES       ACRES
                                                             -------     -------
Gas                                                          1418.93      116.47
                                                             =======     =======

                                     - 10 -

<PAGE>

UNDEVELOPED ACREAGE

The Company does not own any undeveloped acreage.

ITEM 3 - LEGAL PROCEEDINGS

There are no legal  proceedings  to which the Company is a party nor to the best
of the knowledge of management, are any material legal proceedings contemplated.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

No matters were  submitted to a vote by  shareholders  of the Company during the
fourth quarter of the fiscal year ended December 31, 2003.



                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no public market for the common shares of Global.

DIVIDENDS

Global  has not  paid  any  cash  dividends  on its  common  stock  and does not
anticipate paying any cash dividends in the foreseeable future. Global currently
intends to retain future earnings, if any, to fund the development and growth of
its business.  Any future  determination  to pay cash  dividends  will be at the
discretion  of the  board of  directors  and  will be  dependent  upon  Global's
financial  condition,   operating  results,  capital  requirements,   applicable
contractual  restrictions  and other  factors  as the board of  directors  deems
relevant.

STOCK OPTIONS AND SHARE PURCHASE WARRANTS

There are no outstanding  stock options or share  purchase  warrants to purchase
securities of the Company.

OUTSTANDING SHARES AND SHAREHOLDERS OF RECORD

As of April 12,  2004,  the  Company  had four  million  six  hundred  and fifty
thousand  (4,650,000)  shares of its $0.001 par value common voting stock issued
and outstanding  which are held by approximately  thirty-eight (38) shareholders
of record.


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

OVERVIEW

Global Energy Inc. (the "Company") was organized on February 16, 1999, under the
laws of the State of Nevada, U.S.A. as Global Smartcards Inc. On April 28, 2003,
the Company changed its name to Global Energy Inc.

The  Company   originally   planned  to  market   plastic  cards  with  embedded
microprocessors  ("Smart  Cards").  However,  the Company was unable to complete
negotiations to market Smart Cards. By agreement dated June 5, 2003, the Company
purchased   petroleum  and  natural  gas  producing   properties  and  commenced
operations  as  an  independent  energy  company  engaged  in  the  acquisition,
exploration  and  development  of crude oil and  natural gas  properties  in the
United  States.  Prior to this date,  the Company was  considered a  development
stage  enterprise  as defined by  Statement of  Financial  Accounting  Standards
("SFAS") No. 7.


                                     - 11 -

<PAGE>



Substantially  all of the  Company's  oil and  gas  exploration  activities  are
conducted jointly with others. Because the Company owns an undivided interest in
each asset and is  proportionately  liable for its share of each liability,  the
consolidated financial information reflects the Company's proportionate interest
in such  activities.  The Company  sells all of its oil and gas  production on a
spot basis and does not utilize forward sales  contracts.  The Company is not an
operator of any of its oil and gas properties.

SIGNIFICANT ACCOUNTING POLICIES

(a)      Accounting Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities and 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 and assumptions.

         The oil and gas industry is subject,  by its nature,  to  environmental
         hazards  and  clean-up  costs.  At this  time,  management  knows of no
         substantial costs from environmental  accidents or events for which the
         Company may be currently liable. In addition, the Company's oil and gas
         business makes it vulnerable to changes in wellhead prices of crude oil
         and natural gas.  Such prices have been volatile in the past and can be
         expected to be volatile in the future.

(b)      Cash Equivalents

         Cash equivalents  comprise of certain highly liquid  instruments with a
         maturity of three  months or less when  purchased.  As of December  31,
         2003 and December 31, 2002, there were no cash equivalents.

(c)      Concentration of Credit Risk

         The  Company  places  its cash and cash  equivalents  with high  credit
         quality financial  institutions.  As of December 31, 2003 and 2002, the
         Company has no funds placed in a bank beyond insured limits.

(d)      Revenue Recognition

         The Company  recognizes  petroleum  and natural gas  revenues  from its
         interests in producing  wells as petroleum  and natural gas is produced
         and  sold  from  these  wells.   The  Company  has  no  gas   balancing
         arrangements   in  place.   Petroleum  and  natural  gas  sold  is  not
         significantly different from the Company's product entitlement.

(e)      Petroleum and Natural Gas Interests

         The Company  follows the full cost method of  accounting  for petroleum
         and natural gas operations.  Under this method all costs related to the
         exploration  for and  development of petroleum and natural gas reserves
         are  capitalized  on a  country-by-country  basis.  Costs include lease
         acquisition  costs,  geological  and  geophysical  expenses,   overhead
         directly related to exploration and development activities and costs of
         drilling both productive and  non-productive  wells.  Proceeds from the
         sale of properties are applied against  capitalized costs,  without any
         gain or loss being recognized,  unless such a sale would  significantly
         alter the rate of depletion and depreciation.

         Depletion of exploration  and  development  costs and  depreciation  of
         production  equipment is provided using the  unit-of-production  method
         based upon  estimated  proven  petroleum and natural gas reserves.  The
         costs of  significant  unevaluated  properties  are excluded from costs
         subject to depletion. For depletion and depreciation purposes, relative
         volumes of  petroleum  and  natural gas  production  and  reserves  are
         converted into equivalent units based upon relative energy content.


                                     - 12 -

<PAGE>



         In applying the full cost method,  the Company  performs a ceiling test
         whereby the carrying  value of petroleum  and natural gas interests and
         production  equipment,  net  of  deferred  income  taxes,  is  compared
         periodically to an estimate of future net cash flow from the production
         of proven reserves. Net cash flow is estimated using period end prices,
         less  estimated  future  expenditures  to be incurred in developing and
         producing the proved reserves and income taxes.  Should this comparison
         indicate  an excess  carrying  value,  the  excess is  charged  against
         earnings.

         Substantially   all  of  the   Company's   petroleum  and  natural  gas
         exploration,   development  and  production  activities  are  conducted
         jointly  with  others  and,  accordingly,   the  accounts  reflect  the
         Company's proportionate interest in such activities.

(f)      Impairment

         The Company has adopted SFAS 144,  "Accounting  for the  Impairment  or
         Disposal of Long-Lived Assets" which requires that long-lived assets to
         be held and used be reviewed for impairment  whenever events or changes
         in circumstances  indicate that the carrying amount of an asset may not
         be  recoverable.  SFAS 144  established a single  accounting  model for
         long-lived  assets to be  disposed of by sale.  Oil and gas  properties
         accounted  for  using  the full cost  method  of  accounting,  a method
         adopted by the Company,  are excluded from this  requirement,  but will
         continue to be subject to the ceiling test limitations.

(g)      Foreign Currency Translation

         The Company maintains its accounting records in U.S. dollars.

         At the transaction date, each asset, liability,  revenue and expense is
         translated into U.S.  dollars by the use of the exchange rate in effect
         at that date. At the period end,  monetary  assets and  liabilities are
         translated  into U.S.  dollars by using the exchange  rate in effect at
         that date. The resulting foreign exchange gains and losses are included
         in operations.

(h)      Fair Value of Financial Instruments

         Fair value  estimates of financial  instruments  are made at a specific
         point in time, based on relevant  information  about financial  markets
         and specific financial  instruments.  As these estimates are subjective
         in  nature,   involving   uncertainties   and  matters  of  significant
         judgement,  they  cannot  be  determined  with  precision.  Changes  in
         assumptions can significantly affect estimated fair values.

         Fair  value   approximates  the  amounts  reflected  in  the  financial
         statements  for  cash,   amounts   receivable  and  accounts   payable.
         Management  is of the  opinion  that  the  Company  is not  exposed  to
         significant  interest,  credit or  currency  risks  arising  from these
         financial instruments.

(i)      Income Taxes

         The Company has adopted SFAS 109,  "Accounting for Income Taxes", which
         requires the Company to recognize  deferred tax  liabilities and assets
         for the  expected  future  tax  consequences  of events  that have been
         recognized in the Company's  financial  statements or tax returns using
         the liability method.  Under this method,  deferred tax liabilities and
         assets are determined  based on the temporary  differences  between the
         financial  statement  and tax bases of  assets  and  liabilities  using
         enacted tax rates in effect in the years in which the  differences  are
         expected to reverse.

(j)      Earnings (Loss) Per Share

         Net earnings  (loss) per share is provided in accordance with SFAS 128,
         "Earnings Per Share".  Basic  earnings  (loss) per share is computed by
         dividing  losses  available  to  common  stockholders  by the  weighted
         average number of common shares outstanding during the period.  Diluted
         earnings  (loss) per share  reflects per share  amounts that would have
         resulted if dilative  common stock  equivalents  had been  converted to
         common stock.  As of December 31, 2003,  2002 and 2001, the Company has
         no dilutive common stock equivalents such as stock options.

                                     - 13 -

<PAGE>



(k)      New Technical Pronouncements

         In  June  2001,  the  FASB  issued  SFAS  143,  "Accounting  for  Asset
         Retirement  Obligations."  FAS 143 addresses  financial  accounting and
         reporting for  obligations  associated  with the retirement of tangible
         long-lived  assets and the associated asset retirement  costs. SFAS 143
         generally requires obligations  associated with asset retirements to be
         recognized   earlier  and  displayed  as  liabilities  rather  than  as
         contra-assets.  The pronouncement is effective for financial statements
         issued for fiscal years  beginning after June 15, 2002. The adoption of
         SFAS 143 does not have any impact on the Company's  financial  position
         or results of operations.

         In November  2002,  the FASB issued  Interpretation  No. 45 ("FIN 45"),
         "Guarantor's  Accounting and Disclosure  Requirements  for  Guarantees,
         Including   Indirect   Guarantees  of   Indebtedness  of  Others  -  An
         Interpretation  of FASB Statements No. 5, 57, and 107 and Rescission of
         FASB  Interpretation  No.  34".  This   interpretation   clarifies  the
         requirements  for a  guarantor's  accounting  for  and  disclosures  of
         certain  guarantees  issued and outstanding.  FIN 45 also clarifies the
         requirements  related to the  recognition of a liability by a guarantor
         at the  inception of a guarantee.  FIN 45 is effective  for  guarantees
         entered into or modified  after  December 31, 2002. The adoption of FIN
         45 does not have an impact on the Company's financial statements.

         In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
         Compensation  - Transition and  Disclosure."  SFAS 148 amends SFAS 123,
         "Accounting  for  Stock-Based  Compensation",  to  provide  alternative
         methods for  voluntary  transition  to SFAS 123's fair value  method of
         accounting  for  stock-based  employee  compensation.   SFAS  148  also
         requires  disclosure  of the effects of an entity's  accounting  policy
         with  respect to  stock-based  employee  compensation  on reported  net
         income  (loss) and  earnings  (loss)  per share in annual  and  interim
         financial  statements.  The  provisions  of SFAS 148 are  effective  in
         fiscal years  beginning  after  December 15, 2002. The adoption of SFAS
         148 does not have any impact on the  Company's  financial  position  or
         results of operations.

         In January 2003,  the FASB released  FASB  Interpretation  No. 46 ("FIN
         46"),  "Consolidation of Variable Interest  Entities".  FIN 46 requires
         that  all  primary   beneficiaries   of  variable   interest   entities
         consolidate that entity.  FIN 46 is effective  immediately for variable
         interest  entities  created  after  January  31,  2003 and to  variable
         interest entities in which an enterprise obtains an interest after that
         date. It applies in the first fiscal year or interim  period  beginning
         after  June  15,  2003  to  variable  interest  entities  in  which  an
         enterprise  holds a variable  interest it acquired  before  February 1,
         2003. In December  2003,  the FASB published a revision to FIN 46 ("FIN
         46R") to clarify some of the  provisions of the  interpretation  and to
         defer the effective date of implementation for certain entities.  Under
         the  guidance  of FIN  46R,  entities  that do not  have  interests  in
         structures that are commonly  referred to as special  purpose  entities
         are required to apply the provisions of the interpretation in financial
         statements for periods ending after March 14, 2004. The Company did not
         create a variable  interest  entity after January 31, 2003 and does not
         have a variable  interest  entity as of December 31, 2003. The adoption
         of FIN 46R in 2004 does not have an impact on the  Company's  financial
         position or results of operations.

         In April 2003,  the FASB issued SFAS 149,  "Amendment  of Statement No.
         133 on Derivative  Instruments and Hedging Activities." SFAS 149 amends
         certain portions of SFAS 133 and is effective for all contracts entered
         into or  modified  after  June 30,  2003 on a  prospective  basis.  The
         adoption  of SFAS 149 is not  expected to have an effect on the results
         of  operations  or financial  position of the Company since the Company
         currently has no derivatives or hedging contracts.

         In June  2003,  the FASB  issued  SFAS  150,  "Accounting  for  Certain
         Financial  Instruments  with  Characteristics  of both  Liabilities and
         Equity".  SFAS 150 establishes  standards for how an issuer  classifies
         and measures certain financial instruments with characteristics of both
         liabilities and equity. SFAS 150 is effective for financial instruments
         entered into or modified after May 31, 2003, and otherwise is effective
         at the beginning of the first interim period  beginning  after June 15,
         2003. The adoption of SFAS 150 is not expected to have an effect on the
         Company's financial position.


                                     - 14 -

<PAGE>



(l)      Comprehensive Income

         The Company has adopted  SFAS 130,  "Reporting  Comprehensive  Income",
         which established  standards for reporting and display of comprehensive
         income,  its  components  and  accumulated  balances.  The  Company  is
         disclosing this  information on its Statement of  Stockholders'  Equity
         (Deficiency).   Comprehensive  income  comprises  equity  except  those
         resulting from investments by owners and distributions to owners.


(m)      Intangible Assets

         The  Company  has  adopted  SFAS 142,  "Goodwill  and Other  Intangible
         Assets",  which  requires  that  goodwill  and  intangible  assets with
         indefinite  life are not amortized but rather tested at least  annually
         for impairment.  Intangible assets with a definite life are required to
         be amortized over their useful life or estimated useful life.

         The  Company  does not have any  goodwill  nor  intangible  assets with
         indefinite or definite life since inception.

(n) Accounting for Derivative Instruments and Hedging Activities

         The  Company  has  adopted  SFAS  133,   "Accounting   for   Derivative
         Instruments  and  Hedging  Activities",  which  requires  companies  to
         recognize all derivatives  contracts as either assets or liabilities in
         the  balance  sheet  and to  measure  them at fair  value.  If  certain
         conditions  are met, a derivative may be  specifically  designated as a
         hedge,  the  objective  of which is to match the timing of gain or loss
         recognition on the hedging  derivative  with the recognition of (i) the
         changes  in the fair value of the hedged  asset or  liability  that are
         attributable  to the  hedged  risk or (ii) the  earnings  effect of the
         hedged  forecasted  transaction.  For a derivative  not designated as a
         hedging  instrument,  the gain or loss is  recognized  in income in the
         period of change.

         The Company has not entered into derivative  contracts  either to hedge
         existing risks or for speculative purposes.

(o)      Advertising Expenses

         The  Company  expenses  advertising  costs as  incurred.  There were no
         advertising  expenses  incurred  by the  Company  for the  years  ended
         December 31, 2003, 2002 and 2001.

OPERATIONS

The  following  discussion  of the results of  operations of the Company for the
fiscal  years  ended  December  31,  2003,  2002,  and  2001  should  be read in
conjunction  with the  financial  statements  of the Company  and related  notes
included therein.

YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002

With the  acquisition  of the  petroleum  and  natural gas  properties,  with an
effective  purchase  date of January 1, 2003,  the Company  recorded  $72,563 of
revenues  during  fiscal 2003.  This was  comprised  of $66,133  (13,006 mcf) of
natural gas sales and $6,430 (233 barrels) of condensate sales. Production costs
of $14,682 were incurred and depletion of $2,521 was recorded for 2003.

During the year ended  December  31,  2003,  the  Company  incurred  $32,795 for
general  and  administrative  expenses,  an  increase  of  $27,377,  from $5,418
reported  for the  comparable  period in 2002.  The  increase is  attributed  to
increased legal,  regulatory filing and transfer agent costs incurred to prepare
documents for the Company's common stock financing and name change.  The Company
also paid $10,000 for consulting services.



                                     - 15 -

<PAGE>



YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

During the year ended December 31, 2002, the Company incurred $5,418 for general
and administrative expenses, a decrease of $14,231 from $19,649 reported for the
2001 year.  Expenses  incurred in 2002 consisted of $655 for audit fees,  $1,109
for legal expenses,  $2,569 for accounting and administration fees paid to Chase
Management Ltd. ("Chase"), a company controlled by the President of the Company,
and $1,085 for office and miscellaneous  expenses.  The significant  decrease in
general and  administrative  expenses in 2002 compared to 2001 was primarily due
to $7,600 of consulting fees paid to the former President of the Company in 2001
(no fees were paid in 2002) and significant  fees and costs incurred in 2001 for
regulatory  reporting and accounting  services  provided by third  parties,  the
majority of which were provided by Chase in 2002.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31,  2003,  the Company had working  capital of $33,545.  At this
stage of its business, the Company has sufficient positive cash flow to fund its
ongoing  overhead  and has no planned  capital  expenditures.  However,  it will
continue to identify and review other  business  and  investment  opportunities.
This may entail significant funding requirements. The Company is seeking to have
its shares quoted on the Over-the-Counter  Bulletin Board system (the "OTC-BB");
however,  there  are no  assurances  that  the  Company  will be able to  obtain
approval for such quotations from the National Association of Securities Dealers
(the "NASD").  Management  believes  having the shares quoted on the OTC-BB will
assist the Company with fund raising activities.  The Company may be required to
seek to raise additional  capital via a private  placement  offering pursuant to
Regulation "D" Rule 505 or 506 or a private placement in the event the Company's
shares are listed for  quotation  on the OTC-BB.  If the Company  needs to raise
additional  funds, any additional funds raised through the issuance of equity or
convertible  debt  securities,  will result in the  dilution  of the  percentage
ownership  of the  stockholders  of the  Company  and such  securities  may have
rights, preferences or privileges senior to those of the Company's common stock.
The Company does not currently have any contractual  restrictions on its ability
to incur debt and,  accordingly,  the Company could incur significant amounts of
indebtedness  to finance its  operations.  Any such  indebtedness  could contain
covenants  which  would  restrict  the  Company's  operations.  There  can be no
assurance that additional  financing will be available on terms favorable to the
Company,  or at all. If adequate funds are not available or are not available on
acceptable  terms,  the Company may not be able take  advantage  of  acquisition
opportunities,  or respond to competitive  pressures.  The Company does not have
any  preliminary  agreements  or  understandings  between  the  Company  and its
stockholders/officers  and  directors  with  respect  to loans or  financing  to
operate the Company.

The Company  currently does not expect to purchase or sell any of its equipment,
since it owns no equipment.

PLAN OF OPERATIONS

At the present time,  the  Company's  producing oil and gas assets are providing
sufficient  cash  flow to fund  all  current  operating  activities.  Management
believes  that the  Company  will not  require  additional  funds in the next 12
months to maintain its current level of operations.  At this time,  there are no
exploration programs required on the Company's properties.  The Company,  within
the next 12 months,  plans to review other  properties for possible  acquisition
and if an  acquisition  is pursued  additional  funding  may be  required.  Such
financing may include the issuance of additional  common stock.  However,  there
are no assurances that the Company will be able to identify any other properties
for  acquisition or will be able to complete any such  acquisition.  The Company
does not expect any significant changes in the number of employees.

Management  feels  having the shares  quoted on the OTC-BB will give them better
access to the capital markets to raise additional funding for future planned oil
and gas acquisitions and drilling opportunities.

OFF BALANCE SHEET ARRANGEMENTS

The Company does not have any material off balance sheet  arrangements that have
or are  reasonably  likely to have a current or future  effect on the  Company's
financial  condition,  changes in  financial  condition,  revenues or  expenses,
results of operations, liquidity, capital expenditures or capital resources.

                                     - 16 -

<PAGE>



ITEM 7 - FINANCIAL STATEMENTS


                               GLOBAL ENERGY INC.
    FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

                                Table of Contents

                                                                        Page No.

Independent Accountants' Report dated March 22, 2004 .... ...................F-2
Financial Statements:
         Balance Sheets as at December 31, 2003 and 2002.....................F-3
         Statements of Operations for the Years Ended
            December 31, 2003, 2002 and 2001.................................F-4
         Statement of Stockholders' Equity (Deficiency) for the
            Years Ended December 31, 2003, 2002 and 2001.....................F-5
         Statements of Cash Flows for the Years Ended
            December 31, 2003, 2002 and 2001.................................F-6
         Notes to Financial Statements for the Years Ended
            December 31, 2003, 2002 and 2001.................................F-7


ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.

ITEM 8A - CONTROLS AND PROCEDURES

As required by SEC rules,  the Company has  evaluated the  effectiveness  of the
design and operation of its disclosure controls and procedures at the end of the
period  covered  by this  report.  This  evaluation  was  carried  out under the
supervision and with the  participation of the Company's  management,  including
Mr. DeMare the Company's  principal  executive  officer and principal  financial
officer. Based on this evaluation,  Mr. DeMare has concluded that the design and
operation of the Company's  disclosure  controls and  procedures  are effective.
There were no changes in the Company's internal control over financial reporting
or in other factors that have materially  affected,  or are reasonably likely to
materially affect, the Company's internal control over financial reporting.

Disclosure  controls  and  procedures  are  the  Company's  controls  and  other
procedures that are designed to ensure that information required to be disclosed
by the Company in the reports  that its files or submits  under the Exchange Act
is  recorded,  processed,  summarized  and  reported,  within  the time  periods
specified  in the SEC's  rules and forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information required to be disclosed by the Company in the reports that it files
or  submits  under the  Exchange  Act is  accumulated  and  communicated  to the
Company's  management,  including its principal  executive officer and principal
financial officer, as appropriate,  to allow timely decisions regarding required
disclosure.


                                     - 17 -

<PAGE>



                                    PART III


ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT



NAME                 AGE       POSITION
-----------          ---       ------------------------------------------------
Nick DeMare           49       PRESIDENT, CHIEF EXECUTIVE OFFICER, TREASURER,
                               SECRETARY AND DIRECTOR, SINCE SEPTEMBER 30, 2002.

DEAN ROGERS           51       DIRECTOR SINCE JANUARY 7,2004.


NICK DEMARE (AGE 49), PRESIDENT, CFO, SECRETARY AND DIRECTOR

Mr.  DeMare holds a Bachelor of Commerce  degree from the  University of British
Columbia  and is a  member  in  good  standing  of the  Institute  of  Chartered
Accountants  of British  Columbia.  Since  May,  1991,  Mr.  DeMare has been the
President  of  Chase,  a  private  company  which  provides  a  broad  range  of
administrative,   management  and  financial  services  to  private  and  public
companies  engaged  in  mineral  exploration  and  development,  gold and silver
production,  oil and gas  exploration  and production and venture  capital.  Mr.
DeMare  indirectly owns 100% of Chase. Mr. DeMare currently serves as an officer
and director of the following other public reporting companies:



NAMES OF REPORTING ISSUERS         POSITIONS HELD                      MARKET
------------------------------     -------------------------        ------------
Aguila American Resources Ltd.     Director                             TSXV
Andean American Mining Corp.       Director & Secretary                 TSXV
California Exploration Ltd.        Director, President & CEO        TSXV & OTCBB
Dial Thru International Inc.       Director                             OTCBB
GGL Diamond Corp.                  Director                             TSXV
Gold Point Exploration Ltd.        Director & President                 TSXV
Golden Peaks Resources Ltd.        Director                             TSXV
Goldmarca Limited                  Director                             TSXV
Halo Resources Ltd.                Director, President & CEO        TSXV & OTCBB
Hilton Resources Ltd.              Director, President & CEO        TSXV & OTCBB
Kookaburra Resources Ltd.          Director                             TSXV
Lariat Resources Ltd.              Director                             TSXV
Medina International Corp.         Director, Secretary,
                                      Treasurer & CFO                Pink Sheets
Tinka Resources Limited            Director, President &
                                      Secretary                         TSXV
Tumi Resources Limited             Director                         TSXV & OTCBB


DEAN ROGERS (AGE 51), DIRECTOR

Mr. Rogers holds a Bachelor of Science in Civil  Engineering from the University
of Wyoming.  Since 1992, Mr. Rogers has been an independent consultant to public
and private petroleum companies.  Mr. Rogers specializes in consulting primarily
in the Denver- Julesberg Basin of Colorado, as well as Wyoming,  Oklahoma, Texas
and  Alberta,  Canada.  Mr.  Rogers  does not  currently  serve as an officer or
director of any other public reporting companies.



                                     - 18 -

<PAGE>



SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Mr.  DeMare became an officer and director of the Company on September 30, 2002.
As such,  he was  required  to file a Form 3 with the  Securities  and  Exchange
Commission  on or before  October 10, 2002.  As of the date of this report,  Mr.
DeMare  has not filed a Form 3. At the time he became an officer  and  director,
Mr. DeMare did not own any shares of the Company's  common stock. On December 6,
2002, Mr. DeMare filed a Form 4 setting forth the details of his  acquisition of
1,712,500  shares of common stock on December 3, 2002.  Under the revised  rules
adopted  by the  Securities  and  Exchange  Commission,  the  Form 4 was  due on
December  5,  2002.  None  of  the  Company's  former  directors,  officers,  or
beneficial  owners of more than 10% of the  common  stock has filed any  reports
required  by Section  16(a) of the  Securities  Exchange  Act of 1934 during the
prior fiscal year.

COMMITTEES

The Company does not have any audit,  compensation,  and executive committees of
its  board of  directors.  The  entire  board of  directors  is  serving  as the
Company's audit  committee.  At this time, the board of directors has determined
that Mr. DeMare meets the requirements of an audit committee  financial  expert.
Mr. DeMare is not considered  "independent" as that term is defined in Rule 4200
of the NASD.

CONFLICTS OF INTEREST

Mr.  DeMare is  associated  with other  firms  involved  in a range of  business
activities.  Consequently, there are potential inherent conflicts of interest in
his acting as an officer and director of the Company.  Insofar as Mr.  DeMare is
engaged in other business activities,  management anticipates he will not devote
all of his time to the Company's affairs.

The  Company's  officers  and  directors  are now and may in the  future  become
shareholders,  officers or directors of other companies, which may be formed for
the  purpose  of  engaging  in  business  activities  similar  to  the  Company.
Accordingly,  additional  direct  conflicts  of interest may arise in the future
with  respect  to such  individuals  acting on behalf  of the  Company  or other
entities.  Moreover,  additional conflicts of interest may arise with respect to
opportunities which come to the attention of such individuals in the performance
of their duties or  otherwise.  Currently,  the Company does not have a right of
first refusal  pertaining to opportunities  that come to management's  attention
and may relate to the Company's business operations.

The  Company's  officers  and  directors  are,  so long as they are  officers or
directors  of the Company,  subject to the  restriction  that all  opportunities
contemplated by the Company's plan of operation  which come to their  attention,
either  in the  performance  of their  duties or in any  other  manner,  will be
considered  opportunities  of,  and be made  available  to the  Company  and the
companies  that they are  affiliated  with on an equal  basis.  A breach of this
requirement will be a breach of the fiduciary duties of the officer or director.
If the  Company or the  companies  with which the  officers  and  directors  are
affiliated both desire to take advantage of an  opportunity,  then said officers
and directors would abstain from  negotiating  and voting upon the  opportunity.
However, all directors may still individually take advantage of opportunities if
the Company should decline to do so. Except as set forth above,  the Company has
not  adopted  any  other  conflict  of  interest  policy  with  respect  to such
transactions.

CODE OF ETHICS

The Company has not yet adopted a code of ethics that  applies to the  Company's
principal executive officers,  principal financial officer, principal accounting
officer  or  controller,  or persons  performing  similar  functions.  Given the
Company's  current  operations,  management does not believe a code of ethics is
necessary at this stage of the Company's development.



                                     - 19 -

<PAGE>



ITEM 10 - EXECUTIVE COMPENSATION

The  following  table sets  forth  certain  compensation  paid or accrued by the
Company to former and current  officers  during the fiscal years ended  December
31, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
                                                                              LONG TERM COMPENSATION
                                                                         --------------------------------
                                                                                  AWARDS          PAYOUTS
                                               ANNUAL COMPENSATION       ----------------------   -------
                                            -------------------------                SECURITIES
                                                                OTHER    RESTRICTED  UNDERLYING                ALL
                                                               ANNUAL      STOCK     OPTIONS/                 OTHER
                                   YEAR                        COMPEN-     AWARDS       SARS        LTIP      COMPEN-
NAME AND PRINCIPAL POSITION       ENDING    SALARY    BONUS    SATION       ($)        (#)        PAYOUTS     SATION
                                  ------    -------------------------    ----------------------   -------    ---------
<S>                              <C>      <C>        <C>       <C>        <C>        <C>          <C>      <C>

Nick DeMare (1)                    2003      Nil       Nil       Nil         Nil        Nil         Nil      $5,656(2)
President, Chief Executive
Officer, Secretary, Treasurer
and Director
                                   2002      Nil       Nil       Nil         Nil        Nil         Nil      $2,569(2)

Georgios Polyhronopoulos (1)       2002      Nil       Nil       Nil         Nil        Nil         Nil         Nil
(former President, Chief
Executive Officer and
Director)
                                   2001     $7,600     Nil       Nil         Nil        Nil         Nil         Nil
</TABLE>

(1)      On September 30, 2002, Mr. Polyhronopoulos resigned as President, Chief
         Executive  Officer  and  Director  of the  Company  and Mr.  DeMare was
         elected as  Director  of the Company  and  appointed  President,  Chief
         Executive Officer, Secretary and Treasurer of the Company.
(2)      Charged  by Chase, a private company owned by Nick DeMare,  for office,
         secretarial and accounting services performed.

OPTION GRANTS IN LAST FISCAL YEAR

Since its inception, the Company has not granted any stock options.

COMPENSATION OF DIRECTORS

None  of  the  Directors  of the  Company  received  director's  fees  or  other
compensation  in fiscal 2003.  However,  Chase, a private  company owned by Nick
DeMare, provides office, secretarial and accounting services. During fiscal 2003
and 2002, the Company was charged $5,656 and $2,569, respectively,  by Chase. As
at December 31, 2003, $2,614 remained unpaid.

EMPLOYMENT CONTRACTS

The  Company  does not  currently  have any  employment  agreements  in  effect.
However, Chase bills the Company for office, secretarial and accounting services
provided.  The  rates  charged  by  Chase to the  Company  are the same as those
charged by Chase to other arm's-length companies.


ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of April 12, 2004,  information  with respect
to the beneficial ownership by each person who is known to the Company to be the
beneficial  owner of more  than 5% of the  Company's  common  shares  and of Mr.
DeMare. All persons named below have sole voting and investment power over their
shares except as otherwise  noted.  the Company's common stock is the only class
of voting securities outstanding.


                                     - 20 -

<PAGE>



                                       AMOUNT AND NATURE
NAME AND ADDRESS                         OF BENEFICIAL             PERCENTAGE OF
OF BENEFICIAL OWNER                       OWNERSHIP                   CLASS (1)
-----------------------------------    -----------------           -------------

Nick DeMare                              1,712,500(2)                   36.83%
#1305-1090 West Georgia Street
Vancouver, British Columbia,
Canada V6E 3V7
President, Chief Executive Officer,
Secretary,Treasurer and Director

Dean Rogers                                    -0-                         -0-
871 Greeley Ave.
Johnstown, Colorado 80534

Officers and Directors,
as a group (2 persons)                   1,712,500(2)                   36.83%

(1)      Where persons listed on this table have the right to obtain  additional
         shares of common stock through the exercise of  outstanding  options or
         warrants  or through the  conversion  of  debentures  within 60 days of
         April 12, 2004,  these  additional  shares are deemed to be outstanding
         for the purpose of computing  the  percentage  of common stock owned by
         such persons,  but are not deemed to be outstanding  for the purpose of
         computing the percentage owned by any other person.  Based on 4,650,000
         shares of common stock outstanding as of April 12, 2004.
(2)      These shares  are held by Mr. DeMare through DNG Capital Corp. (USA), a
         company indirectly wholly owned by Mr. DeMare.

STOCK OPTION PLAN

The Company does not have a stock option plan.

PENSION PLANS

The Company does not have a defined  benefit  pension plan that provides  annual
benefits to any Executive Officers.

CHANGE OF CONTROL

As of the date of this report,  there are no  arrangements  known to the Company
which may at a subsequent date result in a change of control of the Company.


ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Other than as disclosed  below,  during the fiscal years ended December 31, 2003
and  2002,  none of the  Company's  present  directors,  officers  or  principal
shareholders,  nor any family member of the  foregoing,  nor, to the best of the
Company's information and belief, any of the Company's former directors,  senior
officers  or  principal  shareholders,  nor any  family  member  of such  former
directors, officers or principal shareholders, has or had any material interest,
direct or indirect, in any transaction, or in any proposed transaction which has
materially affected or will materially affect us.

During the fiscal  years  ended  December  31,  2003 and 2002,  the  Company was
charged $5,656 and $2,569,  respectively,  by Chase, a private  company owned by
Nick DeMare (the Company's  President,  Chief Executive  Officer,  Treasurer and
Secretary and a Director and principal shareholder of the Company),  for office,
secretarial and accounting services performed. The rates charged by Chase to the
Company are the same as those charged by Chase to other arm's-length  companies.
At December 31, 2003,  $2,614  remained  unpaid by the Company for past fees and
disbursements  incurred  on behalf of the  Company  and is  included in accounts
payable.



                                     - 21 -

<PAGE>



TRANSACTIONS WITH PROMOTERS

Georgios Polyhronopoulos, Stephen J. Antol and Larry Richardson may be deemed to
"promoters"  of the  Company.  On February  18,  1999,  Messrs.  Polyhronopoulos
(1,500,000  shares),  Antol  (250,000  shares) and Richardson  (250,000  shares)
purchased  2,000,000  common  shares from the Company for an aggregate of $2,000
($0.001 per share).  Mr.Polyhronopoulos  was  compensated for his services as an
officer and director of the Company. Mr. Polyhronopoulos was paid $12,000 during
1999.  During 2000, Mr.  Polyhronopoulos  did not receive a salary.  In 2001 Mr.
Polyhronopoulos  was paid  $7,600.  During  2002,  Mr.  Polyhronopoulos  did not
receive a salary.

During the year ended  December 31, 1999, Mr.  Polyhronopoulos  advanced $500 to
the Company. The advance was repaid during the year ended December 31, 2001.


ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

         REGULATION      EXHIBIT
         S-B NUMBER

            3.1          Articles of Incorporation, as amended (2)

            3.2          Bylaws (1)

           10.1          Assignment  and Bill of Sale  Agreement  dated  June 5,
                         2003 (3)

           31.1          Rule  13a-14(a)  Certification  of Principal  Executive
                         Officer and Principal Financial Officer

           32.1          Certification  of  Principal   Executive   Officer  and
                         Principal  Financial  Officer  Pursuant  to  18  U.S.C.
                         Section 1350, as Adopted Pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002

              (1)   Incorporated  by reference to the exhibits to the  Company's
                    Form 10-SB filed November 10, 1999, file number 000-28025.
              (2)   Incorporated  by reference to the exhibits to the  Company's
                    quarterly  report on Form  10-QSB/A  Amendment No. 1 for the
                    quarter ended March 31, 2003,  filed on April 14, 2004, file
                    number 000- 28025.
              (3)   Incorporated  by reference to the exhibits to the  Company's
                    current  report on Form 8-K dated June 5,  2003,  filed June
                    19, 2003, file number 000-28025.

(b)      Reports  on Form 8-K:  No  reports  were  filed on Form 8-K  during the
         fourth quarter of the period covered by this Form 10-KSB.


ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

For the fiscal years ended December 31, 2003 and 2002,  the Company's  principal
accountant  is  expected  to  bill  approximately   $5,000  and  billed  $1,819,
respectively,  for the audit of the Company's  annual  financial  statements and
review of financial statements included in the Company's Form 10-QSB filings.

AUDIT-RELATED FEES

For the fiscal years ended December 31, 2003 and 2002,  the Company's  principal
accountant is expected to bill $nil and billed $nil, respectively, for assurance
and related  services that were  reasonably  related to the  performance  of the
audit or review of the  Company's  financial  statements  outside  of those fees
disclosed above under "Audit Fees".



                                     - 22 -

<PAGE>



TAX FEES

For the fiscal years ended December 31, 2003 and 2002,  the Company's  principal
accountant  is  expected  to bill $nil and billed  $nil,  respectively,  for tax
compliance, tax advice, and tax planning services.

ALL OTHER FEES

For the fiscal years ended December 31, 2003 and 2002,  the Company's  principal
accountant is expected to bill $nil and billed $nil, respectively,  for products
and services other than those described above.

PRE-APPROVAL POLICIES AND PROCEDURES

Prior to engaging the Company's accountants to perform a particular service, the
Company's  board  of  directors  obtains  an  estimate  for  the  service  to be
performed.  The  board of  directors,  in  accordance  with  procedures  for the
Company, approved all of the services described above.



                                     - 23 -

<PAGE>



                                   SIGNATURES

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

                                     GLOBAL ENERGY INC.

                                     Per:
                                          /s/ Nick DeMare
                                          --------------------------------------
                                          Nick DeMare
                                          President and Director

                                          Dated:  April 14, 2004

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.

                                     Signature:

                                     /s/ Nick DeMare
                                     -------------------------------------------
                                     Nick DeMare
                                     President and Director (Principal Executive
                                     Officer, PrincipalFinancial Officer, and
                                     Principal Accounting Officer)

                                     Dated:  April 14, 2004


                                     /s/ Dean Rogers
                                     -------------------------------------------
                                     Dean Rogers
                                     Director

                                     Dated:  April 14, 2004



                                     - 24 -

<PAGE>





















--------------------------------------------------------------------------------




                               GLOBAL ENERGY INC.
                        (formerly Global Smartcards Inc.)

                              FINANCIAL STATEMENTS
                               FOR THE YEARS ENDED
                        DECEMBER 31, 2003, 2002 AND 2001

                           (Expressed in U.S. dollars)


--------------------------------------------------------------------------------






                                       F-1

<PAGE>



MOORE STEPHENS
ELLIS FOSTER LTD.
CHARTERED ACCOUNTANTS

1650 West 1 st Avenue
Vancouver, BC Canada V6J 1G1
Telephone:  (604) 737-8117 Facsimile:  (604) 714-5916
E-Mail:  generaldelivery@ellisfoster.com
Website:  www.ellisfoster.com

--------------------------------------------------------------------------------



REPORT OF INDEPENDENT ACCOUNTANTS


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS

GLOBAL ENERGY INC.
(formerly Global Smartcards Inc.))

We have  audited  the balance  sheets of GLOBAL  ENERGY  INC.  (formerly  Global
Smartcards  Inc.) ("the  Company") as at December 31, 2003 and 2002, the related
statements of operations,  stockholders'  equity, and cash flows for each of the
three  years  ended  December  31,  2003.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  these  financial  statements  present  fairly,  in all material
respects, the financial position of the Company as at December 31, 2003 and 2002
and the results of its operations and its cash flows for each of the three years
ended  December  31,  2003 in  conformity  with  generally  accepted  accounting
principles in the United States of America.







Vancouver, Canada                           "MOORE STEPHENS ELLIS FOSTER LTD."
March 22, 2004                                    Chartered Accountants








--------------------------------------------------------------------------------

MS An  independently  owned and operated member of Moore Stephens North America,
Inc. Members in principal cities throughout North America.  Moore Stephens North
America, Inc. is a member of Moore Stephens  International  Limited,  members in
principal cities throughout the world.

                                       F-2

<PAGE>



                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                                 BALANCE SHEETS
                           (EXPRESSED IN U.S. DOLLARS)



                                                   DECEMBER 31,    DECEMBER 31,
                                                       2003            2002
                                                         $               $

                                   ASSETS


CURRENT ASSETS

Cash and cash equivalents                                26,459             835
Amounts receivable                                       16,861               -
                                                   ------------    ------------
                                                         43,320             835
PETROLEUM AND NATURAL GAS
   RESOURCE PROPERTIES (Note 3)                          14,971               -
                                                   ------------    ------------
                                                         58,291             835
                                                   ============    ============


                LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIENCY)


CURRENT LIABILITIES

Accounts payable                                          9,775           7,384
                                                   ------------    ------------

STOCKHOLDERS' EQUITY

Common stock, $0.001 par value;
     Authorized - 25,000,000 shares
     Issued and outstanding -
     4,650,000 shares (2000 - 4,000,000 shares)           4,650           4,000

Additional paid-in capital                              104,850          73,000

(Deficit)                                               (60,984)        (83,549)
                                                   ------------    ------------
                                                         48,516          (6,549)
                                                   ------------    ------------
                                                         58,291             835
                                                   ============    ============





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


                                       F-3

<PAGE>



                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                            STATEMENTS OF OPERATIONS
                           (EXPRESSED IN U.S. DOLLARS)


<TABLE>
<CAPTION>

                                                    YEAR ENDED      YEAR ENDED      YEAR ENDED
                                                   DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                       2003            2002            2001
                                                         $               $               $
<S>                                               <C>             <C>             <C>

REVENUE

Oil and gas revenue                                      72,563               -               -
                                                   ------------    ------------    ------------
OPERATING EXPENSES

Production expenses                                      14,682               -               -
Depreciation and depletion                                2,521               -               -
General and administration                               32,795           5,418          19,649
                                                   ------------    ------------    ------------
                                                         49,998           5,418          19,649
                                                   ------------    ------------    ------------
NET INCOME (LOSS) BEFORE INCOME TAXES                    22,565          (5,418)        (19,649)

INCOME TAX EXPENSE                                        7,900               -               -

TAX BENEFIT OF NET OPERATING
     LOSS CARRY FORWARD                                  (7,900)              -               -
                                                   ------------    ------------    ------------
NET INCOME (LOSS) FOR THE YEAR                           22,565          (5,418)        (19,649)
                                                   ============    ============    ============

NET INCOME (LOSS) PER COMMON SHARE
     - BASIC AND DILUTED                                   0.01           (0.00)          (0.01)
                                                   ============    ============    ============

WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES OUTSTANDING
     - BASIC AND DILUTED                              4,500,274       4,000,000       4,000,000
                                                   ============    ============    ============

</TABLE>




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



                                       F-4

<PAGE>



                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                 STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                           (EXPRESSED IN U.S. DOLLARS)




<TABLE>
<CAPTION>

                                                                                                      TOTAL
                                           COMMON STOCK             ADDITIONAL                     STOCKHOLDER
                                   ----------------------------       PAID-IN      ACCUMULATED        EQUITY
                                      SHARES          AMOUNT          CAPITAL       (DEFICIT)      (DEFICIENCY)
                                   ------------    ------------    ------------    ------------    ------------
                                                         $               $               $               $
<S>                              <C>             <C>             <C>             <C>             <C>

Balance, December 31, 2000            4,000,000           4,000          73,000         (58,482)         18,518

Net (loss) for the year                       -               -               -         (19,649)        (19,649)
                                   ------------    ------------    ------------    ------------    ------------
Balance, December 31, 2001            4,000,000           4,000          73,000         (78,131)         (1,131)

Net (loss) for the year                       -               -               -          (5,418)         (5,418)
                                   ------------    ------------    ------------    ------------    ------------
Balance, December 31, 2002            4,000,000           4,000          73,000         (83,549)         (6,549)

March, 2003
Issued from private offering            600,000             600          29,400               -          30,000

June, 2003
Issued for property                      50,000              50           2,450               -           2,500

Net income for the year                       -               -               -          22,565          22,565
                                   ------------    ------------    ------------    ------------    ------------
Balance, December 31, 2003            4,650,000           4,650         104,850         (60,984)         48,516
                                   ============    ============    ============    ============    ============

</TABLE>



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



                                       F-5

<PAGE>



                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                            STATEMENTS OF CASH FLOWS
                           (EXPRESSED IN U.S. DOLLARS)



<TABLE>
<CAPTION>

                                                                    YEAR ENDED      YEAR ENDED      YEAR ENDED
                                                                   DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                                       2003            2002            2001
                                                                         $               $               $
<S>                                                              <C>             <C>             <C>

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

Net income (loss) for the year                                           22,565          (5,418)        (19,649)
Adjustments to reconcile net income (loss) to
   net cash (used in) provided by operating activities
     Depreciation and depletion                                           2,521               -               -
Changes in assets and liabilities
     Increase in amounts receivable                                     (16,861)              -               -
     Increase in accounts payable                                         2,391           3,739           2,145
     Repayment from the former President                                      -               -          15,000
                                                                   ------------    ------------    ------------
Net cash (used in) provided by operating activities                      10,616          (1,679)         (2,504)
                                                                   ------------    ------------    ------------
CASH FLOWS USED IN INVESTING ACTIVITY

Expenditures on petroleum and natural gas resource properties           (14,992)              -               -
                                                                   ------------    ------------    ------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITY

Proceeds from sale of common shares                                      30,000               -               -
                                                                   ------------    ------------    ------------
NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                                25,624          (1,679)         (2,504)

CASH AND CASH EQUIVALENTS -
     BEGINNING OF PERIOD                                                    835           2,514           5,018
                                                                   ------------    ------------    ------------
CASH AND CASH EQUIVALENTS -
     END OF PERIOD                                                       26,459             835           2,514
                                                                   ============    ============    ============

</TABLE>

SUPPLEMENTARY CASH FLOW INFORMATION

During the year ended December 31, 2003, the Company issued 50,000 common shares
at $0.05 per share,  for the  acquisition of petroleum and natural gas resources
properties. See Note 3.



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



                                       F-6

<PAGE>


                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                           (EXPRESSED IN U.S. DOLLARS)


1.     NATURE OF BUSINESS AND NAME CHANGE

       Global  Energy Inc. (the  "Company")  was organized on February 16, 1999,
       under the laws of the State of Nevada,  U.S.A. as Global  Smartcards Inc.
       On April 28, 2003, the Company changed its name to Global Energy Inc.

       The Company  originally  planned to market  plastic  cards with  embedded
       microprocessors  ("Smart  Cards").  However,  the  Company  was unable to
       complete  negotiations  to market Smart Cards. By agreement dated June 5,
       2003,  the  Company   purchased   petroleum  and  natural  gas  producing
       properties,  as  described  in Note 3,  and  commenced  operations  as an
       independent  energy company engaged in the  acquisition,  exploration and
       development of crude oil and natural gas properties in the United States.
       Prior to this date,  the  Company  was  considered  a  development  stage
       enterprise  as defined by  Statement of  Financial  Accounting  Standards
       ("SFAS") No. 7.


2.     SIGNIFICANT ACCOUNTING POLICIES

       (a)    Accounting Estimates

              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions that affect the reported amounts of
              assets and  liabilities  and  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  and
              assumptions.

              The  oil  and  gas  industry  is  subject,   by  its  nature,   to
              environmental hazards and clean-up costs. At this time, management
              knows of no  substantial  costs from  environmental  accidents  or
              events for which the Company may be currently liable. In addition,
              the Company's oil and gas business  makes it vulnerable to changes
              in wellhead  prices of crude oil and natural gas. Such prices have
              been  volatile  in the past and can be  expected to be volatile in
              the future.

       (b)    Cash Equivalents

              Cash  equivalents  comprise of certain  highly liquid  instruments
              with a  maturity  of three  months or less when  purchased.  As of
              December  31,  2003 and  December  31,  2002,  there  were no cash
              equivalents.

       (c)    Concentration of Credit Risk

              The Company places its cash and cash  equivalents with high credit
              quality financial institutions.  As of December 31, 2003 and 2002,
              the Company has no funds placed in a bank beyond insured limits.

       (d)    Revenue Recognition

              The Company recognizes petroleum and natural gas revenues from its
              interests  in  producing  wells as  petroleum  and  natural gas is
              produced  and  sold  from  these  wells.  The  Company  has no gas
              balancing arrangements in place. Petroleum and natural gas sold is
              not   significantly   different   from   the   Company's   product
              entitlement.



                                       F-7

<PAGE>


                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                           (EXPRESSED IN U.S. DOLLARS)


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       (e)    Petroleum and Natural Gas Interests

              The  Company  follows  the full  cost  method  of  accounting  for
              petroleum and natural gas operations.  Under this method all costs
              related to the  exploration  for and  development of petroleum and
              natural  gas  reserves  are  capitalized  on a  country-by-country
              basis.  Costs  include lease  acquisition  costs,  geological  and
              geophysical expenses, overhead directly related to exploration and
              development  activities and costs of drilling both  productive and
              non-productive  wells.  Proceeds from the sale of  properties  are
              applied against capitalized costs,  without any gain or loss being
              recognized,  unless such a sale would significantly alter the rate
              of depletion and depreciation.

              Depletion of exploration and development costs and depreciation of
              production  equipment  is  provided  using the  unit-of-production
              method  based upon  estimated  proven  petroleum  and  natural gas
              reserves.  The costs of  significant  unevaluated  properties  are
              excluded  from  costs  subject to  depletion.  For  depletion  and
              depreciation  purposes,  relative volumes of petroleum and natural
              gas production and reserves are converted  into  equivalent  units
              based upon relative energy content.

              In applying the full cost method,  the Company  performs a ceiling
              test  whereby  the  carrying  value of  petroleum  and natural gas
              interests and production equipment,  net of deferred income taxes,
              is  compared  periodically  to an estimate of future net cash flow
              from the production of proven reserves. Net cash flow is estimated
              using period end prices,  less estimated future expenditures to be
              incurred in  developing  and  producing  the proved  reserves  and
              income taxes.  Should this comparison  indicate an excess carrying
              value, the excess is charged against earnings.

              Substantially  all of the  Company's  petroleum  and  natural  gas
              exploration,  development and production  activities are conducted
              jointly with others and,  accordingly,  the  accounts  reflect the
              Company's proportionate interest in such activities.

       (f)    Impairment

              The Company has adopted SFAS 144,  "Accounting  for the Impairment
              or Disposal of Long-Lived  Assets" which requires that  long-lived
              assets to be held and used be  reviewed  for  impairment  whenever
              events or  changes in  circumstances  indicate  that the  carrying
              amount of an asset may not be recoverable.  SFAS 144 established a
              single accounting model for long-lived assets to be disposed of by
              sale.  Oil and gas  properties  accounted  for using the full cost
              method  of  accounting,  a  method  adopted  by the  Company,  are
              excluded from this requirement, but will continue to be subject to
              the ceiling test limitations.

       (g)    Foreign Currency Translation

              The Company maintains its accounting records in U.S. dollars.

              At the  transaction  date,  each  asset,  liability,  revenue  and
              expense is translated into U.S. dollars by the use of the exchange
              rate in effect at that date.  At the period end,  monetary  assets
              and  liabilities  are  translated  into U.S.  dollars by using the
              exchange  rate in  effect  at that  date.  The  resulting  foreign
              exchange gains and losses are included in operations.

                                       F-8

<PAGE>


                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                           (EXPRESSED IN U.S. DOLLARS)


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       (h)    Fair Value of Financial Instruments

              Fair  value  estimates  of  financial  instruments  are  made at a
              specific  point  in  time,  based on  relevant  information  about
              financial  markets and specific  financial  instruments.  As these
              estimates are subjective in nature,  involving  uncertainties  and
              matters of significant  judgement,  they cannot be determined with
              precision.   Changes  in  assumptions  can  significantly   affect
              estimated fair values.

              Fair value  approximates  the amounts  reflected in the  financial
              statements  for cash,  amounts  receivable  and accounts  payable.
              Management  is of the  opinion  that the Company is not exposed to
              significant interest,  credit or currency risks arising from these
              financial instruments.

       (i)    Income Taxes

              The Company has adopted SFAS 109,  "Accounting  for Income Taxes",
              which requires the Company to recognize  deferred tax  liabilities
              and assets for the expected future tax consequences of events that
              have been recognized in the Company's financial  statements or tax
              returns using the liability  method.  Under this method,  deferred
              tax liabilities  and assets are determined  based on the temporary
              differences  between  the  financial  statement  and tax  bases of
              assets and  liabilities  using  enacted tax rates in effect in the
              years in which the differences are expected to reverse.

       (j)    Earnings (Loss) Per Share

              Net earnings  (loss) per share is provided in accordance with SFAS
              128,  "Earnings  Per Share".  Basic  earnings  (loss) per share is
              computed by dividing  losses  available to common  stockholders by
              the weighted  average number of common shares  outstanding  during
              the period.  Diluted  earnings (loss) per share reflects per share
              amounts  that  would  have  resulted  if  dilative   common  stock
              equivalents had been converted to common stock. As of December 31,
              2003,  2002 and 2001,  the Company has no  dilutive  common  stock
              equivalents such as stock options.

       (k)    New Technical Pronouncements

              In June 2001,  the FASB  issued  SFAS 143,  "Accounting  for Asset
              Retirement  Obligations." FAS 143 addresses  financial  accounting
              and reporting for  obligations  associated  with the retirement of
              tangible  long-lived  assets and the associated  asset  retirement
              costs.  SFAS 143 generally  requires  obligations  associated with
              asset  retirements  to be  recognized  earlier  and  displayed  as
              liabilities  rather than as contra- assets.  The  pronouncement is
              effective  for  financial   statements  issued  for  fiscal  years
              beginning  after June 15, 2002.  The adoption of SFAS 143 does not
              have any impact on the Company's  financial position or results of
              operations.

              In  November  2002,  the FASB issued  Interpretation  No. 45 ("FIN
              45"),  "Guarantor's  Accounting  and Disclosure  Requirements  for
              Guarantees,  Including  Indirect  Guarantees  of  Indebtedness  of
              Others - An  Interpretation  of FASB Statements No. 5, 57, and 107
              and Rescission of FASB Interpretation No. 34". This interpretation
              clarifies the  requirements  for a guarantor's  accounting for and
              disclosures of certain  guarantees issued and outstanding.  FIN 45
              also clarifies the  requirements  related to the  recognition of a
              liability by a guarantor at the  inception of a guarantee.  FIN 45
              is  effective  for  guarantees  entered  into  or  modified  after
              December 31, 2002.  The adoption of FIN 45 does not have an impact
              on the Company's financial statements.

                                       F-9

<PAGE>


                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                           (EXPRESSED IN U.S. DOLLARS)


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

              In  December  2002,  the FASB  issued  SFAS 148,  "Accounting  for
              Stock-Based  Compensation - Transition and  Disclosure."  SFAS 148
              amends SFAS 123,  "Accounting  for Stock-Based  Compensation",  to
              provide alternative methods for voluntary transition to SFAS 123's
              fair  value  method  of  accounting   for   stock-based   employee
              compensation.  SFAS 148 also requires disclosure of the effects of
              an entity's accounting policy with respect to stock-based employee
              compensation on reported net income (loss) and earnings (loss) per
              share in annual and interim financial  statements.  The provisions
              of SFAS 148 are effective in fiscal years beginning after December
              15, 2002. The adoption of SFAS 148 does not have any impact on the
              Company's financial position or results of operations.

              In January  2003,  the FASB released  FASB  Interpretation  No. 46
              ("FIN 46"),  "Consolidation of Variable Interest Entities". FIN 46
              requires  that all  primary  beneficiaries  of  variable  interest
              entities consolidate that entity. FIN 46 is effective  immediately
              for variable  interest entities created after January 31, 2003 and
              to variable  interest  entities in which an enterprise  obtains an
              interest  after that date.  It applies in the first fiscal year or
              interim period beginning after June 15, 2003 to variable  interest
              entities  in which an  enterprise  holds a  variable  interest  it
              acquired  before  February  1, 2003.  In December  2003,  the FASB
              published a revision to FIN 46 ("FIN 46R") to clarify  some of the
              provisions of the  interpretation  and to defer the effective date
              of implementation for certain entities.  Under the guidance of FIN
              46R,  entities that do not have  interests in structures  that are
              commonly  referred to as special purpose  entities are required to
              apply the provisions of the interpretation in financial statements
              for  periods  ending  after  March 14,  2004.  The Company did not
              create a variable  interest entity after January 31, 2003 and does
              not have a variable  interest  entity as of December 31, 2003. The
              adoption  of FIN 46R in  2004  does  not  have  an  impact  on the
              Company's financial position or results of operations.

              In April 2003,  the FASB issued SFAS 149,  "Amendment of Statement
              No. 133 on Derivative  Instruments and Hedging  Activities."  SFAS
              149 amends  certain  portions of SFAS 133 and is effective for all
              contracts  entered  into or  modified  after  June  30,  2003 on a
              prospective  basis.  The  adoption of SFAS 149 is not  expected to
              have an effect on the results of operations or financial  position
              of the Company since the Company  currently has no  derivatives or
              hedging contracts.

              In June 2003,  the FASB issued SFAS 150,  "Accounting  for Certain
              Financial Instruments with Characteristics of both Liabilities and
              Equity".   SFAS  150  establishes  standards  for  how  an  issuer
              classifies  and  measures  certain   financial   instruments  with
              characteristics  of  both  liabilities  and  equity.  SFAS  150 is
              effective for financial instruments entered into or modified after
              May 31, 2003,  and  otherwise is effective at the beginning of the
              first interim period  beginning  after June 15, 2003. The adoption
              of SFAS 150 is not  expected  to have an effect  on the  Company's
              financial position.

       (l)    Comprehensive Income

              The  Company  has  adopted  SFAS  130,  "Reporting   Comprehensive
              Income",  which established standards for reporting and display of
              comprehensive income, its components and accumulated balances. The
              Company  is  disclosing  this  information  on  its  Statement  of
              Stockholders' Equity (Deficiency).  Comprehensive income comprises
              equity  except  those  resulting  from  investments  by owners and
              distributions to owners.




                                      F-10

<PAGE>


                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                           (EXPRESSED IN U.S. DOLLARS)


2.     SIGNIFICANT ACCOUNTING POLICIES (continued)

       (m)    Intangible Assets

              The Company has adopted SFAS 142,  "Goodwill and Other  Intangible
              Assets",  which requires that goodwill and intangible  assets with
              indefinite  life are not  amortized  but  rather  tested  at least
              annually for  impairment.  Intangible  assets with a definite life
              are required to be  amortized  over their useful life or estimated
              useful life.

              The Company does not have any goodwill nor intangible  assets with
              indefinite or definite life since inception.

       (n)    Accounting for Derivative Instruments and Hedging Activities

              The Company  has  adopted  SFAS 133,  "Accounting  for  Derivative
              Instruments and Hedging  Activities",  which requires companies to
              recognize   all   derivatives   contracts  as  either   assets  or
              liabilities  in the  balance  sheet  and to  measure  them at fair
              value.  If  certain  conditions  are  met,  a  derivative  may  be
              specifically  designated as a hedge,  the objective of which is to
              match  the  timing  of  gain or loss  recognition  on the  hedging
              derivative  with the  recognition  of (i) the  changes in the fair
              value of the hedged asset or liability  that are  attributable  to
              the  hedged  risk  or  (ii)  the  earnings  effect  of the  hedged
              forecasted  transaction.  For a  derivative  not  designated  as a
              hedging  instrument,  the gain or loss is  recognized in income in
              the period of change.

              The Company has not entered into  derivative  contracts  either to
              hedge existing risks or for speculative purposes.

       (o)    Advertising Expenses

              The Company expenses advertising costs as incurred.  There were no
              advertising  expenses  incurred by the Company for the years ended
              December 31, 2003, 2002 and 2001.


3.     PETROLEUM AND NATURAL GAS RESOURCE PROPERTIES

                                                                           $

       Acquisition cost, proved reserves                                 17,492
       Less:  Accumulated depreciation and depletion                     (2,521)
                                                                   ------------
                                                                         14,971
                                                                   ============

       On June 5, 2003 the Company  completed a purchase and sale  agreement and
       acquired various working interests in producing petroleum and natural gas
       leases located in the Live Oak and Wharton  Counties,  Texas, for $12,500
       cash and the issuance of 50,000 common  shares,  at $0.05 per share.  The
       Company  also  incurred  $2,492 for costs  associated  with the  property
       acquisition.

       No write-down  was required  during the year ended December 31, 2003 from
       the ceiling test performed.  The ceiling test is a cost-recovery test and
       is not intended to result in an estimate of fair market value.



                                      F-11

<PAGE>


                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                           (EXPRESSED IN U.S. DOLLARS)


4.     STOCKHOLDERS' EQUITY

       During the year ended December 31, 2003, the Company  completed a private
       offering,  for the sale of 600,000 shares of its common stock, at a price
       of $0.05 per share, for $30,000 cash proceeds.

       See also Note 3.


5.     INCOME TAXES

       (a)    The Company has  estimated net losses for tax purposes to December
              31, 2003, totalling  approximately  $61,000,  which may be applied
              against future taxable income until 2017. Accordingly, there is no
              tax expense charged to operations for the years ended December 31,
              2003 and 2002.  The  Company  evaluates  its  valuation  allowance
              requirements  on  an  annual  basis  based  on  projected   future
              operations.  When circumstances change and this causes a change in
              management's  judgement  about the  realizability  of deferred tax
              assets,  the impact of the change on the  valuation  allowance  is
              generally reflected in current income/loss.

       (b)    The tax  effects of  temporary  differences  that give rise to the
              Company's deferred tax asset (liability) are as follows:

                                                       2003            2002
                                                         $               $

              Tax loss carryforwards                     21,500          27,600
              Valuation allowance                       (21,500         (27,600)
                                                   ------------    ------------
                                                              -               -
                                                   ============    ============


6.     RELATED PARTY TRANSACTIONS

       During the year ended  December 31, 2003,  the Company was charged $5,656
       (2002 - $2,569;  2001 - $nil) for accounting and administration fees by a
       company  controlled by the  president of the Company.  As of December 31,
       2003,   $2,614   remained  unpaid  by  the  Company  for  past  fees  and
       disbursements  incurred  on  behalf of the  Company  and is  included  in
       accounts payable.

       During  the year  ended  December  31,  2001,  the  Company  paid  $7,600
       professional fees to a former President of the Company.


7.     SEGMENT REPORTING

       In June 1997, SFAS 131,  "Disclosure  about Segments of an Enterprise and
       Related Information",  was issued.  Operating segments, as defined in the
       pronouncement,  are  components  of an  enterprise  about which  separate
       financial  information  is available and that are evaluated  regularly by
       the  Company in  deciding  how to  allocate  resources  and in  assessing
       performance.  The financial information is required to be reported on the
       basis that is used  internally for  evaluating  segment  performance  and
       deciding how to allocate resources to segments.

       The Company has one reportable  segment,  the exploration and development
       of oil and gas properties.  The Company has  concentrated its oil and gas
       exploration and development activities in the western United States.

                                      F-12

<PAGE>


                               GLOBAL ENERGY INC.
                        (FORMERLY GLOBAL SMARTCARDS INC.)
                          NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                           (EXPRESSED IN U.S. DOLLARS)

8.     COMMITMENTS AND CONTINGENCIES

       The Company may be subject to various  possible  contingencies  which are
       derived  primarily  from  interpretations  of federal  and state laws and
       regulations  affecting  the  oil and gas  industry.  Although  management
       believes it has  complied  with the  various  laws and  regulations,  new
       rulings  and  interpretations  may  require  the  Company to make  future
       adjustments.


9.     SUPPLEMENTARY OIL AND GAS INFORMATION (UNAUDITED)

       The  determination of oil and gas reserve  quantities  involves  numerous
       estimates  which are highly complex and  interpretive.  The estimates are
       subject to continuing  re-evaluation and reserve quantities may change as
       additional  information  becomes  available.  Estimated  values of proved
       reserves  were computed  applying  prices in effect at December 31, 2003.
       The average price used was $30.71 per barrel for condensate and $5.18 per
       Mcf for gas. Estimated future costs were calculated assuming continuation
       of costs and economic conditions at the reporting date.

       (a)    The Company's  share of estimated  proved reserves and the changes
              therein are set forth below:
<TABLE>
<CAPTION>

                                                                        GAS         CONDENSATE
                                                                       (MCF)          (BBLS)
            <S>                                                   <C>             <C>
              Proved reserves:
                 Balance, at December 31, 2002 and 2001                       -               -
                    Acquired in 2003 (Note 3)                            76,688           1,497
                    Production                                          (13,006)           (233)
                                                                   ------------    ------------
                 Balance, at December 31, 2003                           63,682           1,264
                                                                   ============    ============

              Proved developed reserves:
                 Balance, at December 31, 2002 and 2001                       -               -
                                                                   ============    ============

                 Balance, at December 31, 2003                           63,682           1,264
                                                                   ============    ============
</TABLE>

       (b)    The  standardized  measure of  discounted  future  cash flows from
              reserve is set forth below:

<TABLE>
<CAPTION>
                                                                       2003            2002             2001
                                                                        $                $               $
            <S>                                                   <C>             <C>             <C>

              Future cash inflows                                       368,709               -               -
              Future production and development costs                  (212,900)
              Future income tax expenses                                (54,533)              -               -
                                                                   -------------   ------------    ------------
              Future net cash flows                                     101,276               -               -
              10% discount factor                                       (32,977)              -               -
                                                                   -------------   ------------    ------------
              Standardized measure of
                 discounted future net cash flows                        68,299               -               -
                                                                   =============   ============    ============
</TABLE>



                                      F-13

<PAGE>