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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

|                                                |  |                          |  |                                  
|----------------------------------------------- |  | ------------------------ |  | ---------------------------------
|                                               
|EGPI FIRECREEK, INC.                           
|                                               
|                                               
|(Exact name of registrant specified in charter)
|                                                |  |                          |  |                                  
|Nevada                                          |  | 000-32507                |  | 88-0345961                       
|                                                |  |                          |  |                                  
|(State of Incorporation)                        |  | (Commission File Number) |  | (IRS Employer Identification No.)

6564 Smoke Tree Lane
Scottsdale, AZ 85253(Address of principal executive offices) (Zip Code)

(480) 948-6581(Registrants telephone number, including area code)

Securities
registered pursuant to Section 12(b) of the Act: None

Securities
registered pursuant to Section 12(g) of the Act: Common Stock Par Value $.001
Per Share), Preferred stock, (Par Value $.001 Per Share)

Indicate by
check mark whether the issuer (1) has 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 o

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

Indicated by a
check mark whether the Registrant is a shell company (as defined in Rule 121-2
of the Act). Yes o    No x

The issuers
revenues for its most recent fiscal year were -0-

The aggregate
market value on March 16, 2005, of common shares held by non-affiliates was
approximately $2,456,185 based on the average of the closing bid and asked
prices of the registrants common shares on such date, as quoted by the
National Quotation Bureau.

As of March
16, 2006, the issuer had 256,900,350 shares of its $0.001 par value common
stock issued and outstanding. There are also -0- shares of Series A, B, or C
Preferred Stock at $.001 par value for each of the Series of Preferred,
and no shares of non-voting common stock outstanding.

Transitional
Small Business (Check One). Yes o    No x

---

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EGPI FIRECREEK, INC.FORM 10-KSB
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

INDEX

|           |  |                                                                                                                    |  |          
|---------- |  | ------------------------------------------------------------------------------------------------------------------ |  | ---------
|PART I     |  |                                                                                                                   
|           |  |                                                                                                                    |  |          
|Item 1.    |  | Description of Business                                                                                            |  | 3        
|Item 2.    |  | Description of Property                                                                                            |  | 22       
|Item 3.    |  | Legal Proceedings                                                                                                  |  | 32       
|Item 4.    |  | Submission of Matters to a Vote of Security
Holders                                                                |  | 32       
|           |  |                                                                                                                    |  |          
|PART II    |  |                                                                                                                   
|           |  |                                                                                                                    |  |          
|Item 5.    |  | Market for the Registrants Common Equity and
Related
  Stockholder Matters                                        |  | 32       
|Item 6.    |  | Managements Discussion and Analysis or Plan of
  Operation                                                        |  | 34       
|Item 7.    |  | Financial Statements                                                                                               |  | 39/F-1-18
|Item 8.    |  | Changes in and Disagreements with Accountants on
  Accounting and Financial Disclosure                             |  | 58       
|Item 8A.   |  | Controls and Procedures                                                                                            |  | 58       
|Item 8B.   |  | Other Information                                                                                                  |  | 59       
|           |  |                                                                                                                    |  |          
|PART III   |  |                                                                                                                   
|           |  |                                                                                                                    |  |          
|Item 9.    |  | Directors, Executive Officers, Promoters and Control
  Persons, Compliance with Section 16(A) of the Exchange Act. |  | 59       
|Item 10.   |  | Executive Compensation                                                                                             |  | 64       
|Item 11.   |  | Security Ownership of Certain Beneficial Owners and
  Management                                                   |  | 67       
|Item 12.   |  | Certain Relationships and Related
Transactions                                                                     |  | 70       
|Item 13.   |  | Exhibits                                                                                                           |  | 75       
|Item 14.   |  | Principal Accountant Fees and Services                                                                             |  | 77       
|           |  |                                                                                                                   
|SIGNATURES |  | 79                                                                                                                

2

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This Annual Report on Form 10-KSB includes forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The Company has based these forward-looking statements on the
Companys current expectations and projections about future events. These
forward-looking statements are subject to known and unknown risks,
uncertainties and assumptions about us and the Companys subsidiaries that may
cause the Companys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as may, will, should, could, would,
expect, plan, anticipate, believe, estimate, continue or the
negative of such terms or other similar expressions. Factors that might cause
or contribute to such a material difference include, but are not limited to,
those discussed elsewhere in this Annual Report, including the section entitled
Risks Particular to The Companys Business and the risks discussed in the
Companys other Securities and Exchange Commission filings. The following
discussion should be read in conjunction with the Companys audited
Consolidated Financial Statements and related Notes thereto included elsewhere
in this report.

PART I

ITEM
1 - DESCRIPTION OF BUSINESS

HISTORY

EGPI
Firecreek, Inc. (the Company or EGPI) was incorporated in the state of
Nevada on October 4, 1995 as Sterling Market Positions, Inc. with 10,000,000
shares of $.001 par value common stock authorized. Effective June 24, 1999, the
Company changed its name to Energy Producers, Inc. and increased its authorized
common shares to 50,000,000 with a par value of $.001. The Companys principal
place of business is 6564 Smoke Tree Lane, Scottsdale, AZ 85253.

On August 25,
1999, the Company was acquired by Energy Producers Group, Inc., and its wholly
owned subsidiary, Producers Supply, Inc. The purpose of the acquisition and
reverse merger was to become an oil and gas company, and later diversify. The
Company focused its business on oil and gas exploration and acquiring existing
production with proven reserves.

On December
31, 2005 the board of directors of the Company authorized the disposal of the
Companys wholly owned subsidiary marine sales segment assets and operations
International Yacht Sales Group, Ltd. located in Torquay Devon, United Kingdom.

Overview

Through the
acquisition of Firecreek Petroleum, Inc., (Firecreek) the Company has been
building and integrating a line segment of operations facilitating plans for
the Companys commencement of internationally based oil and gas operations.

RECENT DEVELOPMENTS

In late March
2006 the Company and Firecreek Petroleum, Inc., (Firecreek) through our
strategic alliance with the Sahara Group, Inc. (Sahara Group) confirmed
receipt of two preliminary Memoranda of Understanding (MOUs) for extension of
time regarding the potential acquisition of two proved producing oil fields in
the Ukraine, known as the Sakhalinska, and the Bugrevatovskoye. The MOUs allow
us a reasonable amount of time to continue negotiations, collect data on the
fields, and perform due diligence so that we may attempt to secure terms for
suitable debt, equity, or joint venture finance arrangements. For further information please see further
discussion in The Business, listed under Firecreek-Sahara Strategic Alliance, Project Agreement
Status and Expenditures For Fiscal Year Ended December 31, 2005, In Ukraine.

As of March 24, 2006: We
have received in good order most certified reserve data pertaining to our
Business Agreements in Russia from the Russian International Integration Oil
and Gas Construction Syndicate, Minneftegazstroi, by the Russian Ministry of
Natural Resources Department. We are seeking the balance of required
originating log and

3

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interpretive data from
Minneftegazstroi that is required by our third party engineering firm to
furnish reserve reports under US guidelines, and in accordance with certain
definitive agreements with Minneftegazstroi, and in financial requirements. As
our policy in this matter, we currently are sending communications in an effort
to bring a resolution to these requirements. Please see further discussion in
The Business, listed under Firecreek-Sahara Strategic Alliance, Project Agreement
Status and Expenditures For Fiscal Year Ended December 31, 2005, In Russia.

As of March
2006 our Ten Mile Draw project interests located in Sweetwater County Wyoming
acquired in November 2005 for development and sales for natural gas is in
progress. (see further discussion in The Business, Description of
Properties, and elsewhere in this document). The Company further reports via its operator
that well workover development overrun charges for wells 16-1 and 7-16 for our
Ten Mile Draw project are estimated at $250,000, related to harsh winter
environment causing schedule changes, equipment failures, and other associated
area delays and conditions (see additional information on Ten Mile Draw project
under Firecreeks Current Oil and Gas Operations, and elsewhere in this
document).

On November
22, 2005, greater than a majority of the Board of Directors of the Company
approved a corporate restructuring and reorganization resulting in, among other
things, certain changes to the executive offices and staff positions and the
creation of certain committees (the Reorganization). The Reorganization
became effective on November 30, 2005 and is intended to more effectively align
the Company in anticipation of growth in its domestic and international oil
production. As a result of the Reorganization, the position of Chief Executive
Officer has been eliminated and the Registrants former Chief Executive
Officer, Mr. Gregg Fryett, was suspended.

It is intended
that the Reorganization will allow the executive management to focus more
precisely on operations with less bureaucracy and stifling bottlenecks to more
effectively deal with critical timelines. The Reorganization calls for the
creation of specific related executive and finance committees, which will
collectively streamline operations and allow pertinent business and finance
matters to move through a more efficient and deliberative process for
recommendation to the Board of Directors. Each committee will be comprised of a
variety of specific talents with the expertise needed to effectively address
certain oil and gas matters, as well as finance issues that require Board
approval.

On December
20, 2005, after review, the Board of Directors and the Executive Management
Committee voted to terminate Mr. Fryetts executive position as CEO and all
service provider ad hoc arrangements with the Company. Further as a result of
the Reorganization on November 22, 2005, Charles Alliban was removed as
Treasurer of the Company and Firecreek, and Peter Fryett was removed as Vice
President and Assistant Secretary of the Company and Firecreek. At the time and
prior to the disposal of the Companys marine segment, Dennis R. Alexander, the
Chief Financial Officer and Chairman of the Board, and/or any person designated
or appointed by him, was appointed as director of the Companys wholly-owned
subsidiary, International Yacht Sales Group Ltd.

THE BUSINESS

Through the
acquisition of Firecreek Petroleum, Inc., the Company has been building and
integrating a line segment of operations facilitating plans for the Companys
commencement of internationally based oil and gas operations.

In our Fiscal
Year 2005 fourth quarter of operations we initiated a program to begin review
of domestic oil and gas prospects and targets. As a result we acquired non
operated oil and gas interests in the project titled Ten Mile Draw (TMD)
located in Sweetwater County, Wyoming USA for development and production of
natural gas (please see further information in this Section, under Firecreek
Current Oil and Gas Operations, and additional information listed in Item 2,
Description of Property).

In December
2005, we elected to dispose of our second line marine segment operations,
International Yacht Sales Group, Ltd., (IYSG) acquired in late November and
December 2003.

Our Fiscal
Year 2006 plans are to focus on acquisition and development of oil and gas
programs both domestically and overseas. We are working to build a project base
both domestically and internationally for the Company. Although encountering
numerous technical, political, and timing delays in 2005, we will continue our
efforts this year to conclude project acquisitions for development in one or
more overseas Central Asian and European Countries (please see information
listed further in this Section The Business, and in Business Risks,
Management Discussion and Analysis, and Liquidity and Capital Resources
sections).

4

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Firecreek Oil And
Gas Segment

Through
Firecreek, our goal is to become a independent oil and gas company engaged in
the exploration, development and exploitation of crude oil and natural gas on a
global basis. Our activities throughout 2005 have been: i) technically and
politically focused on opportunities for the potential acquisition to enhance
development of selected proved oil and gas projects located in Russia, and similar
type viable projects in Romania and Kazakhstan and other countries within the
same proximate geographical location; ii) evaluation in late 2005 for potential
acquisition and development of domestic targets and prospects; and iii)
concentrated in areas with known hydrocarbon resources, which are conducive for
state of the art rehabilitation programs, for multi-well, ongoing drilling
programs, and other specialized projects such as project management for design
and implementation of systems for pipeline construction and operations.

Firecreek
specializes in the niche market of rehabilitation and enhancement of existing
oilfields through modern management and state of the art technological
applications. Firecreeks management individually has over 25 years of
experience and has collectively been involved in oil and gas operations in 7
U.S. states and 13 countries.

In 2005,
through our strategic alliance with the Sahara Group, we established project
relationships that developed into certain definitive agreements for potential
project acquisition and development in Russia and Kazakhstan. In addition, we
entered into various protocol agreements and understandings for potential
development of projects located in Ukraine. Independent of our strategic
alliance with the Sahara Group, but with their full approval, support and
assistance as required, Firecreeks management incrementally progressed our
2005 efforts in Libya and to a lesser extent in Romania throughout each of the
countries respective independent political processes and vigorous renewed
developments in the oil and gas industry.

Our Firecreek
units anticipates commencing its operations and be online and in production in
Russia and Romania by mid 2006, however, as in the past, we may be subjected to
numerous technical and political timing delays affecting our ability to fully
meet financial lender, partner, or institutional criteria for the objective of
making acquisitions.

We have yet to
close on one or more of our planned acquisitions in Russia and Romania, or in
other above noted countries overseas. Although progress has been made, there
can be no assurance that we will be successful in our attempts to secure
acquisition of one or more of our planned projects in various countries
overseas, or if we do secure required additional finance, if any, to deploy one
or more overseas projects that they will ultimately become profitable (please
see further narrative in this Section The Business listed under Strategic
Alliance with Sahara Group, and Firecreeks Future Planned Oil and Gas
Operations Business Risks and other related Sub Headings).

Firecreeks Current
Oil and Gas Operations

Ten Mile Draw
Project, Sweetwater County, Wyoming

Effective November 15, 2005,
Firecreek, purchased a 50% undivided non operated interest in certain leases,
wells, equipment, mineral interests including oil and gas reserves, and other
rights, (the Assets) located in Sweetwater County, Wyoming from Newport Oil
Corporation (Newport), under the prospect named Ten Mile Draw (TMD). An
Operating Agreement was entered into at the time of the purchase, whereas
Newport became operator for Firecreeks non operated 50% interests, and
Newports operated 50% interests. The Operating Agreement also provides for our
mutual understandings pertaining to the exploration and development of two
tracts of land, and additional rights and options further established therein.
In accordance with the terms of the Purchase and Operating Agreements, Newport
initiated its Phase 1 work program in November and December 2005 to re complete
the first two gas wells, and to restore their production to bring on line to
the area pipeline system for sales of natural gas. As a result of these efforts
natural gas production has commenced as of approximately mid March 2006. Also,
under various rights established with Newport, we are in planning stages,
contemplating new well drilling development and an additional workover program,
for spring and summer 2006 (also see Future Development Contemplated, Ten Mile
Draw Project, and section on Description of Properties).

5

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Purchase And Work Program Costs Associated
With Our Acquired Interests

The Company invested
approximately $1.1 million on November 14, 2005 toward purchase of its
interests and initial Phase 1 development in the Ten Mile Draw project. Of the
$1.1 million $475,000 was paid for the assets, and $614,130 was paid for
workover costs and equipment as our share pursuant to the initial Authorization
For Expenditure (AFE) estimate for workover for the first two wells at the
time of closing pursuant to the terms of the Purchase and Operating Agreements
with Newport. Newport also contributed the sum of $614,129.50 at the time of
closing (total of $1,228,259) for its share of the initial Authorization For Expenditure
estimate.

Funding for the Companys
interests purchased were obtained from its Equity Line providers, Dutchess
Private Equities Funds, through Dutchess Private Equities Fund, LP and Dutchess
Private Equities Fund, II, LP (collectively Dutchess) in the form of a
Promissory Note, and further secured by our interests held in TMD, and from
each Put tendered pursuant to that certain Investment Agreement, as amended,
dated August 23, 2005, between the Company and Dutchess.

Various Terms and Rights Under The
Operating Agreement

Under the Operating
Agreement, Newport is the operator of the Ten Mile Draw Project and Firecreek
is the non-operator. The Operating Agreement provides for the duties and
obligations of the operator and the obligations of Firecreek as the
non-operator with respect to the funding of certain workover expenses and
drilling operations in planning stages. The Operating Agreement provides that
unless changed by other provisions therein, costs and liabilities incurred in
operations are borne and paid by the parties, and equipment and materials
acquired in operations are owned, according to their interests identified as
50% for Firecreek and 50% for Newport. There are workover obligations related
to three existing wells of which two of the three wells were in process of work
program for re-completion in 2005 and are expected to be or have been brought
online respectively in first quarter 2006 having encountered scheduling and
equipment delays due to severe weather conditions. With respect to the third
workover well identified, we are not obligated to contribute to workover costs
for that well until mutually agreed by separate agreement which will be under
the same 50/50 structure as the first two workover wells. The Operating
Agreement further contemplates drilling new wells and development program
related to our acquired interests on land and according to various rights and
options therein available at our election, subject to terms of the Operating
Agreement, to be undertaken also on a third for quarter basis. Additionally the
Operating Agreement calls for Newport to operate the leases, equipment, wells
and reserve interests for the Company through Firecreek on a month-to-month
accounting basis. Newport is experienced in the area with staff available for
oversight and monitoring of the Companys interests. Newport utilizes a pumper
operator located in and familiar with that area. Newport shall administrate
monthly activities including the Companys expected gas production income when
available, issuing monthly management reports, lease operating and interest
owner expense and income payments, and compiling same for delivery to our
accounting offices.

Competition

The oil and gas industry is
highly competitive. As a new independent producer entering the oil and gas
business, the Company will not initially own and may never own any refining or
retail outlets and may have little control over the price it will receive for
planned crude oil production. Higher costs, fees and taxes assessed at the producer
level may become prevalent and will not necessarily be able to be passed on to
the Companys customers. Although management has established relationships in
its proposed acquisition activities, significant competition by individual
producers and operators or major oil companies exist. Integrated and
independent companies and individual producers and operators are active bidders
for desirable oil and gas properties. Many of these competitors have greater
financial resources than the Company has now or will have in the near future.

Sales and Marketability

There were no sales
attributable to oil and gas production or delivery commitments during Fiscal
Year Ended 2005. A Gas Purchase Agreement was entered into November 11, 2005,
by Emerald Operating Company (Emerald) as Producer, and Western Gas
Resources, Inc. (Western). Effective January 1, 2006, Newport, the Companys
Operator for its interests in the TMD Project and Western, signed a
Ratification Agreement, adopting the Gas Purchase Agreement as the agreement
between them covering gas purchases, pursuant to which Newport became the
Producer. The Gas Purchase

6

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Agreement has a term of
three years, continuing thereafter until either party gives written notice of
termination at least thirty days prior to the expiration of the primary term or
any extension of the primary term. Payments relative to the Companys receipt
thereof from Newport based on Gas received to the pipeline are estimated to be
a standard 45-60 days following monthly settlement and calculation by Western.
The BTU content of our gas produced in the TMD workover wells tested above
standard. Through Newport we are entitled to receive bonus payment adjustment
increase for sales of gas, less gathering fees, as applicable, in accordance
with the then terms and calculations of the Gas Purchase Agreement with
Western. The Company believes it has no commitment that obligates us to produce
any set amount of natural gas (see also Description of properties).

The Company is
pursuing potential new development for its present interests and additional
acquisition targets and prospects for oil and natural gas production and in
some of the areas there are gas gathering systems and pipelines available.
Prior to the Companys disposal on December 24, 2003 of interests owned in
proved developed producing oil properties located in Olney Young County, Texas,
sale of crude oil had not posed a problem. Crude oil can be easily sold,
wherever it is produced, in the states where the operations may be located,
subject to transportation costs, and in foreign countries similarly according
to location and access. In foreign countries such as Russia where the Company
is pursuing potential acquisitions, crude oil sales may be or is limited by
export rules respectively. Crude oil when produced generally includes
transportation by one or more methods including truck, rail or pipeline.

Future Development
Contemplated, Ten Mile Draw Project

Projects
have been identified for contemplated drilling and development, including one
additional workover well (the third of three wells discussed above) to be
restored to production subject to agreement of the Company and Newport, for our
TMD project, Sweetwater County, Wyoming. One of the opportunities of interest
is a potential drilling program for 5 wells in the Almond Sand and the Lewis
Sand formations at depths to approximately 4,500 feet. Presently, the Company
holds interests and rights in areas being considered for the drilling program.
The properties and interests are located in our core area operated by Newport
Oil Corporation, which can provide or sub contract the services for the
drilling and development programs. Newport has worked several years in the
region and is directly associated with the oil and gas business. The costs
indicated for such an initial 5-well drilling program are recently estimated to
run approximately $800,000 per well, including rig, equipment, crewing,
permits, title, and legal. For the one workover well estimates indicate
$350,000 on a 50% working interest basis would be necessary for costs to
restore the well to enhanced production utilizing specialized fracing
procedures. Upon a successful effort for a first drilling program, and
completion of the third workover well, a multiple 5-10 well drilling program
could be considered in this area for ongoing stages of additional development
by right of first refusal held by the Company through Firecreeks Purchase and
Operating Agreements with Newport, and subject to such terms and provisions of
and contained in those Agreements. Well data and older reserve analysis
indicates that the Almond Sand and Lewis Sand formations have historically
produced long life reserves with revenues potentially for 20 to 30 years.

Regulations,
Wyoming

Any
oil undertaking within the State of Wyoming requires obtaining the necessary
permits and approvals from the Wyoming Oil and Gas Conservation Commission
(WOGCC). Once a lease is obtained, an operators agreement must be on file
with the WOGCC. In addition, federal regulations including those governed by
the Environmental Protection Agency must be strictly followed (see additional
discussion addressing the regulatory environment governing oil & gas
drilling and production found under Business Risks; Governmental Regulation).
We believe our operator Newport has obtained all necessary permits to operate
the two workover wells associated with the Companys interests in TMD project
held by Firecreek.

Entry And Eventual
Stability In The Oil And Gas Business Will Be Dependent Largely On Our Ability
To Acquire Significant Financing Amounts

The Companys
entry and eventual stability in the oil and gas business will be dependent
largely on our ability to continuously acquire significant financing amounts,
which may be necessary with and or in addition to its present equity line
arrangements, and other potential financing providers, to carry out and
implement its plans (see Management Discussion and Analysis, Business
Risks, and Liquidity and Capital Resources sections).

7

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The Company
and its Firecreek unit are presently in different stages of review and
discussion, gathering data and information, and any available reports on other
potential acquisitions in Texas, and other productive regions and areas in the
U.S. as well as overseas.

Successful
negotiations for acquisitions, confidentiality, timing and the Companys
financial capabilities will continue to play a significant role in any success
of both current and future operations for the Company activities, including
existing subsidiary operations, and or any future planned subsidiary or special
purpose entity (SPE) operations which in the future may exist.

From time to
time Management will examine oil and gas operations in other geographical areas
for potential acquisition and joint venture development.

Firecreeks Overseas
Project Activity Development in Central Asian and European Countries

Strategic Alliance
with Sahara Group

Overview

On August 4,
2004, Firecreek entered into a protocol and strategic alliance with DAC, Inc.
(DAC), a Pennsylvania corporation, and InterOilGas, (IOG), a Luxembourg
corporation. As of December 31, 2004 and throughout 2005 The Sahara Group, Inc.
(Sahara) alliance was domiciled in Delaware, USA. Plans for relocation of its
situs to Vienna or to another location are being reviewed.

The operations
of Sahara are conducted from Firecreek regional offices located in Istanbul,
Turkey. Under the protocol which formed Sahara, IOG is responsible for the
identification and structuring of opportunities in Eastern Europe, Russia,
Turkey and other North Africa venues. IOG and DAC are responsible for political
and governmental coordination between the consortium and senior government
officials regarding potential projects at various stages and statuses development
predominately in Russia, Turkey, Ukraine, with assistance and support for
Firecreeks independent efforts made in Libya in 2004. In 2005 additional
development activities progressed through the Strategic Alliance with Sahara in
Russia, Turkey, Kazakhstan, and Ukraine.

In Moscow on
December 7, 2004 Sahara and Firecreek, the operating partner, signed a General
Agreement on Strategic Partnership on Joint Activity with Russias
International Integration Oil and Gas Construction Syndicate known as Minneftegazstroi
(for additional
historical information please see information in The Business under sub
heading Strategic Alliance with Sahara Group in Form 10-KSB filed April 12,
2005, and in our current Report, as amended, on Form 8K/A, Amendment No. 3,
filed on July 5, 2005 and is incorporated herein by reference).

Firecreek-Sahara Progress In 2005

In June and July 2005 as a
result of various meetings by our overseas negotiation and technical teams, we
entered into the following material definitive agreements: Agreement Regarding Future Operations(RFO
Agreement), Between The Sahara Group, Inc. and Firecreek Petroleum, Inc.; Addition One
To The General Agreement On Strategic Partnership And Joint Activity,
(Russia); Addition
Two to The General Agreement On Strategic Partnership And Joint Activity,
(Russia); Agreement
For Projects, (Russia); Agreement Regarding Seaport, (Russia); Agreement
For Purchase And Sale Of 51% Of Stock Of Transnafta Center,
(Kazakhstan). Information on these Agreements and Exhibits can be found in our
current Report, as amended, on Form 8K/A Amendment No. 3, filed on July 5, 2005
and incorporated herein by reference.

In August 2005 the Company,
Firecreek, and Sahara entered into a Field Development and Operating Agreement
with NaftoGaz Ukraine, the National Oil and Gas Company of Ukraine, regarding
the development and operation of oil and gas fields in Ukraine (see additional
information in our current Report on Form 8-K filed on September 1, 2005 and is
incorporated herein by reference).

8

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In a September 30, 2005
press release we reported: i) Firecreeks negotiating and technical team was
scheduled to return to Almaty Kazakhstan to review the final reports from
overseas legal counsel and accountants as a prelude to the final negotiations
for the acquisition of Kamenkovsky exploration license, and an additional
Proved Undeveloped oil, gas and gas condensate field known as Kamenskoye; and
ii) that the Ukraine Institute for Oil and Gas was continuing to collect and
review production and technical data covering 7 fields offered by NaftoGaz to
Firecreek for its proposed rehabilitation program and that Firecreeks
technical team spent a week in Kiev working with NaftoGazs technical experts
focused on one specific field identified for early rehabilitation (see In
Libya for additional information).

On October 27, 2005 the
Company, Firecreek and Sahara agreed to a Memorandum of Understanding with the
operator of the Bugrevatovskoye field, UKRNAFTA, a subsidiary of NaftoGaz
Ukraine, the National Oil and Gas Company of Ukraine (see additional
information in our Current Report on Form 8-K filed October 27, 2005).

In a December 6, 2005 press
release updating our prior activities reported in the September 30, 2005 press
release, that i) in negotiations overseas, Firecreek and its Strategic Partner
Sahara signed a memorandum of understanding on November 11, 2005 with an oil
producing enterprise in Kazakhstan to jointly undertake final technical due
diligence for review for proposed acquisition and development of a license with
probable reserves known as Kamenskoye which spans approximately 100,000 acres
and is adjacent to the 1.7 million acre Kamenkovsky exploration block, ii) that
Firecreek was continuing to work on the clarification of certain legal issues
affecting the status of the Kamenkovsky exploration license anticipating to
resolve remaining issues in early 2006, and iii) to update its October 27, 2005
press release regarding its MOU with the operator of the Bugrevatovskoye field,
UKRNAFTA, and Firecreek was scheduling its technical team to meet with UKRNAFTA
representatives in Kiev, Ukraine to begin discussions on 2006 budgets, work
programs and a formal operating agreement. In March, the Company and its wholly
owned subsidiary, Firecreek Petroleum, Inc. are working with special advisors
and consultants regarding structuring for potential future financing
contemplated in connection with the Kamenskoye and Kamenkovsky Exploration
& Production Projects/Licenses in Western Kazakhstan. As of April 7, 2006,
the Sahara Groups Chairman is in Kazakhstan, in discussions regarding status of
the two licenses. The Company will report such outcome of the meeting as
applicable, when appropriate.

Firecreek-Sahara Strategic Alliance,
Project Agreement Status and Expenditures For Fiscal Year Ended December 31,
2005

Investment In Sahara

During Fiscal Year 2005, the
Company invested additional funds on behalf of our Firecreek units various
initial infrastructure and activities for acquisition of potential oil and gas
programs planned for its Central Asian and European Countries via its Strategic
Alliance with Sahara. The Company expended approximately USD $235,632 in Fiscal
Year 2005 for Saharas general and administration expenses for its Istanbul
office and related office expenses, consulting, professional fees, telephone,
and travel. This amount does not include restricted share issuance to certain
Sahara consultants. The Company advanced an additional USD $1,566,101, the
aggregate of country expenditure totals, for i) costs related to due diligence,
engineering fees, legal, accounting and travel into efforts made, and further
broken down to each of the certain countries listed below at the end of each
status summary, and ii) as a platform for its potential future growth overseas
(see also Note 18, Segment Information in the Notes to the Consolidated Financial Statements). At December
31, 2005, the Company having achieved a basic ramp up for its various overseas
activities is now working in the first quarter 2006 to level and contain its start
up expense to a minimum in 2006, and maintain the strategic relationship with
Sahara. Toward this goal, on March 17, 2006 the Company, Firecreek, and The
Sahara Group, Dr. Rusbek Bisultanov entered into an Business Relationship
Agreement Letter. The letter formally discusses programs and activities going
forward between the entities regarding current business developments of the
Strategic Alliance created in 2004. It also sets focus on key projects
established, and provides for reduction of expenses and other terms, until all
parties agree to modify such terms. For further information please see Exhibit
10.30 furnished with this Report. We will attempt to conclude acquisition of
one or more established projects. We may or may not be successful in these attempts
(see Business Risks).

9

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In Russia

In the first half of 2005,
the Firecreek and Sahara review team made several negotiation and technical
trips to Moscow which resulted in successful collection of geological,
geophysical, drilling, completion, engineering, production,
pipeline/trucking/railway transportation data, and for all selected fields (see
Agreements and Exhibits in our current Report, as amended, on Form 8K/A
Amendment No. 3, filed on July 5, 2005 and incorporated herein by reference). Substantial
data was collected in June and July 2005 and thereafter delivered to our third
party engineering firm. The reserve data was certified by the Russian
International Integration Oil and Gas Construction Syndicate, Minneftegazstroi,
by the Russian Ministry of Natural Resources department. The reserve data was
confirmed to be substantially accurate in a preliminary review by our
independent third party engineering firm, but was awaiting final delivery of
originating log data required by US regulations in effect, and thus to properly
complete Reserve Reports as required by the Company, and its then financial
partners and investors. In late September 2005 our engineering firms Moscow
office advised us that additional material was delivered by Minneftegazstroi
covering the Phase I Fields and had indicated at that time they would continue
to gather the material from the various archives in each of the two Russian
states and expressed its intent to complete the data collection and transfer to
our engineering firm within 30 to 45 days from September 2005. They advised
that the data on the older wells in and around the subject Phase I Fields had
been retired to inactive archives which had slowed down the process, and that
Phase II Field data would be easier to collect as it is active but still
pending resolution of internal reorganization brought about by a proposed
merger. Minneftegazstroi advised Firecreek, through Sahara, that the internal
reorganization should be complete and resolved within 60 to 90 days from late
September 2005 after which time negotiations may resume for the transfer of the
Phase II Fields to the Firecreek program in conjunction with Minneftegazstroi.
We have not yet received the required balance of data. Firecreek-Sahara
management continue to send correspondences to resolve the differences. We have
not received notification of a termination. Payments for expenditures made
during 2005 related to various Firecreek-Sahara activities in Russia was
approximately USD $498,807 including professional services, office expense,
technical and data fees, legal, accounting, and travel.

Environmental Regulation: The government of the Russian Federations, Ministry of Natural
Resources, and Other agencies establish special rules, restrictions and
standards for enterprises conducting activities affecting the environment. The
general principle of Russian environmental law is that any environmental damage
must be fully compensated. Under certain circumstances, top officers of the
entity causing substantial environmental damage may be subject to criminal
liability.

The law of the Russian
Federation on subsoil requires that all users of subsoil ensure safety of works
related to the use of subsoil and comply with existing rules and standards of
environment protection. Failure to comply with such rules and standards may
result in termination or withdrawal of a license.

Taxation: The
Russian tax system currently is undergoing a major reorganization. New tax laws
including those setting forth rules for application of the value-added tax,
profit tax, and tax on the production of minerals were enacted within the last
three to four years. The cost of legal and accounting advice to keep up with
changes in the Russian tax laws may be significant and penalties for violations,
even inadvertent ones, may be significant.

In Kazakhstan

The Companys efforts via
Firecreek and Sahara in Kazakhstan represented additional substantial
in-country negotiation and technical team efforts in Fiscal 2005, especially
considering a Company of our size and resources available to it. In addition to
our previous project activities discussed, the Company, Firecreek and Sahara
are developing a strategic plan towards securing additional time to continue
our work on the legal complexities for potential acquisition and development
for the Kamenkovsky exploration license, and second license known as the
Kamenskoye which contains Proved Reserves. In 2006, we are aligning with
various industry consultants, legal advisors, and accountants to find and apply
the best methodology to develop an acceptable marketable acquisition approach
for the two programs. We will continue to report developments and progress, as
appropriate. Payments for expenditures made during 2005 related to various
Firecreek-Sahara activities in Kazakhstan were approximately USD $804,101
including professional services, office expense, technical and data fees,
legal, accounting, and travel.

10

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Environmental Regulation: Kazakhstans
environmental legislation is comprised of national laws and regulations as well
as international treaties. The base environmental law is the Law On
Environmental Protection enacted in 1997, which has been changed numerous
times. These laws establish basic environmental protection principles and
requirements, rights and obligations of subsoil users; the scope of
responsibilities of government bodies; environmental pollution quotas and
limits; and obligatory payments for the use of natural resources and environmental
pollution. These laws regulate waste disposal and define the concept of
environmental regulation, environmental and natural resource monitoring, and
environmental protection standards. In addition, oil and gas operations are
subject to regulation by special legal acts. The basic legislation governing
oil and gas operations, the Law On Oil and the Law On Subsoil, contains
environmental protection provisions. Special environmental protection norms
applicable to the oil and gas industry are established in the National Oil
Spill Prevention and Response Plan at Sea and in Kazakhstans Inland Water, the
Conceptual Program for Building up Kazakhstans Gas Industry to 2015, and the
National Petrochemical Industry Development Program for 2004 to 2010. Other oil
governing legislation containing environmental requirements is fairly large and
exists mainly in the form of Kazakhstans government decrees or in ministry
instructions.

Preemptive Purchase Right: As of December 2004, by
virtue of the Law On Subsoil, the government is granted the preemptive right to
buy the subsoil use right (or a portion thereof), and/or participating interest
(block of shares) in a legal entity once such right or interest is offered for
sale on no less beneficial terms than those offered by other buyers. This right
is also applicable to contracts executed prior to the enactment of the
provision. At the time of enactment of the law, there was no binding procedure
established for entities selling the subsoil right and/or stakes in subsoil. No
government body has been designated to have the power to make decisions
regarding enforcement of the preemptive right. On July 29, 2005, the government
issued a decree which somewhat clarified the situation but stopped short of
establishing a detailed procedure for implementing such deals. As of this time,
legislation has established no additional regulations governing this matter.

Taxation of Oil Operations: Subsurface users are
subject to taxation of mineral resources based on two models. The first
provides for payment of taxes and other mandatory payments established by the
Kazakhstan Tax Code, with the exception of the Republic of the governments
share under the production sharing arrangement. The second model provides for
payment of the governments share under a production sharing arrangement, as
well as payment of all taxes and other mandatory payments established by the
Tax Code, with the exception of rent tax on exported crude oil, gas condensate;
royalty; the excise tax on crude oil and gas condensate; the excess profits
tax; the land tax; and the property tax. The tax on excess profit can be as
much as 60%. The governments share under production sharing is set in the
production sharing contract. Royalty is from 2% to 6%. A signing bonus, set as
a result of a competition of investment programs for obtaining subsurface usage
rights, is set in the production sharing contract taking into account the
economic value of the deposits. A commercial discovery bonus may also be
applicable in contracts permitting discoveries. The base rate of Kazakhstans
corporate income tax is 30% for residents. Non-residents income generated from
sources in Kazakhstan are taxed at the base rates of 15% (dividends) and 20% in
most other cases. In addition, the net profit generated by a non-resident legal
entity operating in Kazakhstan through a permanent representation is subject to
a 15% tax.

In Ukraine

The Companys
efforts via Firecreek and Sahara in Kazakhstan represented additional
considerable in-country negotiation and technical team efforts in Fiscal 2005
again considering a Company of our size and resources available to it. In
addition to our previous project activities discussed for Ukraine, the Company,
Firecreek and Sahara has recently secured additional time to continue our work
on potential acquisition and development for the Bugrevatovskoye field,
UKRNAFTA, and also received additional time for a recently negotiated project
under MOU with Sahara known as the Sakhalinska Proved Undeveloped oil, gas and gas
condensate field in Ukraine. The Sakhalinska acquisition opportunity is
independent of our prior negotiation regarding Field Development and Operating
Agreement with NaftoGaz Ukraine, the National Oil and Gas Company of Ukraine.
We are now aligning with various industry consultants, legal advisors, and
accountants to find and apply the best methodology to develop an acceptable
marketable acquisition approach for these two programs in Ukraine. We will
continue to report developments and progress, as appropriate. In so far as our
efforts in Ukraine, we have limited our scope and efforts to these two listed
fields for 2006. Payments for expenditures made during 2005 related to various
Firecreek-Sahara activities in Ukraine was approximately USD $52,203 including
professional services, office expense, data fees, and travel. See also
information listed under Recent Developments.

11

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In Turkey

Turkish Pipeline
Project, Background: Currently there are over
8,500 oil tankers transiting the Bosphorus Strait from the Black Sea into the
Mediterranean. The Turkish government, supported by the environmental group
Greenpeace, considers the potential for tanker accidents to be significant and
unacceptable. It is estimated that the oil coming out of Russia and other
venues by the end of 2008 will exceed 14,000 tankers per year. This significant
increase has created an urgent priority on the part of the Turkish government
to create a modern state-of-the-art pipeline system from the Black Sea to the
Aegean Sea via a route west of the Bosphorus. A Letter of Intent has been
entered into between the Minister of Energy and Sahara covering the construction
of a proposed new pipeline system. Firecreek is the operations partner for
Sahara and will be the project manager. Sahara continues to interact with the
Turkish government concerning fundamental points of consideration regarding the
route and composition of the proposed pipeline from the Black Sea to the Aegean
Sea. The Turkish government has elected to review the overall project and
consult with other participating oil producing countries of the Black Sea
before proceeding with the project. No date has been set for the resumption of
discussions. Plans for such resumption will be based in part upon our internal
and external financial readiness to enter next stage formal discussions to
proceed including feasibility analysis of this project. Certain expenditures in
Turkey related to various Firecreek-Sahara activities was approximately
$72,640, including professional services, and travel.

Competition

We compete in a highly
competitive industry. We will encounter intense competition in all of our
operations, including property acquisition, and equipment and labor required to
operate and to develop properties. The Company, Firecreek, and our Strategic
Alliance with Sahara competes with other major oil companies, independent oil
companies, and individual producers and operators. Many competitors have
financial and other resources substantially greater than ours.

Firecreeks Future Planned Oil and Gas
Operations

Status of
Firecreeks Overseas Project Activity, and Expenditures

Firecreeks
opportunities listed below are considered independent of its Strategic Alliance
with Sahara, and do not conflict or compete with other opportunities existing
in countries being developed by The Sahara Group.

During Fiscal
Year 2005 the Company has expended additional funds on behalf of our Firecreek
units various initial infrastructure and activities for acquisition of
potential oil and gas programs planned for Romania and Libya. The Company
expended approximately USD $138,350 in Fiscal Year 2005, in the aggregate, for
office expenses, consulting, professional fees, telephone, and travel related
to its efforts made in Romania and Libya. Costs are further broken down to each
of the two countries listed at the end of each status summary. At December 31,
2005, the Company having achieved a basic ramp up for its various overseas
activities is now working in the first quarter 2006 to level and contain its
start up expense to a minimum in 2006. To help reduce overhead until the
Company develops potential cash flows, and or secure one or more additional
project financings, we have taken steps in early March 2006 which include
reduction of employees for the Firecreek unit to occasional part time work on a
consulting basis, from one or more individuals, as needed. The Company may take
further steps to downsize its leasing requirements for office space in Ft.
Worth, Texas. Further Firecreek maintains a strategic relationship with
overseas consultants in Romania, and political advisors in Libya. The Company
has established relationships and interest for project financings which could
be provided for both of these countries but is based on obtaining proper
complete due diligence, agreements, and reasonable time for transactional
review and closing processes. The Company must be able to provide capital
infusion for all preparatory work for project financing requirements. The
Company, for its size and available resources, has made sizable investments to
date in an effort to position itself for opportunities, but continuous delays
and timing have created additional expenditures. As a result, our efforts in
Romania, and from time to time in other countries, have fallen behind due
available capital shortages to pay key consultants and other service providers.
Although relationships still remain strong, we must address these budgetary
requirements to proceed. Financial outlays, as and when available, will be
directed toward working on the most probable efforts. There have been many
changes, and delays both in Romania and Libya to varying degrees over the past
two years which has affected our economic plans. We will attempt to conclude
acquisition of one or more established projects and in addition to our oil and
gas project efforts initiated in Wyoming, and the Sahara activities prior
discussed

12

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herein. We may
or may not be successful in these attempts. The Company believes the Firecreek
overseas platform created over the past two years of efforts has provided
progress and substantive opportunities available for the potential growth for
the Company, and subject to all of the tremendous inherent risks associated
with these undertakings (see Business Risks).

In Romania

Firecreek
through its subsidiary operations Firecreek Romania, SRL is currently
discussing the possibility of acquiring oil fields from OMV-PETROM and the
National Agency for Mineral Resources (NAMR) for rehabilitation and
development. Talks were postponed for the holidays and evaluation of additional
new fields. In 2005 Firecreek attempted to acquire a Romanian company that
reportedly had significant probable reserves. During the in-depth due diligence
several discrepancies and title problems were discovered. This production
acquisition project was terminated. Additionally, Firecreek has a proposal to
become the strategic partner of OMV/PETROM in the rehabilitation and management
of a yet undetermined number of fields. Many of these fields are in decline or
in need of significant rehabilitation through technology, reservoir management
and capital infusion. Firecreek has additionally entered into a consultancy
agreement with S.C. RCI Group de Consultanta SRL in Bucharest, Romania. They
have brought to the table several opportunities in Romania and Kazakhstan that
can be acquired under favorable terms. Currently under the agreement, they are preparing
to conduct a detailed geologic and engineering assessment of several oilfields
in Kazakhstan. There are other fields designated for similar engineering and
geological review that are in various stages of production and development. In
addition to the fields in Romania, RCI is conducting for Firecreek a detailed
evaluation on 5 fields in Kazakhstan that are currently in production but
require substantial rehabilitation and development. Upon completion of the
evaluation by RCI, Firecreek will select those fields of interest and send the
detailed geological and engineering reports to Ryder Scott Consultants or other
acceptable engineering firm for review and confirmation prior to project
funding. The RCI opportunities do not conflict or compete with other
opportunities in Kazakhstan being developed by The Sahara Group. Payments
for expenditures made during 2005 related to various Firecreek unit activities
in Romania was approximately USD $106,330 including professional services,
related office expense, data fees, and travel.

In Libya

Several years
ago Firecreek started working with a Canadian company called Gamma Oil and Gas
who had a representative office in Libya. After three trips and in-depth
discussions with the Libyan National Oil Company (NOC), Firecreek tendered a
Memorandum of Understanding in April, 2004 (MOU) covering the Antelat Field to
the southeast of the town of Benghazi. Proved Undeveloped Reserves reported by
Libyan engineering officials are significant. The most encouraging aspect of this
is the reservoir matrix being a limestone or dolomite matrix, which lends to
horizontal development. It is our intention to participate. In addition to the
Antelat Field two other fields have been identified for inclusion into the
program. Those additional fields being the Al Haram and Um Al Faroom fields.
These additional fields were acceptable to the NOC. Firecreek President John R.
Taylor and Executive Vice President William E. Merritt met with Dr. Albadre,
Chairman of the NOC in November, 2004. It was agreed at that meeting that the
Firecreek technical team augmented by technical representatives of Ryder Scott
would be invited to Libya in the first quarter of 2006 to review the field and
well data as a part of a comprehensive evaluation of the three fields. It was
agreed that a formal rehabilitation program for the three fields would be
submitted for NOC review and approval leading up to a formal Production Sharing
Agreement. Firecreek is awaiting the formal invitation from the National Oil
Company of Libya regarding date of the visit. It had been scheduled for March
21, 2006 but was postponed due to the recent change in NOC Chairman. We believe
that all of our activities in Libya to date are within U.S. State Department
Guidelines for conduct. Payments for expenditures made during 2005 related to
various Firecreek unit activities in Libya was approximately USD $32,020
including professional services, related office expense, and travel.

Disposal of Marine
Segment Operations, 2005

On December
31, 2005, the a majority of the Board of Directors elected to dispose of
International Yacht Sales Group, Ltd. of Great Britain (IYSG), which was
acquired in November and December 2003. This action resulted primarily from
decrease of sales or no sales for  the units activities in 2004 and 2005.
The expected completion date for a formal disposal plan is initially set to be
accomplished within a four to six month period, and may be extended if
additional time is necessary.

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ITEM 1A. RISK FACTORS

RISKS RELATED TO OUR BUSINESS

We incurred
historical losses and have a working capital deficit. As a result, we may not
be able to generate profits, support our operations, or establish a return on
invested capital.

We incurred
net losses in fiscal 2005 of $10,867,777 and net losses in fiscal 2004 of
$6,978,881. As of December 31, 2005, we had a working capital deficit of
$3,357,901. In addition, we expect to increase our infrastructure and operating
expenses to fund our anticipated growth. As a result, we may not be able to
generate profits in 2006 or thereafter and may not be able to support our
operations, or otherwise establish a return on invested capital. We cannot
assure you that any of our business strategies will be successful or that
significant revenues or profitability will ever be achieved or, if they are
achieved, that they can be consistently sustained or increased on a quarterly
or annual basis.

We Expect Our Operating Losses To Continue

The Company
expects to incur increased operating expenses during the next year. The amount
of net losses and the time required for the Company to reach and sustain
profitability are uncertain. The likelihood of the Companys success must be
considered in light of the problems, expenses, difficulties, and delays
frequently encountered in connection with a new business, including, but
not  limited to uncertainty as to
development and acquisitions and the time required for the Companys planned
production to become available in the marketplace. There can be no assurance
that the Company will ever generate product revenue or achieve profitability at
all or on any substantial basis. The
Company incurred a net loss of $10,867,777 in fiscal 2005 and $6,978,881 in fiscal year 2004.

Our Level Of
Indebtedness May Affect Our Business.

Our level of
indebtedness could have important consequences for our operations, including:

|  |                                                                                                                                                                                                                    
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may need
  to use a large portion of our cash flow to repay principal and pay interest
  on our debt, which will reduce the amount of funds available to finance our
  operations and other business activities;
|  |                                                                                                                                                                                                                    
| | Our debt
  level may make us vulnerable to economic downturns and adverse developments
  in our businesses and markets; and                                                                                        
|  |                                                                                                                                                                                                                    
| | Our debt
  level may limit our ability to pursue other business opportunities, borrow
  money for operations or capital expenditures in the future or implement our
  business strategy.                           

We expect to
obtain the funds to pay our expenses and to pay principal and interest on our
debt by utilizing cash flow from operations. Our ability to meet these payment
obligations will depend on our future financial performance, which will be
affected by financial, business, economic and other factors. We will not be
able to control many of these factors, such as economic conditions in the
markets in which we operate. We cannot be certain that our future cash flow
from operations will be sufficient to allow us to pay principal and interest on
our debt and meet our other obligations. If cash flow from operations is
insufficient, we may be required to refinance all or part of our existing debt,
sell assets, and borrow more money or issue additional equity.

We have a limited
amount of cash and are likely to require additional capital to continue our
operations.

We have a
limited amount of available cash and will likely require additional capital to
successfully implement our business plan. Although we raised gross proceeds of
up to $4.0 million in May 2005 through the sale of callable secured convertible
notes and three year common stock purchase warrants to Tirion, these funds were
sufficient to sustain our operations for only 6 months.  The Dutchess equity line adds additional
working capital to the extent of the Put Amounts which will sustain our
operations for an extended period of time; however, certain draw down
restrictions pertaining to the Puts apply which could shorten this period of
time. There can be no assurance that we will be able to obtain additional

14

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funding when
needed, or that such funding, if available, will be obtainable on terms
acceptable to us. In the event that our operations do not generate sufficient
cash flow, or we cannot obtain additional funds if and when needed, we may be
forced to curtail or cease our activities, which would likely result in the
loss to investors of all or a substantial portion of their investment.

Production Risks

All of the
Companys current and proposed oil and gas activities would be subject to the
risks normally incident to the exploration for, and development and production
of, natural gas and crude oil. These include, but are not limited to, blowouts,
cratering and fires, each of which could result in damage to life and property.
In accordance with customary industry practices, the Company plans to maintain
future insurance for its proposed operations against some, but not all, of the
risks. Losses and liabilities arising from such events could reduce revenues
and  increase costs to the Company to
the  extent  not  covered  by insurance.

Risks And
Uncertainties Can Impact Our Growth

There are
several risks and uncertainties, including those relating to the Companys
ability to raise money and grow its business and potential difficulties in
integrating new acquisitions for the oil and gas sector of operations,
especially as they pertain to foreign markets and market conditions. These
risks and uncertainties can materially affect the results predicted. Other
risks include the Companys limited operating history, the limited financial
resources, domestic or global economic conditions, activities of competitors and
the presence of new or additional competition, and changes in Federal or State
laws and conditions of equity markets.

The Companys
future operating results over both the short and long term will be subject to
annual and quarterly fluctuations due to several factors, some of which are
outside the control of the Company. These factors include but are not limited
to fluctuating market demand for our services, and general economic conditions.

Governmental
Regulation

Effect of Probable
Governmental Regulation on the Business Domestically and in Foreign Countries

As we expand
our efforts to develop our business, we will have to remain attentive to
relevant federal and state regulations. We intend to comply fully with all laws
and regulations, and the constraints of federal and state restrictions could
impact the success of our efforts.

Our oil and
gas business and services may become established in multiple states and foreign
countries. These jurisdictions may claim that we are required to qualify to do
business as a foreign corporation in each such state and foreign country. New
legislation or the application of laws and regulations from jurisdictions in
this area could have a detrimental effect upon our business. We cannot predict
the impact, if any, that future regulatory changes or developments may have on
our business, financial condition, or results of operation.

The Company
and its current and future operations are subject to federal, state and local
laws, and regulations and ordinances relating to the production and sale of oil
and gas. Some of the laws that the Company is subject to include the Clean Air
Act, the Clean Water Act, and the
Endangered Species Act. Other laws and regulations include laws
governing allowable rates of production, well spacing, air emissions, water
discharges, marketing, pricing, taxes, and use restrictions and other laws
relating to the petroleum  industry. For
example, coal bed methane wells are being
highly regulated for disposing of produced fresh water on the surface.
The EPA is requiring that the fresh water meet more stringent standards than
before, and can require  the water be
injected underground making drilling these wells potentially uneconomical. As
another example, Governmental regulation may delay drilling in areas that have
endangered species. Therefore, if the Company were to undertake a drilling
program in such an area by a proposed development project in the future, no
assurance could be given that such delays would not become more expensive.
Regulations may have a negative financial
impact on us depending  on the
compliance costs.

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Any failure to
obtain, or delays in obtaining regulatory approvals by the Company or its
operators, could delay or  adversely
affect the Companys ability to generate revenues. These laws and regulations
could impose substantial  liabilities
for the Company if it fails to comply. Further, there can be no assurance that
the Company through its contract operators will be able to  obtain
necessary regulatory approvals for any of its future activities
including those which may be proposed for the further development of oil and
gas. Although the Company does not anticipate problems satisfying any of the
regulations  involved, the Company
cannot foresee the possibility of new regulations, which could adversely affect
the business of the Company.

Environmental
regulations and taxes imposed by state governments in a jurisdiction wherein
oil and gas properties are located impose a burden on the cost of production.
Of the gross production revenues, severance and ad valorem taxes in Wyoming for
oil and gas amount to approximately 12%.

Environmental  requirements do have a substantial impact
upon the energy industry. Generally, these requirements  do not appear to affect the proposed Company
operations any differently, or to any greater or lesser extent, than other
companies in the domestic industry as a whole. The Company will establish
policies and procedures for compliance with
environmental laws and regulations affecting its proposed operations.
The Company believes that compliance with environmental laws and regulations
will not have a material adverse effect on the Companys operations or
financial  condition. There can be no
assurances, however, that changes in or additions to laws or regulations
regarding the protection of the environment will not have such an impact in the
future.

At this time
no regulatory or additional regulatory approvals are necessary and, to the best
knowledge of the officers, we have complied with all laws, rules and
regulations.

Cost And Effects Of
Compliance With Environmental Laws

Our business
will be subject to regulation under the state and federal laws regarding
environmental protection and hazardous substances control with respect to its
current and future oil and gas operations. We are unaware of any bills
currently pending in Congress that could change the application of such laws so
that they would affect us.

Risk Factors
Affecting Our Future Results Of Operations For The Company

Due to the
Companys limited operating history, it is difficult to predict accurately
future revenues. This may result in one or more future quarters where the
Companys financial results may fall below the expectation of management and
investors. However firmly management may believe in its prospects, the Company
could fail. Operating results may vary, depending upon a number of factors,
many of which are outside the Companys control. Material factors expected to
impact the Companys operating results include, legal costs associated with
registration of options and other filing requirements, expansion activities,
increased interest and expenses for borrowings and possible hiring of
additional full time employees. Every investor should evaluate the risks,
uncertainties, expenses and difficulties
frequently encountered by companies in the early stage of development.
The past performance of the Company cannot be used to predict the future
performance.

Lack Of Experience

Almost all of
the management team joined the Company in 1999, 2003, and recently in 2004, and
2005, and certain of our management only devote a small percentage of their
time to Company business. This lack of specific training, and experience for
integration of the oil and gas sector coupled with working in the regulatory
environment and less than full time effort in certain cases will probably cause
management to miss opportunities that more experienced managers would recognize
and take advantage of. Managements decisions and choices may not be well
thought out and operations and earnings and ultimate financial success may
suffer irreparable harm. Additionally, these individuals have not previously
worked together. If senior executives and managers are unable to work
effectively as a team, business operations could be considerably disrupted.

16

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Oil And Gas Prices Fluctuate Widely, And Low
Prices For An Extended Period Of Time Are Likely To Have A Material Adverse
Impact On Our Business

Our revenues,
operating results, financial condition and ability to borrow funds or obtain
additional capital depend substantially on prevailing prices for natural gas
and, to a lesser extent, oil. Declines in oil and natural gas prices may
materially adversely affect our financial condition, liquidity, ability to
obtain financing and operating results. Lower oil and gas prices also may
reduce the amount of oil and gas that we can produce economically.
Historically, oil and gas prices and markets have been volatile, with prices
fluctuating widely, and they are likely to continue to be volatile.

Prices for oil
and natural gas are subject to wide fluctuations in response to relatively
minor changes in the supply of and demand for oil and gas, market uncertainty
and a variety of additional factors that are beyond our control. These factors
include:

| |   |                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------
| |  | The domestic
  and foreign supply of oil and natural gas.                                                                                      
| |   |                                                                                                                                                
| |  | The level of
  consumer product demand.                                                                                                        
| |   |                                                                                                                                                
| |  | Weather
  conditions.                                                                                                                          
| |   |                                                                                                                                                
| |  | Political
  conditions in oil producing regions, including the Middle East.                                                                    
| |   |                                                                                                                                                
| |  | The ability
  of the members of the Organization of Petroleum Exporting Countries to agree
  to and maintain oil price and production controls.
| |   |                                                                                                                                                
| |  | The price of
  foreign imports.                                                                                                                
| |   |                                                                                                                                                
| |  | Actions of
  governmental authorities.                                                                                                         
| |   |                                                                                                                                                
| |  | Domestic and
  foreign governmental regulations.                                                                                               
| |   |                                                                                                                                                
| |  | The price,
  availability and acceptance of alternative fuels.                                                                                 
| |   |                                                                                                                                                
| |  | Overall
  economic conditions.                                                                                                                 

These factors
make it impossible to predict with any certainty the future prices of oil and
gas.

Drilling natural gas
and oil wells is a high-risk activity.

Our growth is
materially dependent upon the success of our drilling program. Drilling for
natural gas and oil involves numerous risks, including the risk that no
commercially productive natural gas or oil reservoirs will be encountered. The
cost of drilling, completing and operating wells is substantial and uncertain,
and drilling operations may be curtailed, delayed or cancelled as a result of a
variety of factors beyond our control, including:

| |   |                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------
| |  | unexpected
  drilling conditions, pressure or irregularities in formations                          
| |   |                                                                                                     
| |  | equipment
  failures or accidents                                                                   
| |   |                                                                                                     
| |  | adverse
  weather conditions                                                                        
| |   |                                                                                                     
| |  | compliance
  with governmental requirements; and                                                    
| |   |                                                                                                     
| |  | shortages or
  delays in the availability of drilling rigs or crews and the delivery of
  equipment.

Our future
drilling activities may not be successful and, if unsuccessful, such failure
will have an adverse effect on our future results of operations and financial
condition. Our overall drilling success rate or our drilling success rate for
activity within a particular geographic area may decline. We may ultimately not
be able to lease or drill identified or budgeted prospects within our expected
time frame, or at all. We may not be able to lease or drill a particular
prospect because, in some cases, we identify a prospect or drilling location
before seeking an option or lease rights in the prospect or location.
Similarly, our drilling schedule may vary from our capital budget. The final
determination with respect to the drilling of any scheduled or budgeted wells
will be dependent on a number of factors, including:

| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the results
  of exploration efforts and the acquisition, review and analysis of the
  seismic data                                                                                
| |   |                                                                                                                                                                                    
| |  | the
  availability of sufficient capital resources to us and the other participants
  for the drilling of the prospects                                                            
| |   |                                                                                                                                                                                    
| |  | the approval
  of the prospects by other participants after additional data has been
  compiled                                                                                    
| |   |                                                                                                                                                                                    
| |  | economic and
  industry conditions at the time of drilling, including prevailing and
  anticipated prices for natural gas and oil and the availability of drilling
  rigs and crews
| |   |                                                                                                                                                                                    
| |  | our
  financial resources and results; and                                                                                                                                         

17

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| |   |                                                                                
| | - | -------------------------------------------------------------------------------
| |  | the
  availability of leases and permits on reasonable terms for the prospects.

These projects
may not be successfully developed and the wells, if drilled, may not encounter
reservoirs of commercially productive natural gas or oil.

Reserve estimates
depend on many assumptions that may prove to be inaccurate. Any material
inaccuracies in our reserve estimates or underlying assumptions could cause the
quantities and net present value of our reserves to be overstated.

Reserve
engineering is a subjective process of estimating underground accumulations of
natural gas and crude oil that cannot be measured in an exact manner. The
process of estimating quantities of proved reserves is complex and inherently
uncertain, and the reserve data included in this document are only estimates.
The process relies on interpretations of available geologic, geophysic,
engineering and production data. As a result, estimates of different engineers
may vary. In addition, the extent, quality and reliability of this technical
data can vary. The differences in the reserve estimation process are
substantially due to the geological conditions in which the wells are drilled.
The process also requires certain economic assumptions, some of which are
mandated by the Securities and Exchange Commission, such as natural gas and oil
prices. Additional assumptions include drilling and operating expenses, capital
expenditures, taxes and availability of funds. The accuracy of a reserve
estimate is a function of:

| |   |                                                             
| | - | ------------------------------------------------------------
| |  | the quality
  and quantity of available data;               
| |   |                                                             
| |  | the
  interpretation of that data;                          
| |   |                                                             
| |  | the accuracy
  of various mandated economic assumptions; and
| |   |                                                             
| |  | the judgment
  of the persons preparing the estimate.       

Results of
drilling, testing and production subsequent to the date of an estimate may
justify revising the original estimate. Accordingly, initial reserve estimates
often vary from the quantities of natural gas and crude oil that are ultimately
recovered, and such variances may be material. Any significant variance could
reduce the estimated quantities and present value of our reserves.

Our future
performance depends on our ability to find or acquire additional natural gas
and oil reserves that are economically recoverable.

In general,
the production rate of natural gas and oil properties declines as reserves are
depleted, with the rate of decline depending on reservoir characteristics.
Unless we successfully replace the reserves that we produce, our reserves will
decline, eventually resulting in a decrease in natural gas and oil production
and lower revenues and cash flow from operations. Our future natural gas and
oil production is, therefore, highly dependent on our level of success in
finding or acquiring additional reserves. We may not be able to replace
reserves through our exploration, development and exploitation activities or by
acquiring properties at acceptable costs. Low natural gas and oil prices may
further limit the kinds of reserves that we can develop economically. Lower
prices also decrease our cash flow and may cause us to decrease capital
expenditures.

Exploration,
development and exploitation activities involve numerous risks that may result
in dry holes, the failure to produce natural gas and oil in commercial
quantities and the inability to fully produce discovered reserves. We are
continually identifying and evaluating opportunities to acquire natural gas and
oil properties. We may not be able to successfully consummate any acquisition,
to acquire producing natural gas and oil properties that contain economically
recoverable reserves, or to integrate the properties into our operations
profitably.

Seasonality

Demand for natural gas has historically been
seasonal, with peak demand and typically higher prices occurring during the
colder winter months.

18

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Regulation of Oil
and Natural Gas Exploration and Production

Exploration and production operations are
subject to various types of regulation at the federal, state and local levels.
This regulation includes requiring permits to drill wells, maintaining bonding
requirements to drill or operate wells, and regulating the location of wells,
the method of drilling and casing wells, the surface use and restoration of
properties on which wells are drilled, and the plugging and abandoning of
wells. Our operations are also subject to various conservation laws and
regulations. These include the regulation of the size of drilling and spacing units
or proration units, the density of wells that may be drilled in a given field,
and the unitization or pooling of oil and natural gas properties. Some states
allow the forced pooling or integration of tracts to facilitate exploration
while other states rely on voluntary pooling of lands and leases. In addition,
state conservation laws establish maximum rates of production from oil and
natural gas wells, generally prohibiting the venting or flaring of natural gas
and imposing certain requirements regarding the ratability of production. The
effect of these regulations is to limit the amounts of oil and natural gas we
can produce from our wells, and to limit the number of wells or the locations
where we can drill. Because these statutes, rules and regulations undergo
constant review and often are amended, expanded and reinterpreted, we are
unable to predict the future cost or impact of regulatory compliance. The
regulatory burden on the oil and gas industry increases its cost of doing
business and, consequently, affects its profitability. We do not believe,
however, we are affected differently by these regulations than others in the
industry.

We have limited
control over the activities on properties we do not operate.

Other
companies operate some of the properties in which we have an interest. We have
limited ability to influence or control the operation or future development of
these non-operated properties or the amount of capital expenditures that we are
required to fund with respect to them. The failure of an operator of our wells
to adequately perform operations, an operators breach of the applicable
agreements or an operators failure to act in ways that are in our best
interest could reduce our production and revenues. Our dependence on the
operator and other working interest owners for these projects and our limited
ability to influence or control the operation and future development of these
properties could materially adversely affect the realization of our targeted
returns on capital in drilling or acquisition activities and lead to unexpected
future costs.

Requirement For
Additional Capital

The Company
believes that additional debt or equity financing will be necessary to develop
its planned activities through the next twelve to twenty four months. However,
no assurance can be given that all or a significant portion of any debt or
equity financing will be arranged, consummated, and sold or that any changes in
the Companys operations and expansion plans would not consume available
resources more rapidly than anticipated. The Company will need substantial
funding to support the long-term expansion, development, and marketing of its
business and subsidiary operations.

To the extent
that the Companys capital resources, including the proceeds of any offering,
are insufficient to meet current or planned requirements, the Company will
continue to seek additional funds through equity or debt financing,
collaborative, or other arrangements with corporate partners, and from other
sources, which may have the effect of diluting the holdings of existing
shareholders. The Company has no effective or approved current arrangement with
respect to such additional financing that is either secured or finalized at
this time. Even though the Company has existing prospects for general or
project financing, the outcome may change, be delayed, or may not be
conclusive, therefore financing is not assured or guaranteed. Financing to be
potentially obtained from prospects is not assured or guaranteed until actually
consummated and financing actually provided. The Company at this date does not
anticipate that existing shareholders will provide any portion of the Companys
future financing requirements.

Need For Expansion

The Company
expects expansion will be required to address potential growth. This need for
expansion will continue to place a significant strain on the management and
financial resources of the Company. Failure to manage growth could disrupt the
operations and ultimately  prevent the
Company from generating expected revenues. The Companys business strategy
includes entering into business partnerships and may include acquiring future
businesses, such as, existing production or products, technology and
acquisitions related to oil and gas or other resources, oil and gas field
operations, and engineering. Other areas of future operations may include real
estate, land and commercial development, technology

19

---



and
facilities, and fuel cell technology. The Company may be unable to complete
suitable business partnerships and acquisitions on  commercially reasonable terms, if at all. Competition could
impair the Companys ability to successfully pursue these aspects of this
business strategy.

Business
partnerships or acquisitions could disrupt ongoing business, distract management
and employees and increase expenses. If the Company makes an acquisition, it
could face difficulties assimilating that companys personnel and operations.
Key personnel of the acquired company may decide not to work for the Company.
Acquisition of additional services or technologies also involves risk of
incompatibility and lack of integration into existing operations. If the
Company finances the acquisitions by issuing equity securities, this could
dilute existing stockholders positions. Additionally, funding instruments may
have rights, preferences or privileges senior to those of the Companys
stockholders.

Limited Financial
Data

As a result of
its limited operating history, the Company has limited historical financial
data upon which to forecast revenues and results of operation. The actual
effect of these factors on the price of stock will be difficult to assess.
Results of operation may fall well below the expectations of securities
analysts and  investors, and the trading
price of common stock may drop.

Estimating
Inaccuracies

There are
numerous uncertainties inherent in estimating quantities of proven reserves and
in projecting future rates of production and timing of development
expenditures, including many factors beyond the control of the Company.
Reserve  engineering is a subjective
process of estimating underground accumulations of crude oil, condensate and
natural gas liquids that cannot be measured in an exact manner. The accuracy of
any reserve estimate is a function of the amount and  quality of data and of engineering and geological interpretation.
Estimates of different engineers vary. Results of drilling, testing and
production after the date of an estimate may justify revision of such estimate.
Reserve estimates are often  different
from the quantities ultimately recovered including the continual possibility of
failure to find oil or gas and the drilling of a dry hole, and concentrations
of oil in unexpected differing amounts on certain holes or targets drilled.

Declining Reserves

Volumes of
proposed oil and gas reserves acquired by the Company will decline as reserves
are depleted. Reserve volumes generated from future activities of the Company
are highly dependent upon the level of success in acquiring or finding
additional reserves.

Key Officers
Management Services Were Provided By Outside Consulting Firms, And Individuals
Contributing Additional Key Officers Management Services, And By Employment For
Certain Individual Services, During Fiscal Year Ended December 31, 2005

Individual
outside consulting firms owned by three of our key officers, Dennis R.
Alexander, Chairman and CFO, Gregg Fryett, CEO and Director until November 30,
and December 31, 2005, respectively, and Melvena Alexander, Secretary and
Comptroller along with an additional three key officers, John R. Taylor,
President and Director, William E. Merritt, Executive Vice President, Director,
and General Counsel, Bud Faulder, Vice President and Director individually
providing and contributing additional key services managed the business of the
Company. During fiscal 2005 Mssrs. Taylor, Merritt and Faulder became employees
of Firecreek Petroleum, Inc., and in March 2006 are providing time as needed or
on a consulting basis, or as negotiated. Mr. Faulder has resigned his post on
March 10, 2006. The loss of the services of any key individual could have
effect on the development of the Companys business. The Company may hire
future employees and additional employees not provided through outside
consulting firms, and depend on their services, the loss of which may effect
the development of the Companys
business and could adversely affect the conduct of our business. While
it intends to do so, the Company has not yet applied for key-man life
insurance  and the Company has not obtained
insurance covering the possibility that any of its key officers and management
personnel might become disabled or otherwise unable to render services to the
Company. The success of the Company is also dependent upon its ability to
attract, contract with and retain highly qualified technical, managerial and
marketing personnel. The Company faces

20

---



competition
for such personnel from other companies, many of which have significantly
greater resources than the Company. There can be no assurance that the Company
will be able to recruit and retain such personnel.

Officers And
Directors Beneficially Own 57.08% Majority Of Shares

The executive
officers and directors of the Company currently beneficially own approximately
57.08% of the outstanding Common Stock representing a majority. Accordingly,
such persons will effectively control the Board of Directors of the Company and
will direct the affairs of the Company.

Penny Stock As A
Risk

Definition And
Rule Reference: The Securities and Exchange Commission has adopted Rule 3a51-1
of General Rules and Regulations, Promulgated under the Securities and Exchange
Act of 1934, which established the definition of a penny stock, for the
purposes relevant to the Company, as any equity security that has a market price
of less than $5.00 per share, or with an exercise price of less than $5.00 per
share, subject to certain exceptions. For any transaction  involving a penny stock, unless exempt, the
rules require: (i) that broker or dealer approve a persons account for transactions
in penny stocks; and, (ii) the broker or dealer receive from the investor a
written agreement to the transaction, setting forth the identity and quantity
of the penny stock to be purchased.

Future sales of our
Common Shares in the public market could lower our share price.

We may sell
additional Common Shares in subsequent offerings. We may also issue additional
Common Shares to finance future acquisitions, including acquisitions larger
than those we have done in the past. We cannot predict the size of future
issuances of our Common Shares or the effect, if any, that future issuances and
sales of our Common Shares will have on the market price of our Common Shares.
Sales of substantial amounts of Common Shares, or the perception that such sales
could occur, may adversely affect prevailing market prices for our Common
Shares.

Obligations And
Contingencies

The Company is
liable for future restoration and abandonment costs  associated with its oil and gas properties. These costs include
future site restoration and plugging costs of wells. The cost of future
abandonment of producing wells has not been
determined. Management believes that these costs will not have a
material adverse effect upon its financial position or results of operations.

Other

The Companys
corporate parent operations during fiscal year ended 2005 did not retain any
employees. Individual consulting firms owned by three key officers along with
three additional key officers contributing time and effort managed the
day-to-day operations of our Company full time. Three other directors, of which
are officers of the Company, assisted us and were available as required for no
charge through approximately May 2005 and then became salaried employees
through Firecreek Petroleum, Inc. our subsidiary operations for oil and gas.
During mid year 2005 we were able and began to employ up to eight persons,
including three prior discussed, through Firecreek Petroleum, Inc. subsidiary
operations. We also have six to twelve consultants at minimum, plus part time
web technicians, accounting consultants, legal consultants, oil and gas
technical team consultants and engineers available for project purposes; two
are executive assistants on part time/full time basis with the Firecreek
operations, two are translators, one assists the executive officers on a
contract basis; four advisors assist us with project evaluations and business
development, two advisors have assisted us with information and research and
one with technical writing and presentation. The Company intends to hire
several full time employees if we receive funds which include; international
accounting systems and data processing coordinator, oil and gas staff analyst
and coordinator, chief communications officer; investor relations; operations officer;
financing officers; several key assistants to executive officers, and other.
Future performance will be substantially dependent on the continued services of
management and the ability to retain and motivate them. The loss of the
services of any officers or senior managers could affect activities of our
business and its operations until additional personnel can be retained and
trained to perform some of the management tasks. At the present time the
Company does not have long-term employment agreements with any key personnel
and does not maintain any life insurance policies.

21

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ITEM 2 - DESCRIPTION OF PROPERTY

Glossary of
Oil and Gas Terms.

Barrel:
Equal to 42 U.S. gallons.

Basin:
A depressed sediment-filled area, roughly circular or elliptical in shape,
sometimes very elongated.  Regarded as a
good area to explore for oil and gas.

British
thermal unit, (BTU): A measure of the heating value of a fuel.

Completion:
The installation of permanent equipment for the production of oil or gas.

Field:
A geographic region situated over one or more subsurface oil and gas reservoirs
encompassing at least the outermost
boundaries of all oil and gas accumulations known to be within those
reservoirs vertically projected to the land surface.

Fracturing:
The application of hydraulic pressure to the reservoir formation to create
fractures through which oil or gas may move to the wellbore.

Improved
Oil Recovery (IOR): Effort to improve or enhance oil recovery that does not
include secondary or tertiary basic recovery methods. In most oil fields, only a fraction of the oil can
be produced by natural reservoir pressure and by conventional methods such as
pumping. The remaining, or residual, oil can be recovered only by using
recovery methods that restore pressure and fluid flow in underground formations
through the introduction of water, gas, chemicals, or heat into the reservoir.

License:
Formal or legal permission to explore for oil and gas in a specified area.

Log: Io conduct a survey inside
a borehole to gather information about the subsurface formations; the results
of such a survey. Logs typically consist of several curves on a long grid that
describe properties within the wellbore or surrounding formations that can be
interpreted to provide information about the location of oil, gas, and water.
Also called well logs, borehole logs, wireline logs.

Mcf: Is a
thousand cubic feet of natural gas.

Mineral
interest: The ownership of rights to gas, oil, or other minerals as they  naturally occur in  place, at or below the surface of a
tract of land. Ownership of
the minerals carries with it the right to make such reasonable use of the
surface as may be necessary to explore for and produce the minerals. Only the
mineral owner (or fee owner) may execute an oil or gas lease conveying his
interest in a tract of land.

Oil: Crude oil
or condensate.

Operator: An
individual, company, trust, or foundation responsible for the exploration,
development, and production of an oil or gas well or lease.

Productive:
Able to produce oil and/or gas.

Proved
reserves: Estimated quantities of crude oil, condensate, natural gas,  and natural gas liquids that geological and
engineering data demonstrate with reasonable certainty to be commercially
recoverable in the future from known
reservoirs under existing conditions using established operating
procedures and under current governmental regulations.

Proved
undeveloped reserves: Economically recoverable reserves estimated to exist in
proved reservoirs, which will be recovered from wells, drilled in the future.

22

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Reserves: The
estimated value of oil, gas and/or condensate, which is economically
recoverable.

Tons: A ton of
oil is equal to 7.29 barrels of oil.

Working
interest: The percentage of the operating, drilling, completing and  reworking costs that the Company is required
to pay. The net revenue interest is the
percentage of the revenues that the Company receives from the sale of
oil that is produced from the wells.

Working
interest on a Third for Quarter Basis: The non-operator usually will pay all
costs attributable to restoring the well or wells to production and will own
75% of the working interest in the well or wells; The operator receives the
remaining 25% working interest as a free carried working interest.

Recompletion:
The completion for production of an existing well bore in another formation
from that in which the well has been previously completed.

Severance: The
owner of all rights to a tract of land (vertically or horizontally). In
horizontal severance, for example, if he chooses to sell all or part of
the mineral rights, two distinct estates are
created: the surface rights to the tract of land and the mineral
rights to the same tract. The two estates may change hands independently
of each other. Severed mineral rights may be restricted as to mineral type, or
limited by depth, in which case the landowner retains the rights to minerals
other than those severed, and to depth intervals other than those severed.

Workover:
Operations on a producing well to restore or increase production. A workover
may be performed to stimulate the well, remove sand or wax from the wellbore,
to mechanically repair the well, or for other reasons.

The Company
may participate in the drilling of a well or wells if it is able to
successfully acquire attractive oil and gas leases with substantially proven
undeveloped reserves, a preferred majority or suitable working interest being
available, and can obtain or provide financing or market an interest on terms
acceptable to the Company.

Oil and Gas Properties, Leases, and Interests

Sweetwater County,
Wyoming

Through our
wholly owned subsidiary, Firecreek Petroleum, Inc., we own an interest in 4 gas
wells located in Sweetwater County, Wyoming, 2 of which will be
completed during early 2006 for the production of gas.

The
Company attempts to maintain all of its operating wells in
good working condition. Our contract operator, Newport Oil
Corporation (Newport) is familiar with the oil and gas business in the area
and utilizes a contract pumper to oversee wells and interests owned by the
Company.

The Sweetwater
County, Wyoming properties and  interests are secured by the
Companys loan and promissory notes held by Dutchess Private Equities Funds,
through Dutchess Private Equities Fund, LP and Dutchess Private Equities Fund,
II, LP (collectively Dutchess). All liens and encumbrances are discussed
later in this section.

The
Company owns a 50% undivided non operated interest in certain leases,
wells, equipment, mineral interests including oil and gas reserves, and other
rights, (the assets) located in Sweetwater County, Wyoming from Newport Oil
Corporation (Newport), under the prospect named Ten Mile Draw (TMD). An
Operating Agreement was entered into at the time of the Purchase, between
Firecreek and Newport whereas Newport became operator for Firecreeks non
operated 50% interests, and Newports operated 50% interests. The Operating
Agreement also provides for our mutual understandings pertaining to the
exploration and development of two tracts of land, and additional rights and
options further established therein. Also please see The Business;
Firecreeks Current Oil and Gas Operations; Ten Mile Draw Project, Sweetwater
County, Wyoming; Future Development Contemplated, Ten Mile Draw Project.

The assets represent: (i) the
estates and mineral rights created by oil and gas leases described in Exhibit
A to the purchase agreement, insofar as they cover the lands described in
Exhibit A, and all oil, gas, water disposal and other

23

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wells located
on the lands or lands pooled therewith, together with all of Newports interest
in the rights and appurtenances incident thereto; (ii) all of Newports rights
in, to and under agreements relating to such lands, leases or wells; (iii)
fixtures, personal property, facilities and equipment used or held for use or
charged to such lands, leases, or wells; and (iv) all books, files, data and
records in Newports possession relating to such lands, leases or wells,
reserving to Newport the right to retain possession of the originals of such
records. Further information on the Ten Mile Draw Purchase and Sale, Operating
Agreements with Newport, and other associated Agreements per attached exhibits
can be found in our Current Report on Form 8-K filed November 16, 2005,
incorporated herein by reference. The following table and (1) base map of the
area, details the interests of the Company.

Exhibit A to
the purchase agreement identified the following leases, wells, lands and
interests relating to the Ten Mile Draw Project in Sweetwater County, Wyoming:

Leases:

|          |  |                            |  |                         |  |                        
|--------- |  | -------------------------- |  | ----------------------- |  | -----------------------
|LeaseDate |  | Lessor                     |  | Lessee                  |  | Legal Description      
|          |  |                            |  |                         |  |                        
|         
|2/2/1968  |  | State Of Wyoming           |  | Elaine Wolf             |  | Township 21 North      
|          |  |                            |  |                         |  | Range 99 West          
|          |  |                            |  |                         |  | All of section 16      
|         
|6/30/1972 |  | Champlin Petroleum Company |  | AMOCO Petroleum Company |  | Township 21 North      
|          |  |                            |  |                         |  | Range 99 West          
|          |  |                            |  |                         |  | South half of section 9

Wells:

|              |  |                     |  |              |  |                      
|------------- |  | ------------------- |  | ------------ |  | ---------------------
|Field         |  | Well Name           |  | API Number   |  | Location             
|              |  |                     |  |              |  |                      
|             
|Ten Mile Draw |  | AMOCO Champlin 1-15 |  | 49-037-20999 |  | T21N-R99W-15-CE/2NWSW
|Ten Mile Draw |  | State 68-15600 7-16 |  | 49-037-20511 |  | T21N-R99W-16-NWSWNE  
|Ten Mile Draw |  | State 68-15600 16-1 |  | 49-037-20311 |  | T21N-R99W-16-SWSW    
|Ten Mile Draw |  | UPR 13-9            |  | 49-037-20351 |  | T21N-R99W-9-CSWSW    

Acreage Under First Right of Refusal:

|          |  |                            |  |                                     |  |                      
|--------- |  | -------------------------- |  | ----------------------------------- |  | ---------------------
|LeaseDate |  | Lessor                     |  | Lessee                              |  | Legal Description    
|          |  |                            |  |                                     |  |                      
|         
|1/28/1978 |  | USA W-53458                |  | Texas Gas Exploration
  Corporation |  | Township 20 North    
|          |  |                            |  |                                     |  | Range 99 West        
|          |  |                            |  |                                     |  | All of section 20    
|         
|6/30/1972 |  | Champlin Petroleum Company |  | AMOCO Petroleum Company             |  | Township 21 North    
|          |  |                            |  |                                     |  | Range 99 West:       
|          |  |                            |  |                                     |  | Section 07: W/2, SE/4
|          |  |                            |  |                                     |  | Section 15: W/2, SE/4
|          |  |                            |  |                                     |  | Section 17: W/2, SE/4
|          |  |                            |  |                                     |  | Section 21: W/2, SE/4
|          |  |                            |  |                                     |  | Section 23: W/2, SE/4
|          |  |                            |  |                                     |  | Section 27: W/2, SE/4

(1) The following is a Base
Location Map of the area. The subject acreage is part of the Ten Mile Draw
Field, producing from the Lewis and Almond sandstone reservoirs since October
of 1973.

24

---



(MAP)

At the closing
of the purchase of such 50% undivided interest in the above-described assets,
Firecreek and Newport entered into an Operating Agreement (Operating Agreement),
dated effective November 15, 2005, covering the oil and gas leases and
interests described above. Under the Operating Agreement, Newport is the
operator of the Ten Mile Draw Project and Firecreek is the non-operator. The
Operating Agreement provides that unless changed by other provisions of the
Operating Agreement, costs and liabilities incurred in operations under the
Operating Agreement are borne and paid by the parties, and equipment and
materials acquired in operations are owned, by the parties, as their interests
are identified in the Operating Agreement, being 50% for Firecreek and 50% for
Newport. The Operator Newport will also charge a monthly overhead fee of
$500.00 per producing well. Under the Operating Agreement, Newport furnishes
the monthly Lease Operation Expense and activity reports to the Company, acting
in capacities as Manager and consultant. Newport coordinates with
Company management for oversight and decision making on
important items related to gas production, workover and or development
activities. Newport will administrate the Companys monthly run checks
from Western Gas Resources, Inc. Newport will collect and process the run
checks representing the monthly payments due for the production of gas
related to the Company and Newports interests. Newport administrates
monthly payments and activities including revenue received to be paid for
the Companys gas production income relative to our interests in the
properties, and will include accounting for lease operating expenses (LOEs),
collecting and compiling Joint Interest Billing (JIB) statements and certain
reports and financial statements related to production income and expenses for
monthly delivery to the Companys accounting personnel. The Operating Agreement
is in perpetuity, unless generally speaking, the business is wound up or down,
or other triggering events transpire, as defined by the terms therein listed in
the Operating Agreement. The Company may elect to cancel the agreement for good
cause, or Newport may cancel the Agreement upon 30 day written notice to the
Company.

The Operating
Agreement additionally provides for the duties and obligations of the operator
and the obligations of Firecreek as the non-operator with respect to the
funding of certain workover and drilling operations. The workover obligations
relate to three existing wells: (i) State 68-15600 7-16 (the 7-16 Well); (ii)
State 68-15600 16-1 (the 16-1

25

---



Well); and
(iii) UPR 13-9 (the 13-9 Well). The fourth well covered by Exhibit A to the
purchase agreement, AMOCO Champlin 1-15, is non-productive at present and
will be shut in.

With respect
to the three workover wells, Firecreek and Newport are each responsible for 50%
of the workover costs and have 50% of the working interest. As to the 7-16 Well
and the 16-1 Well, each of Firecreek and Newport contributed the sum of
$614,129.50 (total of $1,228,259) pursuant to the initial AFE for workover at
the time of closing, with the acknowledgment that the initial AFE is only an
estimate of workover costs for those two wells and each party is liable for 50%
of all costs attributable to workover of those wells. As to the 13-9 Well, in
Section 9 of Township 21 North, Range 99 West, 6th Prime Meridian,
Firecreek is not obligated to contribute to workover costs for that well until
and unless agreed by separate agreement. Discussions regarding the 13-9 well
with Newport that also involves third parties, anticipate that if agreed,
Firecreek would at its election retain working interests in the 13-9 well on
same basis as the first two workover wells that is 50/50 as described above.

With respect
to the two workover wells in Section 16, Township 21 (the 7-16 Well and the
16-1 Well), the total 100% working interest is subject to: (i) a royalty
interest of 12.5%, and (ii) an overriding royalty interest of 5.00%. The total
net revenue interest is therefore 100% minus 17.5% or 82.50%, and Firecreek has
one-half of this or 41.25%.

The Operating
Agreement contemplates drilling additional wells during 2006 in Section 16,
Township 21 North, Range 99 West, 6th Prime Meridian, and four to six wells on
other land subject to the Operating Agreement. With respect to new wells,
Newport will prepare proposed drilling programs and submit those to Firecreek
for review. Drilling of new wells will be undertaken on the basis of a third
for a quarter; that is, Firecreek, as the non-operator will pay all costs of
drilling, equipping, testing and completing each well and will own 75% of the
working interest in each well; Newport, as the operator, will receive the
remaining 25% working interest as a free carried working interest.

As to new
wells contemplated in Section 16, Township 21, Firecreeks interest is subject
to 75% of the royalty/overriding royalty (75% of 17.5%) and therefore Firecreeks
net revenue interest is 61.875%.

Newport will
formally offer to Firecreek the opportunity to participate in new wells and
Firecreek will have fifteen days to elect to participate or not participate
in such wells. If Firecreek elects to not participate, it will lose all
rights to participate in future wells. Newport, as the operator, is responsible
for the management of the development program and will determine the
parameters, timing, and direction of further drilling.

To secure its
obligations under the Operating Agreement, each party granted to the other a
lien on any interest it owns or acquires in leases and interests in the area
subject to the Operating Agreement, and a security interest and/or purchase
money security interest in any interest it owns or acquires in personal
property and fixtures on or used in connection therewith, to secure performance
of its obligations under the Operating Agreement.

Each of the
parties may sell its interest under the Operating Agreement provided the entire
interest of the party is sold, or as mutually agreeable by the parties from
time to time in writing.

The Companys
Operator, Newport Oil Corporation, has re-completed the 16-1 and 7-16 well and
is reported by its pumper in the area to be producing gas in the Almond and
Lewis Formations.

The
Company may in the future look into employing new
technology and or other effective measures or methods to be
taken to improve production of gas in the existing or new wells.

The
Company attempts to maintain all of its operating wells in
good working condition. Newport Oil Corporation, based in Clearwater, FL,
is familiar with the oil and gas business and interests located in Sweetwater
County, Wyoming. Newport operates the Companys interests in the properties,
further utilizing a contract pumper in the area who oversees production and
maintenance activities for the wells, equipment, and other development
activities for the leases.

26

---



Financing Related To
Our Oil and Gas Interests Located In Sweetwater County, Wyoming

The wells and
interests listed above are secured and encumbered by two notes to Dutchess
Private Equities Funds, through Dutchess. Information on the Dutchess Private
Equities Fund Agreements, the Ten Mile Draw Purchase and Sale with Newport, and
attached additional exhibits can be found in our Current Reports on Form 8-K
filed November 16, 2005, and December 16, 2005, respectively, and in Notes To
Financial Statements Note 8, Issuance of Convertible Debentures, incorporated
herein by reference.

The Company
paid cash of approximately $1.1 million on November 14, 2005 toward purchase of
its interests and initial Phase 1 development in the Ten Mile Draw project. Of
the $1.1 million, $475,000 were paid for the assets, and $614,130 plus other
title and miscellaneous costs pursuant to the initial AFE estimate for workover
for our share of the first two wells at the time of closing pursuant to the
terms of the Purchase and Operating Agreements with Newport.

General Terms
for the two Dutchess notes:

Effective for
the periods commencing (a.) November 14th, and (b.) December 15th,
2005, respectively as follows:

Original face
value principal amount notes in the amount of $1,600,000, and $343,750 secured
by the Companys interests related to its assets and interests in the subject
properties located in Sweetwater County, Wyoming, and from each Put tendered
pursuant to that certain Investment Agreement, as amended, dated August 23,
2005, between the Company and Dutchess. Interest rate of 0%, principal payments
beginning on or about December 14, 2005, and January 15, 2006, and
continuing, all due and payable one year from inception of both notes.
There are no due on sale provisions for either note. (See also section on Liquidity
and Capital Resources, and Notes To Financial Statements Note 9,
Issuance of Convertible Debentures, incorporated herein by reference).

Exploration and
Production

The Company did
not participate in the drilling of a well
or wells since May/June of 2000 through 2002 and to entering recent
workover programs in Sweetwater County, Wyoming on two wells. The Company, in
addition to its present plans contemplated for the Ten Mile Draw, may
participate in the drilling of a well or wells if it is able to successfully
acquire attractive oil and gas leases with substantially proven undeveloped
reserves, a preferred majority, or suitable working interest being available,
and can obtain or provide financing or market an interest on terms acceptable
to the Company.

Proved Reserves

The following
table sets forth the estimated total proved developed producing, and total
proved undeveloped oil and gas for Gross Working Interest reserves, owned by
the Companys wholly owned subsidiary Firecreek Petroleum, Inc. and Newport Oil
Corporation. This analysis was performed in a professional manner using
customary and accepted petroleum engineering and geological practices and
techniques. The analysis is valid for the data provided to the authors of the
report (listed below), representing a true and accurate assessment of the
Proven Developed Reserves, the Proven Undeveloped Reserves, for the interests
held by Firecreek Petroleum, Inc. (50% Working Interest) and Newport Oil
Corporation (50% Working Interest) in the south half of Section 9 and all of
Section 16, Township 21 North, Range 99 West, as outlined in the report. The
following reserve information is based on excerpts of the independent
engineering and geological report prepared by Michael T. Borah (Wyoming PE No.
5107) and Lynette D. W. George (Wyoming PG No. 1004), respectively, at the
request of the Company and Newport Oil Corporation. Natural Gas prices for the
various economic analyses were based on NYMEX value of $11.25 per MMBTU on
December 31, 2005 (source Oilnergy.com website on 2/28/05). Prices were
adjusted for a BTU content of each zone, 1,185 BTU for the Lewis, and 1,029 BTU
for the Almond, respectively. No gas analyses were available for the Ten Mile
Draw Wells. Accordingly, nearby wells in the Bitter Creek, Hay Reservoir, and
Siberia Ridge Fields were researched in WOGOC files for equivalent-zone
analyses. After adjustment for BTU content, the price differential between the
Opal, Wyoming Hub and the Henry Hub for the NYMEX quote was researched.
Although the differential varied daily, it was found that an approximate 75%
reduction was appropriate for the end of the year 2005. After a $0.90 per Mcf
deduction was taken for compression and gathering fees (typical for the area),
prices were calculated as follows: the Lewis at $9.10 per Mcf for December 31,
2005, and the Almond price at $7.78 per

27

---



Mcf for
December 31, 2005. These prices were utilized for all economics performed for
the report.

(1) Gross (WI)
reserves for the subject acreage, based on the appropriate category and
effective January 1, 2006, are as follows:

| |                 |  |                  |  |                    | 
| | --------------- |  | ---------------- |  | ------------------ | 
| |                 |  | Proven Developed |  | Proven Undeveloped | 
| |                 |  |                  |  |                    | 
| |                 |  |                  |  |                    | 
| | Lewis           |  | 241,954 Mcf      |  | 0                  | 
| | Almond          |  | 357,699 Mcf      |  | 2,264,732 Mcf      | 
| | Almond CBM      |  | 0                |  | 0                  | 
| | Lance CBM       |  | 0                |  | 0                  | 
| | Ft. Union
  CBM |  | 0                |  | 0                  | 

| |                            |                                         
| | -------------------------- | ----------------------------------------
| | Proven
  Developed         | Net Present
  Value (10%)  =  $1,131,261
| | Proven
  Undeveloped       | Net Present
  Value (10%)  =  $3,198,112
| |                            |                                         
| | Total Proven
  Reserves:   | 2,367,977
  Mcf (100% Working Interest) 
| | Total Net
  Present Value: | $4,329,373
  (100% Working Interest)    

| |                                                                         
| | ------------------------------------------------------------------------
| | Newport Oil
  Corporation and Firecreek Petroleum, Inc. each own        
| | 50% of the
  totals represented above.                                  
| |                                                                         
| | Firecreek
  Petroleum, Inc. is a wholly owned subsidiary of the Company.
| | Newport Oil
  Corporation is the Operator.                              

(1) The
reserves assigned to the properties in the evaluation were determined by
analyzing current test data, extrapolating historical production data, and
comparing field data with the production history of similar wells in the area.
The current volatility of oil and gas prices provides and element of
uncertainty to any estimates. If prices should vary significantly from those
projected in the appraisal, the resulting values would change substantially.
The reserve estimates contained in the engineering and geological report are
based on accepted engineering and evaluation principles. The present value of
estimated future net revenues, discounted at 10% does not necessarily represent
an estimate of fair market value for the evaluated properties.

There are
numerous uncertainties inherent in estimating quantities of proved
reserves. The reserves and reservoir predictions are estimates only. There
are numerous uncertainties in the estimation of interpretation parameters,
including factors such as product prices, product demand, subsurface heterogeneities,
and other variables, that are beyond the control of the authors of the report
as well as the owners of the subject properties. The estimates in
the appraisal are based on various assumptions relating to
rates of future production, timing and amount of development
expenditures, oil and gas prices, and the results of planned development work.
Actual future production rates and volumes, revenues, taxes, operating
expenses, development expenditures, and quantities of recoverable oil and gas reserves
may vary substantially form those assumed in the estimates. Any significant
change in these assumptions, including changes that result from variances
between projected and actual results, could materially and adversely affect
future reserve estimates. In addition, such reserves may be subject to downward
or upward revision based upon production history, results of future
development, prevailing oil prices, and other factors.

Reservoir
engineering and geological interpretation are a subjective process of estimating
underground accumulations of oil and natural gas that cannot be measured in an
exact manner. The accuracy of any reserve estimate, performance prediction, or
geological analysis is a function of the quality of the available data and of
engineering and geological interpretation and judgment. In addition, the
impacts of various drilling, completion, and production practices on
productivity can be estimated but not fully defined or quantified. As a result,
estimates and analyses by different engineers

28

---



and
geoscientists may vary.

The actual
amount of the Companys proved reserves is dependent on the prevailing price
for oil, which is beyond the Companys control of influence. World oil prices
declined significantly during 1997 and 1998 from previous years and increased
significantly during years 1999 and 2000. In 2001 and 2002 prices again have
been extremely volatile. In 2003, 2004, and 2005, the futures market reported
unprecedented natural gas and crude oil prices. There can be no assurance that
oil/gas prices will decline or increase in the future. Oil and gas prices have
been and are likely to continue to be volatile and subject to wide fluctuations
in response to any of the following factors: relatively minor changes in the
supply of and demand for oil and gas; market uncertainty; political conditions
in international oil producing regions; fear of war, or non fear of war; the
extent of domestic production and importation of oil; the level of consumer
demand; weather conditions; the competitive position of oil as a source of
energy as compared with natural gas, coal, nuclear energy, hydroelectric power,
and other energy sources; the refining capacity of prospective oil purchasers;
national inventory levels; the effect of federal and state regulation on the
production, transportation and sale of oil; and other factors all of which are
beyond the control or influence of the Company.

Additional Maps, TMD

Lewis Net Pay

(MAP)

29

---



Almond Formation Net Pay

(MAP)

Almond Total Coal
Thickness

(MAP)

30

---



Wells And Acreage

In the oil and
gas industry and as used herein, the word gross well or acre is a well or
acre in which a working interest is owned; the number of gross wells
is the total number of wells in which a working interest is owned. A net
well or acre is deemed to exist when the sum
of fractional ownership working interests in gross wells or
acres equals one. The number of net wells or acres is the sum of the fractional
working interests owned in gross wells or acres.

Set fourth
below is information respecting the developed and undeveloped acreage owned by
the Company in Sweetwater County Wyoming as of December 31, 2005.

|                    |                   |                     |       |     | 
|------------------- | ----------------- | ------------------- | ----- | --- | 
|                    | Developed Acreage | Undeveloped Acreage |      
|                    |                   |                     |       |     | 
|                    | Gross             | Net                 | Gross | Net | 
|                    |                   |                     |       |     | 
|                   
|Sweetwater
  County | 320               | 160                 | 960   | 360 | 
|                    |                   |                     |       |     | 
|Total               | 320               | 160                 | 960   | 360 | 

Production And Sale
Of Oil And Gas

There is no
information relating to the Companys net gas produced from the Companys
properties located in Sweetwater County, Wyoming, after royalties, in Fiscal
Year Ended December 31, 2005. Gas was not produced and such required tables
therefore have been omitted.

Disposal of
Intangible Assets Acquired Through Exchange Merger Acquisition with
International Group Holdings, Ltd. (IYSG)

On December 1,
2003 through our exchange merger acquisition with International Group Holdings,
Ltd., as amended, a commercial and private leisure marine vessel sales
brokerage and charter business, International Yacht Sales Group, Ltd. of Great
Britain (IYSG) and all of its divisions, as a wholly owned subsidiary of the
Company. Divisions of IYSG include but are not limited to International Yacht
Sales Brokerage and Charter (IYSBC), Emedia8 (E8), International Marine
Services (IMS), International World Realty (IWR), International Boat
Services (IBS), and International Commercial Shipping (ICS).

At December
31, 2004, management elected to impair the book value of its long lived assets
since estimates of future cash flows attributable to these assets could not be
assured. Consequently, management recognized $1,344,617 impairment expense in
the consolidated statement of operations.

On December
31, 2005 the majority of the Board of Directors of the Company elected to
dispose of its wholly owned subsidiary, International Yacht Sales Group, Ltd.
(IYSG) of United Kingdom. The results of operations for these segments is
included in loss from discontinued operations in the consolidated statements of
operations for fiscal 2005.

Out Corporate
offices are located in Scottsdale, Arizona, and our wholly-owned subsidiary
Firecreek Petroleum, maintains an office in Fort Worth, Texas.

The Companys wholly owned
subsidiary, Firecreek Petroleum, is the lessee of office space in Fort Worth,
Texas.  The lease is for 24 months from
June 1, 2005 through May 31, 2007. Basic monthly rent is $7,053.

31

---



The Company is committed to a
non-cancelable operating lease for office space in Fort Worth, Texas.  Future minimum lease payments required under
this lease is as follows:

|                               |  |   |         | 
|------------------------------ |  | - | ------- | 
|2006                           |  | $ | 104,504 | 
|2007                           |  |   | 35,260  | 
|                               |  |   |         | 
|                               |  |   |         | 
|Total
  minimum lease payments |  | $ | 139,764 | 
|                               |  |   |         | 

Rent expense
for fiscal year 2005 and 2004 was $128,925 and $-0-, respectively.

The Chief
Executive Officer and Shareholder of the Company provided corporate office
space through 2004 at no charge. During the last quarter of 2005, the Company
paid $5,132 for approximately 1,431 square feet of office space utilized for
its headquarters located at 6564 Smoke Tree Lane, Scottsdale, Arizona 85253.
There is no further agreement in place to pay for the premises and at this time
is continuing to be provided free of charge. Please see Certain Relationships
and Related Transactions.

ITEM
3 - LEGAL PROCEEDINGS

We are a not a
party to any legal proceedings.

ITEM
4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to
a vote of our security holders during the fourth quarter of 2005.

PART II

ITEM
5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET PRICE AND
DIVIDENDS OF COMPANY

The Company
became available for quotation on the over-the-counter, NASD NQB Pink Sheets
initially January 20, 2000. As of March 14, 2003, the Company moved to the
over-the-counter market, NASD OTC Electronic Bulletin Board quotation medium
system, and is presently dually quoted on both Pink Sheets, and Bulletin Board.
The range of high and low bid information for the shares of the Companys stock
for the last two complete fiscal years, as reported by the OTC Bulletin Board
National Quotation Bureau, is set forth below. Such quotations represent prices
between dealers, do not include retail markup, markdown or commission, and do
not represent actual transactions.

|                |  |   |       |  |     |       |  | 
|--------------- |  | - | ----- |  | --- | ----- |  | 
|2006            |  |   | High  |  | Low |      
|                |  |   |       |  |     |      
|First
  Quarter |  | $ | 0.044 |  | $   | 0.017 | 

|                               |  |   |       |  |     |       |  | 
|------------------------------ |  | - | ----- |  | --- | ----- |  | 
|Year Ended
  December 31, 2005 |  |   | High  |  | Low |      
|                               |  |   |       |  |     |      
|First
  Quarter                |  | $ | 0.062 |  | $   | 0.015 | 
|Second
  Quarter               |  |   | 0.066 |  |     | 0.013 | 
|Third
  Quarter                |  |   | 0.181 |  |     | 0.057 | 
|Fourth
  Quarter               |  |   | 0.076 |  |     | 0.03  | 

|                               |  |   |      |  |     |       |  | 
|------------------------------ |  | - | ---- |  | --- | ----- |  | 
|Year Ended
  December 31, 2004 |  |   | High |  | Low |      
|                               |  |   |      |  |     |      
|First
  Quarter                |  | $ | 0.21 |  | $   | 0.11  | 
|Second
  Quarter               |  |   | 0.23 |  |     | 0.06  | 
|Third
  Quarter                |  |   | 0.13 |  |     | 0.065 | 
|Fourth
  Quarter               |  |   | 0.09 |  |     | 0.03  | 

32

---



As of March
16, 2005, the Company had issued and outstanding 256,900,350 shares of common
stock, held by approximately 1718 holders of record.

There have
been no cash dividends declared by the Company since its inception. Further,
there are no restrictions that would limit the Companys ability to pay
dividends on its common equity or that would be likely to do so in the
future.

SECURITIES AUTHORIZED FOR ISSUANCE
UNDER EQUITY COMPENSATION PLANS.

The following information is
provided for the fiscal year ended December 31, 2005 with respect to
compensation plans (including individual compensation arrangements) under which
equity securities of the issuer are authorized for issuance, aggregated as
follows:

(i) All compensation plans
previously approved by security holders; and

(ii) All compensation plans
not previously approved by security holders.

Equity
Compensation Plan Information

|                                                                                                       |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|------------------------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------- | ---------- | --------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------- | - | ----- | ---- |  |  | ---------- |  | 
|Plan category                                                                                          |  | Number of
  securities to be
  issued upon exercise of
  outstanding options,warrants
  and rights(a) |            | Weighted
  average exercise
  price of outstanding options,
  warrants and rights
  (see footnotes)(b)(*) |  | Number of
  securities
  remaining available for future
  issuance(c) |  
|                                                                                                       |  |                                                                                                       |            |                                                                                                           |  |                                                                       |  
|(i) Equity compensation plansapproved by security holders                                              |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|                                                                                                       |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|2004 Stock Incentive Plan                                                                              |  |                                                                                                       | 2,500,000  |                                                                                                           |  |                                                                       | $ | 0.18  |      |  |  | -0-        |  | 
|2004 Stock Incentive Plan 2                                                                            |  |                                                                                                       | 1,400,000  |                                                                                                           |  |                                                                       | $ | 0.09  |      |  |  | -0-        |  | 
|2005 Stock Incentive Plan (1)                                                                          |  |                                                                                                       | 2,600,000  |                                                                                                           |  |                                                                       | $ | 0.04  | (*)  |  |  | 1,300,000  |  | 
|Tirion Group, Inc. -Warrant (2)                                                                        |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       |   | (5)   |      |  |  | 2,000,000  |  | 
|DLM Asset Management,-Warrant (2)                                                                      |  |                                                                                                       | 6,700,000  |                                                                                                           |  |                                                                       | $ | 0.06  |      |  |  | 6,700,000  |  | 
|John R Taylor-Option (4)                                                                               |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|William E. Merritt-Option (4)                                                                          |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|George B. Faulder-Option (4)                                                                           |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|Dr. Mousa Hawamdah-Option (4)                                                                          |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|James Barker-Option (4)                                                                                |  |                                                                                                       | 1,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 1,000,000  |  | 
|Charles Alliban-Option (4)                                                                             |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|Dennis R. Alexander-Option (4)                                                                         |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|Gregg Fryett-Option (4)                                                                                |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|Peter Fryett-Option (4)                                                                                |  |                                                                                                       | 2,000,000  |                                                                                                           |  |                                                                       | $ | 0.70  |      |  |  | 2,000,000  |  | 
|                                                                                                       |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|(ii) Equity compensation plansnot approved by security holders                                         |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|                                                                                                       |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|M. Herzog-Option (3)                                                                                   |  |                                                                                                       | 600,000    |                                                                                                           |  |                                                                       | $ | 0.95  |      |  |  | 600,000    |  | 
|(Mel Herzog and Charlotte Herzog TTEE UA DTD Jan 31, 1994 Herzog
  Revocable Living Trust JT Grantors) |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|D. Alexander-Option (3)                                                                                |  |                                                                                                       | 600,000    |                                                                                                           |  |                                                                       | $ | 0.95  |      |  |  | 600,000    |  | 
|M. Alexander-Option (3)                                                                                |  |                                                                                                       | 500,000    |                                                                                                           |  |                                                                       | $ | 0.95  |      |  |  | 500,000    |  | 
|D. Kronenburg-Option (3)                                                                               |  |                                                                                                       | 500,000    |                                                                                                           |  |                                                                       | $ | 0.95  |      |  |  | 500,000    |  | 
|(David J. Kronenberg Assigned to D.J. and S.M. Kronenberg Family
LLLP)                                 |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|L. Trapp-Option (3)                                                                                    |  |                                                                                                       | 600,000    |                                                                                                           |  |                                                                       | $ | 0.95  |      |  |  | 600,000    |  | 
|T. Richards-Option (3)                                                                                 |  |                                                                                                       | 500,000    |                                                                                                           |  |                                                                       | $ | 0.95  |      |  |  | 500,000    |  | 
|Bradley Ray-Option                                                                                     |  |                                                                                                       | 500,000    |                                                                                                           |  |                                                                       | $ | 0.95  |      |  |  | 500,000    |  | 
|Steven Antebi-Warrant  (2)                                                                             |  |                                                                                                       | 4,000,000  |                                                                                                           |  |                                                                       | $ | 0.025 |      |  |  | 4,000,000  |  | 
|Sapphire Consultants-Warrant (2)(6)                                                                    |  |                                                                                                       | 2,500,000  |                                                                                                           |  |                                                                       | $ | 0.02  |      |  |  | 2,500,000  |  | 
|Confin International Inv.-Warrant (2)(6)                                                               |  |                                                                                                       | 3,750,000  |                                                                                                           |  |                                                                       | $ | 0.02  |      |  |  | 3,750,000  |  | 
|John Brigandi-Warrant (2)                                                                              |  |                                                                                                       | 625,000    |                                                                                                           |  |                                                                       | $ | 0.02  |      |  |  | 313,000    |  | 
|                                                                                                       |  |                                                                                                       |            |                                                                                                           |  |                                                                       |   |       |      |  |  |            |  | 
|Total (1)                                                                                              |  |                                                                                                       | 40,375,000 |                                                                                                           |  |                                                                       | $ | 0.41  | (**) |  |  | 40,062,000 |  | 

33

---



(*)     Information
listed for column (b) in the table above represents the exercise or strike
price for each option or warrant, excluding those noted (1) and (5). The
calculation for Column (b) note (1) is the estimated average of the closing bid
prices on the effective date of issuances under the plan prior to February 9,
2005.

(**)   The
final Total listed for column (b) in the table above represents the weighted
average exercise price for all 2005 options and warrants listed and noted (2),
and (4) in the table only (please see calculation method and additional
information listed in item 12. Issuance of Warrants located in Notes to the
Consolidated Financial Statements For the Years Ended December 31, 2005 and
December 31, 2004).

(1) The balance of shares
available under the 2005 Stock Incentive Plan registered on Form S-8 are not
available for further issuance after February 9, 2005 unless authorized,
pursuant to terms of various agreements with our lenders during the year ended
December 31, 2005, and information has been excluded from the final Total
calculations listed above for columns (a), (b), and (c) accordingly.

(2) The Company provided
warrants to a lender and various consultants during 2005. For further
information regarding terms of these warrants to purchase underlying shares of
the Companys common stock issued, please see our Registration Statement on
Form SB-2, as amended, and incorporated herein by reference.

(3) Represents historical
options issued by the Company. For further information regarding terms for
these options, please see information furnished in our Form 10-KSB, Amendment
No. 3, filed on October 4, 2002, and incorporated herein by reference.

(4) Represents options
issued by the Company as part of the Firecreek Petroleum, Inc. acquisition which
vested, becoming available for exercise February 9, 2005. For terms of these
options, please see information furnished in a Current Report on Form 8-K/A
(Amendment No. 2) filed on September 16, 2004, and incorporated herein by
reference.

(5) The strike price for the
Tirion Warrant is 80% of the average of the then lowest three closing bids for
the previous 30 days from the date the warrants are exercised. For further
information regarding terms of the Warrant please see our Registration
Statement on Form SB-2, as amended, and incorporated herein by reference.

(6) On March 14, 2006 the
Company noticed the holders of the Warrants that they must exercise their
Warrants for cash or the Warrants will be cancelled without further notice, 30
days following such notice thereof.

RECENT SALES OF UNREGISTERED
SECURITIES

On November 14 and December
15 of 2005, the Company issued convertible debentures with a face value of
$375,000 and $82,500 respectively, to pay an incentive fee to the holder of the
equity credit line. The debentures became convertible at the date of the
issuances and mature in November and December 2010. The debentures were issued
pursuant to an exemption from registration as provided in Section 4(2) of the
Securities Act of 1933. For terms of the debentures please see information
furnished in Exhibit A to each of Exhibits 10.3, and 99.1 to our Current
Reports on Form 8-K filed on November and December 16, 2005, respectively,
incorporated herein by reference.

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

Summary Results Of
Operations

Overview

You should
read the following discussion and analysis in conjunction with the Consolidated
Financial Statements and Notes thereto, and the other financial data appearing
elsewhere in this Report.

The
information set forth in Managements Discussion and Analysis of Financial
Condition and Results of Operations (MD&A) contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act
of 1934, as amended, and the Private Securities Litigation

34

---



Reform Act of
1995, including, among others (i) expected changes in the Companys revenues
and profitability, (ii) prospective business opportunities and (iii) the
Companys strategy for financing its business. Forward-looking statements are
statements other than historical information or statements of current
condition. Some forward-looking statements may be identified by use of terms
such as believes, anticipates, intends or expects. These
forward-looking statements relate to the plans, objectives and expectations of
the Company for future operations. Although the Company believes that its
expectations with respect to the forward-looking statements are based upon
reasonable assumptions within the bounds of its knowledge of its business and
operations, in light of the risks and uncertainties inherent in all future
projections, the inclusion of forward-looking statements in this report should
not be regarded as a representation by the Company or any other person that the
objectives or plans of the Company will be achieved. In light of these risks
and uncertainties, there can be no assurance that actual results, performance
or achievements of the Company will not differ materially from any future
results, performance or achievements expressed or implied by such
forward-looking statements. The foregoing review of important factors should
not be construed as exhaustive. The Company undertakes no obligation to release
publicly the results of any future revisions it may make to forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

The Company is
currently focused on oil and gas activities in the following areas: i)
Development of our domestic interests acquired initially in Wyoming for
production of oil and primarily natural gas, and ii) pursuit of and potential
completion of projects overseas in Central Asian and European countries; and
further, the Company has been making presentations to asset-based lenders and
other financial institutions for the purpose of expanding and supporting our
growth potential by development of our oil and gas operations in 2006 with a
goal to increase sales output of our Firecreek unit.

One of the
ways our plans for growth could be altered if current opportunities now
available become unavailable:

The Company
would need to identify, locate, or address replacing current potential
acquisitions or strategic alliances with new prospects or initiate other
existing available projects that may have been planned for later stages of
growth and the Company may therefore not be ready to activate. This process can
place a strain on the Company. New acquisitions, business opportunities, and
alliances, take time for review, analysis, inspections and negotiations. The
time taken in the review activities, is an unknown factor, including the
business structuring of the project and related specific due diligence factors.

General

The Company
historically derived its revenues primarily from retail sales of oil and gas
field inventory equipment, service, and supply items primarily in the southern
Arkansas area, from acquired interests owned in revenue producing oil wells,
leases, and equipment located in Olney, Young County, Texas, and in December
2003, from our acquisition of commercial and private leisure marine vessel
sales brokerage and charter business, International Yacht Sales Group, Ltd. of
Great Britain. The Company disposed of the first two segments of operations in
2003 and disposed of the third segment in 2005. We accounted for the segments
as discontinued operations in the consolidated statements of operations for the
related fiscal year.

Effective July
1, 2004, we acquired Firecreek Petroleum, Inc., and its subsidiary Firecreek
Romania, SRL. Firecreek is an international oil exploration and development
company specializing in the niche market of rehabilitation and enhancement of
existing oilfields through modern management and state of the art technological
applications. Management individually has many years of experience and has one
or more collectively been involved in oil and gas operations worldwide.
Throughout 2004 and 2005, through the Firecreek Petroleum unit, we have i)
developed relationships and prepared for potential acquisitions in Romania and
Libya, and ii) through our alliance with Sahara, we have developed additional
potential projects for acquisition that are located in Russia, Romania, Kazakhstan,
Ukraine, and Turkey (see further discussion in The Business). There are no
revenues attributable to sales of oil and natural gas for the fiscal years
ended 2004 or 2005.

Effective November 15, 2005,
Firecreek Petroleum purchased a 50% undivided interest in leases, wells,
equipment, gas and to a lesser extent oil reserves, and other rights, located
in Sweetwater County, Wyoming. The project is listed under

35

---



the prospect name Ten Mile
Draw (TMD). We have commenced with gas production and are contemplating
additional drilling and workover programs (see further discussion in
The Business).

The Company
expects to incur an increase in operating expenses during the next year from
commencing the described activities related to its plans for Firecreek
Petroleum oil and gas operations. The amount of net losses and the time
required for the Company to reach and maintain profitability are uncertain at
this time. There is a likelihood that the Company will encounter difficulties
and delays encountered with business subsidiary operations, including, but not
limited to uncertainty as to development and the time and timing required for
the Companys plans to be fully implemented, governmental regulatory responses
to the Companys plans, fluctuating markets and corresponding spikes, or dips
in our products demand, currency exchange rates between countries, acquisition
and development pricing, related costs, expenses, offsets, increases, and
adjustments. There can be no assurance that the Company will ever generate
significant revenues or achieve profitability at all or on any substantial
basis.

On December 1,
2003 through our exchange merger acquisition with International Group Holdings,
Ltd., as amended, a commercial and private leisure marine vessel sales
brokerage and charter business, International Yacht Sales Group, Ltd. of Great
Britain (IYSG) and all of its divisions, as a wholly owned subsidiary of the
Company. Divisions of IYSG include but are not limited to International Yacht
Sales Brokerage and Charter (IYSBC), Emedia8 (E8), International Marine
Services (IMS), International World Realty (IWR), International Boat
Services (IBS), and International Commercial Shipping (ICS).

At December
31, 2004, management elected to impair the book value of its long lived assets
since estimates of future cash flows attributable to these assets could not be
assured. Consequently, management recognized $1,344,617 impairment expense in
the consolidated statement of operations.

On December 31, 2005 the majority
of the Board of Directors of the Company elected to dispose of its wholly owned
subsidiary, International Yacht Sales Group, Ltd. (IYSG) of United Kingdom. The
results of operations for these segments is included in loss from discontinued
operations in the consolidated statements of operations for fiscal 2005.

RESULTS OF OPERATIONS - 2005
Compared to 2004

General and administrative
costs increased approximately 97% percent to $9,287,691 in 2005 from $4,714,608
in 2004.

Following is a breakdown of
general and administrative costs for this period versus a year ago:

Detail of general &
administrative expenses:

|                          |  |           |           |           |   |           | 
|------------------------- |  | --------- | --------- | --------- | - | --------- | 
|                          |  | 31-Dec-05 |           | 31-Dec-04 |  
|                          |  |           |           |           |   |           | 
|Advertising
  & promotion |  | $         | 70,765    |           | $ | 5,476     | 
|Administration            |  |           | 342,982   |           |   | 293,244   | 
|Consulting                |  |           | 3,994,215 |           |   | 1,290,872 | 
|Broker
  commissions      |  |           | 656,008   |           |   | 0         | 
|Impairments               |  |           | 0         |           |   | 2,558,257 | 
|Depreciation              |  |           | 16,040    |           |   | 4,978     | 
|Professional
  fees       |  |           | 2,300,792 |           |   | 435,324   | 
|Rent
  & storage          |  |           | 128,925   |           |   | 0         | 
|Research                  |  |           | 711       |           |   | 57,791    | 
|Salaries
  & benefits     |  |           | 377,385   |           |   | 29,159    | 
|Payroll
  taxes           |  |           | 26,726    |           |   |           | 
|Relocation                |  |           | 3,343     |           |   |           | 
|Telephone                 |  |           | 128,821   |           |   | 29,721    | 
|Travel
  costs            |  |           | 487,773   |           |   | 9,786     | 
|Loan
  origination fees   |  |           | 265,075   |           |   | 0         | 
|Wells
  development       |  |           | 488,130   |           |   | 0         | 
|                          |  |           |           |           |   |           | 
|                          |  |           |           |           |   |           | 
|Total                     |  | $         | 9,287,691 |           | $ | 4,714,608 | 
|                          |  |           |           |           |   |           | 

36

---



Consulting Fees of
$3,994,215 were incurred during investigations into acquiring profitable
business enterprises.

Professional Fees of
$2,300,792 were incurred in regards to legal costs, securing financing, and the
acquisition of leads and contacts with regard to possible new business ventures
and includes data acquisition costs, technical work, engineering reports, in
connection with various acquisition studies in Kazakhstan, Russia, Ukraine, and
Romania.

Brokerage commissions of
$656,008 were incurred in obtaining finance from issuance of debentures.

Rent and Storage of $128,925
includes leasing and furnishing offices in Forth Worth, Texas and Istanbul.

Travel costs of $487,773 to
Turkey, Russia, Romania, England, Kazakhstan and Ukraine, etc. was in
connection with signing of agreements, negotiating contracts and arranging for
potential financing.

Loan origination fees of
$265,075 include costs related to obtaining financing and credit lines.

Wells development includes
costs of $488,130 related to workover programs for our oil and gas interest
held in the Ten Mile Draw project in Sweetwater County, Wyoming.

After deducting general and
administrative expense, the Company experienced a loss from operations of
$9,287,691 in 2005 as compared to a loss of $4,714,608, in fiscal 2004.

Interest expense for fiscal
year 2005 was $1,898,261 as compared to $351,390 in fiscal year 2004. Interest
expense in 2005 includes amortization of the beneficial conversion features
related to debentures issued in 2004 and 2005, totaling  $1,555,849.

After deducting interest
expense, the Company incurred a loss before extraordinary items of $11,185,952
in fiscal year 2005 compared to a loss of $5,065,998, in fiscal year 2004.

After accounting for
extinguishment of debt, and discontinued operations (net of tax) the net loss
was $10,867,777 in fiscal year 2005, as compared to $6,978,881, for fiscal year
2004. On a per share basis, fully diluted loss per share for fiscal year 2005
was $0.08 compared to $0.13, in fiscal 2004.

During year 2006 based on
development efforts achieved to date, we expect to limit and reduce our million
dollar plus expenditures for overseas Eurasian acquisition activities related
to oil and gas programs until we are reasonably assured an acquisition can be financed,
closed, and activated. We also look to secure ongoing potential financing to
expand our growth and to provide for additional drilling and workover programs
related to our Ten Mile Draw Project in Wyoming.

LIQUIDITY AND CAPITAL
RESOURCES

Cash on hand
at December 31, 2005 was $149,962 compared to $5,538 at the beginning of the
year. At December 31, 2005, the Company had working capital deficit of
$3,357,901 compared to $1,445,998 at the beginning of the year.

Cash used by
operating activities was $5,940,790 for the year ended December 31, 2005,
compared with $1,479,125 for the year ended December 31, 2004.

The Company
paid $713,899 in fiscal year 2005 for the Ten Mile Draw lease, well equipment,
and office equipment. The Company received $7,555,000 in fiscal year 2005 by
issuing convertible debentures and promissory notes on its equity line.
Shareholder advances were paid down by $418,538. In addition the equity line
was paid down by $334,333.

37

---



Total assets
increased to $850,580 at December 31, 2005 compared to $5,538 mainly as a
result of the acquisition of assets, and interests for the workover and
development of oil and primarily gas leases in Sweetwater County, Wyoming.

Shareholders
equity decreased to a deficit of $4,448,610 at December 31, 2005 from a deficit
of $3,215,858 at December 31, 2004. During fiscal year 2005, the Company issued
22,815,831shares to consultants valued at $1,407,972 for services rendered. In
addition, the Company raised $4,349,510by issuing convertible debt, and $283,069
by issuing 4,710,253 shares to settle other debts. Net loss of $10,867,777 for
fiscal year 2005 decreased stockholders equity to deficit $4,448,610 at the end
of the year.

The Company
must generally undertake certain ongoing expenditures in connection expanding
and developing its Firecreek Petroleum, Inc. oil and gas business, and for
various past and present legal, accounting, consulting, and technical review,
and to perform due diligence for activating one or more of its acquisition and
development programs; furthering its development of new and ongoing business
prospects, and in pursuing capital financing for its existing and proposed
operations.

Management has
estimated that such cost for initially paying down certain of the Companys
recent debt, and activating development of its current plans for domestic and
overseas commencement of the Firecreek oil and gas segment operations, will
initially require approximately $8,000,000 to $12,500,000 or more during the
first six to twelve months of fiscal 2006. The Company recently obtained
$100,000 in February 2006 from the exercise of warrants. We are working to
secure $5,000,000 to $7,000,000 or more in asset based, and or other debt or
equity finance by early May to assist our 2006 plans, and are  in addition to the availability of our
established equity credit line. There can be no guarantee or assurance that we
will receive or be successful in obtaining additional financing.

Financing our
full expansion and development plans for our domestic and overseas oil and gas
operations could require up to $50,000,000 or more. The Company may elect to
reduce or increase its requirement as circumstances dictate. We may elect to
revise these plans and requirements for funds depending on factors including;
changes in acquisition and development estimates; interim corporate and project
finance requirements; unexpected timing of markets as to cyclical aspects as a
whole; currency and exchange rates; project availability with respect to
interest and timing factors indicated from parties representing potential
sources of capital; structure and status of our strategic alliances, potential
joint venture partners, and or our targeted acquisitions and or interests.

The Company
cannot predict that it will be successful in obtaining funding for its plans or
that it will achieve profitability in fiscal 2006.

38

---



ITEM
7 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

EGPI FIRECREEK, INC.
(formerly Energy Producers, Inc.)

CONSOLIDATED
FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND DECEMBER 31, 2004

Index to Financial Statements

|                                                           |             
|---------------------------------------------------------- | ------------
|Independent
  Auditors Report                             | F-1         
|                                                           |             
|Consolidated
  Balance Sheets                              | F-2         
|                                                           |             
|Consolidated
  Statement of Operations                     | F-3         
|                                                           |             
|Consolidated
  Statement of Cash Flows                     | F-4         
|                                                           |             
|Consolidated
  Statement of Changes in Shareholders Equity | F-5­
   F-6
|                                                           |             
|Notes to
  the Consolidated Financial Statements           | F-7
   F-18

39

---



DONAHUE
ASSOCIATES, LLC
Certified Public Accountants
27 Beach Road Suite CO5A
Monmouth Beach, NJ 07750
Tel. 732-229-7723

Independent Auditors Report

The
Shareholders
EGPI Firecreek Inc.

We have
audited the accompanying consolidated balance sheets of EGPI Firecreek Inc. as
of December 31, 2005 and December 31, 2004 and the related consolidated
statements of operations and consolidated statements of changes in
shareholders equity and cash flows for the years then ended. These financial
statements are the responsibility of management.  Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of EGPI Firecreek Inc. as of December
31, 2005 and December 31, 2004 and the related consolidated statements of
operations and consolidated statements of changes in shareholders equity and
cash flows for the years then ended then ended in conformity with generally
accepted accounting principles generally accepted in the United States of America.

As more fully
discussed in Note 3 to the consolidated financial statements, there are
significant matters concerning the Company that raise substantial doubt as to
the ability of the Company to continue as a going concern.  Managements plans with regard to these matters
are also discussed in Note 3 to the consolidated financial statements.  The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets or the amounts and classifications of recorded liabilities that
might be necessary in the event that the Company cannot continue in existence.

Monmouth
Beach, New Jersey
April 8, 2006

40

---



EGPI
Firecreek, Inc.
(formerly Energy Producers, Inc.)Consolidated Balance Sheets
As of December 31, 2005 and December 31, 2004

|                                                                                                                                                                      |  |           |             |           |             |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | ----------- | --------- | ----------- | ---------- | -
|                                                                                                                                                                      |  |           |             |           | As Restated |           
|                                                                                                                                                                      |  | 31-Dec-05 |             | 31-Dec-04 |            
|                                                                                                                                                                      |  |           |             |           |            
|ASSETS                                                                                                                                                                |  |           |             |           |             |            |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Current
  assets:                                                                                                                                                     |  |           |             |           |             |            |  
|Cash                                                                                                                                                                  |  | $         | 149,962     |           | $           | 5,538      |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Total current assets                                                                                                                                                  |  |           | 149,962     |           |             | 5,538      |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Other
  assets:                                                                                                                                                       |  |           |             |           |             |            |  
|Fixed assets- net                                                                                                                                                     |  |           | 697,859     |           |             | 0          |  
|Other receivables                                                                                                                                                     |  |           | 2,759       |           |             | 0          |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Total assets                                                                                                                                                          |  | $         | 850,580     |           | $           | 5,538      |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                                                                 |  |           |             |           |             |            |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Current
  liabilities:                                                                                                                                                |  |           |             |           |             |            |  
|Accounts payable & accrued expenses                                                                                                                                   |  | $         | 303,436     |           | $           | 789,801    |  
|Notes payable                                                                                                                                                         |  |           | 3,204,427   |           |             | 3,000      |  
|Notes payable- shareholders                                                                                                                                           |  |           | 0           |           |             | 653,990    |  
|Capital lease payable- current portion                                                                                                                                |  |           | 0           |           |             | 4,745      |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Total current liabilities                                                                                                                                             |  |           | 3,507,863   |           |             | 1,451,536  |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Advances
  payable to shareholders                                                                                                                                    |  | $         | 147,780     |           | $           | 564,803    |  
|Convertible
  debentures payable-net                                                                                                                                  |  |           | 26,195      |           |             | 214,441    |  
|Capital
  lease payable- non current portion                                                                                                                          |  |           | 0           |           |             | 4,531      |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Total liabilities                                                                                                                                                     |  |           | 3,681,838   |           |             | 2,235,311  |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Net
  liabilities of discontinued operations                                                                                                                          |  |           | 78,352      |           |             | 20,738     |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Shareholders
  deficit:                                                                                                                                              |  |           |             |           |             |            |  
|Series A preferred stock, 20 million
  authorized, par value $0.001, one share convertible to one common share, no
  stated dividend, none outstanding                |  | $         | 0           |           | $           | 205,347    |  
|Series B preferred stock, 20 million
  authorized, par value $0.001, one share convertible to one common share, no
  stated dividend, none outstanding                |  |           | 0           |           |             | 760,000    |  
|Series C preferred stock, 20 million
  authorized, stated value $.001, one share convertible to ten common shares, no
  stated dividend, 2,025,000 outstanding        |  |           | 1,539,000   |           |             | 0          |  
|Common stock- $.001 par value, authorized
  920,000,000 shares, issued and outstanding, 220,913,500 at December 31, 2005
  and 75,247,968 shares at December 31, 2004 |  |           | 220,913     |           |             | 75,248     |  
|Additional
  paid in capital                                                                                                                                          |  |           | 15,878,127  |           |             | 6,388,767  |  
|Accumulated
  deficit                                                                                                                                                 |  |           | (20,547,650 | )         |             | (9,679,873 | )
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Total shareholders deficit                                                                                                                                           |  |           | (4,448,610  | )         |             | (3,215,858 | )
|                                                                                                                                                                      |  |           |             |           |             |            |  
|                                                                                                                                                                      |  |           |             |           |             |            |  
|Total Liabilities & Shareholders
  Deficit                                                                                                                           |  | $         | 850,580     |           | $           | 5,538      |  
|                                                                                                                                                                      |  |           |             |           |             |            |  

See the notes to the consolidated financial statements.

41

---



EGPI
Firecreek, Inc.
(formerly Energy Producers, Inc.)Consolidated
Statements of OperationsFor the Years Ended
December 31, 2005 and December 31, 2004

|                                                          |  |           |             |           |             |            |  
|--------------------------------------------------------- |  | --------- | ----------- | --------- | ----------- | ---------- | -
|                                                          |  |           |             |           | As Restated |           
|                                                          |  | 31-Dec-05 |             | 31-Dec-04 |            
|                                                          |  |           |             |           |             |            |  
|General
  and administrative expenses:                    |  |           |             |           |             |            |  
|General administration                                    |  | $         | 9,287,691   |           | $           | 4,714,608  |  
|                                                          |  |           |             |           |             |            |  
|Total general & administrative
expenses                   |  |           | 9,287,691   |           |             | 4,714,608  |  
|                                                          |  |           |             |           |             |            |  
|                                                          |  |           |             |           |             |            |  
|Net
  loss from operations                                |  | ($        | 9,287,691   | )         | ($          | 4,714,608  | )
|                                                          |  |           |             |           |             |            |  
|Other
  revenues and expenses:                            |  |           |             |           |             |            |  
|Interest expense                                          |  |           | (1,898,261  | )         |             | (351,390   | )
|                                                          |  |           |             |           |             |            |  
|                                                          |  |           |             |           |             |            |  
|Net
  loss before provision for income taxes              |  | ($        | 11,185,952  | )         | ($          | 5,065,998  | )
|                                                          |  |           |             |           |             |            |  
|Provision
  for income taxes                              |  |           | 0           |           |             | 0          |  
|                                                          |  |           |             |           |             |            |  
|                                                          |  |           |             |           |             |            |  
|Net
  loss before extraordinary item                      |  | ($        | 11,185,952  | )         | ($          | 5,065,998  | )
|                                                          |  |           |             |           |             |            |  
|Extraordinary
  item- extinguishment of debt (net of tax) |  |           | 375,789     |           |             | 157,000    |  
|                                                          |  |           |             |           |             |            |  
|                                                          |  |           |             |           |             |            |  
|Net
  loss from continuing operations                     |  | ($        | 10,810,163  | )         | ($          | 4,908,998  | )
|                                                          |  |           |             |           |             |            |  
|Loss
  from discontinued operations (net of tax)          |  |           | (57,614     | )         |             | (2,069,883 | )
|                                                          |  |           |             |           |             |            |  
|                                                          |  |           |             |           |             |            |  
|Net
  loss                                                |  | ($        | 10,867,777  | )         | ($          | 6,978,881  | )
|                                                          |  |           |             |           |             |            |  
|                                                          |  |           |             |           |             |            |  
|Basic
  & fully diluted net loss per common share:        |  |           |             |           |             |            |  
|Loss from continuing operations                           |  | ($        | 0.08        | )         | ($          | 0.09       | )
|Loss from discontinued operations                         |  |           | (0.00       | )         |             | (0.04      | )
|Gain from extraordinary item                              |  |           | 0.00        |           |             | 0.00       |  
|                                                          |  |           |             |           |             |            |  
|Loss per share                                            |  | ($        | 0.08        | )         | ($          | 0.13       | )
|                                                          |  |           |             |           |             |            |  
|                                                          |  |           |             |           |             |            |  
|Weighted
  average of common shares outstanding:          |  |           |             |           |             |            |  
|Basic & fully diluted                                     |  |           | 134,874,275 |           |             | 53,088,218 |  

See the notes to the consolidated financial statements.

42

---



EGPI
Firecreek, Inc.(formerly Energy Producers, Inc.)Consolidated Statements of Cash FlowsFor the Years Ended
December 31, 2005 and December 31, 2004

|                                                                         |  |           |            |           |             |           |  
|------------------------------------------------------------------------ |  | --------- | ---------- | --------- | ----------- | --------- | -
|                                                                         |  |           |            |           | As Restated |          
|                                                                         |  | 31-Dec-05 |            | 31-Dec-04 |            
|Operating
  Activities:                                                  |  |           |            |           |             |           |  
|Net
  loss from continuing operations                                    |  | ($        | 10,810,163 | )         | ($          | 4,908,998 | )
|Adjustments to reconcile net loss items not
  requiring the use of cash: |  |           |            |           |             |           |  
|Depreciation expense                                                     |  |           | 16,040     |           |             | 58,737    |  
|Amortization of beneficial conversion
  feature                          |  |           | 1,555,849  |           |             | 269,174   |  
|Consulting expense                                                       |  |           | 4,162,398  |           |             | 1,139,659 |  
|Extraordinary item- forgiveness of debt
  (net of tax)                   |  |           | (375,789   | )         |             | (157,000  | )
|Bad debt expense                                                         |  |           | 0          |           |             | 141,443   |  
|Impairment expense                                                       |  |           | 0          |           |             | 2,558,257 |  
|Changes
  in other operating assets and liabilities:                     |  |           |            |           |             |           |  
|Other receivable                                                         |  |           | (2,759     | )         |             | (708,310  | )
|Accounts payable and accrued expenses                                    |  |           | (486,366   | )         |             | 127,913   |  
|                                                                         |  |           |            |           |             |           |  
|Net
  cash used by operations                                            |  | ($        | 5,940,790  | )         | ($          | 1,479,125 | )
|                                                                         |  |           |            |           |             |           |  
|Investing
  activities:                                                  |  |           |            |           |             |           |  
|Purchase of equipment                                                    |  | ($        | 713,899    | )         |             | 0         |  
|                                                                         |  |           |            |           |             |           |  
|Net
  cash used by investing activities                                  |  |           | (713,899   | )         |             | 0         |  
|                                                                         |  |           |            |           |             |           |  
|Financing
  Activities:                                                  |  |           |            |           |             |           |  
|Funds received from equity line                                          |  | $         | 3,555,000  |           | $           | 0         |  
|Issuance of convertible debenture                                        |  |           | 4,000,000  |           |             | 650,000   |  
|Payment of equity line                                                   |  |           | (334,333   | )         |             | 0         |  
|Payment of shareholder advances                                          |  |           | (418,538   | )         |             | 0         |  
|Exercise of warrants                                                     |  |           | 6,260      |           |             | 0         |  
|Payment of capital lease                                                 |  |           | (9,276     | )         |             | (3,986    | )
|Payment of bank loan                                                     |  |           | 0          |           |             | (4,936    | )
|Issuance of common stock                                                 |  |           | (0         | )         |             | 50,180    |  
|Proceeds from shareholder advances                                       |  |           | 0          |           |             | 748,250   |  
|                                                                         |  |           |            |           |             |           |  
|Net cash provided by financing activities                                |  |           | 6,799,113  |           |             | 1,439,508 |  
|                                                                         |  |           |            |           |             |           |  
|                                                                         |  |           |            |           |             |           |  
|Net
  increase (decrease) in cash during the period                      |  |           | 144,424    |           |             | (39,617   | )
|                                                                         |  |           |            |           |             |           |  
|Cash
  balance at January 1st                                            |  |           | 5,538      |           |             | 45,155    |  
|                                                                         |  |           |            |           |             |           |  
|                                                                         |  |           |            |           |             |           |  
|Cash
  balance at December 31st                                          |  | $         | 149,962    |           | $           | 5,538     |  
|                                                                         |  |           |            |           |             |           |  
|                                                                         |  |           |            |           |             |           |  
|Supplemental
  disclosures of cash flow information:                     |  |           |            |           |             |           |  
|Interest paid during the period                                          |  | $         | 1,600      |           | $           | 1,574     |  
|Income taxes paid during the period                                      |  | $         | 0          |           | $           | 0         |  

See the notes to the consolidated
financial statements.

43

---



EGPI
Firecreek, Inc.(formerly Energy
Producers, Inc.)Consolidated Statement of Changes in Shareholders Deficit
For the Years Ended December 31, 2005 and December 31, 2004

|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|------------------------------------------- |  | ------ | ----------- | ----- | - | ------- |  | ----------- | ---------- | ----- | -- | ----------- | - | -- | ----------- | -
|                                            |  | Common |             | Par   |   | Paid in |  | Accumulated |            |       |    |            
|                                            |  | Shares |             | Value |   | Capital |  | Deficit     |            | Total |   
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Balance
  at January 1, 2004                |  |        | 36,088,968  |       | $ | 36,089  |  | $           | 2,983,534  |       | ($ | 2,700,992   | ) | $  | 318,631     |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Issued
  shares for services                |  |        | 14,125,000  |       |   | 14,125  |  |             | 1,125,534  |       |    |             |   |    | 1,139,659   |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Debentures
  converted to shares            |  |        | 5,034,000   |       |   | 5,034   |  |             | 176,916    |       |    |             |   |    | 181,950     |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Beneficial
  conversion feature             |  |        |             |       |   |         |  |             | 522,783    |       |    |             |   |    | 522,783     |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Issuance
  of stock to purchase Firecreek   |  |        | 20,000,000  |       |   | 20,000  |  |             | 1,580,000  |       |    |             |   |    | 1,600,000   |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Net
  loss for the fiscal year              |  |        |             |       |   |         |  |             |            |       |    | (6,978,881  | ) |    | (6,978,881  | )
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Balance
  at December 31, 2004- as restated |  |        | 75,247,968  |       |   | 75,248  |  |             | 6,388,767  |       |    | (9,679,873  | ) |    | (3,215,858  | )
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Issued
  shares for services                |  |        | 22,815,831  |       |   | 22,816  |  |             | 1,385,156  |       |    |             |   |    | 1,407,972   |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Issued
  shares to pay debt                 |  |        | 4,710,253   |       |   | 4,710   |  |             | 278,359    |       |    |             |   |    | 283,069     |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Issued
  shares to pay equity line          |  |        | 3,268,464   |       |   | 3,268   |  |             | 128,128    |       |    |             |   |    | 131,396     |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Debentures
  converted to shares            |  |        | 93,491,153  |       |   | 93,491  |  |             | 4,256,019  |       |    |             |   |    | 4,349,510   |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Preferred
  shares converted to common      |  |        | 21,066,831  |       |   | 21,067  |  |             | 1,385,280  |       |    |             |   |    | 1,406,347   |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Beneficial
  conversion feature             |  |        |             |       |   |         |  |             | 1,733,545  |       |    |             |   |    | 1,733,545   |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Detachable
  warrants issued                |  |        |             |       |   |         |  |             | 316,926    |       |    |             |   |    | 316,926     |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Warrants
  exercised                        |  |        | 313,000     |       |   | 313     |  |             | 5,947      |       |    |             |   |    | 6,260       |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Net
  loss for the period                   |  |        |             |       |   |         |  |             |            |       |    | (10,867,777 | ) |    | (10,867,777 | )
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  
|Balance
  at December 31, 2005              |  |        | 220,913,500 |       | $ | 220,913 |  | $           | 15,878,127 |       | ($ | 20,547,650  | ) | ($ | 4,448,610   | )
|                                            |  |        |             |       |   |         |  |             |            |       |    |             |   |    |             |  

See
the notes to the consolidated financial statements.

44

---



EGPI
Firecreek, Inc.(formerly Energy
Producers, Inc.)
Consolidated Statement of Changes in Preferred Stock
For the Years Ended December 31, 2005 and December 31, 2004

|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|---------------------------------------- |  | ---------------- | ---------- | ---------------- |  | ---------------- | - | ------------- | --------- | ------------- | -- | ------------- | - | -- | ------- | - | -- | --------- | -
|                                         |  | Issued 
  Shares |            | Issued 
  Shares |  | Issued 
  Shares |   | Par value     |           | Par value     |    | Par value     |  
|                                         |  | Preferred
  A    |            | Preferred
  B    |  | Preferred
  C    |   | Preferred
  A |           | Preferred
  B |    | Preferred
  C |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|Balance
  at  January 1, 2004            |  |                  | 0          |                  |  | 0                |   |               | 0         |               | $  | 0             |   | $  | 0       |   | $  | 0         |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|Issued shares to purchase Firecreek      |  |                  | 2,566,837  |                  |  | 9,500,000        |   |               |           |               |    | 205,347       |   |    | 760,000 |   |    |           |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|Balance at December 31, 2004-as restated |  |                  | 2,566,837  |                  |  | 9,500,000        |   |               | 0         |               | $  | 205,347       |   | $  | 760,000 |   | $  | 0         |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|Issued
  shares for services             |  |                  |            |                  |  |                  |   |               | 2,925,000 |               |    |               |   |    |         |   | $  | 1,980,000 |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|Converted
  shares to common stock       |  |                  | (2,566,837 | )                |  | (9,500,000       | ) |               |           |               | ($ | 205,347       | ) | ($ | 760,000 | ) |    |           |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|Converted
  shares to common stock       |  |                  |            |                  |  |                  |   |               | (900,000  | )             |    |               |   |    |         |   | ($ | 441,000   | )
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  
|Balance
  at December 31, 2005           |  |                  | 0          |                  |  | 0                |   |               | 2,025,000 |               | ($ | 0             | ) | $  | 0       |   | $  | 1,539,000 |  
|                                         |  |                  |            |                  |  |                  |   |               |           |               |    |               |   |    |         |   |    |           |  

See
the notes to the consolidated financial statements.

45

---



EGPI Firecreek, Inc.
(formerly Energy Producers, Inc.)Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2005 and December 31, 2004

1. Organization of the Company and
Significant Accounting Principles

The Company
was incorporated in the State of Nevada October 1995. Effective October 13,
2004 the Company, previously known as Energy Producers Inc., changed its name
to EGPI Firecreek, Inc..

In August 1999
the Company acquired Energy Producers Group Inc. and its wholly owned subsidiary,
Producers Supply, Inc.(PSI), an oil and gas service company located in
Stephens, Arkansas. PSI was discontinued in fiscal year 2003. In November 2003,
the Company sold its interest in its oil wells it had acquired in August 1999.

In November
2003, the Company acquired all of the issued and outstanding shares of
International Yacht Sales Group Ltd. (IYSG), a UK based on-line broker of
luxury yachts, and other entities. IYSG was discontinued in December 2005.

In July 2004,
the Company acquired all of the issued and outstanding shares of Firecreek
Petroleum Inc., a Delaware State corporation, for 20 million shares of common
stock, 2,566,831 shares of preferred A stock, and 9,500,000 shares of preferred
B stock.

In April 27,
2005, the Company increased its authorized common stock to 920,000,000 shares
with par value of $.001, of which twenty million of these shares are
non-voting.

Consolidation-the
accompanying consolidated financial statements include the accounts of the
company and its wholly owned subsidiary. All significant inter-company balances
have been eliminated.

Use of Estimates- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management to
make reasonable estimates and assumptions that affect the reported amounts of
the assets and liabilities and disclosure of contingent assets and liabilities
and the reported amounts of revenues and expenses at the date of the
consolidated financial statements and for the period they include. Actual
results may differ from these estimates.

Revenue Recognition-For
its natural gas producing activities, the Company uses successful efforts
costing. Under successful efforts costing, certain identifiable costs
associated with the acquisition of properties and extraction are capitalized
and depreciated over the lesser of the depletion of the productive assets or
its useful life.

Cash- For the
purpose of calculating changes in cash flows, cash includes all cash balances
and highly liquid short-term investments with original maturity dates of three
months or less.

Accounts receivable-
The Company provides, through charges to income, a charge for bad debt expense,
which is based upon managements evaluation of numerous factors. These factors
include economic conditions, a predictive analysis of the outcome of the
current portfolio and prior credit loss experience, and the degree to which the
receivable is secured by liens on assets.

46

---



Fixed Assets- Fixed assets are stated at cost. Depreciation
expense is computed using the straight-line method over the estimated useful
life of the asset. The following is a summary of the estimated useful lives
used in computing depreciation expense:

| |                              |  |        
| | ---------------------------- |  | -------
| | Office equipment             |  | 3 years
| | Computer hardware & software |  | 3 years
| | Improvements & furniture     |  | 5 years
| | Well lease & equipment       |  | 7 years

Expenditures for major repairs and renewals that extend the useful life
of the asset are capitalized. Minor repair expenditures are charged to expense
as incurred.

Long Lived Assets- The
Company reviews for the impairment of long-lived assets whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. An impairment loss would be recognized when estimated future
cash flows expected to result from the use of the asset and its eventual
disposition is less than its carrying amount.

Debentures Payable-The
Company applies Emerging Issues Task Force (EITF) No. 98-5, Accounting
for Convertible Debt Issued with Beneficial Conversion Features.
EITF No.98-5 requires that a beneficial conversion feature be recognized upon
the issuance of convertible securities with a favorable conversion feature, and
the resultant beneficial conversion feature be amortized to interest expense
during the period from the date of issuance to the date the securities become
convertible.

Discontinued Operations-
The discontinued business operations of IYSG are summarized in the balance
sheet as net liability from discontinued operations and in the statement of
operations as loss from discontinued operations.

Income taxes-The Company accounts for income taxes in
accordance with the Statement of Accounting Standards No. 109 (SFAS No. 109), Accounting
for Income Taxes. SFAS No. 109 requires an asset and liability
approach to financial accounting and reporting for income taxes. Deferred
income tax assets and liabilities are computed annually for differences between
financial statement and income tax bases of assets and liabilities that will
result in taxable income or deductible expenses in the future based on enacted
tax laws and rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when
necessary to reduce deferred tax assets and liabilities to the amount expected
to be realized. Income tax expense is the tax payable or refundable for the
period adjusted for the change during the period in deferred tax assets and
liabilities.

Reclassifications-
Certain 2004 amounts in the consolidated financial statements have been
reclassified to conform to the 2005 presentation.

Recent accounting pronouncements-
Statement of Financial Accounting Standards
No. 123R, Share-Based Payment. In December 2004, the FASB
issued Statement No. 123R, Share-Based Payment. SFAS No. 123R
is a revision of SFAS No. 123, Accounting for Stock-Based
Compensation, and supersedes APB 25. SFAS No. 123R eliminates
the option of using the intrinsic value method of accounting previously
available, and requires companies to recognize in the financial statements the
cost of employee services received in exchange for awards of equity instruments
based on the grant date fair value of those awards. The effective date of
SFAS No. 123R is January 1, 2006 for calendar year companies.
SFAS No. 123R permits companies to adopt its requirements using
either a modified prospective method, or a modified retrospective method.

47

---



Under the
modified prospective method, compensation cost is recognized in the financial
statements beginning with the effective date, based on the requirements of
SFAS No. 123R, for all share-based payments granted after that date,
and for all unvested awards granted prior to the effective date of
SFAS No. 123R. Under the modified retrospective method, the
requirements are the same as under the modified prospective method, but it
also permits entities to restate financial statements of previous periods based
on pro-forma disclosures made in accordance with SFAS No. 123. The
adoption of SFAS No. 123 has no material impact on the Companys consolidated
results of operations, financial condition, or cash flows.

FASB Interpretation No. 47, Accounting
for Conditional Asset Retirement Obligations. In
March 2005, the FASB issued FASB Interpretation (FIN) No. 47, Accounting
for Conditional Asset Retirement Obligations. The interpretation clarifies the
requirement to record abandonment liabilities stemming from legal obligations
when the retirement depends on a conditional future event. FIN No. 47
requires that the uncertainty about the timing or method of settlement of a
conditional retirement obligation be factored into the measurement of the
liability when sufficient information exists. The Company adopted
FIN No. 47 as of December 31, 2005. There was no material impact
on the Companys consolidated results of operations, financial condition, or
cash flows.

Statement of Financial Accounting Standards
No. 154, Accounting Changes and Error Corrections, a replacement of APB
Opinion No. 20 and FASB Statement No. 3. In
May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement
No. 3. SFAS No. 154 requires retrospective application to prior
period financial statements for changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the cumulative
effect of the change. SFAS No. 154 also requires that retrospective
application of a change in accounting principle be limited to the direct
effects of the change. Indirect effects of a change in accounting principle
should be recognized in the period of the accounting change.
SFAS No. 154 will become effective for the Companys fiscal year
beginning January 1, 2006. The impact of SFAS No. 154 will depend
on the nature and extent of any voluntary accounting changes and correction of
errors after the effective date, but management does not currently expect
SFAS No. 154 to have a material impact on the Companys consolidated
results of operations, financial condition, or cash flows.

Emerging Issues Task Force
(EITF) Issue 04-13 Accounting for Purchases and Sales of Inventory
with the Same Counterparty. The Emerging Issues Task
Force considered Issue No. 04-13 in its May 17, 2005 and
June 16, 2005 meetings to discuss inventory sales to another entity in the
same line of business from which it also purchases inventory. The Task Force
reached consensus on the issue that purchases and sales of inventory with the
same counterparty should be combined as a single non-monetary transaction (net)
and noted factors that may indicate that transactions were entered into in
contemplation of one another. The Task Force ratified Issue No. 04-13 at
its September 28, 2005 meeting, which should be applied to new arrangements
entered into in the first interim or annual reporting period beginning after
March 15, 2006. The Company does not expect Issue No. 04-13 to have a
material impact on the Companys consolidated results of operations, financial
condition, or cash flows.

2. Net Loss per Share

The Company
applies SFAS No. 128, Earnings per Shareto compute net loss per
share.
In accordance with SFAS No. 128, basic net loss per share has been computed
based on the weighted average of common shares outstanding during the years. Diluted
net loss per share gives the effect of outstanding common stock equivalents in
the form of warrants, convertible preferred stock, and convertible debentures.
These common stock equivalents outstanding are convertible into 81,544,232 and
33,026,831 shares of common stock at December 31, 2005 and December 31, 2004,
respectively.

48

---



The effects on
net loss per share of the common stock equivalents, however, are not included
in the calculation of net loss per share since their inclusion would be anti-dilutive.

Net loss per
common share has been computed as follows:

|                                        |  |           |             |                        |    |            |  
|--------------------------------------- |  | --------- | ----------- | ---------------------- | -- | ---------- | -
|                                        |  | 31-Dec-05 |             | As
  restated31-Dec-04 |   
|                                        |  |           |             |                        |    |            |  
|Net
  loss from continuing operations   |  | ($        | 10,810,163  | )                      | ($ | 4,908,998  | )
|                                        |  |           |             |                        |    |            |  
|                                        |  |           |             |                        |    |            |  
|Net
  loss from discontinued operations |  | ($        | 57,614      | )                      | ($ | 2,069,883  | )
|                                        |  |           |             |                        |    |            |  
|                                        |  |           |             |                        |    |            |  
|Net
  gain from extraordinary items     |  |           | 375,789     |                        |    | 157,000    |  
|                                        |  |           |             |                        |    |            |  
|                                        |  |           |             |                        |    |            |  
|Total
  shares outstanding              |  |           | 220,913,500 |                        |    | 75,247,968 |  
|                                        |  |           |             |                        |    |            |  
|                                        |  |           |             |                        |    |            |  
|Weighted
  average                      |  |           | 134,874,275 |                        |    | 53,088,218 |  
|                                        |  |           |             |                        |    |            |  
|                                        |  |           |             |                        |    |            |  
|Loss
  from continuing operations       |  | ($        | 0.08        | )                      | ($ | 0.09       | )
|Loss
  from discontinued operations     |  |           | (0.00       | )                      |    | (0.04      | )
|Gain
  from extraordinary items         |  |           | 0.00        |                        |    | 0.00       |  
|                                        |  |           |             |                        |    |            |  
|                                        |  |           |             |                        |    |            |  
|Loss
  per share                        |  | ($        | 0.08        | )                      | ($ | 0.13       | )
|                                        |  |           |             |                        |    |            |  

3. Going Concern

The
accompanying consolidated financial statements have been presented in
accordance with generally accepted accounting principals, which assume the
continuity of the Company as a going concern. However, during the years ended
December 31, 2005 and December 31, 2004, the Company generated no material
revenues and has relied on borrowings and the issuance of common and preferred
stock to raise money for its business operations and plans. This situation
raises the doubt of the Companys ability to continue as a going concern.

Managements plans with regard to this matter
are as follows:

|  |                                                                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | Raise interim finance in addition to its present equity line to
  assist expansion-development of oil and gas, and corporate operations                              
|  |                                                                                                                                                                      
|- | Obtain asset
  based project finance or develop joint ventures to fund full scale work
  programs for oil and gas projects
  domestically and overseas               
|  |                                                                                                                                                                      
|- | Scale back
  certain current staffing, operations, and expenditures both incurred
  domestically and overseas until cash flow increases to a more sustainable
  level
|  |                                                                                                                                                                      
|- | At
  appropriate time to acquire and deploy international accounting software and
  systems for subsidiary oil and gas operations                                    

4. Fair Values of Financial Instruments

The carrying
amounts of the cash, other receivable, accounts payable and accrued expenses,
notes payable, notes payable to shareholders, capital lease payable, advances
payable to shareholders, and convertible

49

---



debentures
payable reported in the balance sheets are estimated by management to
approximate fair value at December 31, 2005 and December 31, 2004

5. Common and Preferred Stock Transactions

In July 2004,
the Company acquired all of the issued and outstanding shares of Firecreek
Petroleum Inc., a Delaware State corporation, for 20 million shares of common stock,
2,566,831 shares of preferred A stock, and 9,500,000 shares of preferred B
stock.

During the
year ended December 31, 2004, the Company issued 14,125,000 shares of common
stock to pay consulting fees.

During the
year ended December 31, 2004, holders of the convertible debt elected to
convert $131,770 of the convertible debt to 5,034,000 shares of common stock.

During the
year ended December 31, 2005, the Company issued 22,815,831 shares of common
stock to pay consulting fees.

During the
year ended December 31, 2005, the Company issued 2,925,000 preferred C stock to
pay consulting fees.

During the
year ended December 31, 2005, the Company issued 4,710,253 shares of common
stock to pay outstanding debt.

During the
year ended December 31, 2005, debenture holders converted $4,349,510 of debt to
93,491,153 shares of common stock.

During the
year ended December 31, 2005, preferred stock holders converted 9,500 shares of
preferred A stock, 2,566,837 shares of preferred B stock, and 900,000 shares of
preferred C stock into 21,066,831 shares of common stock.

During the
year ended December 31, 2005, the Company issued 3,268,464 shares of common
stock to pay down the equity line note discussed in Note 9.

During the
year ended December 31, 2005, a warrant holder elected to exercise 313,000
warrants into 313,000 shares of common stock.

6. Authorization of Preferred C Stock

Series A preferred stock:
Series A preferred stock has a par value of $0.001 per share has no stated
dividend preference. The Series A is convertible into common stock at a
conversion ratio of one preferred share for one common share. In July 2004, as
part of the purchase of Firecreek Petroleum Inc., the Company issued 2,566,831
shares of Preferred A stock. Preferred A has liquidation preference over
Preferred B stock and common stock. All of the preferred A stock was converted
to common stock in fiscal year 2005.

Series B preferred stock:
Series B preferred stock has a par value of $0.001 per share has no stated
dividend preference. The Series B is convertible into common stock at a
conversion ratio of one preferred share for one common share. The Series B has
liquidation preference over common stock. In July 2004, as part of the purchase
of Firecreek Petroleum Inc., the Company issued 9,500.000 shares of Preferred B
stock. Preferred B

50

---



has
liquidation preference over common stock. All of the preferred B stock was
converted to common stock in fiscal year 2005.

Series C preferred stock:
In June 2005, the shareholders elected to authorize for issue 20,000,000 shares
of preferred C stock. The Preferred C stock has a stated value of $.001 and no
stated dividend rate and is non-participatory. One share of preferred is
convertible into 10 shares of common stock. The Company issued 2,925,000 shares
of preferred C stock, of which 900,000 were converted to common stock in fiscal
year 2005.

7. Fixed Assets- Net

The following
is a detailed list of fixed assets at December 31, 2005:

|                                |  |   |         |  
|------------------------------- |  | - | ------- | -
|Well lease & equipment          |  | $ | 601,000 |  
|Computer
  equipment & software |  |   | 63,676  |  
|Office
  equipment              |  |   | 19,056  |  
|Improvements
  & furniture      |  |   | 30,166  |  
|Accumulated
  depreciation      |  |   | (16,039 | )
|                                |  |   |         |  
|                                |  |   |         |  
|Net
  property & equipment      |  | $ | 697,859 |  
|                                |  |   |         |  

8. Issuance of Convertible Debentures

In April and
November 2004, the Company received proceeds $650,000 and issued unsecured
convertible debt at 1% due in April 2009. The debt is convertible into
16,760,000 shares of common stock. As a result of the transaction, the Company
allocated $522,783 of the proceeds received to additional paid in capital as
the beneficial conversion feature related to the equity portion of the
convertible debt. The beneficial conversion feature was amortized to interest
expense in fiscal years 2004 and 2005. The balance of the convertible debt on
the December 31, 2004 balance sheet is as follows:

|                                |  |   |          |  
|------------------------------- |  | - | -------- | -
|Proceeds received               |  | $ | 650,000  |  
|Beneficial
  conversion feature |  |   | (522,783 | )
|Converted
  debt to shares      |  |   | (181,950 | )
|Allocated
  to interest expense |  |   | 269,174  |  
|                                |  |   |          |  
|                                |  |   |          |  
|Net
  convertible debt payable  |  | $ | 214,441  |  
|                                |  |   |          |  

In May 2005,
the Company issued convertible debentures and received proceeds of $4,000,000.

The debentures
become convertible in August 2005 and mature in May 2006. The debentures are
convertible into common stock at 80% of the lowest bid price of the common
stock for the five days preceding conversion. The debentures carry an interest
rate of 7.00%. All of these debentures were converted into 67,996,340 shares of
common stock in September 2005. As a result of the issuance of the debentures,
the Company allocated $1,227,273 of the proceeds to a beneficial conversion
feature. The beneficial conversion feature was allocated interest expense in
the consolidated statements of operations in 2005.

In November and December of
2005, the Company issued convertible debentures with a face value of $457,500
to pay an incentive fee to the holder of the equity credit line. The debentures
became convertible at the date of the issuances and mature in November and
December 2010. The debentures are convertible into common stock at $.06 per
share or 75% of the lowest bid price of the common stock for the five days
preceding conversion.

51

---



The debentures
carry no interest. As a result of the issuance of the debentures, the Company
allocated $506,272 to a beneficial conversion feature and allocated $74,967 of
the beneficial conversion feature to interest expense in 2005. The balance of
the convertible debt on the December 31, 2005 balance sheet is as follows:

|                                |  |   |          |  
|------------------------------- |  | - | -------- | -
|Investor
  incentive            |  | $ | 457,500  |  
|Beneficial
  conversion feature |  |   | (506,272 | )
|Allocated
  to interest expense |  |   | 74,967   |  
|                                |  |   |          |  
|                                |  |   |          |  
|Net
  convertible debt payable  |  | $ | 26,195   |  
|                                |  |   |          |  

9. Equity Credit Line

In September,
November and December of 2005, the Company issued promissory notes for
$4,343,750 on a $25 million dollar equity line to a financing company and
received proceeds of $3,555,000. The promissory notes mature in one year at an
effective interest rate of approximately 20%.

Under the
terms of the equity line agreement, the Company is obligated to pay the face
value of the notes or an equivalent amount in common stock during the coming
year. As a result of the agreement, the Company has registered 527,315,789
shares of common stock.

In November
and December of 2005, the Company paid $334,333 and issued 3,268,464 shares of
common stock to pay the amounts borrowed on the equity line.

10. Income Tax Provision

Provision for income taxes is comprised of the following:

|                                                                                                                                                          |  |           |            |           |    |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | ---------- | --------- | -- | ---------- | -
|                                                                                                                                                          |  | 31-Dec-05 |            | 31-Dec-04 |   
|                                                                                                                                                          |  |           |            |           |   
|Net
  loss before provision for income taxes                                                                                                              |  | ($        | 11,185,952 | )         | ($ | 6,182,601  | )
|                                                                                                                                                          |  |           |            |           |    |            |  
|Current
  tax expense:                                                                                                                                    |  |           |            |           |    |            |  
|Federal                                                                                                                                                   |  | $         | 0          |           | $  | 0          |  
|State                                                                                                                                                     |  |           | 0          |           |    | 0          |  
|                                                                                                                                                          |  |           |            |           |    |            |  
|Total                                                                                                                                                     |  | $         | 0          |           | $  | 0          |  
|                                                                                                                                                          |  |           |            |           |    |            |  
|Less
  deferred tax benefit:                                                                                                                              |  |           |            |           |    |            |  
|Timing differences                                                                                                                                        |  |           | (4,935,873 | )         |    | (3,253,443 | )
|Allowance for recoverability                                                                                                                              |  |           | 4,935,873  |           |    | 3,253,443  |  
|                                                                                                                                                          |  |           |            |           |    |            |  
|Provision for income taxes                                                                                                                                |  | $         | 0          |           | $  | 0          |  
|                                                                                                                                                          |  |           |            |           |    |            |  
|                                                                                                                                                          |  |           |            |           |    |            |  
|A reconciliation of provision for income
  taxes at the statutory rate to provision for income taxes at the Companys
  effective tax rate is as follows: |  |           |            |           |    |            |  
|                                                                                                                                                          |  |           |            |           |    |            |  
|Statutory
  U.S. federal rate                                                                                                                             |  |           | 34         | %         |    | 34         | %
|Statutory
  state and local income tax                                                                                                                    |  |           | 10         | %         |    | 10         | %
|Less
  allowance for tax recoverability                                                                                                                   |  |           | -44        | %         |    | -44        | %
|                                                                                                                                                          |  |           |            |           |    |            |  
|Effective
  rate                                                                                                                                          |  |           | 0          | %         |    | 0          | %
|                                                                                                                                                          |  |           |            |           |    |            |  
|Deferred
  income taxes are comprised of the following:                                                                                                   |  |           |            |           |    |            |  
|Timing
  differences                                                                                                                                      |  | $         | 4,935,873  |           | $  | 3,253,443  |  
|Allowance
  for recoverability                                                                                                                            |  |           | (4,935,873 | )         |    | (3,253,443 | )
|                                                                                                                                                          |  |           |            |           |    |            |  
|Deferred
  tax benefit                                                                                                                                    |  | $         | 0          |           | $  | 0          |  
|                                                                                                                                                          |  |           |            |           |    |            |  

52

---



Note:  The deferred tax benefits arising from the
timing differences begin to expire in fiscal year 2010 and may not be
recoverable upon the purchase of the Company under current IRS statutes.

11. Concentration of Credit Risk

The Company
has entered into an equity line credit agreement with a financing company that
committed to purchase up to $25,000,000 of the Companys Stock over the course
of 36 months after the Companys registration statement was declared effective.
The Company has borrowed against its equity line. Dilution, conditions in the
market, terms of the Companys credit, the ability to make its payments, and
other effects could limit or entirely prevent the Companys ability to draw
down additional borrowings now or in the future, or to generate cash from the
issuance of common stock to sustain operations and growth. One or more of these
occurrences would have a material adverse affect on the Companys financial
position and its ability to continue to operate as a going concern.

The Company
relies on the financial support its shareholders.  A withdrawal of this support would have a material adverse affect
on the Companys consolidated financial position and its ability to continue to
operate as a going concern.

12. Issuance of Warrants

During fiscal
year 2005, the Company issued 36,575,000 warrants to purchase common stock to
debenture holders and consultants. The Company applied an option pricing model
to determine the fair value of the warrants issued. The following assumptions
were used in the option pricing model. The dividend yield is 0%, volatility is
20%, and a risk-free interest rate of 2%.

The fair
values generated by option pricing model may not be indicative of the future
values, if any, that may be received by the warrant holder.

A list of
warrants outstanding at December 31, 2005 and December 31, 2004 is as follows:

|                                 |  |        |            |                           |   |                            |  |  |      |  | 
|-------------------------------- |  | ------ | ---------- | ------------------------- | - | -------------------------- |  |  | ---- |  | 
|                                 |  | Amount |            | Wgtd Avg
  Exercise Price |   | Wgtd
  Years
  to Maturity | 
|                                
|Outstanding at January 1, 2004   |  |        | 4,600,000  |                           | $ | 0.97                       |  |  | 6.20 |  | 
|                                 |  |        |            |                           |   |                            |  |  |      |  | 
|Issued                           |  |        | 0          |                           |   |                            |  |  |      |  | 
|Expired                          |  |        | (400,000   | )                         |   |                            |  |  |      |  | 
|                                 |  |        |            |                           |   |                            |  |  |      |  | 
|                                 |  |        |            |                           |   |                            |  |  |      |  | 
|Outstanding at December 31, 2004 |  |        | 4,200,000  |                           | $ | 0.96                       |  |  | 2.64 |  | 
|                                 |  |        |            |                           |   |                            |  |  |      |  | 
|Issued                           |  |        | 36,575,000 |                           |   |                            |  |  |      |  | 
|Exercised                        |  |        | (313,000   | )                         |   |                            |  |  |      |  | 
|Expired                          |  |        | (400,000   | )                         |   |                            |  |  |      |  | 
|                                 |  |        |            |                           |   |                            |  |  |      |  | 
|                                 |  |        |            |                           |   |                            |  |  |      |  | 
|Outstanding at December 31, 2005 |  |        | 40,062,000 |                           | $ | 0.41                       |  |  | 3.53 |  | 
|                                 |  |        |            |                           |   |                            |  |  |      |  | 

53

---



There is no
formal stock option plan for employees.

12. Purchase of Firecreek Petroleum Inc.

In July 2004,
the Company acquired all of the issued and outstanding shares of Firecreek
Petroleum Inc., a Delaware State corporation, for 20 million shares of common
stock, 2,566,831 shares of preferred A stock, and 9,500,000 shares of preferred
B stock. As a result of the purchase, the Company recognized $2,565,347 in
goodwill.  The goodwill represents the
difference between the fair market value of the stock issued on the date of the
purchase agreement and the net book value of the Company at the date of the
purchase. At the date of the purchase, management concluded the goodwill asset
recognized upon the purchase of these operations would not be recoverable and
accordingly had recognized and impairment charge of $2,656,347 in the
consolidated statement of operations in fiscal 2004.

13. Debt

The
following is a listing of unaffiliated debt

|                                                                                                                                                                                    |  |           |           |           |   |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | --------- | --------- | - | --------- | 
|                                                                                                                                                                                    |  | 31-Dec-05 |           | 31-Dec-04 |  
|                                                                                                                                                                                    |  |           |           |           |  
|Unsecured note issued to an unaffiliated
  individual in March 2002 at 10% due in March 2003. The note was paid in full
  in June 2005                                              |  | $         | 0         |           | $ | 3,000     | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Capital lease payable on office equipment
  paid in 2005                                                                                                                            |  |           | 0         |           |   | 9,273     | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Total unaffiliated debt                                                                                                                                                             |  | $         | 0         |           | $ | 12,273    | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|The following is a listing of notes
  payable and advances from shareholders:                                                                                                       |  |           |           |           |   |           | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Unsecured notes due to a shareholder due
  on demand with interest rates ranging from 12% to 18%. The notes were paid in
  full in June 2005                                        |  | $         | 0         |           | $ | 198,886   | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Unsecured notes due to a shareholder due
  on demand with interest at 12% The note was paid in full in June 2005                                                                    |  |           | 0         |           |   | 38,919    | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Unsecured note due to a shareholder due on
  demand with interest at 12% The note was paid in full in April 2005 by
  issuing 570,435 shares of common stock.                       |  |           | 0         |           |   | 4,000     | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Unsecured note due to a shareholder due on
  demand interest at 18% The note was paid in full in June 2005                                                                          |  |           | 0         |           |   | 17,819    | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Note payable due a former shareholder of
  the Company. The statute of limitations on this debt expired in November 2005
  and upon the advice of council the debt was written off. |  |           | 0         |           |   | 373,306   | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Convertible debentures                                                                                                                                                              |  |           | 26,195    |           |   | 214,441   | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Equity credit line maturing in 2006 at
  effective interest of 20%                                                                                                                  |  |           | 3,204,427 |           |   | 0         | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Unsecured advances to shareholders and
  officers of the Company with interest payable at 6%                                                                                        |  |           | 147,780   |           |   | 585,866   | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 
|Total notes and advances payable to
  shareholders                                                                                                                                  |  | $         | 3,378,402 |           | $ | 1,433,237 | 
|                                                                                                                                                                                    |  |           |           |           |   |           | 

54

---



14. Supplemental Information on Natural Gas
Operations

In November
2005, the Company purchased a 50% working interest in The Ten Mile Draw Field,
a natural gas field located in Sweetwater County, Wyoming for $1,089,130 for
development of the reserves.  The
following is a summary of the Companys natural gas production activities at
December 31, 2005.

|                                                            |  |                                                                     |            |                                                  |    |           |  
|----------------------------------------------------------- |  | ------------------------------------------------------------------- | ---------- | ------------------------------------------------ | -- | --------- | -
|                                                            |  | Proved developed
  and undeveloped
  In thousands of 
  cubic feet. |            | Proved developed
  In thousands of
  cubic feet. |   
|                                                            |  |                                                                     |            |                                                  |   
|At January 1, 2005                                          |  |                                                                     | 0          |                                                  |    | 0         |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Revisions                                                   |  |                                                                     | 0          |                                                  |    | 0         |  
|Improvements                                                |  |                                                                     | 0          |                                                  |    | 0         |  
|Purchases                                                   |  |                                                                     | 1,432,193  |                                                  |    | 299,827   |  
|Extensions                                                  |  |                                                                     | 0          |                                                  |    | 0         |  
|Production                                                  |  |                                                                     | 0          |                                                  |    | 0         |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|At December 31, 2005                                        |  |                                                                     | 1,432,193  |                                                  |    | 299,827   |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Estimated future cash
  flows discounted at 10%             |  |                                                                     |            |                                                  |    |           |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Net discounted futures cash flows:                          |  |                                                                     |            |                                                  |    |           |  
|Sales                                                       |  | $                                                                   | 5,367,939  |                                                  | $  | 1,402,637 |  
|Expenses and taxes                                          |  |                                                                     | (3,203,253 | )                                                |    | (837,007  | )
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Net discounted future cash flows                            |  | $                                                                   | 2,164,687  |                                                  | $  | 565,631   |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Results of operations                                       |  |                                                                     |            |                                                  |    |           |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Revenues                                                    |  |                                                                     |            |                                                  | $  | 0         |  
|Production costs                                            |  |                                                                     |            |                                                  | $  | 0         |  
|Exploration costs                                           |  |                                                                     |            |                                                  | $  | 0         |  
|Development costs                                           |  |                                                                     |            |                                                  | $  | 488,130   |  
|Depreciation & amortization                                 |  |                                                                     |            |                                                  | $  | 0         |  
|Provision for income tax                                    |  |                                                                     |            |                                                  | $  | 0         |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Net loss from natural gas producing
  activities:           |  |                                                                     |            |                                                  | ($ | 488,130   | )
|                                                            |  |                                                                     |            |                                                  |    |           |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Capitalized cost of natural gas producing
  activities:     |  |                                                                     |            |                                                  |    |           |  
|Natural gas lease property                                  |  |                                                                     |            |                                                  | $  | 475,000   |  
|Well Equipment                                              |  |                                                                     |            |                                                  |    | 126,000   |  
|Accumulated depreciation                                    |  |                                                                     |            |                                                  |    | 0         |  
|                                                            |  |                                                                     |            |                                                  |    |           |  
|Net capitalized costs of natural gas
  producing activities |  |                                                                     |            |                                                  | $  | 601,000   |  
|                                                            |  |                                                                     |            |                                                  |    |           |  

55

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15. Disposal of IYSG

The business
operations of IYSG were discontinued by a formal plan for disposal adopted by
management in December 2005. The net of the assets and liabilities of IYSG are
recorded as a net liability of discontinued operations in the consolidated
balance sheets and the result of its operations are included in the
consolidated statements of operations as loss from discontinued operations.

16. Commitments and Contingencies

The Company is
committed to a non-cancelable operating lease for office space in Fort Worth,
Texas.  Future minimum lease payments
required under this lease is as follows:

|                               |  |   |         | 
|------------------------------ |  | - | ------- | 
|2006                           |  | $ | 104,504 | 
|2007                           |  |   | 35,260  | 
|                               |  |   |         | 
|                               |  |   |         | 
|Total
  minimum lease payments |  | $ | 139,764 | 
|                               |  |   |         | 

Rent expense
for fiscal year 2005 and 2004 was $128,925 and $-0-, respectively.

In the event
of a default on the equity line of credit discussed in Note 9, the holder can
secure a portion of the Companys assets not to exceed 200% of the face amount
of the credit line and can increase the face amount of the credit line by
12.50% as a penalty. The holder can elect to convert unpaid balances of the
equity credit line to three year convertible debentures at 15% at an exercise
price of 50% of the lowest closing bid price for the Companys stock for the
fifteen days prior to conversion of the debentures.

17. Related Party Transactions

During fiscal
years 2005 and 2004, the chief executive officer and shareholder provided
office space to the Company.  The chief
executive officer charged the Company $5,132 and $-0- for the use of the space
in fiscal years 2005 and 2004, respectively.

During fiscal
year 2004, officers of the Company advanced $564,803 to the Company for its
operations at no stated interest.
Interest expense on the advances has been imputed at the Companys cost
of capital and $50,180 in interest expense has been recorded in the
consolidated statement of operations.

In December
2004, officers of the Company forgave $157,000 of advances to the Company.  Consequently, the Company recorded an
extraordinary gain, net of tax, in the consolidated statement of operations.

In November
2005, the statute of limitations on the debt owed to a former shareholder
expired and on the advice of council, the Company wrote the debt off.  The Company recorded an extraordinary gain
of $375,780 in the statement of operations.

During fiscal
year 2005, shareholders charged the Company 6% interest or $28,432 on
outstanding shareholder advances.

In December
2005, the Company issued 2,500,000 shares of common stock to an officer to pay
a shareholder advance of $127,500.

56

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18. Segment Information

The following
table provides the Companys geographic information for administrative
expenses, total assets, depreciation and amortization, interest expense, and
capital expenditures for the year ended December 31, 2005.  The table is based upon the Companys
business operations or efforts to produce business operations by country.

|                               |  |   |           | 
|------------------------------ |  | - | --------- | 
|Administrative
  expenses:     |  |   |           | 
|United States                  |  | $ | 489,402   | 
|Turkey                         |  |   | 72,640    | 
|Libya                          |  |   | 32,020    | 
|Romania                        |  |   | 106,330   | 
|Russia                         |  |   | 498,807   | 
|Kazakhstan                     |  |   | 804,101   | 
|Ukraine                        |  |   | 52,203    | 
|Corporate                      |  |   | 7,232,188 | 
|                               |  |   |           | 
|Total administrative expenses  |  | $ | 9,287,691 | 
|                               |  |   |           | 
|                               |  |   |           | 
|Total
  assets:                |  |   |           | 
|United States                  |  | $ | 601,000   | 
|Turkey                         |  |   | 0         | 
|Libya                          |  |   | 0         | 
|Romania                        |  |   | 0         | 
|Russia                         |  |   | 0         | 
|Kazakhstan                     |  |   | 0         | 
|Ukraine                        |  |   | 0         | 
|Corporate                      |  |   | 249,580   | 
|                               |  |   |           | 
|Total assets                   |  | $ | 850,580   | 
|                               |  |   |           | 
|                               |  |   |           | 
|Depreciation
  & amortization: |  |   |           | 
|United States                  |  | $ | 0         | 
|Turkey                         |  |   | 0         | 
|Libya                          |  |   | 0         | 
|Romania                        |  |   | 0         | 
|Russia                         |  |   | 0         | 
|Kazakhstan                     |  |   | 0         | 
|Ukraine                        |  |   | 0         | 
|Corporate                      |  |   | 16,040    | 
|                               |  |   |           | 
|Total depreciation             |  | $ | 16,040    | 
|                               |  |   |           | 
|                               |  |   |           | 
|Interest
  expense:            |  |   |           | 
|United States                  |  | $ | 0         | 
|Turkey                         |  |   | 0         | 
|Libya                          |  |   | 0         | 
|Romania                        |  |   | 0         | 
|Russia                         |  |   | 0         | 
|Kazakhstan                     |  |   | 0         | 
|Ukraine                        |  |   | 0         | 
|Corporate                      |  |   | 1,898,261 | 
|                               |  |   |           | 
|Total interest expense         |  | $ | 1,898,261 | 
|                               |  |   |           | 
|                               |  |   |           | 
|Capital
  expenditures         |  |   |           | 
|United States                  |  | $ | 601,000   | 
|Turkey                         |  |   | 0         | 
|Libya                          |  |   | 0         | 
|Romania                        |  |   | 0         | 
|Russia                         |  |   | 0         | 
|Kazakhstan                     |  |   | 0         | 
|Ukraine                        |  |   | 0         | 
|Corporate                      |  |   | 112,899   | 
|                               |  |   |           | 
|Total capital expenditures     |  | $ | 713,899   | 
|                               |  |   |           | 

57

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19. Subsequent Events

In March 2006,
regarding the Ten Mile Draw project interests located in Sweetwater County
Wyoming, well work-over development overage charges were estimated at $250,000
due winter conditions.

20. Restatement of 2004 Balances

Subsequent to
the issuance of the financial report for fiscal year 2004, management
determined that the price of the preferred shares to value the purchase of
Firecreek Inc. was incorrect.  The error
understated net loss and net loss per share for fiscal year 2004.  The following table shows the balances
affected and the corrected amounts.

|                                |  |             |           |             |    |           |  
|------------------------------- |  | ----------- | --------- | ----------- | -- | --------- | -
|                                |  | As Restated |           | As Reported |   
|                                |  |             |           |             |    |           |  
|Net
  loss                      |  | ($          | 6,978,881 | )           | ($ | 6,025,601 | )
|Loss
  per share- fully diluted |  | ($          | 0.13      | )           | ($ | 0.11      | )
|Preferred
  A                   |  | $           | 205,347   |             | $  | 2,567     |  
|Preferred
  B                   |  | $           | 760,000   |             | $  | 9,500     |  

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

None

ITEM 8A. CONTROLS AND PROCEDURES

Our President and Chief
Financial Officer (the Certifying Officers) are responsible for establishing
and maintaining disclosure controls and procedures for the Company.

The Certifying Officers have
designed such disclosure controls and procedures as defined under Rule
13a-13(e) promulgated under the Securities and Exchange Act of 1934 as amended,
to ensure that material information is made known to them, particularly during
the period in which this report was prepared.

The Certifying Officers have
evaluated the effectiveness of the Companys disclosure controls and procedures
within 90 days of the date of this report and believe that the Companys
disclosure controls and procedures are effective based on the required
evaluation as of the date of this Report. There have been no significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of their evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

58

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ITEM 8B. OTHER INFORMATION

Please see terms and
provisions listed in our Voting Agreement, incorporated herein by reference to
Exhibit 99.3 to the Registrants Report on Form 8-K filed April 7, 2005.

PART III

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

The directors, executive
officers and significant employees of the Company as of March 31, 2006 are as
follows:

|                    |  |     |  |                                                                                                       
|------------------- |  | --- |  | ------------------------------------------------------------------------------------------------------
|NAME                |  | AGE |  | POSITION
  WITH COMPANY                                                                               
|                    |  |     |  |                                                                                                       
|Dennis R. Alexander |  | 51  |  | Chairman, and CFO of the Company, and Firecreek Petroleum,
Inc.                                       
|John R. Taylor      |  | 61  |  | President, and Director of the Company and President, CEO, and
  Director of Firecreek Petroleum, Inc.
|William E. Merritt  |  | 62  |  | Director, Executive Vice President and General Counsel of the
  Company, and Firecreek Petroleum, Inc.
|Rupert C. Johnson   |  | 55  |  | Director of the Company                                                                               
|Melvena Alexander   |  | 71  |  | Secretary and Comptroller of the Company and Firecreek Petroleum,
  Inc.                              
|Dr. Mousa Hawamdah  |  | 58  |  | Director of the Company and Firecreek Petroleum, Inc. -Libyan
  Government Advisor                    
|James M. Barker Jr. |  | 52  |  | Vice President, International Accounting for the Company and
  Firecreek Petroleum, Inc.              
|J. Michael Hester   |  | 65  |  | Member of Advisory Board of the Company                                                               

Term for Directors:  In accordance with Article 9.2 of the
Companys Bylaws: The members of the Board of Directors shall hold office until
the first annual meeting of Stockholders and until their successors shall have
been elected and qualified. At the first annual meeting of Stockholders and at
each annual meeting thereafter the Stockholders shall elect Directors to hold
office until the next succeeding annual meeting, except in the case of
classification of the Directors. Each Director shall hold office for the term
for which he is elected until his successor shall have been elected and qualified.

Dennis R. Alexander has
served as Chairman and CFO of the Company and Firecreek Petroleum, Inc. since
July 1, 2004 having served as the President and Director of the Company from
May 18, 1999 to June 30, 2004. In September 1998 he

59

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was a founder,
and from January 19, 1999 through its acquisition with the Company served as
President and Director of Energy Producers Group, Inc. From April 1997 through
March 1998, served as CEO, Director, Consultant of Miner Communications, Inc.,
a media communications company. From April 26, 1997 through March, 1998 he was
a director of Rockline, Inc., a private mining, resource company, and a founder
of World Wide Bio Med, Inc., a private health-bio care, start up company. Since
March 1996 to the present he has owned Global Media Network USA, Inc., which
has included management consulting, advisory services. Mr. Alexander devotes
approximately 60 to 80 hours per week minimum, and more as required, to the
business of the Company.

John R. Taylor has been President and Director of the
Company, and President and Director of Firecreek Petroleum, Inc., since July 1,
2004. He has been CEO of Firecreek Petroleum, Inc. since July 27, 2005. He has
over 26 years experience in the petroleum industry and been actively engaged in
the search for commercial hydrocarbons since he was 13 years old, beginning his
career in the oil industry working the family business: Mr. Taylor graduated
St. Johns Military School; University of Nebraska, BGS Political Science and
Prelaw. Mr. Taylor is also a Graduate of Halliburton Energy Institute. His
Military service in the U. S. Army was during the period from 1965 to 1975
being honorably discharged in 1975 as a Captain (P). He served in Viet Nam,
Germany and Korea in Aviation and Air Defense assignments. He is a Member of
numerous oil and gas related clubs and associations, including the North Texas
Oil & Gas Association, listed in Whos Who in the South and Southwest and
in Whos Who in Finance and Industry. Mr. Taylor is a member of the Confederate
Air Force and a former Regional Coordinator for the American Defense Institute.
Mr. Taylor has been directly involved in evaluation of prospect operations,
drilling production, project management, and seismic exploration, as well as
acquisition and development. Mr. Taylor founded a group of companies with his
associates known as the Firecreek Group of companies, or simply Firecreek,
which has operated directly, or through subsidiaries or branches, in the U.S.,
Turkey and Romania, and have sought opportunities in Vietnam, Russia, Chechnya,
Bosnia-Herzegovina, the Caribbean, Mexico and South America. Mr. Taylor was a
principal advisor to the Serbian government in the early post-war battle damage
assessment and reconstruction planning efforts of the Bosnia petroleum
facilities and pipelines. In 1994, returned to post-war Vietnam and negotiated
and obtained an initial Production Sharing Contract (PSC) covering
essentially the entire onshore area south of Saigon, as well as the adjoining
shallow coastal water area extending out 12 to 25 miles from the shoreline. He
has gained experience from the Vietnam project in the use of satellite-based
telecommunications which was utilized in Bosnia-Herzegovina implementing a
program for British soldiers to be able to call home after the war. Mr. Taylor
has extensive experience in project planning, execution and management and a
reputation for handling difficult and complex international situations
involving remote petroleum operations and host government relations. Mr. Taylor
devotes approximately 40-80 hours per week, and more as required, to the
business of the Company.

William E.
Merritt has been Executive Vice President, General Counsel and Director of the
Company, and Firecreek Petroleum, Inc. since July 1, 2004. A founder of
Firecreek Petroleum (Romania), Inc. he has served as a Director and as
Executive Vice President and General Counsel of that company since its
formation in 1999. Mr. Merritt has also served in the same capacities for
Firecreek Petroleum, Inc. since it was reorganized in March 2004 to concentrate
on international oil and gas operations. He serves as a Director and as
Executive Vice President and General Counsel of the Company resulting from the
merger of those companies now known as Firecreek Petroleum, Inc. He has served
in similar capacities in other Firecreek-related companies engaged in
international telecommunications operations since 1996. Mr. Merritt holds a
B.S.E.E. and an M.S.E.E. from Michigan State University and a Juris Doctor in
law from Southern Methodist University.

Rupert C. Johnson has served
as a Director of the Company since October 4, 2005. Mr. Johnson is the senior
partner and head of Tirion Group, Inc. leading a team which is engaged in
business processes in the Resources Sector, with its concentration towards Oil
and Metals in production and marketing related activities. Tirion has assisted
the Companys Strategic operations, corporate objectives, and provided funding.
Mr. Johnson has extensive experience in Consulting and Investments through his
business interests in resources and trading. He has developed projects in oil
products in the Middle East, Southern Africa and Central Europe. Mr. Johnsons
concentration is towards cash producing investment, working with investment
funds and other sources of finance. He has work relationships with several oil,
mining and trading entities. Mr. Johnson holds small interests in certain
trading and mining ventures. Mr. Johnson was formerly founding CEO and largest
private shareholder of a trading and investment business involved in the oil,
chemical and metal, and agricultural sectors in the Sub Saharan African
continent known as the EXTRADE Group. The groups base was mainly operated from
Cape Town and Johannesburg for the African Region and internationally from the
UK and Switzerland The group developed substantial trade and supportive
investments in petroleum in refining, storage and retail,

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storage and land investments
in Agriculture. The group also developed partnerships with multi-national
associated business entities based in several African countries, Singapore,
Germany, Switzerland, Argentina and Brazil, Black Sea countries and in the
middle East. The group which commenced business in 1985, was, prior to its
dissolution commencing in 2001/2, one of the largest privately owned businesses
in the Southern African region employing over 1000 staff and assets in excess
of $100 million. Several of the unbundled businesses remain today in
controlling roles in their activities in certain regions in the Sub Saharan
continent.

Melvena
Alexander serves as Secretary and Comptroller of the Company and Firecreek
Petroleum, Inc. since July 1, 2004. She served as Secretary since March 15,
2003 to June 30, 2004 having been Secretary and Comptroller of the Company
since May 18, 1999. In September 1998 she was a founder, and from January 19,
1999 through the acquisition processes with the Company served as  Secretary of Energy Producers Group, Inc.
She is founder and President of Melvena Alexander CPA since 1982, which
prepares financial statements and tax reports. From October 1998 through April
16, 2004 she worked in the Department
of Patient Finance at Arizona State Hospital as an Accounting Technician
11. Mrs. Alexander graduated Arizona State University with a B.S. in
Accounting, received CPA Certificate, State of Arizona. She is a member of
AICPA and the American Society of Women Accountants. Mrs. Alexander devotes a
minimum of 40-60 hours per week, and more as required, to the business of the
Company.

Dr. Mousa Hawamdah has been a Director since July 1,
2004, and Chairs the Audit Committee. He has been a Libyan Political envoy,
since July 1, 2004, and was an officer of the Company and Firecreek Petroleum,
Inc. until December 29, 2004. Dr. Mousa is the President and significant
shareholder GAMA Oil and Gas, Inc., a Libyan corporation that is domesticated
in Ottawa, Canada. He was born in Libya and became a U.S. citizen in 1982. Dr.
Mousa has a Bachelors Degree from San Jose State University in Geology. He has
a Masters and Doctorate Degree in Physics from Georgetown University.

James M.
Barker Jr. has been Vice President International Accounting for the Company and
Firecreek Petroleum, Inc. since July 1, 2004. He is an honors graduate, B.B.A.,
and received his M.B.A. in Finance from Texas Christian University, Fort Worth,
Texas. He is a Certified Public Accountant and a member of the American
Institute of CPAs, the Texas State Society of CPAs and the Fort Worth Chapter
of CPAs. He has published several papers relating to marketing and finance and
has been a Finance instructor. He has expertise in cash management, capital and
debt restructuring, portfolio management, financial projections and electronic
data processing and financial reporting systems. He also has in-depth
consulting experience in all phases of business operations, financial
reporting, computer installations, auditing, financial management, and tax
return preparation. Mr. Barker has extensive experience in the public, private
and international sectors regarding analysis and resolution of complex
financial and operational situations.

On November
22, 2005, greater than a majority of the Board of Directors of the Company
approved a corporate restructuring and reorganization resulting in, among other
things, certain changes to the executive offices and staff positions and the
creation of certain committees (the Reorganization). The Reorganization
became effective on November 30, 2005 and is intended to more effectively align
the Company in anticipation of growth in its domestic and international oil
production. As a result of the Reorganization, the position of Chief Executive
Officer has been eliminated and the Registrants former Chief Executive
Officer, Mr. Gregg Fryett, was been suspended.

It is intended
that the Reorganization will allow the executive management to focus more
precisely on operations with less bureaucracy and stifling bottlenecks to more
effectively deal with critical timelines. The Reorganization calls for the
creation of specific related executive and finance committees, which will
collectively streamline operations and allow pertinent business and finance
matters to move through a more efficient and deliberative process for
recommendation to the Board of Directors. Each committee will be comprised of a
variety of specific talents with the expertise needed to effectively address
certain oil and gas matters, as well as finance issues that require Board
approval.

On December
20, 2005, after review, the Board of Directors and the Executive Management
Committee voted to terminate Mr. Fryetts executive position as CEO and all
service provider ad hoc arrangements with the Company. Further as a result of
the Reorganization on November 22, 2005, Charles Alliban was removed as
Treasurer of the Company and Firecreek, and Peter Fryett was removed as Vice
President and Assistant Secretary of the Company and Firecreek. At the time and
prior to the disposal of the Companys marine segment, Dennis R. Alexander, the
Chief Financial Officer and

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Chairman of
the Board, and/or any person designated or appointed by him, was appointed as
director of the Companys whooly-owned subsidiary, International Yacht Sales
Group Ltd.

Advisory Board

J. Michael Hester has
served as an Advisory Board member of the Company and Firecreek Petroleum, Inc.
since July 1, 2005. He is a Graduate of University of Miami, Miami, Florida;
Syracuse University Graduate School, Marketing & Management, Syracuse, New
York. Mr. Hester is U.S. Army Reserves, Recipient of American Spirit Army
Medal and Top Trainee out of 10,000 at Fort Knox, Kentucky. He is listed in
Whos Who in Insurance  1986 thru 1989. His past experience includes: Member
of the Boards of Directors of Combined Insurance Company of America, Ryan
Insurance Group, Combined Life Insurance Company of Australia, and Combined
Life Insurance Company of New York; President & Chief Operating Officer of
Diversified Financial Systems, Inc. which purchased the assets of failed banks
and savings and loans from the FDIC and RTC; is currently President & Chief
Executive Officer of J.M.H. Associates, Inc.; member of the Board of Directors
of Trinity Capital Inc. and Vice Chairman National Board of Directors,
Executive Committee, Chairman Council of Trustees of Prevent Child Abuse 
America. Mr. Hester has thirty-five years experience in sales, marketing,
finance, real estate, profit management, management development and motivation.

Family
Relationships

Dennis R.
Alexander, Chairman and CFO is the son of Melvena Alexander, Secretary and
Comptroller.

Committees Of The Board Of Directors

The Board of
Directors has the following committees: Audit, Nominating, Executive,
Projects, Compensation and Stock Option, Administration and Legal, Finance, and
Shareholder and Investor Relations.

In 2005 we
restructured and added to our 2004 committee initiatives. We are again in
process of evaluating various committee structures, and persons capable of
becoming independent seat(s), and to provide for a more independent committee
functionability and standards.

The Audit
Committee is composed of one member: Dr. Mousa Hawamdah, its Chairman.

The
responsibilities of the Audit Committee include: (1) the recommendation of the
selection and retention of the Companys independent public accountants; (2)
the review of the independence of such accountants; (3) to review and approve
any material accounting policy changes affecting the Companys operating
results; (4) the review of the Companys internal control system; (5) the review
of the Companys annual financial report to stockholders; and (6) the review of
applicable interested party transactions.

The Committee
formed to act as a Nominating Committee is composed of three members of the
Board of Directors: Messrs. Alexander, Chairman, Taylor, member and Johnson,
member.

The function
of the Nominating Committee is to seek out qualified persons to act as members
of the Companys Board of Directors, and provide for compliance standards. The
Nominating Committee seeks to identify director candidates based on input
provided by a number of sources, including (a) the Nominating Committee
members, (b) our other Directors, (c) our stockholders, and (d) third parties
such as professional search firms. In evaluating potential candidates for
director, the Nominating Committee considers the merits of each candidates
total credentials.

The Executive
Committee is composed of four members of the Board of Directors: Messrs.
Alexander, Chairman-member, Taylor, member, Johnson, member, and Merritt,
member.

The function
of the Executive Committee is to exercise all power and authority of the Board
of Directors, except as limited by the Companys by-laws or applicable law, and
further in accordance with the Companys Corporate Governance Guidelines.

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The Projects
Committee is composed of three members of the Board of Directors: Messrs.
Taylor, Chairman-member, Alexander, member, and Merritt, member.

The function
of the Projects Committee is to propose new oil and gas projects for
consideration by the Executive Committee and to coordinate with the Finance
Committee to present a joint recommendation for such projects to the Executive
Committee and the Board of Directors. Upon approval of a project, the Projects
Committee coordinates with the Finance Committee and appropriate entities and
persons, including management, lenders and project operators, to oversee and
manage the accomplishment of approved projects.

The Committee
formed to act as the Compensation and Stock Option Committee is composed of three
members of the Board of Directors: Messrs. Alexander, Chairman-member, Taylor,
member, and Johnson, member.

The function
of the Compensation and Stock Option Committee is to review and recommend along
with the Board of Directors, compensation and benefits for the executives of
the Company, consultants, and administers and interprets the Company Stock
Option Plan and the Directors Stock Option Plan and are authorized to grant
options pursuant to the terms of these plans.

The Committee
formed to act as the Administration and Legal Committee is composed of two
members of the Board of Directors: William E. Merritt, as Chairman, and Dennis
R. Alexander as a member.

The function
of the Administration and Legal Committee is to supervise matters relating to
staff and administration, personnel, payroll, facilities, equipment and
systems.

The Committee
formed to act as the Finance Committee is composed of four members of the Board
of Directors, and one external consultant: Messrs. Alexander, Chairman-member,
Johnson, member, Taylor, member, Merritt, member, and Dermot McAtamney of DLM
Asset Management, external financing matters.

The function
of the Finance Committee is to oversee financial affairs of the Company and
make recommendations to the Executive Committee and Board of Directors
regarding financial affairs and policies of the Company, seek funding for
approved projects, and track use of funds for projects and operations.

The Committee
formed to act as the Shareholder and Investor Relations Committee is composed
of one member of the Board of Directors: George B. Faulder, its Chairman. Mr.
Faulder who resigned on March 10, 2006 is replaced on April 8, 2006 by Mr.
Joseph M. Vasquez III, as its Chairman and adds Dermot McAtamney as a member.

The function
of the Shareholder and Investor Relations Committee is to assist the Executive
Committee and the Board of Directors in maintaining good relations with the
Companys shareholders and investors, and disseminating information regarding
the Companys activities.

COMPLIANCE WITH
SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a)
of the Securities Exchange Act of 1934 requires the Companys officers and
directors, and persons who own more than ten percent of the Companys Common
Stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (SEC). Officers, directors and greater
than ten percent stockholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.

Based solely
on current managements review of the copies of such forms received by it from
former management, the Company believes that, during the year ended December
31, 2005, its officers, directors, and greater than ten-percent beneficial
owners complied with all applicable filing requirements.

Code of Ethics

On December
31, 2003, the Company adopted its Code of Ethics and Business Conduct that
applies to all of the officers, directors and/or employees of the Company. The
Code of Ethics is included and filed as Exhibit 14 to our Form-10KSB

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filed on April
27, 2004 incorporated herein for reference. The Code is posted on our website
(www.egpifirecreek.com) currently under final stages of
development/construction. We will disclose on our completed website any waivers
of, or amendments to, our Code.

ITEM
10 - EXECUTIVE COMPENSATION

The following
tables summarize annual and long-term compensation paid to the Companys Chief
Executive Officer and the Companys four other most highly compensated
executive officers whose total annual salary and bonus compensation exceeded
$100,000 who were serving as of December 31, 2005 for all services rendered to
the Company and its subsidiaries during each of the last three fiscal years.
The Company did not retain any employees and payments are made for services as
available. The Company through Firecreek Petroleum, Inc. retained approximately
eight employees during Fiscal Year 2005. All other tables required to be
reported have been omitted, as there has been no compensation awarded to,  earned by or paid to any of the executives
of the Company that is required to be reported other than what is stated below.

All shares
beneficially owned by the named executives below listed are bound by terms of a
Voting Agreement (please see Exhibit 99.3 to a Report on Form 8-K filed April
7, 2005 incorporated herein by reference).

Summary Compensation Table

|                                     |  |                     |      |                                 |  |                                      |      |                                   |        |                                      |  |                                     |         |         |  |           |  |  |         |       
|------------------------------------ |  | ------------------- | ---- | ------------------------------- |  | ------------------------------------ | ---- | --------------------------------- | ------ | ------------------------------------ |  | ----------------------------------- | ------- | ------- |  | --------- |  |  | ------- | ------
|                                     |  | Annual Compensation |      | Long Term Compensation
  Awards | 
|                                     |  |                     |      |                                 | 
|Name and
  Principal Position1/16/17 |  | Year                |      | Salary ($)                      |  | Other Annual
  Compensation
  ($) 3/ |      | Restricted
  Stock
  Awards ($)2/ |        | Securities
  Underlying
  Options(#) |  | All Other
  Compensation
  ($) 4/5/ |        
|                                     |  |                     |      |                                 |  |                                      |      |                                   |        |                                      |  |                                     |        
|                                     |  |                     |      |                                 |  |                                      |      |                                   |        |                                      |  |                                     |         |         |  |           |  |  |        
|Dennis R. Alexander
  (*)            |  |                     | 2005 |                                 |  | n/a                                  |      |                                   | n/a    |                                      |  |                                     | n/a     |         |  | -0-       |  |  | 144,000 | 9/13/ 
|Chairman and CFO                     |  |                     | 2004 |                                 |  | n/a                                  |      |                                   | n/a    |                                      |  |                                     | 400,000 | 6/7/10/ |  | 2,000,000 |  |  | 80,000  | 8/10/ 
|                                     |  |                     | 2003 |                                 |  | n/a                                  |      |                                   | n/a    |                                      |  |                                     | 100,000 | 6/ 10/  |  | -0-       |  |  | -0-     |       
|                                     |  |                     |      |                                 |  |                                      |      |                                   |        |                                      |  |                                     |         |         |  |           |  |  |         |       
|John R. Taylor                       |  |                     | 2005 |                                 |  | 55,000                               | (**) |                                   | 83,600 | 9/14                                 |  |                                     | n/a     |         |  | -0-       |  |  | 144,000 | 9/ 14/
|President and Director               |  |                     | 2004 |                                 |  | n/a                                  |      |                                   | 30,000 | (**)                                 |  |                                     | 80,000  | 7/11    |  | 2,000,000 |  |  | 192,000 | 8/11/ 
|                                     |  |                     | 2003 |                                 |  | n/a                                  |      |                                   | n/a    |                                      |  |                                     | n/a     |         |  | -0-       |  |  | -0-     |       
|                                     |  |                     |      |                                 |  |                                      |      |                                   |        |                                      |  |                                     |         |         |  |           |  |  |         |       
|William E. Merritt                   |  |                     | 2005 |                                 |  | 70,000                               | (**) |                                   | 83,600 | 9/15/                                |  |                                     | n/a     |         |  | -0-       |  |  | 144,000 | 9/ 15/
|Executive V.P.                       |  |                     | 2004 |                                 |  | n/a                                  |      |                                   | n/a    |                                      |  |                                     | 80,000  | 7/12    |  | 2,000,000 |  |  | 192,000 | 8/12  
|and General Counsel                  |  |                     | 2003 |                                 |  | n/a                                  |      |                                   | n/a    |                                      |  |                                     | n/a     |         |  | -0-       |  |  | -0-     |       

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1/ | As part of an agreement
  with Firecreek Petroleum, Inc. for the Exchange of Common Stock Dated July
  29, 2004, all named executives listed in the table received provisions and
  rights for facilitation fees, on completion of certain events, and terms to
  be established, as listed therein Section 9. d. of the agreement filed July
  16, 2004 on Form 8-K as exhibit 21.1 thereto and incorporated for reference.
  Please also see Certain Relationships and Related Transactions.                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2/ | The amount
  in this column for 2003 represents the value of restricted stock grants made
  to the named executive on July 1, 2003 based on the closing market price on
  or near $0.05; $320,000 of the amount listed in this column for 2004
  represents the value of restricted stock grants made to D.R. Alexander on
  April 1, 2004, based on the closing market prices on or near such date of
  $0.16; $80,000 of the amount listed in this column for 2004 represents the
  value of restricted stock grants each made to D.R. Alexander, J.R. Taylor,
  and W.E. Merritt, on August 2, 2004, based on the closing market prices on or
  near such dates of $0.08.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3/ | The amount
  in this column for 2005 represents the value of the common restricted stock
  underlying sub-series C-2 of series C preferred stock on July 12, 2005 to the
  named executives.  J.R. Taylor, and
  W.E. Merritt, received 110,000 shares each for services rendered, based on
  the closing market prices on or near such dates of $0.076.                                                                                                                                                                                                                                                                                                                    

64

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4/  | The amounts in this column
  for 2004 represents the value of the series B preferred stock issued to each
  of the named executives on August 2, 2004, based on the then closing
  market prices on or near such date at $0.08 per share. As additional consideration on behalf of the
  agreement with Firecreek Petroleum, D.R. Alexander, J.R. Taylor, and W.E.
  Merritt, received 1,000,000, 2,400,000, and 2,400,000 shares, respectively.
  Each share of Series B preferred converted into 1 share of common restricted
  stock on August 2, 2005 according to its rights and preferences.                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5/  | The amounts
  in this column for 2005 represents the aggregate value of series C preferred
  stock issued to each of the named executives on April 5, and July 12, 2005,
  based on the then closing market prices on or near such dates of $.02 and $.076 per share, respectively.
  D.R. Alexander, J.R. Taylor, and W.E. Merritt each received 150,000 shares of
  sub-series C-1, and 150,000 shares of sub-series C-2 of series C preferred
  stock, on April 5, and July 12, respectively. Series C preferred converts
  1:10 into common restricted stock, six months from the date of issuance, and
  in accordance with its rights and preferences. Each share of the sub-series
  C-1 of series C preferred issued to the named executives converted to ten
  shares of common on October 5, 2005.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|6/  | D.R.
  Alexander was granted 2,000,000 shares of restricted stock on July 1, 2003,
  and 2,000,000 shares of restricted stock on April 1, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|7/  | D.R.
  Alexander, J.R. Taylor, and W.E. Merritt, were each granted 1,000,000 shares
  of restricted stock on August 2, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|8/  | D.R.
  Alexander, J.R. Taylor, and W.E. Merritt, each received 1,000,000,
  2,400,000, and 2,400,000 shares of common restricted stock on August 2, 2005,
  respectively. This was a result of the automatic conversion of series B
  preferred stock on a one for one basis to common one year from its original
  date of issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|9/  | J.R. Taylor
  and W.E. Merritt each received 110,000 shares of C-2 of series C preferred on
  July 12, 2005. Additionally, D.R. Alexander, J. R. Taylor, and W.E. Merritt
  each received, a.) 150,000 shares of sub-series C-1 of series C preferred on
  April 5, 2005 and each of their issuances has converted into 1,500,000 shares
  of common restricted stock as of October 5, 2005, and b.) 150,000 shares of
  sub-series C-2 of series C preferred on July 12, 2005 which converts on
  January 12, 2006. The sub-series C-2 is not yet converted as of December 31,
  2005.                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|10/ | Mr.
  Alexander holds a total of 6,000,000 shares of common restricted stock as of
  December 31, 2005. The market value of the 6,000,000 shares on December 31,
  2005 was $180,000. No dividends are paid on the restricted common stock held.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|11/ | Mr. Taylor
  holds a total of 3,600,000 shares of restricted stock as of December 31,
  2005. The market value of the 3,600,000 shares on December 31, 2005 was
  $108,000. No dividends are paid on the restricted common stock held.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|12/ | Mr. Merritt
  holds a total of 3,600,000 shares of restricted stock as of December 31,
  2005. The market value of the 3,600,000 shares on December 31, 2005 was
  $108,000. No dividends are paid on the restricted common stock held.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|13/ | Mr.
  Alexander holds a total of 1,500,000 shares of common restricted stock as a
  result of C preferred conversion to common, and an additional 150,000 shares
  of unconverted sub-series C-2 of series C preferred as of December 31, 2005.
  The market value of these shares on December 31, 2005 was $90,000. No
  dividends are paid on the restricted common or preferred stock held.                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|14/ | Mr. Taylor
  holds a total of 1,500,000 shares of common restricted stock as a result of C
  preferred conversion to common, and an additional 260,000 shares of
  Sub-Series C-2 of Series C preferred as of December 31, 2005. The market
  value of the underlying common restricted shares on December 31, 2005 was
  $123,000. No dividends are paid on the preferred stock held.                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|15/ | Mr. Merritt
  holds a total of 1,500,000 shares of common restricted stock as a result of C
  preferred conversion to common, and an additional 260,000 shares of
  Sub-Series C-2 of Series C preferred as of December 31, 2005.. The market
  value of the underlying common restricted shares on December 31, 2005 was $123,000.
  No dividends are paid on the restricted stock held.                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|16/ | D.R.
  Alexander has been with the Company since 1999; J.R. Taylor, and W.M.
  Merritt, since July 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|17/ | With respect
  to the terms of the voting agreement filed herewith as exhibit 9.1, Sections
  10., and 11.(a), (b), and (c) therein and further in accordance with terms
  and provisions provided for in the Companys agreement with Firecreek
  Petroleum, Inc., Section 9. g. and h. filed July 16, 2004 on Form 8-K as
  exhibit 21.1 thereto and incorporated herein for reference: It is anticipated
  that on performance related to commencement of its first oil and gas project
  the Board of Directors will recommend to the Stock Option and Compensation
  Committee to evaluate, authorize, and establish Key Person Salaries, and
  other benefits.                                                                                                                                        

65

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|     |                                                                                                                                          
|---- | -----------------------------------------------------------------------------------------------------------------------------------------
|(*)  | Please see
  Certain Relationships and Related Transactions for additional discussion on
  agreements with individual consulting firms.
|     |                                                                                                                                          
|(**) | Represents
  compensation received by the named executives from Firecreek Petroleum.                                                     

Option Grants in
Fiscal Year 2004

Individual Grants

The following
table provides information related to options granted, vesting to our named
executive officers during the fiscal year ended December 31, 2005.

|Name                  |  | Number of
  Securities Underlying 
  Options Granted (#)a/b/ |           | % of Total
  Options Granted
  in Fiscal Year |  | Exercise
  or Base
  Price ($/sh) |  | Expiration
  Date |     
|--------------------- |  | ------------------------------------------------------------ | --------- | --------------------------------------------- |  | --------------------------------- |  | ----------------- | ----
|                      |  |                                                              |           |                                               |  |                                   |  |                   |     
|Dennis R.
  Alexander |  |                                                              | 2,000,000 |                                               |  | 11.76%                            |  |                   | $.70
|John R.
  Taylor      |  |                                                              | 2,000,000 |                                               |  | 11.76%                            |  |                   | $.70
|William E.
  Merritt  |  |                                                              | 2,000,000 |                                               |  | 11.76%                            |  |                   | $.70

a/ The market price for the underlying
restricted common stock on August 9, 2004, the date of grant, and December 31,
2005, for all grants listed in the table was $0.10, and $0.03 respectively.

b/ Including those executives listed in the
above table, the total number of options granted, vesting in the Fiscal Year
2005 to all officers, consultants, directors, and advisors was 17,000,000.

(*) The
following are excerpts from certain provisions contained in the option
agreement with the persons listed above, and include but are not limited to the
following:

(1) The date
of all agreements set forth in the table above is August 9, 2004.

(2) The
exercise price for all option agreements is $.70 per share.

(3) The
expiration of each of the agreements is four (4) years from the date of
Vesting.

(4) The
Vesting Date is: For and after the expiration of on hundred eighty (180) days
following the date of the agreement or February 9, 2005.

(5) The
Expiration Date for all option agreements is 2/9/2009.

(6) The
exercise price of the options is equal to or in excess of the fair market value
of the stock on the date of grant.

(7) For all
option grants listed in the table above the following provision is provided: If
at any time after the date of this Agreement and prior to the expiration of all
Exercise Period(s), the Company proposes to file a registration statement to
register any Common Stock (other than Common Stock issued with respect to any
acquisition or any employee stock option, stock purchase or similar plan) under
the Securities Act of 1933, as amended (the Securities Act) for sale to the
public in an underwritten offering, it will at each such time give prior
written notice to the Optionee of its intention to do so (Notice of Intent)
and, upon the written request of the Optionee made within 30 calendar days
after the receipt of any such notice (which request must specify the number of
Option Shares Optionee requests to be included in the registration, the Company
will use its best efforts to effect the registration under the Securities Act
of the Option Shares which the Company has been so requested to register,
provided, however, that if the managing underwriter shall certify in writing
that inclusion of all or any of the Option Shares would, in such managing
underwriters opinion, materially interfere with the proposed distribution and
marketing of the Common Stock in respect of which registration was originally
to be effected (such writing to state the basis of such opinion and the maximum
number of shares which may be distributed without such interference), then the
Company may, upon written notice to the Optionee, have the right to exclude
from such registration such number of Option Shares which it would otherwise be
required to register hereunder

66

---



as is
necessary to reduce the total amount of Common Stock to be so registered to the
maximum amount which can be so marketed.

Aggregated Option
Exercises in Last Fiscal Year and Fiscal Year-End Option Value

|                      |  |  |                                   |  |                  |   |                                                             |  |                                                 |  |  |   |  | 
|--------------------- |  |  | --------------------------------- |  | ---------------- | - | ----------------------------------------------------------- |  | ----------------------------------------------- |  |  | - |  | 
|Name                  |  |  | Shares
  Acquired
  On
  Exercise |  | Value
  Realized |   | Number of
  Securities
  Underlying
  Unexercised
  Options |  | Value of
  Unexercised
  In-the-money
  Options | 
|                      |  |  |                                   |  |                  |   |                                                             |  |                                                 | 
|Dennis R.
  Alexander |  |  |                                  |  |                  |  |                                                             |  | 2,000,000                                       |  |  |  | 
|John R.
  Taylor      |  |  |                                  |  |                  |  |                                                             |  | 2,000,000                                       |  |  |  | 
|William E.
  Merritt  |  |  |                                  |  |                  |  |                                                             |  | 2,000,000                                       |  |  |  | 

Employee Pension,
Profit Sharing or Other Retirement Plans

The Company
does not have a defined benefit, pension plan, profit sharing, or other
retirement plan.

Director Compensation

As of February
4, 2000 each member of the  Board of
Directors, subject to approval of the Chairman and CEO, may be paid $500.00 per
formal meeting plus certain expenses for out of State Directors incurred in
connection with attendance at Board and Committee meetings. There are no
agreements provided to Directors or individual agreements with any Director
other than that presented in this paragraph, and the understanding that at
minimum a traveling Director will be considered by the Chairman more favorably
for reimbursement of expenses for travel and may, at the election of the
Chairman, be paid $500 for attendance at a formal meeting. This determination
by the Chairman to provide for either reimbursement or compensation for a
formal meeting is principally to be based on the finances of the Company
available at the time.

Employment Agreements

The Company
does not have any employment agreements with its executive officers.

ITEM
11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The
following  table sets forth  certain
information  regarding the  beneficial ownership of the Companys
Securities by each person or group that is known by the Company to be the
beneficial owner of more than five percent of its outstanding Securities, each
director of the Company, each executive officer, and all directors and executive
officers of the Company as a group as of December 31, 2005. Unless otherwise
indicated, the company believes that the persons named in the table below,
based on  information furnished by such
owners, have sole voting and investment power with respect to the Common Stock
beneficially owned by them, where applicable.

Under
securities laws, a person is considered to be the beneficial owner of
securities owned by him (or certain persons whose ownership is attributed to
him) and that can be acquired by him within 60 days from the date of this Form
10-KSB filing, including upon the exercise of options, warrants or convertible
securities. The Company determined a beneficial owners percentage ownership by
assuming that options, warrants or convertible securities that are held by him,
but not those held by any other person, and which are exercisable within 60
days of the date of this Form 10-KSB filing, have been exercised or converted.

67

---



|                 |  |                                   |                                     |             |                        |      |                    |       |   |  | 
|---------------- |  | --------------------------------- | ----------------------------------- | ----------- | ---------------------- | ---- | ------------------ | ----- | - |  | 
|Title of
  Class |  |                                   | Name and Address
  Beneficial Owner |             | Beneficial
  Ownership |      | Percent
  of Class |      
|                 |  |                                   |                                     |             |                        |      |                    |      
|                 |  |                                   |                                     |             |                        |      |                   
|Common and       |  | Gregg Fryett                      |                                     | 17,434,818  | *                      | (1)  |                    | 6.20  | % | 
|Preferred        |  | 50
  Reddenhill Road              |                                     |             |                        |      |                    |       |   | 
|                 |  | Torquay                           |                                     |             |                        |      |                    |       |   | 
|                 |  | Devon TQ1
  3RR                   |                                     |             |                        |      |                    |       |   | 
|                 |  | United
  Kingdom                  |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | Dennis R Alexander
  **           |                                     | 12,512,500  | *                      | (2)  |                    | 4.45  | % | 
|Preferred        |  | 6564 Smoke
  Tree Lane            |                                     |             |                        |      |                    |       |   | 
|                 |  | Scottsdale,
  Arizona 85253       |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common           |  | Rupert C.
  Johnson **            |                                     | 73,346,240  | *                      | (3)  |                    | 26.08 | % | 
|                 |  | c/o 6564
  Smoke Tree Lane        |                                     |             |                        |      |                    |       |   | 
|                 |  | Scottsdale,
  Arizona 85253       |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | John R.
  Taylor**                |                                     | 14,212,887  | *                      | (4)  |                    | 5.05  | % | 
|Preferred        |  | 6777 Camp
  Bowie Blvd. Suite 332 |                                     |             |                        |      |                    |       |   | 
|                 |  | Fort Worth,
  TX 76116            |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | Dr. Mousa
  Hawamdah**            |                                     | 8,270,174   | *                      | (5)  |                    | 2.94  | % | 
|Preferred        |  | 6777 Camp
  Bowie Blvd. Suite 332 |                                     |             |                        |      |                    |       |   | 
|                 |  | Fort Worth,
  TX 76116            |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | George B.
  Faulder IV            |                                     | 12,028,409  | *                      | (6)  |                    | 4.28  | % | 
|Preferred        |  | 6777 Camp
  Bowie Blvd. Suite 332 |                                     |             |                        |      |                    |       |   | 
|                 |  | Fort Worth,
  TX 76116            |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | William E.
  Merritt**            |                                     | 11,862,887  | *                      | (7)  |                    | 4.22  | % | 
|Preferred        |  | 6777 Camp
  Bowie Blvd. Suite 332 |                                     |             |                        |      |                    |       |   | 
|                 |  | Fort Worth,
  TX 76116            |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common           |  | Peter Fryett                      |                                     | 4,380,000   | *                      | (8)  |                    | 1.56  | % | 
|                 |  | 153 Duchy
  Dr.                   |                                     |             |                        |      |                    |       |   | 
|                 |  | Paignton,                         |                                     |             |                        |      |                    |       |   | 
|                 |  | Devon TQ31EW                      |                                     |             |                        |      |                    |       |   | 
|                 |  | United Kingdom                    |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | Charles
  Alliban                 |                                     | 2,450,000   | *                      | (9)  |                    | 0.87  | % | 
|Preferred        |  | The White
  House, Luscombe Rd.   |                                     |             |                        |      |                    |       |   | 
|                 |  | Paignton,                         |                                     |             |                        |      |                    |       |   | 
|                 |  | Devon TQ33XW                      |                                     |             |                        |      |                    |       |   | 
|                 |  | United
  Kingdom                  |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | Melvena
  Alexander**             |                                     | 2,815,000   | *                      | (10) |                    | 1.00  | % | 
|Preferred        |  | 6564 Smoke
  Tree Lane            |                                     |             |                        |      |                    |       |   | 
|                 |  | Scottsdale,
  Arizona 85253       |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common           |  | James M.
  Barker Jr.**           |                                     | 1,223,500   | *                      | (11) |                    | 0.44  | % | 
|                 |  | 6777 Camp
  Bowie Blvd. Suite 332 |                                     |             |                        |      |                    |       |   | 
|                 |  | Fort Worth,
  TX 76116            |                                     |             |                        |      |                    |       |   | 
|                 |  |                                   |                                     |             |                        |      |                    |       |   | 
|Common and       |  | All Officers
  and Directors      |                                     |             |                        |      |                    |       |   | 
|Preferred        |  | as a Group
  (**8-Persons)        |                                     | 160,536,415 | *                      |      |                    | 57.08 | % | 

68

---



---

* Persons in the preceding table, and
corresponding footnotes, are also part of and bound by a voting agreement,
along with other shareholders.


(a) For all Persons in the
preceding table, and corresponding footnotes: Options, and Sub-Series C-2 of
Series C Preferred are included in calculations as to each persons beneficial
ownership position.

(1) Includes 9,195,000
shares owned directly by Mr. Gregg Fryett our former CEO and Director, and
2,000,000 shares owned by Mrs. Rachel Fryett his wife. Also included are i)
2,000,000 shares of restricted common stock under presently exercisable stock
options, which may be purchased by Mr. Gregg Fryett after February 9, 2005, ii)
260,000 of Sub Series C-2 carrying 10 votes per share, converting 1:10 into
shares of common restricted stock on January 12, 2006, and iii) 1,639,818 shares
are held in the name of Big Boat Company, Ltd. of which the reporting person is
shareholder and director.

(2) Includes 7,912,500
shares owned directly by Mr. Alexander, and 300,000 in the name of his wife,
Deborah L. Alexander. There are 50,000 shares in the name of Ashton Alexander
and 50,000 shares in the name of Sarah Alexander, his two minor children, and
he has voting power over 50,000 in the name of Aaron  Alexander, and
50,000 in the name of Julie Alexander-Schumacher, his wifes adult children.
Also included are i) 600,000 shares of common restricted stock under presently
exercisable stock options, which may be purchased by Mr. Alexander after
November 30, 2000, ii) 2,000,000 shares of common restricted stock under
presently exercisable stock options which may be purchased by Mr. Alexander
after February 9, 2005, and iii) 150,000 of Sub Series C-2 Preferred Stock
carrying 10 votes per share, converting 1:10 into shares of common restricted
stock on January 12, 2006.

(3) Includes 67,996,340
shares in which Rupert C. Johnson has voting and dispositive power over the
shares by virtue of being the principal of Tirion Group, Inc., the beneficial
owner of the shares. Also reflected in the table: i) Mr. Johnson indirectly
owns warrants to purchase 2,000,000 shares of common stock and has voting and
dispositive power over the shares by virtue of being the principal of Tirion
Group, Inc., the beneficial owner of these shares. Common shares underlying
these presently exercisable warrants may be purchased by Tirion Group, Inc.
after May 18, 2005; ii) As of February 2006, Mr. Johnson indirectly owns by
virtue of an assignment, warrants to purchase 3,350,000 shares of common stock
and has voting and dispositive power over the shares by virtue of being the
principal of Tirion Group, Inc., the beneficial owner of these shares, a
company that Mr. Johnson is a principal shareholder and manager thereof.

(4) Includes 8,912,887
shares owned directly by Mr. Taylor. Also included are i) 2,000,000 shares of
common restricted stock under presently exercisable stock options, which may be
purchased by Mr. Taylor after February 9, 2005, and ii) 260,000 of Sub Series
C-2 Preferred Stock carrying 10 votes per share, converting 1:10 into shares of
common restricted stock on January 12, 2006. Further included in the table are
gifts made by Mr. Taylor to the following persons and amounts, of his original
Series B Preferred converted 1:1 into common restricted stock: a.) 100,000
shares to Ben E. Taylor Irrevocable Living Trust, for family member b.) 100,000
shares to Ben R. Taylor Living Trust, for family member c.) 100,000 shares to
Cheryl Cashion 1998 Family Trust, for family member d.) 100,000 shares to
Joseph S. Behm, for family member e.) 100,000 shares to Ann M. Adams, for
family member f.) 100,000 shares to John Russell Taylor, for family member g.)
100,000 shares to John Dustin Taylor, for family member. Mr. Taylor maintains
voting power over all of the gifts.

(5) Includes 6,270,174
shares owned directly by Dr. Hawamdah. Also included are 2,000,000 shares of
common restricted stock under presently exercisable stock options, which may be
purchased by Mr. Hawamdah after February 9, 2005.

(6) Includes 7,428,409
shares owned directly by Mr. Faulder. Also included are i) 2,000,000 shares of
common restricted stock under presently exercisable stock options, which may be
purchased by Mr. Faulder after February 9, 2005, and ii) 260,000 of Sub Series
C-2 Preferred Stock carrying 10 votes per share, converting 1:10 into shares of
common restricted stock on January 12, 2006.

(7) Includes 7,262,887
shares owned directly by Mr. Merritt. Also included are i) 2,000,000 shares of
common restricted stock under presently exercisable stock options, which may be
purchased by Mr. Merritt after February 9, 2005, and ii) 260,000 of Sub
Series C-2 Preferred Stock carrying 10 votes per share, converting 1:10 of
shares of common restricted stock on January 12, 2006.

69

---



(8) Includes 1,280,000
shares owned directly by Mr. Peter Fryett, our former Vice President, Assistant Secretary and a director, and 1,100,000 in the name of his
wife, Marion Fryett. Also included are 2,000,000 shares of common restricted
stock under presently exercisable stock options, which may be purchased by Mr.
Peter Fryett after February 9, 2005.

(9) Includes 200,000 shares
owned directly by Mr. Alliban, our former Treasurer and a director. Also included are 2,000,000 shares of common
restricted stock under presently exercisable stock options, which may be
purchased by Mr. Alliban after February 9, 2005, and 25,000 of Sub Series C-2
Preferred Stock carrying 10 votes per share, converting 1:10 into shares of
common restricted stock on January 12, 2006.

(10) Includes 1,215,000
shares owned directly by Mrs. Alexander. Also included are 500,000 shares of
common restricted stock under presently exercisable stock options, which may be
purchased by Mrs. Alexander after November 30, 2000, and 110,000 of Sub Series
C-2 Preferred Stock carrying 10 votes per share, converting 1:10 into shares of
common restricted stock on January 12, 2006.

(11) Includes 223,000 shares
owned directly by Mr. Barker Jr. Also included are 1,000,000 shares of common
restricted stock under presently exercisable stock options, which may be
purchased by Mr. Barker Jr. after February 9, 2005.

ITEM
12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with
Executive Management

Please see
EXECUTIVE COMPENSATION section of this document related to transactions in
addition to those contained in this section including, rights and provisions,
grants and bonus, additional consideration and other compensation for the
following named executives: Dennis R. Alexander, Chairman and Chief Financial
Officer and Director, John R. Taylor, President and Director, William E.
Merritt, Executive Vice President, General Counsel and Director.

Transactions with
Former Executive Management

For additional
information other than that furnished in this section regarding: former
Officers and Directors George B. Faulder, former Vice President and Director of
the Company and Firecreek Petroleum; and, Gregg Fryett, former CEO and Director
of the Company and Firecreek Petroleum, and International Yacht Sales Group, LTD.,
please see
information under Item 10  Executive Compensation and other
information contained in
Form 10-KSB filed April 12, 2005, incorporated herein by reference.

Contracts

The Company
has verbal contracts with various entities (owned by related parties) to
provide accounting, management, and other professional services. The entities,
their owners and their amounts are as follows:

|                                         |  |                           |               |   |         |  |         |        |      |   |      |  |   |         |  | 
|---------------------------------------- |  | ------------------------- | ------------- | - | ------- |  | ------- | ------ | ---- | - | ---- |  | - | ------- |  | 
|                                         |  |                           |               |   | Paid    |  | Accrued |       
|                                         |  |                           |               |   |         |  |         |       
|Entity                                   |  |                           | Related Party |   | 2005    |  | 2004    |        | 2005 |   | 2004 | 
|                                         |  |                           |               |   |         |  |         |        |      |   |      | 
|Global Media
  Network USA, Inc.         |  | Dennis R.
  Alexander (1) |               | $ | 133,250 |  | $       | -0-    |      | $ | -0-  |  | $ | 120,000 | 
|Angro
  Holding Ltd f/k/a                |  | Gregg Fryett
  (2)        |               | $ | 100,000 |  | $       | 20,000 |      | $ | -0-  |  | $ | 100,000 | 
|Able Marine, Ltd. Melvena Alexander,
CPA |  | Melvena
  Alexander (3)   |               | $ | 78,300  |  | $       | 31,879 |      | $ | -0-  |  | $ | 24,121  | 

|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Dennis R.
  Alexander, Chairman and CFO, and is a shareholder of the Company.                                                             
|    |                                                                                                                                           
|(2) | Gregg
  Fryett, Chief Executive Officer until November 30, 2005, and Director through
  December 31, 2005, and shareholder of the Company.
|    |                                                                                                                                           
|(3) | Melvena
  Alexander, Secretary and Comptroller, and is a shareholder of the Company.                                                      

70

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Indirect Third Party
Consulting Fee Arrangement with Director

On June 14, 2005 the Board
of Directors of the Company approved the signing of a Fee Protection Agreement
with DLM Asset Management (DLM) in connection with utilizing DLM in the area
of raising various forms of financing and business development. Pursuant to the
Agreement, we are required to pay to DLM ten percent (10%) cash compensation
and ten percent  (10%) warrant compensation on the first $4,000,000 that
the Company receives. As of June 16, 2005 the Company has paid in the aggregate
a total of $400,000, excluding expenses, to DLM on behalf of its plan of
finance with Tirion Group, Inc., which includes other term provisions with DLM
listed in our Registration Statement on Form SB-2/A declared effective on
September 7, 2005 and incorporated by reference hereto. Of the aggregate total
of $400,000 paid to DLM, approximately $200,000 was paid to Tirion Group, Inc.
of which Rupert C. Johnson, a Director of the Company, is a principal
shareholder and manager thereof.

Salary to Former Vice President and
Director

George B. Faulder, a former
Vice President and Director of the Company and Firecreek Petroleum, and a
Shareholder of the Company, received salary in the amount of USD $55,000 during
2005 (see other related compensation and non compensation stock issuances to
George B. Faulder listed in this section).

Preferred Stock
Issuances

As part of an
agreement with Firecreek Petroleum, Inc. for the Exchange of Common Stock Dated
July 29, 2004, all named executives in the table below received provisions and
rights for facilitation fees, on completion of certain events, and certain
terms to be established, as provided in the agreement filed July 16, 2004 on
Form 8-K as exhibit 21.1 thereto and incorporated for reference.

On April 5 and July 12,
2005, by majority consent of the Board of Directors and applicable committees
approved the following issuances of its Sub-Series C-1 and C-2 of Sub Series C
Preferred Stock, par value $0.001 per share, to the following persons. The
shares were issued pursuant to a private placement and carry a rule 144 legend.
The shares were issued pursuant to an exemption from registration as provided
in Section 4(2) of the Securities Act of 1933. For description of Rights and
Preferences as to C-1 of Sub Series C Preferred stock please see Exhibit 99.2
to a Current Report on Form 8-K filed April 7, 2005; and, as to C-2 of Sub
Series C Preferred Stock please see Exhibit 99.2 to a Current Report on Form
8-K, as amended, filed initially on July 14, 2005, both incorporated herein by
reference. The shares are covered under a Voting Agreement (please see
Exhibit 99.3 to a Current Report on Form 8-K filed April 7, 2005,
incorporated herein by reference).

(*)See Notes Below Table)).

|                      |  |         |         |           |                |                      |                         |  |                                      |      |                                          |  |  |   |         |  |  | 
|--------------------- |  | ------- | ------- | --------- | -------------- | -------------------- | ----------------------- |  | ------------------------------------ | ---- | ---------------------------------------- |  |  | - | ------- |  |  | 
|Name                  |  |         | Date(s) |           | Share
  Amount |                      | Type of
  Consideration |  | Fair Market Value
  of Consideration |      | Value of
  Underlying
  Common Stock ($) | 
|                      |  |         |         |           |                |                      |                         |  |                                      |      |                                          | 
|George B. Faulder (1) |  | 4/05/05 |         | 150,000/a |                | Preferred Stock      |                         |  | $                                    | 1500 |                                          |  |  | $ | 30,000  |  | 
|6777 Camp Bowie Blvd. |  | 7/12/05 |         | 150,000/b |                | in exchange for      |                         |  | $                                    | 1500 |                                          |  |  | $ | 114,000 |  | 
|Suite 215             |  |         |         |           |                | Rights in connection |                         |  |                                      |      |                                          |  |  |   |         |  | 
|Fort Worth, TX 76116  |  |         |         |           |                | with the Companys   |                         |  |                                      |      |                                          |  |  |   |         |  | 
|                      |  |         |         |           |                | acquisition of FPI   |                         |  |                                      |      |                                          |  |  |   |         |  | 
|                      |  |         |         |           |                |                      |                         |  |                                      |      |                                          |  |  |   |         |  | 
|Gregg Fryett (2)      |  | 4/05/05 |         | 150,000/a |                | Preferred Stock      |                         |  | $                                    | 1500 |                                          |  |  | $ | 30,000  |  | 
|50 Reddenhill Road    |  | 7/12/05 |         | 150,000/b |                | in exchange for      |                         |  | $                                    | 1500 |                                          |  |  | $ | 114,000 |  | 
|Torquay               |  |         |         |           |                | Rights in connection |                         |  |                                      |      |                                          |  |  |   |         |  | 
|Devon TQ1 3RR         |  |         |         |           |                | with the Companys   |                         |  |                                      |      |                                          |  |  |   |         |  | 
|United Kingdom        |  |         |         |           |                | acquisition of FPI   |                         |  |                                      |      |                                          |  |  |   |         |  | 

/a Shares of Sub-Series C-1 of Series C
Preferred Stock

/b Shares of Sub-Series C-2 of Series C
Preferred Stock

71

---



(*) $288,000
of the financing proceeds in the immediately preceding table were used
primarily for additional consideration in exchange for a partial amount of the
Rights established for services in connection with the Companys acquisition of
FPI. Each named persons established rights therein remaining is agreed to be
reduced by $150,000 each on April 5, and July 12, 2005, respectively, and such
amount of rights in the aggregate are cancelled accordingly.

(1) George B.
Faulder is the former Vice President and a Director of the Company and
Firecreek Petroleum, and a Shareholder of the Company.

(2) Gregg
Fryett is the former Chief Executive Officer and a Director of the Company,
Firecreek Petroleum, and International Yacht Sales Group, LTD., and a
Shareholder of the Company.

On July 12,
2005, by majority consent of the Board of Directors, the Compensation and Stock
Option Committee, and the Executive Management Committee, the Registrant
approved the following issuances of its Sub-Series C-2 Preferred Stock, par
value $0.001 per share, to the following persons. The shares were issued
pursuant to a private placement and carry a rule 144 legend. The shares were
issued pursuant to an exemption from registration as provided in Section 4(2)
of the Securities Act of 1933. For description of Rights and Preferences see
Exhibit 99.2 to a
Current Report on Form 8-K, as amended, filed initially on July 14, 2005,
incorporated herein by reference.

(*)(See Notes
Below Table)).

|                          |  |         |         |         |                |                      |                         |  |                                      |      |                                          |  |  |   |        |  |  | 
|------------------------- |  | ------- | ------- | ------- | -------------- | -------------------- | ----------------------- |  | ------------------------------------ | ---- | ---------------------------------------- |  |  | - | ------ |  |  | 
|Name                      |  |         | Date(s) |         | Share
  Amount |                      | Type of
  Consideration |  | Fair Market Value
  of Consideration |      | Value of
  Underlying
  Common Stock ($) | 
|                          |  |         |         |         |                |                      |                         |  |                                      |      |                                          | 
|Melvena Alexander(**)(1)  |  | 7/12/05 |         | 110,000 |                | Preferred Stock      |                         |  | $                                    | 1100 |                                          |  |  | $ | 83,600 |  | 
|6564 Smoke Tree Ln        |  |         |         |         |                | in consideration of  |                         |  |                                      |      |                                          |  |  |   |        |  | 
|Scottsdale, Arizona 85253 |  |         |         |         |                | services rendered to |                         |  |                                      |      |                                          |  |  |   |        |  | 
|                          |  |         |         |         |                | the Company or FPI   |                         |  |                                      |      |                                          |  |  |   |        |  | 
|                          |  |         |         |         |                |                      |                         |  |                                      |      |                                          |  |  |   |        |  | 
|George B. Faulder (**)(2) |  | 7/12/05 |         | 110,000 |                | Preferred Stock      |                         |  | $                                    | 1100 |                                          |  |  | $ | 83,600 |  | 
|6777 Camp Bowie Blvd.     |  |         |         |         |                | in consideration of  |                         |  |                                      |      |                                          |  |  |   |        |  | 
|Suite 215                 |  |         |         |         |                | services rendered to |                         |  |                                      |      |                                          |  |  |   |        |  | 
|Fort Worth, TX 76116      |  |         |         |         |                | the Company or FPI   |                         |  |                                      |      |                                          |  |  |   |        |  | 
|                          |  |         |         |         |                |                      |                         |  |                                      |      |                                          |  |  |   |        |  | 
|Gregg Fryett (**)(3)      |  | 7/12/05 |         | 110,000 |                | Preferred Stock      |                         |  | $                                    | 1100 |                                          |  |  | $ | 83,600 |  | 
|50 Reddenhill Road        |  |         |         |         |                | in consideration of  |                         |  |                                      |      |                                          |  |  |   |        |  | 
|Devon TQ1 3RR             |  |         |         |         |                | services rendered to |                         |  |                                      |      |                                          |  |  |   |        |  | 
|United Kingdom            |  |         |         |         |                | the Company or FPI   |                         |  |                                      |      |                                          |  |  |   |        |  | 

(*) $250,300
of the financing proceeds in the immediately preceding table were used
primarily in consideration of services rendered to the Company or Firecreek
Petroleum.

(1) Melvena
Alexander is Secretary and Comptroller of the Company and Firecreek Petroleum,
and a Shareholder of the Company.

(2) George B.
Faulder is a former Vice President and Director of the Company and Firecreek
Petroleum, and a Shareholder of the Company.

(3) Gregg
Fryett is the former Chief Executive Officer and a Director of the Company,
Firecreek Petroleum, and International Yacht Sales Group, LTD., and a
Shareholder of the Company.

(**) The
shares are covered under the terms of the Voting Agreement listed in Exhibit
99.3 to a Current Reports on Form 8-K, filed April 7, 2005, and incorporated by
reference thereto.

72

---



Option Issuances

The following
table provides information related to options granted, vesting to our former named
executive officers during the fiscal year ended December 31, 2005.

|                    |  |           |                                                             |       |                                               |  |                                   |   |                   |  |  |        |  | 
|------------------- |  | --------- | ----------------------------------------------------------- | ----- | --------------------------------------------- |  | --------------------------------- | - | ----------------- |  |  | ------ |  | 
|Name                |  |           | Number of
  Securities Underlying
  Options Granted (#)a/b/ |       | % of Total
  Options Granted
  in Fiscal Year |  | Exercise
  or Base
  Price ($/sh) |   | Expiration
  Date | 
|                    |  |           |                                                             |       |                                               |  |                                   |   |                   | 
|Gregg Fryett        |  | 2,000,000 |                                                             | 11.76 | %                                             |  |                                   | $ | .70               |  |  | 2/9/09 | 
|George B.
  Faulder |  | 2,000,000 |                                                             | 11.76 | %                                             |  |                                   | $ | .70               |  |  | 2/9/09 | 

a/ The market price for the underlying
restricted common stock on August 9, 2004, the date of grant, and December 31,
2005, for all grants listed in the table was $0.10, and $0.03 respectively.

b/ Including those executives listed in the
above table, the total number of options vesting in the Fiscal Year 2005 to all
officers, consultants, directors, and advisors, either affiliated or non affiliated,
was 17,000,000.

The following
are excerpts from certain provisions contained in the option agreement with the
persons listed above, and include but are not limited to the following:

(1) The date
of all agreements set forth in the table above is August 9, 2004.

(2) The
exercise price for all option agreements is $.70 per share.

(3) The
expiration of each of the agreements is four (4) years from the date of
Vesting.

(4) The
Vesting Date is: For and after the expiration of on hundred eighty (180) days
following the date of the agreement or February 9, 2005.

(5) The
Expiration Date for all option agreements is 2/9/2009.

(6) The
exercise price of the options is equal to or in excess of the fair market value
of the stock on the date of grant.

(7) For all option
grants  listed in the table above the
following provision is provided: If at any time after  the date of this Agreement and
prior to the expiration of all Exercise
Period(s), the Company proposes to file a registration  statement to register any Common Stock
(other than Common Stock issued with respect to any acquisition or any employee
stock option, stock purchase or similar
plan) under the  Securities  Act of 1933, as amended (the Securities
Act) for sale to the public in an underwritten offering, it will at each such
time give prior written notice to the Optionee of its intention to do so
(Notice of Intent) and, upon the
written  request of the Optionee
made within 30 calendar days after the receipt of any such notice (which
request must specify the number of Option
Shares Optionee requests to be included in the registration, the Company
will use its best efforts to effect the registration under the Securities Act
of the Option Shares which the  Company
has been so requested to register, provided, however, that if the managing
underwriter shall certify in writing that inclusion of all or any of the Option
Shares would, in such managing underwriters opinion, materially interfere with
the proposed distribution and marketing of the Common Stock in respect of which
registration was originally to be effected (such writing to state the basis of
such opinion and the maximum number of shares which  may be  distributed without
such interference), then the Company may, upon written notice to the Optionee,
have the right to exclude from such registration such number of Option Shares
which it would  otherwise be required to
register hereunder as is necessary to reduce the total amount of Common Stock
to be so registered to the maximum amount which can be so marketed.

Aggregated
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Value

|                    |  |  |                                   |  |                  |   |                                                             |  |                                                 |  |  |   |  | 
|------------------- |  |  | --------------------------------- |  | ---------------- | - | ----------------------------------------------------------- |  | ----------------------------------------------- |  |  | - |  | 
|Name                |  |  | Shares
  Acquired
  On
  Exercise |  | Value
  Realized |   | Number of
  Securities
  Underlying
  Unexercised
  Options |  | Value of
  Unexercised
  In-the-money
  Options | 
|                    |  |  |                                   |  |                  |   |                                                             |  |                                                 | 
|Gregg Fryett        |  |  |                                  |  |                  |  |                                                             |  | 2,000,000                                       |  |  |  | 
|George B.
  Faulder |  |  |                                  |  |                  |  |                                                             |  | 2,000,000                                       |  |  |  | 

73

---



---

Unsecured,
Demand Note Payable to John R. Taylor, President and Director, for loans made
to Firecreek Petroleum, Inc. Total for the note is $316,483 at December 31,
2004. The note is current at March 31, 2005, and thereafter reduced to $59,531
at December 31, 2005. The note is current at March 31, 2006. The note is due on
demand.


Unsecured, Demand
Note Payable to George B. Faulder IV, former Vice-President and Director, for
loans made to Firecreek Petroleum. Total for the note is $59,389. The note is
current at March 31, 2006. The note is due on demand.

Unsecured,
Demand Note Payable to Big Boat Company, U.K., a company owned by Gregg Fryett,
the former Chief Executive Officer of the Company, as part of the acquisition
of IGH and IYSG. Total for the note is approximately USD$240,118 based on the
then conversion rate (British Pound Sterling to USD) at December 31, 2004. The
note, its principal and interest, was paid in full at September 30, 2005.

Promissory
Notes Payable to Thomas J. Richards, formerly an advisory member through April
2004.  Total for all notes owed is
$146,525, the principal balance. The notes, and all principal and interest,
were paid in full at June 17, 2005.

Unsecured,
Demand Note Payable to Dennis R. Alexander, Chairman and CFO, and then
President, director and shareholder for cash funds loaned to the Company in the
amount of $109,780. The notes principal and interest was paid in full at
December 31, 2005.

Unsecured,
Demand Note Payable to Melvena Alexander, CPA, Secretary and Comptroller for
accrued services for the Fiscal Year ended 2002 in the amount of $60,000. The
note principal and interest is paid in full as of December 31, 2005.

Promissory
Notes payable to Larry W. Trapp, a former director of the Company through April
26, 2004, and currently a shareholder of the Company. A note in the amount of
$14,200 was issued June 1, 2001 with interest at 12% per annum. A second note
in the amount of $22,000 was issued August 16, 2002 with interest at 12%. Both
notes, and their respective principal and interest, were paid in full in June
2005.

Convertible debenture note
in the principal amount of USD $4,000,000, due to Tirion Group, Inc. Rupert C.
Johnson, principal of Tirion Group, Inc. is also a Director of the Company as
of October 4, 2005. The note and its principal and interest was paid in full by
conversion to common stock in September 2005.

The Chief
Executive Officer and Shareholder of the Company provided corporate office
space through 2004 at no charge. During the last quarter of 2005, the Company
paid $5,132 for approximately 1,431 square feet of office space utilized for
its headquarters located at 6564 Smoke Tree Lane, Scottsdale, Arizona 85253.
There is no further agreement in place to pay for the premises and at this time
is continuing to be provided free of charge.

The former CEO
or Managing Director of International Yacht Sales Group, Ltd. (IYSG), and former Chief Executive Officer and
Director of the Company Mr. Gregg Fryett, provided office space located
at 50 Reddenhill Road, Torquay Devon TQ1 3RR United Kingdom, for the IYSG
management operations, and the Companys International offices free of charge
until the end of fiscal year 2004. The Company discontinued IYSG in late 2005
and Mr. Fryett has been terminated as CEO of the Company.

The President, and Director of
Firecreek Petroleum, and President, Director, and Shareholder of the Company
Mr. John R. Taylor provided co-sharing of approximately 1963 square feet of
office space through a non affiliated family company at no charge during fiscal
year 2004 and through May 31, 2005. The
Companys wholly-owned subsidiary, Firecreek Petroleum headquartered at
6777 Camp Bowie Blvd S-215, Ft. Worth, TX 76116, is now the lessee of office space in Fort Worth, Texas. The
lease is for
24 months from June 1, 2005 through May 31, 2007. Basic monthly rent is $7,053
and approximately $49,361 has been paid from June through December 2005.

74

---



ITEM 13 - EXHIBITS

|            |                                                                                                                                                                                                                                                                                               
|----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. | Description                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                               
|2.1         | Agreement
  for the Exchange of Common Stock, dated December 12, 2003 (relating to the
  acquisition of International Group Holdings, Inc.) (filed as exhibit 2.1 to
  the Current Report on Form 8-K dated December 1, 2003, filed December 15,
  2003 and incorporated herein by reference).
|            |                                                                                                                                                                                                                                                                                               
|2.2         | Agreement
  for the Exchange of Common Stock, dated June 29, 2004 (relating to
  acquisition of Firecreek Petroleum, Inc.) (filed as exhibit 2.1 to Current
  Report on form 8-K dated June 24, 2004, filed July 15, 2004 and incorporated
  herein by reference).                            
|            |                                                                                                                                                                                                                                                                                               
|3.1         | Articles of
  Amendment to Articles of Incorporation of EGPI Firecreek, Inc. (filed as
  Exhibit 99.1 to Current Report on Form 8-K dated Feb. 15, 2005, filed
  February 22, 2005 and incorporated herein by reference). *                                                                   
|            |                                                                                                                                                                                                                                                                                               
|3.2         | Correction
  of Articles of Amendment to Articles of Incorporation of EGPI Firecreek Inc.,
  filed with the Nevada Secretary of State on May 12, 2005.                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                               
|3.3         | Amended
  By-Laws of Registrant, dated July 1, 2004 (filed as exhibit 2.2 to Current
  Report on Form 8-K dated June 4, 2004, filed July 15, 2004, and incorporated
  herein by reference).                                                                                                   
|            |                                                                                                                                                                                                                                                                                               
|5.1         | Consent of
  Gersten, Savage, LLP (filed as Exhibit 5.1 to Registration Statement on Form
  SB-2/A filed on September 2, 2005 and incorporated herein by reference).                                                                                                                          
|            |                                                                                                                                                                                                                                                                                               
|10.1        | Securities
  Purchase Agreement dated May 18, 2005, between the Company and Tirion Group,
  Inc. (filed as an Exhibit to Current Report on Form 8-K dated May 26, 2005
  and incorporated herein by reference).                                                                               
|            |                                                                                                                                                                                                                                                                                               
|10.2        | Registration
  Rights Agreement dated May 18, 2005, between the Company and Tirion Group,
  Inc. (filed as an Exhibit to Current Report on Form 8-K dated May 26, 2005
  and incorporated by reference).                                                                                      
|            |                                                                                                                                                                                                                                                                                               
|10.3        | Intellectual
  Property Security Agreement dated May 2, 2005, by and between the Company and
  AJW Partners and its affiliates (filed as an Exhibit on Form 10-QSB for the
  quarter ended March 31, 2005 and incorporated herein by reference).                                              
|            |                                                                                                                                                                                                                                                                                               
|10.4        | Guaranty and
  Pledge Agreement dated May 2, 2005, between the Company, Greg Fryett, CEO of
  the Company, and AJW Partners and its affiliates (filed as an Exhibit to Form
  10-QSB for the quarter ended March 31, 2005 and incorporated herein by
  reference).                            
|            |                                                                                                                                                                                                                                                                                               
|10.5        | Security
  Agreement dated May 2, 2005, between the Company and AJW Partners and its
  affiliates (filed as an Exhibit to Form 10-QSB for the quarter ended March
  31, 2005 and incorporated herein by reference).                                                                           
|            |                                                                                                                                                                                                                                                                                               
|10.6        | Form of
  Callable Secured Convertible Note to AJW Partners LLC, dated May 2, 2005 (filed
  as an Exhibit to Form 10-QSB for the quarter ended March 31, 2005 and
  incorporated herein by reference).                                                                                        
|            |                                                                                                                                                                                                                                                                                               
|10.7        | Form of
  Callable Secured Convertible Note to AJW Offshore Limited, dated May 2, 2005
  (filed as an Exhibit to Form 10-QSB for the quarter ended March 31, 2005 and
  incorporated herein by reference).                                                                                    
|            |                                                                                                                                                                                                                                                                                               
|10.8        | Form of
  Callable Secured Convertible Note to AJW Qualified Partners, LLC, dated May
  2, 2005 (filed as an Exhibit to Form 10-QSB for quarter ended March 31, 2005
  and incorporated herein by reference).                                                                                 
|            |                                                                                                                                                                                                                                                                                               
|10.9        | Form of
  Callable Secured Convertible Note to New Millenium Capital Partners II, LLC,
  dated May 2, 2005, (filed as an Exhibit to Form 10-QSB for quarter ended
  March 31, 2005 and incorporated herein by reference).                                                                     

75

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|      |                                                                                                                                                                                                                                                                                                             
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.10 | Final Voting
  Agreement of EGPI Firecreek (filed as exhibit 99.3 to Current Report on Form
  8-K dated April 5, 2005, filed April 7, 2005 and incorporated herein by
  reference).                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                             
|10.11 | Form of
  Stock Purchase Warrant issued to AJW Partners LLC, effective May 2, 2005,
  Form 10-QSB for the quarter ended March 31, 2005 and incorporated herein by
  reference).                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                             
|10.12 | Form of
  Stock Purchase Warrant issued to AJW Offshore Limited, effective May 2, 2005,
  Form 10-QSB for the quarter ended March 31, 2005 and incorporated herein by
  reference).                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                             
|10.13 | Form of
  Stock Purchase Warrant issued to AJW Qualified Partners, LLC, effective May
  2, 2005, Form 10-QSB for the quarter ended March 31, 2005 and incorporated
  herein by reference).                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                             
|10.14 | Form of
  Stock Purchase Warrant to New Millenium Capital Partners II, LLC, effective
  May 2, 2005, Form 10-QSB for the quarter ended March 31, 2005 and
  incorporated herein by reference).                                                                                                              
|      |                                                                                                                                                                                                                                                                                                             
|10.15 | Fee
  Protector Agreement, dated June 14, 2005, by and between the Company and DLM
  Asset Management, Inc. (filed as an Exhibit to the Current Report on Form
  8-K/A dated June 20, 2005 and incorporated herein by reference).                                                                           
|      |                                                                                                                                                                                                                                                                                                             
|10.16 | Repurchase
  Agreement dated May 31, 2005, by and between the Company and AJW Partners
  (filed as an Exhibit to the Current Report on Form 8-K/A dated June 2, 2005
  and incorporated herein by reference).                                                                                               
|      |                                                                                                                                                                                                                                                                                                             
|10.17 | Callable
  Secured Convertible Note, dated May 18, 2005 issued to Tirion Group (filed as
  an Exhibit to Current Report on Form 8-K dated May 26, 2005 and incorporated
  herein by reference).                                                                                                             
|      |                                                                                                                                                                                                                                                                                                             
|10.18 | Stock
  Purchase Warrant, dated May 18, 2005 issued to Tirion Group (filed as an
  Exhibit to Current Report on Form 8-K dated May 26, 2005 and incorporated
  herein by reference).                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                             
|10.19 | Standard
  Office Lease between the Company and Camp Bowie Centre (filed as an Exhibit
  to Current Report on Form 8-K dated May 26, 2005 and incorporated herein by
  reference).                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                             
|10.20 | Securities
  Purchase Agreement, dated May 2, 2005, between the Company and AJW Partners
  and its affiliates (filed as an Exhibit to Form 10-QSB for the quarter ended
  March 31, 2005 and incorporated herein by reference).                                                                             
|      |                                                                                                                                                                                                                                                                                                             
|10.21 | Registration
  Rights Agreement, dated May 2, 2005, between the Company and AJW Partners
  and Affiliates (filed as an Exhibit to Form 10-QSB for the quarter ended
  March 31, 2005 and incorporated herein by reference).                                                                                 
|      |                                                                                                                                                                                                                                                                                                             
|10.22 | Investment
  Agreement, dated as of June 28, 2005, by and between the Company and Dutchess
  Private Equities Fund, II, LP (filed as Exhibit 10.22 to Registration Statement
  on Form SB-2/A filed on September 2, 2005 and incorporated herein by
  reference).                                           
|      |                                                                                                                                                                                                                                                                                                             
|10.23 | Registration
  Rights Agreement, dated as of June 28, 2005, by and between the Company and
  Dutchess Private Equities Fund, II, L.P. (filed as Exhibit 10.23 to
  Registration Statement on Form SB-2/A filed on September 2, 2005 and
  incorporated herein by reference).                                
|      |                                                                                                                                                                                                                                                                                                             
|10.24 | Placement
  Agent Agreement, dated June 28, 2005, by and between the Company, U.S. Euro
  Securities and Dutchess Equities Fund II L.P. (filed as Exhibit 10.24 to
  Registration Statement on Form SB-2/A filed on September 2, 2005 and
  incorporated herein by reference).                              
|      |                                                                                                                                                                                                                                                                                                             
|10.25 | Extension
  and Amendment of Corporate Advisory Agreement between the Company and Steven
  Antebi; dated June 13, 2005 (Replaces incorrect exhibit previously filed.)
  (filed as Exhibit 10.25 to Registration Statement on Form SB-2/A filed on
  September 2, 2005 and incorporated herein by reference).

76

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|      |                                                                                                                                                                                                                                                                                            
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.26 | Amendment to
  Investment Agreement, dated August 23, 2005 by and between the Company and
  Dutchess Private Equities Fund, II, LP (filed as Exhibit 10.26 to
  Registration Statement on Form SB-2/A filed on September 2, 2005 and
  incorporated herein by reference).                  
|      |                                                                                                                                                                                                                                                                                            
|10.27 | Amendment to
  Registration Rights Agreement, dated as of August 23, 2005, by and between
  the Company and Dutchess Private Equities Fund, II, L.P. (filed as Exhibit
  10.27 to Registration Statement on Form SB-2/A filed on September 2, 2005 and
  incorporated herein by reference).
|      |                                                                                                                                                                                                                                                                                            
|10.28 | Extension
  and Amendment of Certain Provisions of Corporate Advisory Agreement between
  the Company and Steven Antebi, dated January 30, 2006 (filed as Exhibit 10.1
  to Current Report on Form 8-K filed February 3, 2006 and incorporated herein
  by reference).                     
|      |                                                                                                                                                                                                                                                                                            
|10.29 | Warrant
  Certificate containing revised terms of previously issued warrant issued to
  Steven Antebi, dated July 12, 2005 (filed as Exhibit 10.4 to Current Report
  on Form 8-K filed on February 3, 2006 and incorporated herein by reference).                                         
|      |                                                                                                                                                                                                                                                                                            
|10.30 | Business
  Relationship Letter Agreement between the Company, Firecreek, and The Sahara
  Group furnished with this Report.                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                            
|10.31 | Annual
  Report on Form 10-KSB, filed on April 12, 2005, and incorporated herein by
  reference.                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                            
|21    | Updated List
  of Subsidiaries                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                            
|31.1  | President
  Certification Pursuant to Section 302                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                            
|31.2  | CFO
  Certification Pursuant to Section 302                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                            
|32.1  | President
  Certification Pursuant to Section 906                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                            
|32.2  | CFO
  Certification Pursuant to Section 906                                                                                                                                                                                                                                                

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES

The Audit
Committee has adopted a policy regarding the retention of the independent
auditors that requires pre-approval of all services by the Audit Committee or
the Chairman of the Audit Committee. When services are pre-approved by the
Chairman of the Audit Committee, notice of such approvals is given
simultaneously to the other members of the Audit Committee, or board of
directors if Audit Committee is represented by only one member.

The Audit
Committee has reviewed and discussed the fees paid to Donahue Associates for the
reports covering fiscal 2004 and 2005 for audit, audit-related, tax and other
services.

The Audit
Committee has reviewed and discussed the audited financial statements with the
Companys management; and discussed with Donahue and Associates, L.L.C. independent
auditors for the Company, the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees, as amended.

The aggregate
fees billed for the fiscal year ended December 31, 2004 for professional services
rendered by Donahue and Associates, L.L.C. for the audit of the Companys
financial statements were $10,000 for fiscal 2004, and $17,500 for fiscal 2005.
For quarterly review of interim financial statements filed on Form 10-QSB for
fiscal 2004 and 2005, $2,250 and $3,150, respectively, was paid.

77

---



Audit-Related Fees

Donahue and
Associates, L.L.C. did not bill us for any assurance or related services that
were related to the performance of the audit of the financial statements.

Tax Fees

Since December
22, 2003 Donahue Associates has not provided any professional services for tax
compliance, tax advice and tax planning.

Other Fees

No other fees
were paid to Donahue Associates, L.L.C..

|         |                     
|-------- | --------------------
|PART F/S | FINANCIAL STATEMENTS

The financial
statements of the Company as required by Item 310 of Regulation S-B are
included in Part II, Item 7 of this report.

78

---



SIGNATURES

Pursuant to
the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on April 14, 2006 on
its behalf by the undersigned, thereunto duly authorized.

| |                          | 
| | ------------------------ | 
| | EGPI
  FIRECREEK, INC.  
| | (Registrant)            
| |                         
| | /s/ John R.
  Taylor    
| |                          | 
| | John R.
  Taylor        
| | President
  and Director

Pursuant to
the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

|                          |                                |                  |  |  | 
|------------------------- | ------------------------------ | ---------------- |  |  | 
|Name                      | Title                          | Date            
|                          |                                |                  |  |  | 
|                          |                                |                  |  |  | 
|/s/ Dennis
  R. Alexander | Chairman and
  CFO             | April 14,
  2006
|                          | (Chief
  Financial Officer)    |                 
|Dennis R.
  Alexander,    |                                |                 
|                          |                                |                 
|/s/ John R.
  Taylor      | President
  and Director       | April 14,
  2006
|                          |                                |                 
|John R.
  Taylor          |                                |                 
|                          |                                |                 
|/s/ William
  E. Merritt  | Executive
  Vice President and | April 14,
  2006
|                          | General
  Counsel and Director |                 
|William E.
  Merritt      |                                |                 
|                          |                                |                 
|/s/ Dr.
  Mousa Hawamdah  | Director                       | April 14,
  2006
|                          |                                |                 
|Dr. Mousa
  Hawamdah      |                                |                 
|                          |                                |                 
|/s/ Rupert
  C. Johnson   | Director                       | April 14,
  2006
|                          |                                |                 
|Rupert C.
  Johnson       |                                |                 

79

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