UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K/A


(Amendment
No. 1)





(Mark
One)





[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934





For the fiscal year ended March 31,
2008





[  
      ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934




For the
transition period from [   ] to [   ]





Commission
file number 000 19949





Torrent
      Energy Corporation(Exact
      name of registrant as specified in its charter)Colorado
            
            84-1153522(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)11918
      SE Division, Suite 197, Portland, OR
            
            97266(Address
      of principal executive offices)
            
            (Zip
      Code)




Issuer’s
telephone number:  503.224.0072





Securities
registered pursuant to Section 12(b) of the Act:





Title
      of each class
              Nil
            
            Name
      of each exchange on which registered
              Nil




Securities
registered pursuant to Section 12(g) of the Act:





Shares
      of Common Stock, $0.001 par value(Title
      of class)




Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes
[   ]  No [X]




Indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes
[   ]  No [X]









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 preceding 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
[   ]




Indicate by
check mark if  disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained in this form, and will not  be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ 
 ]




Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See definition
of “accelerated filer,” “large accelerated filer” and "smaller reporting
company" in Rule 12b 2 of the Exchange Act.  (Check one):




Large accelerated
      filer [   ]
            Accelerated filer
      [   ]Non-accelerated
      filer [   ]
            Smaller reporting
      company [X]





Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b 2
of the Exchange Act) Yes [ 
 ] No [X]




State
issuer’s revenues for its most recent fiscal
year.  $ Nil




State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of a
specified date within 60 days.  (See definition of affiliate in
Rule 12b 2 of the Exchange Act.)




41,012,047 shares of common
stock at $0.04 per share = $1,640,482




(1)
Closing price on July 11, 2008.




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




41,732,547 shares of common
stock issued and outstanding as of July 11, 2008




Explanatory Note:Torrent Energy Corporation is filing
this Amendment No. 1 to its annual report on Form 10-K/Ato
supplement the information required by Part III (Items 10, 11, 12, 13 and 14) of
Form 10-K.  Torrent Energy Corporation currently does
not  plan to file a definitive proxy statement pursuant to Regulation
14A with the Commission within 120 days from the end of the fiscal year covered
by the Form 10-K.




2




PART
III




ITEM
      10.
              DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE




As of
July 25, 2008, our directors and executive officers, their ages, positions held,
and duration as such, are as follows:




Name
            Position
      Held with our Company
            Age
            Date
      First Electedor
      AppointedJohn
      D. Carlson
            President,
      Chief Executive Officer and Director
            54
            June
      30, 2004Pete
      J. Craven
            Chief
      Financial Officer and Secretary
            51
            December
      19. 2007





Currently we
have only one seat filled on our board of directors.  Our sole
director holds office until the next annual meeting of the stockholders or until
his successors has been elected and qualified.




Our
former Chairman and director, William A. Lansing, resigned as our Chairman and
as a director effective April 26, 2008.  Our three other former
directors, George Hampton, Curtis Hartzler and Michael Raleigh, resigned as
directors of our Company effective March 14, 2008.   Messrs.
Lansing, Hampton, Hartzler and Raleigh’s resignations were not as a result of
any disagreement on any matter relating to our Company’s operations, policies or
practices.




During
the fiscal year ended March 31, 2008, each non-executive director, when serving
as a Director of the Board, was to receive $7,500 per quarter for their services
and is reimbursed for their expenses incurred to attend
meetings.  During the fiscal year ended March 31, 2008, as a result of
the Company’s limited working capital, all non-executive directors agreed to
forego their director’s fee for the third and fourth quarters.




The
officers of our Company are appointed by our board of directors and serve until
their successors are appointed by the board of directors or until their death,
resignation or removal from office.  During the past fiscal year,
there have been no changes to the procedures by which security holders may
recommend nominees for directors to our board.




Business
Experience




The
following is a brief account of the education and business experience during the
past five years for of each of our directors, executive officers and key
employees indicating each person’s principal occupation during the period, and
the name and principal business of the organization by which he or she was
employed.




John
D. Carlson, President, Chief Executive Officer and Director




John D.
Carlson became president and chief executive officer of our Company on January
16, 2006 and has been a director since June 2004.  Mr. Carlson has
also been chief operating officer of our Company's wholly owned subsidiary,
Methane Energy Corp. since May 2005 and a director since January
2006.  Mr. Carlson was also appointed director of our wholly owned
subsidiary, Cascadia Energy Corp. in January 2006.




3




Mr.
Carlson brings to our Company over 25 years experience as a registered
professional petroleum engineer with work experience ranging from Amoco Canada
to Sproule Associates Ltd. to several private and public oil and gas companies
in Alberta.  From June 2005 to August 2007, Mr. Carlson served as a
director of Triangle Petroleum Corporation.  From February 2004 to
July 2004, Mr. Carlson was president and a director of Pacific Rodera Energy
Inc., a Calgary-based oil and gas exploration and development
company.  From September 2003 to January 2004, Mr. Carlson was vice
president, operations for Pacific Rodera Energy Inc.  From September
2001 to December 2003, Mr. Carlson was president of Samson Oil and Gas Inc., a
Hobbema, Alberta-based oil and gas exploration and development company where he
was also general manager from January 2001 to August 2001. From 1984 to 2000,
Mr. Carlson was an associate and senior petroleum engineer for Sproule
Associates, Ltd.  Mr. Carlson received a bachelor of science degree in
civil engineering from the University of Calgary in 1977.




Pete
J. Craven, Chief Financial Officer and Secretary




Pete J.
Craven became chief financial officer and secretary of the board of directors on
December 19, 2007.   Mr. Craven has thirty years of progressive
experience in finance, strategic planning, accounting, mergers, acquisitions,
capital structuring, equity and debt markets including securities
regulations.  In February 2007, Mr. Craven joined the Company as Vice
President of Finance taking on direct responsibility of all accounting,
budgeting, financial analysis and compliance with securities
regulations.




Prior to
joining our Company, Mr. Craven held the position of Chief Financial Officer for
Home Phone Tunes, Inc. in 2006 and 2007, an electronics and internet start-up
company.   From 1982 through 2006, Mr. Craven held various
financial and regulator positions for PacifiCorp, an integrated electricity
company with operations in Western United States.   These
positions included Director of Regulatory Affairs, Director of Finance Strategy,
Director of Accounting, and Controller for PacifiCorp Financial Services, and
Vice President/Controller for NERCO, Inc. Mr.
Craven began his professional career at the public accounting firm of Ernst
& Ernst and as a CPA in the State of Oregon (currently
inactive).   Mr. Craven received a bachelor of arts
degree in accounting and economics from Gonzaga University in
1978.




Family
Relationships




There are
no family relationships among our directors or officers.




Involvement
in Certain Legal Proceedings




Except as
noted below, our directors, executive officers and control persons have not been
involved in any of the following events during the past five years:




4




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




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




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




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






Proceedings Under Chapter 11
of the Bankruptcy Code





As
discussed in our annual report on Form 10-K filed on July 15, 2008, the Company
commenced Chapter 11 proceedings (Case No. 08-32638) on June 2, 2008 by
filing a voluntary petition for reorganization under the Bankruptcy Code with
the United States Bankruptcy Court for the District of Oregon.  Each
of the Company’s subsidiaries, Methane Energy Corp. and Cascadia Energy Corp.
also commenced a case under Chapter 11 of the Bankruptcy Code on the same day
(together with the Company’s  filing, the “Chapter 11
Cases”).  The Company’s sole director is also a director of the
Company’s subsidiaries.  As a result of the Chapter 11 Cases, each of
the Company’s director and executive officers has been associated with a
corporation that filed a petition under the federal bankruptcy laws within the
last five years.




Audit
Committee Financial Expert




The
Company currently does not have a separate Audit Committee and our sole director
performs the functions of the Audit Committee.  The Company had an
Audit Committee of the Board of Directors during most of the last fiscal year up
to the resignations of the independent directors in March and April of
2008.    The Company’s former Audit Committee of the Board
of Directors was comprised of Mr. Lansing, Mr. Raleigh, and Mr.
Hartzler.  During the time our Audit Committee was in place, we
determined that it did not have a member of the Audit Committee that qualified
as an “audit committee financial expert” as defined in Item 401(e) of Regulation
S-B, and is “independent” as the term is used in Item 7(d)(3)(iv) of Schedule
14A under the Securities Exchange Act of 1934, as amended.




We
believe that Mr. Carlson and, prior to their resignations, the independent
members of our board of directors were collectively capable of analyzing and
evaluating our financial statements and understanding internal controls and
procedures for financial reporting.  In addition, during the past
fiscal year we believed that retaining an independent director who would qualify
as an “audit committee financial expert” would have been overly costly and
burdensome and was not warranted in our circumstances given the early stages of
our development and the fact that we have not generated any revenues to
date.   The Company intends to consider adding new board members
that would qualify as a financial expert and reconstitute the Audit Committee
once the Company emerges from Chapter 11 reorganization.




5




Code
of Ethics




Our
Company’s board of directors adopted a Code of Business Conduct and Ethics that
applies to, among other persons, our Company’s president and chief executive
officer (being our principal executive officer) and our Company’s chief
financial officer (being our principal financial and accounting officer and
controller), as well as persons performing similar functions.  As
adopted, our Code of Business Conduct and Ethics sets forth written standards
that are designed to deter wrongdoing and to promote:




(1)           honest
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships;




(2)           full,
fair, accurate, timely, and understandable disclosure in reports and documents
that we file with, or submit to, the Securities and Exchange Commission and in
other public communications made by us;




(3)           compliance
with applicable governmental laws, rules and regulations;




(4)           the
prompt internal reporting of violations of the Code of Business Conduct and
Ethics to an appropriate person or persons identified in the Code of Business
Conduct and Ethics; and




(5)           accountability
for adherence to the Code of Business Conduct and Ethics.




Our Code
of Business Conduct and Ethics requires, among other things, that all of our
Company’s personnel are accorded full access to our president and secretary with
respect to any matter which may arise relating to the Code of Business Conduct
and Ethics.  Further, all of our Company’s personnel are to be
accorded full access to our Company’s board of directors if any such matter
involves an alleged breach of the Code of Business Conduct and Ethics by our
president or secretary.




In
addition, our Code of Business Conduct and Ethics emphasizes that all employees,
and particularly managers and/or supervisors, have a responsibility for
maintaining financial integrity within our Company, consistent with generally
accepted accounting principles, and federal and state securities laws. Any
employee who becomes aware of any incidents involving financial or accounting
manipulation or other irregularities, whether by witnessing the incident or
being told of it, must report it to his or her immediate supervisor or to our
president or secretary.  If the incident involves an alleged breach of
the Code of Business Conduct and Ethics by the president or secretary, the
incident must be reported to any member of our board of
directors.  Any failure to report such inappropriate or irregular
conduct of others is to be treated as a severe disciplinary
matter.  It is against our Company policy to retaliate against any
individual who reports in good faith the violation or potential violation of our
Company’s Code of Business Conduct and Ethics by another.




6




Our Code
of Business Conduct and Ethics was filed with the Securities and Exchange
Commission as Exhibit 14.1 to our annual report on Form 10-KSB for the year
ended March 31, 2005.  We will provide a copy of the Code of Business
Conduct and Ethics to any person without charge, upon
request.  Requests can be sent to: Torrent Energy Corporation, 11918
SE Division, Suite 197; Portland, Oregon 97266.




Section
16(a) Beneficial Ownership Compliance




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




Based
solely on our review of the copies of such forms received by our Company, or
written representations from certain reporting persons that no Form 5's were
required for those persons, we believe that, during the fiscal year ended March
31, 2008, all filing requirements applicable to our officers, directors and
greater than 10% beneficial owners as well as our officers, directors and
greater than 10% beneficial owners of our subsidiaries, Methane Energy Corp. and
Cascadia Energy Corp. were complied with.




Name
            Number
      of
              Late
      Reports
            Number
      of Transactions Not Reported on a
              Timely
      Basis
            Failure
      to File
              Requested
      FormsJohn
      D. Carlson
            Nil
            Nil
            NilPete
      J. Craven
            Nil
            Nil
            NilGeorge
      L. Hampton III
            Nil
            Nil
            NilCurtis
      Hartzler
            Nil
            Nil
            NilWilliam
      A. Lansing
            Nil
            Nil
            NilMichael
      Raleigh
            Nil
            Nil
            NilMichael
      D. Fowler
            Nil
            Nil
            NilThomas
      J. Deacon
            Nil
            Nil
            NilSteve
      Pappajohn
            Nil
            Nil
            Nil




7




ITEM
      11.
            EXECUTIVE
      COMPENSATION




The
following tables set forth certain information regarding our chief executive
officer and each of our most highly-compensated executive officers whose total
annual salary and bonus for the fiscal years ending March 31, 2008, 2007 and
2006 exceeded $100,000:




SUMMARY
      COMPENSATION TABLEName
      and principal position
            Fiscal
      Year
            Salary
              ( $
      )
            Bonus
              ( $
      )
            Stock
              Awards
              ( $
      )
            Option
              Awards
              ( $
      )
            Non-equity
              Incentive
      Plan
              Compensation
              ( $
      )
            All
      Other
              Compensation
              ( $
      )
            Total
              
              ( $
      )John
      D. Carlson, President &
            2008
            100,000(1)
            -
            -
            -
            -
            -
            100,000Chief
      Executive Officer, Director
            2007
            198,584(1)
            500(2)
            -
            575,000(3)
            -
            -
            774,0842006
            157,627(1)
            -
            -
            177,626(3)
            -
            10,000(4)
            345,253Pete
      J. Craven,
            2008
            106,250(12)
            -
            -
            91,865(13)
            -
            -
            198,115Chief
      Financial Officer
      and Secretary
            2007
            18,750(12)
            -
            -
            70,230(13)
            -
            -
            88,9802006
            -
            -
            -
            -
            -
            -
            -Mark
      Gustafson, Chairman, President &
            2008
            -
            -
            -
            -
            -
            -
            -Chief Executive Officer, Treasurer &
            2007
            65,045(5)
            79,500(6)
            -
            -
            -
            -
            144,545Secretary
            2006
            152,261(5)
            -
            -
            355,252(7)
            -
            5,000(8)
            512,513Michael
      D. Fowler, Chief Financial Officer,
            2008
            97,500(9)
            -
            -
            -
            -
            -
            97,500Treasurer
      & Secretary
            2007
            180,000(9)
            15,500(2),(10)
            -
            -
            -
            -
            195,5002006
            45,000(9)
            5,000(10)
            -
            417,617(11)
            -
            -
            467,617




8




(1) John D.
Carlson became our president and chief executive officer on January 16,
2006.  On January 16, 2006, we entered into a consulting agreement
with Mr. Carlson where we agreed to pay him annual base compensation of $200,000
commencing January 16, 2006.  Of the $157,627 that was paid to Mr.
Carlson in fiscal 2006, $41,667 relates to annual compensation agreement and
$115,960 relates to payments for consulting services prior to his appointment as
president and chief executive officer.  For the fiscal year ended
March 31, 2008, Mr. Carlson was paid his agreed upon compensation for the first
six months and accepted no compensation for the third quarter ended December 31,
2007.  For the fourth quarter ended March 31, 2008, Mr. Carlson agreed
to take a reduced compensation of $22,500 which was accrued but not paid during
the fiscal year.  Amounts shown in the Executive Compensation Table
represent only those amounts paid during the fiscal year.  Please also
refer to Item 13 – Certain Relationships and Related Transactions, and Director
Independence in this annual report.




(2) John D.
Carlson was paid a Christmas bonus of $500 as were all other employees of our
Company.




(3)           We
granted to Mr. Carlson stock options to purchase 250,000 shares of our common
stock on May 10, 2006 as consideration for his service as president and chief
executive officer.  The options are exercisable at $2.97 per share
until May 10, 2011 and vest over 18 months with 25% vesting immediately and
additional 25% increments vesting every six months until November 10,
2007. We
granted to Mr. Carlson stock options to purchase 200,000 shares of our common
stock on April 1, 2005 as an incentive for acting as a director of our
Company.  The options are exercisable at a price of $1.25 per share
until April 1, 2010.  These options vest over 18 months, as to 25%
immediately and 25% every six months until September 17, 2006.




(4)           John
D. Carlson was paid a retainer  of $10,000 in fiscal 2006 as
compensation for acting as a director of our Company.




(5)  Mark
Gustafson was our chairman and a director from September 21, 2004 to October 6,
2006.  He was also our president, chief executive officer, acting
chief financial officer from September 21, 2004 to January 16
2006.  Effective April 1, 2005, we amended our consulting agreement
with MGG Consulting (wholly-owned by Mr. Gustafson), to provide for services as
our president, chief executive officer and acting chief financial officer, to
reduce the compensation rate to $800 per day.  Effective January 16,
2006, the compensation rate was restored to $1,000 per day, which was his rate
of compensation for service as our chairman and director until his resignation
on October 6, 2006.  Please also refer to Item 13 – Certain
Relationships and Related Transactions, and Director Independence in this annual
report.




(6)           Mr.
Gustafson was paid a bonus of $79,500 for his work in completing the Series E
convertible preferred stock financing during fiscal 2007.




(7)           We
granted to Mr. Gustafson stock options to purchase up to 400,000 shares of our
common stock on April 1, 2005 as compensation for services as our president,
chief executive officer and acting chief financial officer.  The
options are exercisable at a price of $1.25 per share until April 1, 2010. These
options vest over 18 months, as to 25% immediately and 25% every six months
until fully vested on September 17, 2006.  In July 2007, Mr. Gustafson
forfeited these 400,000 stock options.




(8)           Mr.
Gustafson was paid a retainer of $5,000 in fiscal 2006 as compensation for
acting as a director of our Company




(9)           Michael
D. Fowler became our chief financial officer, treasurer and secretary on January
16, 2006 and held these positions until his resignation on December 19,
2007.   Prior to this time, he was acting as a consultant to our
Company.  In December 2005, we entered into a letter of employment
with Mr. Fowler where we agreed to pay him an annual base salary of $180,000 and
to pay an annual performance-based bonus of up to $20,000.  The terms
of the letter of employment were approved at our board meeting held on January
13, 2006 where we officially appointed Mr. Fowler as our chief financial
officer, treasurer and secretary effective January 16, 2006.  During
the year ended March 31, 2007, Mr. Fowler received $15,000 in performance-based
bonuses and a $500 Christmas bonus, which was also paid to all other employees
of the Company.




9




(10) On August 11,
2005, we entered into a contract with Tatum LLC to provide the services of
Michael D. Fowler as a consultant to our Company.  During fiscal 2005,
we paid Tatum LLC $66,500 for consulting services provided by Mr. Fowler to
December 31, 2005 and $50,000 for a resource placement fee when we hired Mr.
Fowler.  Since January 2006, we have paid Tatum LLC a resource fee of
$1,000 per month; and during this period, Mr. Fowler has held less than a 0.05
percent interest in Tatum LLC.  Please also refer to Item 13 – Certain
Relationships and Related Transactions, and Director Independence in this annual
report.




(11)           We
granted to Mr. Fowler stock options to purchase up to 250,000 shares of our
common stock on January 16, 2006 as compensation for services as our chief
financial officer, treasurer and secretary.  The options were
exercisable at a price of $2.11 per share until January 16, 2011. These options
vest over 18 months, as to 25% immediately and 25% every six months until July
16, 2007.   Mr. Fowler forfeited these stock options upon his
resignation.




(12)           Pete
J. Craven became our chief financial officer and Secretary on December 19, 2007
and prior to this promotion he served as the Vice President of Finance since his
initial hiring with the Company on February 15, 2007.  On December 19,
2007, we entered into a letter of employment with Mr. Craven where we agreed to
pay him an annual base salary of $150,000 increasing to $180,000 upon closing of
a new financing arrangement and applied retroactively back to this promotion
date.     For the fourth quarter ended March 31, 2008,
Mr. Craven agreed to withhold taking certain compensation payments totaling
$31,250 which has been accrued as unpaid compensation at March 31,
2008.  Amounts shown in the Executive Compensation Table represent
only those amounts paid during the fiscal year.




(13)           We
granted to Mr. Craven stock options to purchase up to 250,000 shares of our
common stock on December 5, 2008 as compensation for services as our chief
financial officer and secretary.  The options were exercisable at a
price of $0.50 per share until December 5, 2012. These options vest over 18
months, as to 25% immediately and 25% every six months until June 5,
2009.   We granted to Mr. Craven stock options to purchase up to
75,000 shares of our common stock on February 15, 2007 as compensation for
services as our vice president of finance.  The options were
exercisable at a price of $1.27 per share until February 15,
2012.  These options vest over 18 months, as to 25% immediately and
25% every six months until August 15, 2008.




Compensation
Discussion and Analysis




General
Philosophy.  We compensate our senior management using a
combination of salary, bonus and equity compensation designed to be competitive
with comparable oil and gas companies while aligning management’s incentives
with the long-term interests of our stockholders.  To date, our
compensation setting process has consisted of targeting an overall compensation
package sufficient to entice our senior management to accept the risks inherent
in a development-stage enterprise and join our Company.  Consequently
we have provided no salary increases to our existing senior management team
since their respective hire dates.  We anticipate developing a
comprehensive incentive compensation program at such time as we have further
advanced the development of our Company to encompass gas production
activities.




Base Salaries.  We
want to provide our senior management with a level of assured cash compensation
in the form of base salary that is compatible with the financial resources of a
development-stage company but which facilitates an appropriate lifestyle for our
executives given their professional status and accomplishments.  For
our president and chief executive officer, we concluded that an initial base
salary of $200,000 was appropriate in this regard.  For our chief
financial officer, we concluded that an initial base salary of $180,000 was
appropriate.




10




Bonuses.  Our
objective is to award cash bonuses based on performance
objectives.  During the Fiscal Year Ended March 31, 2008, no bonuses
were earned or paid.    For the fiscal year ended March 31,
2007, Mr. Fowler was paid cash bonuses totaling $15,000 for meeting the specific
objective of successfully completing all SEC filings that fiscal year and
received a Christmas bonus of $500, which was paid to all employees of our
Company that fiscal year.  During the year ended March 31, 2007, our
president and chief executive officer only received the $500 Christmas
bonus.




Equity
Compensation.  Our only form of equity compensation has been to
award non-qualified stock options.  We selected this form of equity
compensation because of the accounting and tax treatments existing early in our
Company’s history and an expectation by our employees that stock options would
provide upside to their compensation to balance their risk/reward
expectations.




Other.  We have no
severance benefits policy for our senior executives and employment is “at
will.”  Similarly we have no company-funded retirement plans but do
sponsor a 401(k) plan for which no company matching contributions have been
made.  Finally, we have no “change of control” protection for our
executive management or for our employees.




Board Process.  The
Board of Directors established a Compensation Committee, comprised exclusively
of independent outside directors.  However, as mentioned previously all
independent directors resigned in March and April of 2008.  During the
past fiscal year when this Compensation Committee was in place, two members had
extensive executive level experience in other companies in the oil and gas
industry and brought a perspective of reasonableness to compensation matters
within our Company.  Additionally, the chairman of the Compensation
Committee was serving in a similar board position on two other publicly traded
companies and, in that capacity, regularly reviewed compensation surveys for
chief executive officers and other executive level personnel.






11




The
following table provides a summary of plan-based equity awards to our named
executive officer in the last completed fiscal year.




GRANTS
      OF PLAN-BASED AWARDSEstimated
      future payouts under
              non-equity
      incentive plan awards
            Estimated
      future payouts under
              equity
      incentive plan awardsName
      and principal position
            Grant
      date
            Threshold
              ($)
            Target
              ($)
            Maximum
              ($)
            Threshold
              (#)
            Target
              (#)
            Maximum
              (#)
            All
      other
              stock
      awards:
              Number
      of
              shares
      of stock
              or
      units
              (#)
            All
      other option
              awards:
      Number
              of
      securities
              underlying
              options
              (#)
            Exercise
      or
              base
      price of
              option
              awards
              ($)
            Market
              price
      at date
              of
      grant
              ($)Pete
      J. Craven, Chief
            December
      5, 2007
            -
            -
            -
            -
            -
            -
            -
            250,000
            $0.50
            $0.50Financial
      Officer and Secretary
            February
      15, 2007
            -
            -
            -
            -
            -
            -
            -
            75,000
            $1.27
            $1.27





12




Outstanding
equity awards as of March 31, 2008 are summarized as follows:




OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOption
      Awards
            Stock
      AwardsName
      and principal position
            Number
      of securities underlying unexercised options
              (#)
              Exercisable
            Number
      of securities underlying unexercised options
              (#)
              Unexercisable
            Equity
      incentive plan awards:
              Number
      of securities underlying unexercised unearned options
              (#)
            Option
      exercise price
              ($)
            Option
      expiration date
            Number
      of shares of stock that have not vested
              (#)
            Market
      value of shares that have not vested
              ($)
            Equity
      incentive plan awards:
              Number
      of unearned shares that have not vested
              (#)
            Equity
      incentive plan awards:
              Market
      or payout value of unearned shares that have not vested
              ($)John
      D. Carlson, President
            
            -
            -
            
            
            -
            -
            -
            -&
      Chief Executive Officer,
            200,000
            -
            -
            $ 1.25
            April
      1, 2010
            -
            -
            -
            -Director
            125,000
            125,000
            -
            $ 2.97
            May
      10, 2011
            -
            -
            -
            -Pete
      J. Craven. ChiefFinancial
      Officer and
            56,250
            18,750
            -
            $1.27
            February
      15, 2012
            -
            -
            -
            -Secretary
            62,500
            187,500
            -
            $0.50
            December
      5, 2012
            -
            -
            -
            -




13




Stock
options exercised by our executive officers during the fiscal year ended March
31, 2008 are noted below.




OPTION
      EXERCISES AND STOCK VESTINGName
      and principal position
            Number
      of shares acquired on exercise
              ( #
      )
            Value
      realized on exercise
              ( $
      )
            Number
      of shares acquired on vesting
              ( #
      )
            Value
      realized on vesting
              ( $
      )John
      D. Carlson, President & Chief Executive Officer,
    Director
            45,000
            ($6,300)
            -
            -Mark
      Gustafson, Chairman, President & Chief Executive Officer, Treasurer
      & Secretary
            -
            -
            -
            -Pete
      J. Craven. Chief Financial Officer and Secretary
            -
            -
            -
            -Michael
      D. Fowler, Chief Financial Officer, Treasurer &
    Secretary
            -
            -
            -
            -





Compensation
of Directors




Compensation
paid to our board of directors during the fiscal year ended March 31, 2008 is
summarized as follows:




DIRECTOR
      COMPENSATIONName
            Fees
      earned or paid in cash(2)
              ($)
            Stock
      awards
              ($)
            Option
      awards
              ($)
            Non-equity
      incentive plan compensation
              ($)
            Non-qualified
      deferred compensation earnings
              ($)
            All
      other compensation
              ($)
            Total
              ($)George
      L. Hampton III
            15,000
            -
            -
            -
            -
            2,000(1)
            17,000Curtis
      Hartzler
            15,000
            -
            -
            -
            -
            -
            15,000William
      A. Lansing
            15,000
            -
            -
            -
            -
            -
            15,000Michael
      Raleigh
            15,000
            -
            -
            -
            -
            -
            15,000




(1)
            Mr.
      Hampton performed certain consulting services for our Company during the
      year ended March 31, 2008.




(2)
            As
      a result of the Company’s limited available working capital all
      independent board members waived their third and fourth quarter board
      compensation totaling $15,000 each.




14




Except as
noted below, we have no formal plan for compensating our directors for their
service in their capacity as directors, although such directors are expected in
the future to receive stock options to purchase shares of common stock as
awarded by our board of directors.  On December 17, 2004, our board of
directors approved a resolution to pay our directors a quarterly retainer of
$2,500 commencing January 1, 2005.  On May 1, 2006, our board of
directors approved a resolution to pay new non-executive directors a quarterly
retainer of $5,000 commencing April 1, 2006.  Directors are also
entitled to reimbursement for reasonable travel and other out-of-pocket expenses
incurred in connection with attendance at meetings of our board of
directors.  On September 29, 2006, our board approved a resolution to
pay non-executive directors a quarterly retainer of $7,500 commencing October 1,
2007.  Our board of directors may award special remuneration to any
director undertaking any special services on our behalf other than services
ordinarily required of a director.  Due to the Company’s limited
available working capital during the fiscal year ended March 31, 2008, the
independent directors elected to not take their third quarter and fourth quarter
retainer compensation totaling $15,000 each.




Employment
Contracts and Termination of Employment and Change in Control
Arrangements




We
employed Michael Fowler as our chief financial officer, treasure, and secretary
executive officer until December 19, 2007.  Mr. Fowler became the
chief financial officer, treasurer and secretary of our Company on January 16,
2006 and had been providing consulting services to our Company since September
2005.  Mr. Fowler was also appointed chief financial officer,
treasurer and secretary of our wholly-owned subsidiaries, Methane Energy Corp.
and Cascadia Energy Corp., effective January 16, 2006 which he also resigned
from on December 19, 2007.




We
employed Mark Gustafson as our president, chief executive officer, acting chief
financial officer and a director until January 16, 2006 pursuant to a consulting
agreement dated December 17, 2004 between our Company and MGG Consulting, a
company that is wholly-owned by Mr. Gustafson. We agreed to pay MGG Consulting
$8,000 per month commencing December 1, 2004 unless terminated at any time by
either party upon written notice.  We then entered into a consulting
agreement with MGG Consulting on January 1, 2005 whereby the agreement was
revised to pay MGG Consulting the sum of $1,000 per day commencing January 1,
2005.  Effective April 1, 2005, the agreement was again amended to
reduce the compensation rate to $800 per day.  Effective January 16,
2006, the compensation rate was restored to $1,000 per day, which was his rate
of compensation for service as our chairman and director until his resignation
on October 6, 2006.




Prior to
Mr. Gustafson becoming our president, chief executive officer, acting chief
financial officer and a director, we had entered into a consulting agreement
dated February 16, 2004 with MGG Consulting where we granted 490,000 options to
Mr. Gustafson as compensation for acting as a consultant to our
Company.  All of these options have been exercised.  We
entered into a consulting agreement dated March 24, 2004 with MGG Consulting
where we granted 320,000 options to Mr. Gustafson as compensation for acting as
a consultant to our Company.  We also granted to Mr. Gustafson stock
options to purchase up to 540,000 shares of our common stock on May 7, 2004 as
compensation for consulting services provided to our Company.  All of
these options have been exercised.




15




We employ
both John Carlson, our president and chief executive officer, and Pete J.
Craven, our chief financial officer, on an at will basis whereby no formal
employment agreements exist.  Mr. Carlson has signed an agreement to
provide a minimum of 30 days notice in the event he chose to resign his
position.




We have
no plans or arrangements in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment as a result of resignation, retirement, change of
control or a change of responsibilities following a change of control, where the
value of such compensation exceeds $100,000 per executive officer.




ITEM
      12.
              SECURITIES
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS




The
following table sets forth certain information regarding beneficial ownership of
our shares of common stock as of July 25, 2008,


- by each
  person who is known by us to beneficially own more than 5% of our shares of
  common stock;

- by each
  of our officers and directors; and

- by all
  of our officers and directors as a group.

Name
      and Address of Beneficial Owner
            Title
      of Class
            Amount
      and Nature of Beneficial Owner(1)
            Percentage
      of Class(2)John
      D. Carlson
              Box
      13, Site 8, RR #1
              Priddis,
      Alberta, Canada T0L 1W0
            common
      stock
            550,000(3)
            1.29%Pete
      J. Craven
              1440
      Country Commons Ln
              Lake
      Oswego, Oregon 97034
            common
      stock
            200,500(4)
            0.47%All
      Officers and Directors
              As
      a Group (3 persons)
            common
      stock
            1,610,500
            3.78%




(1)
            Beneficial
      ownership is determined in accordance with the rules of the Securities and
      Exchange Commission and generally includes voting or investment power with
      respect to securities. Shares of common stock subject to options or
      warrants currently exercisable or convertible, or exercisable or
      convertible within 60 days of July 25, 2008 are deemed outstanding for
      computing the percentage of the person holding such option or warrant but
      are not deemed outstanding for computing the percentage of any other
      person.




(2)
            Percentage
      based on 41,732,547 shares of common stock outstanding on July 25, 2008
      plus additional shares for options
above.




(3)
            Includes
      450,000 options currently
exercisable.




(4)
            Includes
      200,000 options currently
exercisable.




Changes
in Control




We are
unaware of any contract or other arrangement the operation of which may at a
subsequent date result in a change in control of our Company.




16




Equity
Compensation Plan Information




The
following table provides a summary of the number of options granted under our
compensation plans, as well as options granted outside of our compensation
plans, the weighted average exercise price and the number of options remaining
available for issuance all as at March 31, 2008.




Number
      of securities to be issued upon exercise of outstanding
      options
            Weighted-Average
      exercise price of outstanding options, warrants and rights
            Number
      of securities remaining available for future issuance under equity
      compensation plansEquity
      compensation plans not approved by security holders(1)
            155,000
            $ 0.50
            NilEquity
      compensation plans approved by security holders(2)
            1,650,000
            $1.50
            650,000Equity
      compensation plans approved by security holders(3)
            1,725,000
            $1.85
            75,000Total
            3,530,000
            $ 1.63
            725,000





(1)
            Referring
      to our 2004 non-qualified stock option plan.  Please see the
      “2004 Non-Qualified Stock Option Plan” section
  below.




(2)
            Referring
      to our 2005 equity incentive plan. Please see the “2005 Non-Qualified
      Stock Option Plan” section below.




(3)
            Referring
      to our 2006 equity incentive plan.  Please see the “2006 Equity
      Incentive Plan” section below




2004
Non-Qualified Stock Option Plan




On
February 10, 2004, our board of directors adopted the 2004 Non-Qualified
Stock Option Plan (the “2004 Plan”) for our executives, employees and outside
consultants and advisors.  Under the plan, executives, employees and
outside consultants and advisors may receive awards of non-qualified stock
options.  The purpose of the plan is to provide executives, employees
and non-employee consultants and advisors with an increased incentive to make
contributions to our Company.  The aggregate number of shares of
common stock that may be granted by our Company under the 2004 Plan will not
exceed a maximum of 1,800,000 shares of common stock during the period of the
plan.  The 2004 Plan shall terminate upon the earlier of
February 10, 2014 or the issuance of all shares of common stock granted
under the plan.  The option prices per share are determined by our
board of directors when the stock option is granted.




17




During
the year ended March 31, 2004, we granted 1,060,000 stock options to
various consultants of our Company.  Each option entitles the holder
to acquire one share of common stock at an exercise price of $0.10 per
share.  These options have vesting periods ranging from immediately to
over seven months, and expire two years from date of grant.




During
the fiscal year ended March 31, 2005, we granted a total of 1,340,000 stock
options of which 740,000 were under the 2004 Plan and the other 600,000 were
outside the plan.  Of the total 1,340,000 options, 740,000 stock
options were granted to various directors and consultants of our Company under
the 2004 Plan.  Each option entitles the holder to acquire one share
of common stock at exercise prices ranging from $0.10 to $0.50 per share.
Vesting of these options ranged from 100% immediately to 25% immediately and 25%
every six months afterward until fully vested 18 months from the date of
grant.  These options expire five years from the date of
grant.




Of the
600,000 stock options granted outside the 2004 Plan, 200,000 stock options with
an exercise price of $1.00 per share and another 200,000 with an exercise price
of $2.00 per share were granted pursuant to a mail distribution agreement with a
third party.  These options vested immediately and were exercisable
until November 1, 2005.  These options have a cashless exercise
provision whereby the optionee can elect to receive shares of common stock in
lieu of paying cash for the options based on a formula that includes using the
average closing prices of the five trading days preceding the exercise
date.




The other
200,000 stock options granted outside the 2004 Plan were to a consultant
providing public and investor relations services.  These options have
an exercise price of $0.83 per share, vested 25% immediately, and 25% every
quarter thereafter.  Either party may terminate the investor relations
agreement with thirty days written notice.




2005
Equity Incentive Plan




On
March 17, 2005, our board of directors adopted the 2005 Equity Incentive
Plan for our executives, employees and outside consultants and
advisors.  Under the 2005 Equity Incentive Plan, executives, employees
and outside consultants and advisors may receive awards as described in the 2005
Equity Incentive Plan.  The purpose of the equity incentive plan is to
provide long-term performance incentives to those key employees and consultants
of our Company and our subsidiaries who are largely responsible for the
management, growth and protection of the business of our Company and our
subsidiaries.  A maximum of 2,000,000 shares of our common stock are
subject to the 2005 Equity Incentive Plan.  As of December 31,
2005, a registration statement on Form S-8 was filed to register the common
stock issuable under our 2005 Equity Incentive Plan with an amendment to
increase the number of shares under the plan to 2,500,000.




On
April 1, 2005, 1,200,000 stock options were granted to directors and
officers under the 2005 Equity Incentive Plan to purchase 1,200,000 shares of
our common stock.  On April 15, 2005, 300,000 stock options were
granted to an officer of our subsidiary, Methane Energy Corp., under the 2005
Equity Incentive Plan to purchase 300,000 shares of our common stock with an
exercise price of $1.25 per share.  On June 2, 2005, 200,000
stock options were granted to consultants under the 2005 Equity Incentive Plan
to purchase 200,000 shares of our common stock with an exercise price of $2.00
per share.




18




On
October 15, 2005, 250,000 stock options were granted to a newly hired
employee of our subsidiary, Methane Energy Corp., under the 2005 Equity
Incentive Plan to purchase 250,000 shares of our common stock with an exercise
price of $2.00 per share.  On November 22, 2005, 40,000 stock
options were granted to a consultant under the 2005 Equity Incentive Plan to
purchase 40,000 shares of our common stock with an exercise price of $2.00 per
share.  On January 16, 2006, 310,000 stock options were granted
to a newly hired officer and to other employees and consultants under the 2005
Equity Incentive Plan with an exercise price of $2.11 per share.  In
addition, we had previously granted a consultant the option to purchase 200,000
shares of our common stock at an exercise price of $0.83 per share pursuant to a
consulting agreement for public and investor relations with a third party in
which 25% of the options vest immediately and 25% vest every quarter thereafter
and either party may terminate the investor relations agreement with thirty
days’ written notice.  These options were originally granted outside
of the 2005 Equity Incentive Plan, subsequently were revised to be included
under the 2005 Equity Incentive Plan, and were exercised by the consultant
during fiscal year 2007.




2006
Equity Incentive Plan




On
May 10, 2006, our board of directors adopted the 2006 Equity Incentive Plan
for our executives, employees and outside consultants and
advisors.  Under the 2006 Equity Incentive Plan, executives, employees
and outside consultants and advisors may receive awards as described in the 2006
Equity Incentive Plan.  The purpose of the equity incentive plan is to
provide long-term performance incentives to those key employees and consultants
of our Company and our subsidiaries who are largely responsible for the
management, growth and protection of the business of our Company and our
subsidiaries.  A maximum of 1,800,000 shares of our common stock are
subject to the 2006 Equity Incentive Plan.




Recent
Sales of Unregistered Securities




In
May 2004, we issued 1,442,930 shares of our common stock and 1,442,930
warrants to purchase our shares of common stock at an exercise price of $0.50
pursuant to a private placement in exchange for aggregate cash payments of
$505,025.  We issued 300,071 shares of our common stock to two
non-U.S. persons (as that term is defined in Regulation S of the
Securities Act of 1933) or entities for aggregate payments of $105,025 in an
offshore transaction relying on Regulation S and/or Section 4(2) of the
Securities Act of 1933.  We also issued 1,142,859 shares of our common
stock to two U.S. persons or entities for aggregate cash payments of
$400,000 and in reliance on Rule 506 of Regulation D and Section 4(2) of
the Securities Act of 1933.  Certain registration rights were granted
to investors pursuant to this financing.  No advertising or general
solicitation was employed in offering the securities.  The offerings
and sales were made to a limited number of persons, all of whom were our
accredited investors, business associates or executive officers, and transfer
was restricted by us in accordance with the requirements of the Securities Act
of 1933.




19




In
June 2004, we issued 600,000 shares of our common stock pursuant to the
lease purchase and sale agreement with Geo-Trends-Hampton International,
LLC.  These shares of common stock were issued in reliance on
Rule 506 of Regulation D and Section 4(2) of the Securities Act
of 1933, as amended.  No advertising or general solicitation was
employed in offering the securities.  The offerings and sales were
made to a limited number of persons, all of whom were our accredited investors,
business associates or executive officers, and transfer was restricted by us in
accordance with the requirements of the Securities Act of 1933.




In
June 2004, we issued 300,000 shares of our common stock pursuant to an
investor relation's agreement.  These shares of common stock were
issued to non-U.S. persons (as that term is defined in Regulation S of
the Securities Act of 1933), in an offshore transaction relying on
Regulation S and/or Section 4(2) of the Securities Act of
1933.




In
June 2004, we issued 500,000 shares of our common stock and 500,000
warrants to purchase our shares of common stock pursuant to a private placement
in exchange for aggregate cash payments of $200,000.  The shares of
common stock were issued to three U.S. persons or entities in reliance on
Rule 506 of Regulation D under the Securities Act of 1933.  Certain
registration rights were granted to investors pursuant to this
financing.  No advertising or general solicitation was employed in
offering the securities.  The offerings and sales were made to a
limited number of persons, all of whom were our accredited investors, business
associates or executive officers, and transfer was restricted by us in
accordance with the requirements of the Securities Act of 1933.




On
July 21, 2006, we entered into an agreement with GeoMechanics
International, Inc. (“GMI”) pursuant to which GMI provided certain technical
services to the Coos Bay project during the 2006/2007 drilling season in return
for 125,000 shares of our common stock.  These technical services were
valued at $227,500 and included geomechanical evaluation, modeling and advisory
services.




For
discussion of the Company’s issuances of Series B Convertible Preferred Stock,
Series C Convertible Preferred Stock and Series E Convertible Preferred Stock
see our audited consolidated financial statements and related
notes.




In
addition to representations by the above-referenced persons, we have made
independent determinations that all of the above-referenced persons, who
represented that they were accredited, were accredited or sophisticated
investors and that they were capable of analyzing the merits and risks of their
investment, and that they understood the speculative nature of their
investment.  Furthermore, all of the above-referenced persons were
provided with access to our Securities and Exchange Commission
filings.




Except as
expressly set forth above, the individuals and entities to whom we issued
securities as indicated in this section of the annual report are unaffiliated
with us.




Purchases
of Equity Securities by the Issuer and Affiliated Purchasers




We did
not purchase any of our shares of common stock or other securities during the
fiscal year ended March 31, 2008.




20


ITEM
      13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE




Other
than as disclosed below, there have been no transactions, or proposed
transactions, which have materially affected or will materially affect us in
which any director, executive officer or beneficial holder of more than 10% of
the outstanding shares of common stock, or any of their respective relatives,
spouses, associates or affiliates, has had or will have any direct or material
indirect interest.




On
February 1, 2008, John D. Carlson, President, Chief Executive Officer and
Director of the Company, loaned $50,000 to the Company and the Company issued a
short-term promissory note to Mr. Carlson.  On March 1, 2008, Mr.
Carlson loaned the Company an additional $25,000 in exchange for cancellation of
the previous short-term note and issuance of a new short-term promissory note
with a principal balance of $75,000.  On March 12, 2008, William A.
Lansing, then chairman of the Company’s board of director, loaned $25,000 to the
Company and the Company issued a short-term promissory note to Mr.
Lansing.  Interest on the promissory notes (collectively, the “Notes”)
accrues from the date of issuance at the rate of eight percent (8%) per annum.
Repayment of principal, together with accrued interest, may be made at any time
without penalty. In the event that any amount payable under the Notes is
not paid in full when due, the Company shall pay, on demand, interest on such
amount at the rate of twelve percent (12%) per annum. Upon any "Event of
Default," as defined in the Notes, the entire unpaid balance of the applicable
promissory note may be declared immediately due and payable by the
noteholder.  As of March 31, 2008, there was $75,318 and $25,000
payable outstanding under the Notes to Messrs. Carlson and Lansing,
respectively, excluding accrued interest payable.




As of
March 31, 2008, there was $13,179 representing unpaid expense reimbursement
owing to directors and officers.  As of March 31, 2008, there were
also unpaid liabilities for salaries and consulting services totaling
$73,417.




We
received proceeds of $80,000 pursuant to a shareholder loan from Ettinger
Investment Corp.  The loan was to be repaid by January 22, 2005 or we
would be required to pay interest at 12% per annum in respect of the loan. If
the loan was repaid prior to January 22, 2005, the loan would bear no
interest.  On January 17, 2005, we repaid the shareholder in full with
no interest.




During
the fiscal years ended March 31, 2007, 2006 and 2005, we incurred consulting
charges from MGG Consulting, which is wholly-owned by Mark Gustafson, our
previous president, chief executive officer, acting chief financial officer
until January 16, 2006.  Please refer to Item 11 – Executive
Compensation – Summary Compensation Table of this annual report.




During
the year ended March 31, 2008, our Company recorded $102,000 in consulting fees
to our directors and officers.  During the fiscal year ended March 31,
2008, our Company also paid directors fees to related parties serving in that
capacity, a total of $60,000.




During
the fiscal year ended March 31, 2006, our Company paid Tatum LLC a total of
$119,500 of which $3,000 was paid during the period Michael Fowler became our
chief financial officer.  During the fiscal year ended March 31, 2007,
we paid Tatum LLC a total of $26,250 and during the fiscal year ended March 31,
2008, we paid Tatum LLC $6,000.  During this period, Mr. Fowler held
an ownership interest in Tatum LLC of less than 0.05 percent.




Transactions with
Promoters




The
promoters of our Company are our directors and officers.




21




ITEM
      14.
            PRINCIPAL
      ACCOUNTING FEES AND SERVICES




Audit
Fees




The
aggregate fees billed by Peterson Sullivan PLLC for professional services
rendered for the audit of our annual consolidated financial statements included
in our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 are
estimated at $40,000.  During the fiscal year ending March 31, 2008,
fees billed by Peterson Sullivan PLLC for quarterly interim financial statement
reviews and services in connection with registration statements and other
filings with the Securities and Exchange Commission were $17,650.




The
aggregate fees billed by Peterson Sullivan PLLC for professional services
rendered in connection with the audit of our consolidated financial statements
included in our Annual Report on Form 10-K and for quarterly reviews for the
fiscal year ended March 31, 2007 were $68,577.  The aggregate fees
billed by Peterson Sullivan PLLC for professional services rendered for the
audit of our annual consolidated financial statements for the fiscal year ended
March 31, 2006 were $33,935.




The
aggregate fees billed by Ernst & Young LLP for professional services
rendered for the audit of our annual consolidated financial statements included
in our Annual Report on Form 10-KSB for the fiscal year ended March 31, 2005
were CDN$30,000.  During the fiscal year ending March 31, 2006, fees
billed by Ernst & Young LLP for quarterly interim financial statement
reviews and services in connection with registration statements and other
filings with the Securities and Exchange Commission were
CDN$26,300.




Audit
Related Fees




For the
fiscal years ended March 31, 2008 and March 31, 2007, the aggregate fees billed
for assurance and related services by Peterson Sullivan PLLC relating to the
performance of the audit of our consolidated financial statements which are not
reported under the caption “Audit Fees” above, were nil.  For the
fiscal year ended March 31, 2006, the aggregate fees billed for assurance and
related services by Ernst & Young LLP relating to the performance of the
audit of our consolidated financial statements which are not reported under the
caption “Audit Fees” above, were nil.




For the
fiscal year ended March 31, 2005, the aggregate fees billed for assurance and
related services by Ernst & Young LLP relating to the performance of the
audit of our consolidated financial statements which are not reported under the
caption “Audit Fees” above, were nil.




22




Tax
Fees




For the
fiscal year ended March 31, 2008, the aggregate fees billed by Peterson Sullivan
PLLC for other non-audit professional services, other than those services listed
above, were $1,440.  For the fiscal year ended March 31, 2007, the
aggregate fees billed by Peterson Sullivan PLLC for other non-audit professional
services, other than those services listed above, were $5,010.




For the
fiscal year ended March 31, 2007, the aggregate fees billed by Ernst & Young
LLP for other non-audit professional services, other than those services listed
above, were nil.




This
category includes the fees for professional services rendered for tax
compliance, tax advice and tax planning.




We do not
use Peterson Sullivan PLLC for financial information system design and
implementation.  These services, which include designing or
implementing a system that aggregates source data underlying the consolidated
financial statements or generates information that is significant to our
consolidated financial statements, are provided internally or by other service
providers.  We do not engage Peterson Sullivan PLLC to provide
compliance outsourcing services.




Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require
that before Peterson Sullivan PLLC is engaged by us to render any auditing or
permitted non-audit related service, the engagement be:


- approved
  by our audit committee (which currently consists of our entire board of
  directors); or

- entered
  into pursuant to pre-approval policies and procedures established by the audit
  committee, provided the policies and procedures are detailed as to the
  particular service, the audit committee is informed of each service, and such
  policies and procedures do not include delegation of the audit committee’s
  responsibilities to management.

The audit
committee requires advance approval of all audit engagements, audit-related
activities, tax services, and any other services performed by the independent
auditor.  Unless the specific service has been previously pre-approved
with respect to that year, the audit committee must approve the permitted
service before the independent auditor is engaged to perform it.  The
audit committee has delegated to the chair of the audit committee authority to
approve permitted services provided that the chair reports any decisions to the
committee at its next scheduled meeting.




The audit
committee has considered the nature and amount of fees to be billed by Peterson
Sullivan PLLC and believes that the provision of services for activities
unrelated to the audit is compatible with maintaining Peterson Sullivan PLLC’s
independence.




23




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 its behalf by
the undersigned, thereunto duly authorized.




TORRENT
ENERGY CORPORATION




By:
      /s/ John D. CarlsonJohn
      D. CarlsonPresident,
      Chief Executive Officer and Director(Principal
      Executive Officer)




By:
      /s/ Peter CravenPeter
      CravenChief
      Financial Officer and Secretary(Principal
      Financial Officer and Principal Accounting Officer)Date:  July
      28, 2008