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--06-30
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<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><b>Note 1 - Organization
and summary of significant accounting policies:</b></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Following is a summary of
our organization and significant accounting policies:</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Organization
and nature of business – </b>Octagon 88 Resources, Inc. (identified in these footnotes as “we” or the Company)
is a Nevada corporation incorporated on June 9, 2008.  We are currently based in Switzerland.  We intend to
operate in the U.S. and Canada.  We use June 30 as a fiscal year for financial reporting purposes.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">We are a natural
resource exploration stage company and anticipate acquiring, exploring, and if warranted and feasible, developing natural resource
assets.  We currently do not hold any exploration-related assets, having let our agreement with our oil and gas leases
expire.  We are reviewing various oil and gas assets for acquisition.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">To date, our activities
have been limited to formation, the raising of equity capital, and the development of a business plan. We filed a Form S-1 with
the U.S. Securities and Exchange Commission, which became effective on September 24, 2008.  We also applied for a listing
on the OTC Bulletin Board; our application was approved in July, 2009.  We are now exploring various oil and gas acquisitions
and sources of capital.  In the current exploration stage, we anticipate incurring operating losses as we implement our
business plan.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Basis of presentation
- </b>Our accounting and reporting policies conform to U.S. generally accepted accounting principles applicable to exploration
stage enterprises.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Use of estimates
- </b>The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual
results could differ from those estimates.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Cash and cash
equivalents - </b>We consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three
months to be cash equivalents.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Fair value of
financial instruments and derivative financial instruments </b>- The carrying amounts of cash and current liabilities approximate
fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties
and matters of significant judgment, and, therefore, cannot be determined with precision.  Changes in assumptions could
significantly affect these estimates.  We do not hold or issue financial instruments for trading purposes, nor do we
utilize derivative instruments in the management of our foreign exchange, commodity price or interest rate market risks.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">The FASB Codification
clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined
for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant
levels of inputs as follows:</p>
<p style="margin: 0pt"> </p>
<table cellpadding="0" cellspacing="0" style="width: 98%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: top">
<td style="text-align: left; border-top: black 0.5pt solid; border-bottom: black 2px solid; width: 12%; padding-left: 18pt; text-indent: 0pt">Level 1:</td>
<td style="border-top: black 0.5pt solid; border-bottom: black 2px solid; width: 2%"> </td>
<td style="text-align: left; border-top: black 0.5pt solid; border-bottom: black 2px solid; width: 77%; padding-left: 18pt; text-indent: 0pt">Quoted prices in active markets for identical assets or liabilities.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Level 2</td>
<td style="border-bottom: black 2px solid"> </td>
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Level 3:</td>
<td style="border-bottom: black 2px solid"> </td>
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</td></tr>
</table>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0 0 0 20pt"><font style="font: 10pt Times New Roman, Times, Serif">The determination of where assets and liabilities
fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.</font></p>
<p style="margin: 0"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Oil and gas properties
</b>– We use the successful efforts method of accounting for oil and gas properties.   Under that method:</p>
<p style="margin: 0pt"> </p>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">a.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Geological and geophysical costs and the costs of carrying and retaining undeveloped properties are charged to expense when incurred since they do not result in the acquisition of assets.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">b.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Costs incurred to drill exploratory wells and exploratory-type stratigraphic test wells that do not find proved reserves are charged to expense when it is determined that the wells have not found proved reserves.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">c.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Costs incurred to acquire properties and drill development-type stratigraphic test wells, successful exploratory well, and successful exploratory-type stratigraphic wells are capitalized.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">d.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Capitalized costs of wells and related equipment are amortized, depleted, or depreciated using the unit-of-production method.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">e.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Costs of unproved properties are assessed periodically to determine if an impairment loss should be recognized.</td></tr>
</table>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Other long-lived
assets – </b>Property and equipment are stated at cost less accumulated depreciation computed principally using accelerated
methods over the estimated useful lives of the assets.  Repairs are charged to expense as incurred.  Impairment
of long-lived assets is recognized when the fair value of a long-lived asset is less than its carrying value.  No impairments
of long-lived assets occurred during the years ended September 30, 2012 and 2011.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Federal income
taxes</b> - Deferred income taxes are reported for timing differences between items of income or expense reported in the financial
statements and those reported for income tax purposes in accordance with applicable FASB Codification regarding <i>Accounting for
Income Taxes</i>, which require the use of the asset/liability method of accounting for income taxes.  Deferred income
taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards.  Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.  The Company provides deferred taxes for the estimated
future tax effects attributable to temporary differences and carryforwards when realization is more likely than not.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">We have analyzed
filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all
open tax years in these jurisdictions.  We are not currently under examination by the Internal Revenue Service or any
other jurisdiction.  We believe that our income tax filing positions and deductions will be sustained on audit and do not
anticipate any adjustments that will result in a material adverse effect on our financial condition, results of operations, or
cash flow.  Therefore, no reserves for uncertain income tax positions have been recorded.</p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">Net income per
share of common stock – We have adopted applicable FASB Codification regarding <i>Earnings per Share</i>, which require
presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation.  In the accompanying financial statements, basic earnings per share of common stock is computed
by dividing net income by the weighted average number of shares of common stock outstanding during the period.  At September
30, 2012 and 2011, there were no variances between the basic and diluted loss per share as there were no potentially dilutive
securities outstanding.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><b>Note 2 – Going concern:</b></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">As at September 30, 2012,
we are not currently engaged in an operating business, we expect to incur exploration stage operating losses until operations commence,
and for a period of time thereafter.  We intend to rely on our officers and directors to perform essential functions
without compensation until a business operation can be commenced.   We allowed our oil and gas assets to lapse without
any exploration activities being undertaken.  We are currently seeking other acquisitions of oil and gas assets.  Further,
we are currently working on raising capital to fund operations and for acquisitions. There is no assurance that such efforts will
succeed and we will raise any funds or that we will be able to acquire any assets of merit.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">From inception through September
30, 2012, we had incurred operating losses of approximately $153,537, of which approximately $100,277 represented actual cash losses.  At
September 30, 2012, our cash on hand was $5,783.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">These factors raise substantial
doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><b>Note 3 – Oil and
gas properties:</b></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">On June 10, 2008, we executed
a Farm-in Letter Agreement with Unitech Energy Resources, Inc. (“Unitech”), of Calgary, Alberta, Canada.  Under
the agreement, we acquired a 50% working interest in Alberta, Canada Petroleum and Natural Gas Agreement Number 050606526, (the
“Lease”) held by Unitech. The Farm-in Letter Agreement required that we pay 100% of all costs associated with drilling,
re-completing, and testing, and thereafter both Parties would pay their respective 50% share of any go-forward costs.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">During 2008, we paid Unitech
$15,000 for our 50% working interest in the Lease, which amount was recorded on our balance sheet as Undeveloped, Unproven property.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">During September 2008, we
amended the Farm-in Letter Agreement to require that we meet a minimum spending requirement of $30,000 on or before June 14, 2010
in order to maintain its 50% ownership interest in the lease.  During June, 2010 the lease lapsed due to failure of the
Company to expend the required exploration expenses.  All associated costs in the amount of $15,000 recorded on the asset
as undeveloped, unproven property were written off.   Management is currently reviewing other properties which they
feel have merit and hope to acquire properties before the end of 2012.</p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><b>Note 6- Income
taxes:</b></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">Deferred income taxes are
determined using the liability method for the temporary differences between the financial reporting basis and income tax basis
of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect
when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized
based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets
and liabilities and their respective tax bases.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">At September 30, 2012, deferred
tax assets consist of the following by applying the statutory income tax rate of $34%:</p>
<p style="margin: 0pt"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 88%; text-align: justify; text-indent: 0pt">Net operating losses</td>
<td style="text-align: right; width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 9%; text-align: right">43,935</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 2px; text-align: justify; text-indent: 0pt">Valuation allowance</td>
<td style="text-align: right; padding-bottom: 2px"> </td>
<td style="border-bottom: black 2px solid; text-align: left"> </td>
<td style="border-bottom: black 2px solid; text-align: right">(43,935</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px">)</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 4px"> </td>
<td style="text-align: right; padding-bottom: 4px"> </td>
<td style="border-bottom: black 4px double; text-align: left">$</td>
<td style="border-bottom: black 4px double; text-align: right">-</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px"> </td></tr>
</table>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">At September 30, 2012, the
Company had a net operating loss carryforward in the approximate amount of $140,164, available to offset future taxable income
through 2032.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><b>Note 4 – Related
party transactions:</b></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">During the period ended September
30, 2012, Kenmore International S.A. further advanced $6,000 to the Company for professional fees including legal fees, consulting
fees and accounting fees paid on our behalf.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">On August 27, 2012, the Company
negotiated debt settlements whereby they agreed to settle debt in the amount of $35,473 with Kenmore International S.A. at a price
of $1.00 per share for a total share issuance of 35,473 shares of common stock.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">As at September 30, 2012
$5,384 was due and payable to a company owned by a prior director of the Company for services provided.</p>
<p style="margin: 0pt"></p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><b>Note 5 – Issuance
of shares:</b></p>
<p style="margin: 0pt"> </p>
<p style="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">On August 27, 2012, the Company
negotiated debt settlements whereby they agreed to settle debt in the amount of $35,473 with Kenmore International S.A. at a price
of $1.00 per share for a total share issuance of 35,473 shares of common stock. These shares were issued on September 24, 2012.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: left; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">As of September 30, 2012, there
were a total of 39,177,473 shares issued and outstanding.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif"><b>Note 7 - New accounting
pronouncements:</b></p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0; font: 10pt Times New Roman, Times, Serif">The Financial Accounting
Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of
financial accounting and reporting. The Company has reviewed the recently issued pronouncements and concluded that there are no
new accounting standards are applicable to the Company.</p>
<p style="margin: 0pt"> </p>
<p style="margin: 0pt"></p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Organization
and nature of business – </b>Octagon 88 Resources, Inc. (identified in these footnotes as “we” or the Company)
is a Nevada corporation incorporated on June 9, 2008.  We are currently based in Switzerland.  We intend to
operate in the U.S. and Canada.  We use June 30 as a fiscal year for financial reporting purposes.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">We are a natural
resource exploration stage company and anticipate acquiring, exploring, and if warranted and feasible, developing natural resource
assets.  We currently do not hold any exploration-related assets, having let our agreement with our oil and gas leases
expire.  We are reviewing various oil and gas assets for acquisition.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">To date, our activities
have been limited to formation, the raising of equity capital, and the development of a business plan. We filed a Form S-1 with
the U.S. Securities and Exchange Commission, which became effective on September 24, 2008.  We also applied for a listing
on the OTC Bulletin Board; our application was approved in July, 2009.  We are now exploring various oil and gas acquisitions
and sources of capital.  In the current exploration stage, we anticipate incurring operating losses as we implement our
business plan.</p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Basis of presentation
</b>- The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles applicable
to exploration stage enterprises.</p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Use of estimates
- </b>The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual
results could differ from those estimates.</p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Cash and cash
equivalents - </b>We consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three
months to be cash equivalents.</p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Fair value of
financial instruments and derivative financial instruments </b>- The carrying amounts of cash and current liabilities approximate
fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties
and matters of significant judgment, and, therefore, cannot be determined with precision.  Changes in assumptions could
significantly affect these estimates.  We do not hold or issue financial instruments for trading purposes, nor do we
utilize derivative instruments in the management of our foreign exchange, commodity price or interest rate market risks.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">The FASB Codification
clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined
for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant
levels of inputs as follows:</p>
<p style="margin: 0pt"> </p>
<table cellpadding="0" cellspacing="0" style="width: 98%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: top">
<td style="text-align: left; border-top: black 0.5pt solid; border-bottom: black 2px solid; width: 12%; padding-left: 18pt; text-indent: 0pt">Level 1:</td>
<td style="border-top: black 0.5pt solid; border-bottom: black 2px solid; width: 2%"> </td>
<td style="text-align: left; border-top: black 0.5pt solid; border-bottom: black 2px solid; width: 77%; padding-left: 18pt; text-indent: 0pt">Quoted prices in active markets for identical assets or liabilities.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Level 2</td>
<td style="border-bottom: black 2px solid"> </td>
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Level 3:</td>
<td style="border-bottom: black 2px solid"> </td>
<td style="text-align: left; border-bottom: black 2px solid; padding-left: 18pt; text-indent: 0pt">Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.</td></tr>
</table>
<p style="margin: 0"> </p>
<p style="margin: 0 0 0 20pt"><font style="font: 10pt Times New Roman, Times, Serif">The determination of where assets and liabilities
fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.</font></p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Oil and gas properties
</b>– We use the successful efforts method of accounting for oil and gas properties.   Under that method:</p>
<p style="margin: 0pt"> </p>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">a.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Geological and geophysical costs and the costs of carrying and retaining undeveloped properties are charged to expense when incurred since they do not result in the acquisition of assets.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">b.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Costs incurred to drill exploratory wells and exploratory-type stratigraphic test wells that do not find proved reserves are charged to expense when it is determined that the wells have not found proved reserves.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">c.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Costs incurred to acquire properties and drill development-type stratigraphic test wells, successful exploratory well, and successful exploratory-type stratigraphic wells are capitalized.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">d.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Capitalized costs of wells and related equipment are amortized, depleted, or depreciated using the unit-of-production method.</td></tr>
</table>
<table align="center" border="0" cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; font-size: 10pt">
<tr style="vertical-align: top">
<td style="width: 18pt; font-family: Times New Roman, Times, Serif"> </td>
<td style="width: 18pt; font-family: Times New Roman, Times, Serif; text-indent: 0pt">e.</td>
<td style="font-family: Times New Roman, Times, Serif; text-align: justify">Costs of unproved properties are assessed periodically to determine if an impairment loss should be recognized.</td></tr>
</table>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Other long-lived
assets</b> – Property and equipment are stated at cost less accumulated depreciation computed principally using accelerated
methods over the estimated useful lives of the assets.  Repairs are charged to expense as incurred.  Impairment
of long-lived assets is recognized when the fair value of a long-lived asset is less than its carrying value.  No impairments
of long-lived assets occurred during the period ended September 30, 2012 and 2011.</p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Federal income
taxes</b> - Deferred income taxes are reported for timing differences between items of income or expense reported in the financial
statements and those reported for income tax purposes in accordance with applicable FASB Codification regarding <i>Accounting for
Income Taxes</i>, which require the use of the asset/liability method of accounting for income taxes.  Deferred income
taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carryforwards.  Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.  The Company provides deferred taxes for the estimated
future tax effects attributable to temporary differences and carryforwards when realization is more likely than not.</p>
<p style="margin: 0pt"> </p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif">We have analyzed
filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all
open tax years in these jurisdictions.  We are not currently under examination by the Internal Revenue Service or any
other jurisdiction.  We believe that our income tax filing positions and deductions will be sustained on audit and do not
anticipate any adjustments that will result in a material adverse effect on our financial condition, results of operations, or
cash flow.  Therefore, no reserves for uncertain income tax positions have been recorded.</p>
<p style="text-align: justify; text-indent: 0pt; margin: 0 0 0 18pt; font: 10pt Times New Roman, Times, Serif"><b>Net income per
share of common stock</b> – We have adopted applicable FASB Codification regarding <i>Earnings per Share</i>, which
require presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation.  In the accompanying financial statements, basic earnings per share of common stock is
computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.  At
September 30, 2012 and 2011, there were no variances between the basic and diluted loss per share as there were no potentially
dilutive securities outstanding.</p>
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="width: 88%; text-align: justify; text-indent: 0pt">Net operating losses</td>
<td style="text-align: right; width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 9%; text-align: right">43,935</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 2px; text-align: justify; text-indent: 0pt">Valuation allowance</td>
<td style="text-align: right; padding-bottom: 2px"> </td>
<td style="border-bottom: black 2px solid; text-align: left"> </td>
<td style="border-bottom: black 2px solid; text-align: right">(43,935</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 2px">)</td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 4px"> </td>
<td style="text-align: right; padding-bottom: 4px"> </td>
<td style="border-bottom: black 4px double; text-align: left">$</td>
<td style="border-bottom: black 4px double; text-align: right">-</td>
<td nowrap="nowrap" style="text-align: left; padding-bottom: 4px"> </td></tr>
</table>
<p style="margin: 0pt"> </p>
153537
100277
0.50
1
0.50
15000
30000
15000
43935
43935
0
0.34
140164
2032
6000
35473
35473
1.00
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Note 8 – Subsequent events: </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">(a)</font></td><td style="text-align: justify"><font style="font-size: 10pt">On October 3, 2012, the Company entered in to a letter agreement
for a Financing Commitment and Credit Facility (the “Financing Agreement”) for the Company with Zentrum Energie Trust
AG. (“Zentrum’), whereby Zentrum will provide both debt and equity funds to the Company for investments in assets owned
by private operating oil companies.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Under the terms of the Financing
Agreement, the first draw is to be an equity placement into the Company by Zentrum of $500,000 by way of the issuance of 200,000
units, each unit consisting of one share of common stock at $2.50 per share, a one year warrant to purchase an additional 200,000
shares of common stock at an exercise price of $3.00 per share and a three year warrant to purchase 200,000 shares of common stock
at an exercise price of $3.00 per share.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Further funds may be by way of debt
or equity. Any funds drawn down as debt under the credit facility will have a first security charge on the investments acquired
with such funds.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Fees of 8% for equity placements
and 3% for debt placements will be deducted on funding. For any debt converted to equity, a further fee of 5% will be paid by
the Company at conversion.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Zentrum has agreed that the Company
may allocate up to ten percent of the funds from debt or equity for general and administrative costs and due diligence costs and
any other costs they may approve from time to time.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Zentrum shall further have a first
right of refusal on all financings for a period of two years from the execution of the formal agreement. The final agreement shall
provide for registration rights. Zentrum’s legal counsel is preparing the formal agreements for execution.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">(b)</font></td><td style="text-align: justify"><font style="font-size: 10pt">On October 3, 2012, the Board of Directors of the Company appointed
Dr. Peter Beck as a Director of the Company.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">(c)</font></td><td style="text-align: justify"><font style="font-size: 10pt">On October 4, 2012, Jacqueline Danforth resigned as a Director of
the Company.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">(d)</font></td><td><font style="font-size: 10pt">On October 11, 2012, Feliciano Tighe resigned as Chief Financial Officer of the Company. </font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 10pt">(e)</font></td><td><font style="font-size: 10pt">On October 12, 2012, the Board of Directors appointed Bryan Leonard Cook as Chief Financial Officer
of the Company.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in">(f)</td><td style="text-align: justify">On October 15, 2012, the Company entered into a Share Exchange Agreement with Zentrum Energie Trust
AG to acquire a 22% interest in CEC North Star Energy Ltd. (“North Star”) from Zentrum which represents approximately
3,100,000 shares of North Star. North Star’s portfolio of assets contains conventional light sweet oil developments with
proven reserves quick cash flow and unconventional long-term heavy oil assets with blue-sky potential of several billions of barrels
exploration and developments. Under the terms of the share exchange agreement, the Company the shares of North Star in exchange
for the issuance of 14,000,000 restricted shares of the Company valued at $4.50 per share for a total acquisition cost of $63,000,000.</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">Further, the Company is required
to reach an agreement with its controlling shareholder, Kenmore Interational S.A. for the return to the treasury of the Company
of a total of 31, 942,000 restricted shares of common stock. The Company has also agreed to effect a forward split of its authorized
and issued and outstanding shares of common stock on the basis of three for one (3-1) subsequent to the acquisition of North Star.
Zentrum shall have the right to appoint two directors to the Board of the Company subsequent to the Closing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The transaction is expected to close
on or before October 31, 2012 and if closed, will effect a change in control of the Company.</p>
<p style="margin: 0pt"></p>
500000
200000
1
2.50
1
200000
3.00
1
200000
3.00
0.08
0.03
0.05
10
2
0.22
3100000
14000000
4.50
63000000
31942000
3
2