UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

 (Mark one)

  x   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the Fiscal Year Ended December 31, 2008

OR

 o   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 000-52034

AMERIWEST ENERGY CORP.

(Exact name of registrant as specified in Its Charter)

Nevada	98-0359930
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

123 West 1st Ave., Suite 215, Casper, WY 82601

(Address of Principal Executive Offices)   (zip code)

Registrant’s telephone number, including area code:  (307) 472-5193

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

None	None
(Title of each class)	(Name of each exchange on which registered)

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

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  o NO  x

Note -  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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  o NO  x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, 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.  o

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

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  o	Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

YES  o NO  x

The aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 30, 2008 was $25,789,581 (computed by reference to the last sale price of a share of the registrant’s common stock on that date as reported by the Over the Counter Bulletin Board). For purposes of this computation, it has been assumed that the shares beneficially held by directors and officers of registrant were “held by affiliates”; this assumption is not to be deemed to be an admission by such persons that they are affiliates of registrant.

As of April 14, 2009, there were 61,173,741 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Exhibits incorporated by reference are referred under Part IV.

TABLE OF CONTENTS

PART 1		Page
ITEM 1.	DESCRIPTION OF BUSINESS	5
ITEM 1A.	RISK FACTORS	7
ITEM 1B.	UNRESOLVED STAFF COMMENTS	13
ITEM 2.	DESCRIPTION OF PROPERTY	13
ITEM 3.	LEGAL PROCEEDINGS	13
ITEM 4.	SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS	13
PART II
ITEM 5.	MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	14
ITEM 6.	SELECTED FINANCIAL DATA	15
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION	15
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	27
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	27
ITEM 9(T)A.	CONTROLS AND PROCEDURES	27
ITEM 9B.	OTHER INFORMATION	28
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT	30
ITEM 11.	EXECUTIVE COMPENSATION	31
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS	34
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	35
ITEM 14.	PRINCIPAL ACCOUNTANTS FEES AND SERVICES	36

2

PART IV
ITEM 15.	EXHIBITS AND REPORTS ON FORM 8-K	38
SIGNATURES			40

3

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Background

Ameriwest Energy Corp. (the “Company,” “we,” “us,” “our”) was incorporated under the laws of the State of Nevada on January 3, 2001 under the name Henley Ventures Inc. for the purpose of acquiring and developing mineral properties. We acquired certain rights to mineral claims on the Red Bird, Pleasant Surprise and Red Bird Protection in British Columbia, Canada. The Red Bird is a large claim block which covers a number of old gold and copper showings, which were first discovered in the early part of the last century. In July 2006, we commenced Phase I of the exploration program to undertake further geochemical sampling by way of the establishment of a grid to obtain soil and rock samples for assaying as an initial stage. To date, no minerals have yet been discovered on the properties and certain of our rights to such mineral claims expired in September 2007. On December 15, 2006, we effected a 9-for-1 forward stock split to better position the company for growth in 2007 and to improve trading liquidity, broaden ownership, and enhance overall shareholder value.

In May 2007, we decided to concentrate significant efforts on the exploration, development and production of oil and gas. To facilitate this shift in business focus, we effected a 3.6-to-1 forward stock split on May 4, 2007, and on June 12, 2007, Henley Ventures, Inc., a Nevada corporation merged with and into its wholly owned subsidiary, South Sea Energy Corp. resulting in South Sea Energy Corp. being the surviving corporation. On June 15, 2007, we signed a letter of intent with CBM Asia Development Corp., (“CBM”) as amended, to acquire 40% interest in a participation agreement of a coal bed methane project in East Kalimatan, Indonesia, for $100,000. The letter of intent also provided that our newly appointed directors and officers receive 26,000,000 shares of our common stock. The terms of the acquisition were subject to the parties closing the transaction no later than July 7, 2007. On August 17, 2007, we entered into a memorandum of understanding for the termination of the negotiations with CBM. Pursuant to the memorandum of understanding, the 26,000,000 shares issued to our now former officers and directors were returned to treasury for cancellation and we relinquished any rights we may have had to the underlying project. At December 31, 2007, related acquisition costs totaling $209,230 were written off.

On August 24, 2007, we entered into an assignment agreement with Pin Petroleum Partners Ltd. (“Pin”), whereby Pin agreed to assign its rights and obligation under a certain letter of intent with Muddy Minerals, LLC (“Muddy”), to a property referred to as the South Glenrock “C” oil field, located in Converse County, Wyoming for the aggregate sum of $550,000. Under the terms of the letter of intent we assumed, we agreed to acquire the oil field, together with a 78% net royalty interest in the oil field for the aggregate sum of $5,000,000. In concert with our intention to focus our business endeavors on the U.S. oil and gas sector, we appointed a new President and director on August 24, 2007, and on August 28, 2007, we merged with and into our wholly owned subsidiary, Ameriwest Energy Corp. resulting in Ameriwest Energy Corp. being the surviving corporation. On May 31, 2008, we entered into an amendment to the agreement with Muddy whereby we agreed to amend the terms of the letter of intent as follows: (i) extend the closing date to September 1, 2008; (ii) $1,750,000 that has been paid to Muddy is non-refundable and deemed earned by Muddy and shall be credited toward the purchase price at closing; and (iii) in consideration for extending the closing date, we agreed to pay Muddy two additional payments in the amounts of $194,575.34 and $105,424.66, respectively. On September 1, 2008, we entered into an amendment agreement with Muddy whereby we agreed to amend the terms of the letter of intent as follows: (i) extend the closing date to December 15, 2008; and (ii) in consideration for extending the closing date, we agreed to pay Muddy the sum of $100,000 including accrued interest on the remaining payments calculated from June 1, 2008 through December 15, 2008.

On March 19, 2008, we entered into an exclusive option agreement with Hot Springs Resources, Ltd. to purchase certain assets of Hot Springs including (i) wells, well bores, leases, contracts, records, books, equipment, buildings, etc., and (ii) not less than a working interest of 95% at a 79.9% net revenue interest in certain acreage inside the Burch Ranch Unit, a working interest of 100% at an 82% net revenue interest in leases outside of the Burch Ranch Unit and all of Hot Springs’ interest in a leasehold attached to or held by unit, other formations and hydrocarbon substances, for the aggregate purchase price of $4,280,000 and the issuance of 400,000 shares of our common stock. The option expired on September 17, 2008. The parties have a verbal agreement to renegotiate the terms of the option when financing for the project is available.

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On April 15, 2008, we entered into an exclusive option agreement with Alpha Development Corporation and JK Minerals, Inc. (“Optionors”) to purchase certain assets of its Cold Creek Unit and adjacent leases including (i) wells, well bores, casing, leases, contracts, hydrocarbon substances, records, books, documents, licenses, reports and data, tangible depreciable property and assets such as pumping units and all equipment used in the production of hydrocarbon substances at Cole Creek, and (ii) a working interest of about 35% at the net revenue interest that exists as of April 15, 2008, in all leases and wells in all formations that are below the base of the Shannon Formation, and the sellers’ working interest in all depths and formations from the surface to the base of the Shannon Formation (which was approximately 68% working interest at 77% net revenue interest when the sellers previously purchased that interest), for the aggregate purchase price of $10,000,000. On June 25, 2008, we entered into an amendment agreement with Optionors whereby Optionors agreed to extend the closing of the transaction to October 30, 2008 provided that we made payments of $200,000 to Optionors no later than August 18, 2008 and $150,000 no later than September 17, 2008. In the event we do not exercise the option, such extension payments totaling $350,000 shall be forfeited and retained by Optionors. The option expired on September 17, 2008. The parties have a verbal agreement to renegotiate the terms of the option when financing for the project is available.

On May 1, 2008, we became the official operator of record for the South Glenrock "C" oil field and pursuant to an Assignment of Revenues with Muddy, received the right to all production revenues from the field.

On May 30, 2008 we entered into a Purchase and Sale Agreement with Geochem Exploration, LLC, a Wyoming limited liability company (“Geochem”) and acquired from Geochem, 100% working interest and 80% net royalty interest in the Skull Valley Prospect in Tooele County, Utah for the aggregate purchase price of $400,000.  We committed to spud, drill and complete a well on the property no later that March 31, 2009. As of the date of this Report, we have not spudded, drilled and completed a well and as such are in default of our obligations under the agreement, which will likely result in a reversion of our interest in the Prospect back to Geochem.

On August 21, 2008, we entered into a Farmout and Area of Mutual Interest (AMI) Agreement with Tyler Rockies Exploration, Ltd., a Texas limited partnership (“TRE”) where in consideration for $50,000, we have the right to earn up to a 50% ownership interest in oil and gas leasehold rights to approximately 2,800 gross acres within the Geary Prospect lands located in Natrona and Converse counties, Wyoming. We agreed to commence drilling of a well within the AMI on or before May 1, 2009. After we have drilled 3 wells to the contract depth of the Dakota Formation, TRE will assign and convey 50% of its interest in the AMI to us. We will operate the wells and receive a 75% Net Revenue Interest.

Subsequent to our fiscal year ended December 31, 2008, on February 25, 2009, we entered into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation (“Wold”) where we have the right to earn up to a 100% ownership interest in oil and gas leasehold rights to approximately 320 net acres within certain land located in Natrona and Converse counties, Wyoming. We agreed to commence drilling of a test well within such lands on or before August 1, 2009. After we have drilled an initial test well to the contract depth of 8,000 feet, Wold will assign and convey to us, 100% of its interest in the drillsite spacing unit and participating area, and 65% of its operating rights in the one-half block of the land where the test well was drilled. We will operate the actual well drilled and receive a 80% Net Revenue Interest.

Subsequent to our fiscal year ended December 31, 2008, on March 30, 2009, we entered into an Agreement to Operate South Glenrock Block “C” And Extension of Purchase Agreement with Muddy. Under the agreement, both Muddy and we agreed to (i) extend the closing date to June 1, 2009, (ii) reduce the purchase price to $4,000,000, (iii) confirm that the amount of $1,750,000 we previously paid towards the purchase price is non-refundable, (iv) confirm that we shall operate and manage South Glenrock oilfield until the closing date or upon termination of the agreement and entitled to all revenue generated from such oilfield, and (v) assign all our interest in South Glenrock “C” upon termination of the agreement.

Development

Our future operations are dependent upon the identification and successful completion of additional long-term or permanent equity financings, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurances that we will be successful, which would in turn significantly affect our ability to roll out our business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements.

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We continue to operate with very limited administrative support, and our current officers and directors continue to be responsible for many duties to preserve our working capital. We expect no significant changes in the number of employees over the next 12 months.

Subject to available financing, we plan to initiate drilling operations in the next several months, and together with increasing current production, we may have some significant ongoing capital expenditures. We believe that, with our current efforts to raise capital, we should have sufficient cash resources to satisfy our needs over the next twelve months. Our ability to satisfy cash requirements thereafter will determine whether we achieve our business objectives. Should we require additional cash in the future, there can be no assurance that we will be successful in raising additional debt or equity financing on terms acceptable to our company, if at all.

Dividends

We have not, and currently do not intend to, pay dividends. Any change in this current intention is in the discretion of the Board of Directors.

Employees

As of December 31, 2008, we had two full time employees. We currently utilize temporary contract labor throughout the year to address business and administrative needs.

ITEM 1A. RISK FACTORS

Investors should carefully consider the risks described below before deciding whether to invest in our common stock. The risks described below are not the only ones we face. Additional risks not presently known to us or that we currently believe are immaterial may also impair our business operations and financial results. If any of the following risks actually occurs, our business, financial condition or results of operations could be adversely affected. In such case, the trading price of our common stock could decline and you could lose all or part of your investment. Our filings with the Securities and Exchange Commission also contain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face described below. See "Forward-Looking Statements."

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

The duration or severity of the current global economic downturn and disruptions in the financial markets, and their impact on Ameriwest, are uncertain.

The oil industry generally is highly cyclical, with prices subject to worldwide market forces of supply and demand and other influences. The recent global economic downturn, coupled with the global financial and credit market disruptions, have had a historic negative impact on the oil industry. These events have contributed to an unprecedented decline in crude oil prices, weak end markets, a sharp drop in demand, increased global inventories, and higher costs of borrowing and/or diminished credit availability. While we believe that the long-term prospects for oil remain bright, we are unable to predict the duration or severity of the current global economic and financial crisis. There can be no assurance that any actions we may take in response to further deterioration in economic and financial conditions, will be sufficient. A protracted continuation or worsening of the global economic downturn or disruptions in the financial markets could have a material adverse effect on our business, financial condition or results of operations.

6

Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.

We have a limited operating history. As such, our historical operating results may not provide a meaningful basis for evaluating our business, financial performance and prospects. We may not be able to achieve a similar growth rate in future periods. Accordingly, you should not rely on our results of operations for any prior periods as an indication of our future performance. Our success is significantly dependent on completing planned acquisition and meeting business objectives. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate recoverable reserves or operate on a profitable basis. We are in the initial stages of developing our oil reserves and have recently begun producing and selling oil from our recent acquisitions and strategic alliances. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.

We have incurred losses in prior periods and may incur losses in the future.

We incurred net losses of $6,606,098 for the period from January 3, 2001 (inception) to December 31, 2008. We cannot be assured that we can achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. There can be no assurance that future operations will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.

Our future operating revenue is dependent upon the performance of our properties.

Our future operating revenue depends upon our ability to profitably operate our existing properties by drilling and completing wells that produce commercial quantities of oil and our ability to expand our operations through the successful implementation of our plans to explore, acquire and develop additional properties. The successful development of oil properties requires an assessment of potential recoverable reserves, future oil and gas prices, operating costs, potential environmental and other liabilities and other factors. Such assessments are necessarily inexact. No assurance can be given that we can produce sufficient revenue to operate our existing properties or acquire additional oil producing properties and leases. We may not discover or successfully produce any recoverable reserves in the future, or we may not be able to make a profit from the reserves that we may discover. In the event that we are unable to produce sufficient operating revenue to fund our future operations, we will be forced to seek additional, third-party funding, if such funding can be obtained. Such options would possibly include debt financing, sale of equity interests in the Company, joint venture arrangements, or the sale of oil and gas interests. If we are unable to secure such financing on a timely basis, we could be required to delay or scale back our operations. If such unavailability of funds continued for an extended period of time, this could result in the termination of our operations and the loss of an investor’s entire investment.

If we are unable to obtain additional funding our business operations will be harmed and if we do obtain additional financing our then existing shareholders may suffer substantial dilution.  

We will require additional funds to continue our oil exploration and production activities, and to take advantage of any available business opportunities. Historically, we have financed our expenditures primarily with proceeds from the sale of debt and equity securities, and bridge loans from our officers and stockholders. In order to meet our obligations or acquire an operating business, we will have to raise additional funds. Obtaining additional financing will be subject to market conditions, industry trends, investor sentiment and investor acceptance of our business plan and management. These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us. If we are not successful in achieving financing in the amount necessary to further our operations, implementation of our business plan may fail or be delayed.

Any failure to meet our debt obligations or the occurrence of a continuing default under our debt instruments would adversely affect our business and financial condition.  

We have issued both short and long term promissory notes totaling approximately $3,236,946 and we anticipate additional debt obligations to finance our business objectives. Our ability to meet our current and future debt obligations and other expenses will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which we are unable to control.  If our cash flow is not sufficient to service our debt, we may be required to refinance the debt, sell assets or sell shares of common stock on terms that we do not find attractive, if it can be done at all.

We own rights to oil properties that have not yet been developed.

We own rights to oil properties that have limited or no development. There are no guarantees that our properties will be developed profitably or that the potential oil resources on the property will produce as expected if they are developed.

7

Inability of Our Officers and Directors to Devote Sufficient Time to the Operation of the Business May Limit Our Success.

Presently, our officers and directors allocate only a portion of their time to the operation of our business. If the business requires more time for operations than anticipated or the business develops faster than anticipated, the officers and directors may not be able to devote sufficient time to the operation of the business to ensure that it continues as a going concern. This lack of sufficient time of our management may result in limited growth and success of the business.

If we are unable to successfully recruit qualified managerial and field personnel having experience in oil and gas exploration, we may not be able to execute on our business plan.

In order to successfully implement and manage our business plan, we will be dependent upon, among other things, successfully recruiting qualified managerial and field personnel having experience in the oil and gas exploration business. Competition for qualified individuals is intense. There can be no assurance that we will be able to find, attract and retain existing employees or that we will be able to find, attract and retain qualified personnel on acceptable terms.

Inherent risk in drilling

Drilling for oil involves numerous risks, including the risk that we will not encounter commercially productive oil reservoirs. The wells we drill or participate in may not be productive and we may not recover all or any portion of our investment in those wells. The seismic data and other technologies we use do not allow us to know conclusively prior to drilling a well that crude is present or may be produced economically. The costs of drilling, completing and operating wells are often uncertain, and drilling operations may be curtailed, delayed or canceled as a result of a variety of factors including, but not limited to:

•  unexpected drilling conditions;

•  pressure or irregularities in formations;

•  equipment failures or accidents;

•  mechanical difficulties, such as lost or stuck oil field drilling and service tools;

•  fires, explosions, blowouts and surface cratering;

•  uncontrollable flows of oil and formation water;

•  environmental hazards, such as oil spills, pipeline ruptures and discharges of toxic gases;

•  other adverse weather conditions; and

•  increase in the cost of, or shortages or delays in the availability of, drilling rigs and equipment.

Certain future drilling activities may not be successful and, if unsuccessful, this failure could have an adverse effect on our future results of operations and financial condition. While all drilling, whether developmental or exploratory, involves these risks, exploratory drilling involves greater risks of dry holes or failure to find commercial quantities of hydrocarbons.

Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring the leases.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies which have substantially greater technical, financial and operational resources and staffs. Accordingly, there is a high degree of competition for desirable leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict if the necessary funds can be raised or that any projected work will be completed.

8

Our oil operations involve substantial costs and are subject to various economic risks.

Our oil operations are subject to the economic risks typically associated with exploration, development and production activities, including the necessity of significant expenditures to locate and acquire producing properties and to drill exploratory wells. The cost and length of time necessary to produce any reserves may be such that it will not be economically viable. In conducting exploration and development activities, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause our exploration, development and production activities to be unsuccessful. In addition, the cost and timing of drilling, completing and operating wells is often uncertain. We also face the risk that the oil reserves may be less than anticipated, that we will not have sufficient funds to successfully drill on the property, that we will not be able to market the oil due to a lack of a market and that fluctuations in the prices of oil will make development of those leases uneconomical. This could result in a total loss of our investment.

A substantial or extended decline in oil and gas prices may adversely affect our business, financial condition, cash flow, liquidity or results of operations as well as our ability to meet our capital expenditure obligations and financial commitments to implement our business plan.

Any revenues, cash flow, profitability and future rate of growth we achieve will be greatly dependent upon prevailing prices for oil and gas. Our ability to maintain or increase our borrowing capacity and to obtain additional capital on attractive terms is also expected to be dependent on oil and gas prices. Historically, oil and gas prices and markets have been volatile and are likely to continue to be volatile in the future. Prices for oil and gas are subject to potentially wide fluctuations in response to relatively minor changes in supply of and demand for oil and gas, market uncertainty, and a variety of additional factors beyond our control. Those factors include:

•  the domestic and foreign supply of oil and natural gas;

•  the ability of members of the Organization of Petroleum Exporting Countries and other producing countries to agree upon and maintain oil prices and production levels;

•  political instability, armed conflict or terrorist attacks, whether or not in oil or natural gas producing regions;

•  the level of consumer product demand;

•  the growth of consumer product demand in emerging markets, such as China and India;

•  weather conditions, including hurricanes and other natural occurrences that affect the supply and/or demand of oil and natural gas;

•  domestic and foreign governmental regulations and other actions;

•  the price and availability of alternative fuels;

•  the price of foreign imports;

•  the availability of liquid natural gas imports; and

•  worldwide economic conditions.

These external factors and the volatile nature of the energy markets make it difficult to estimate future prices of oil and natural gas. Lower oil and natural gas prices may not only decrease our revenues on a per unit basis, but may also reduce the amount of oil we can produce economically, if any. A substantial or extended decline in oil and natural gas prices may materially affect our future business, financial condition, results of operations, liquidity and borrowing capacity, and may require a reduction in the carrying value of our oil properties. While our revenues may increase if prevailing oil and gas prices increase significantly, exploration and production costs and acquisition costs for additional properties and reserves may also increase.

Governmental and environmental regulations could adversely affect our business.

Our business is subject to federal, state and local laws and regulations on taxation, the exploration for and development, production and marketing of oil and safety matters. Many laws and regulations require drilling permits and govern the spacing of wells, rates of production, prevention of waste, unitization and pooling of properties and other matters. These laws and regulations have increased the costs of planning, designing, drilling, installing, operating and abandoning our oil wells and other facilities. In addition, these laws and regulations, and any others that are passed by the jurisdictions where we have production, could limit the total number of wells drilled or the allowable production from successful wells, which could limit our revenues.

9

Our operations are also subject to complex environmental laws and regulations adopted by the various jurisdictions in which we have or expect to have oil operations. We could incur liability to governments or third parties for any unlawful discharge of oil or other pollutants into the air, soil or water, including responsibility for remedial costs. We could potentially discharge these materials into the environment in any of the following ways:

•  from a well or drilling equipment at a drill site;

•  from gathering systems, pipelines, transportation facilities and storage tanks;

•  damage to oil wells resulting from accidents during normal operations; and

•  blowouts, cratering and explosions.

Because the requirements imposed by laws and regulations are frequently changed, we cannot assure you that laws and regulations enacted in the future, including changes to existing laws and regulations, will not adversely affect our business. In addition, because we acquire interests in properties that have been operated in the past by others, we may be liable for environmental damage caused by the former operators.

Title to the properties in which we have an interest may be impaired by title defects.

Our general policy is to obtain title opinions on significant properties that we drill or acquire. However, there is no assurance that we will not suffer a monetary loss from title defects or title failure. Additionally, undeveloped acreage has greater risk of title defects than developed acreage. Generally, under the terms of the operating agreements affecting our properties, any monetary loss is to be borne by all parties to any such agreement in proportion to their interests in such property. If there are any title defects or defects in assignment of leasehold rights in properties in which we hold an interest, we will suffer a financial loss.

The unavailability or high cost of drilling rigs, equipment, supplies, personnel and oil field services could adversely affect our ability to execute our exploration and development plans on a timely basis and within our budget.

Our industry is cyclical and, from time to time, there is a shortage of drilling rigs, equipment, supplies or qualified personnel. During these periods, the costs and delivery times of rigs, equipment and supplies are substantially greater. In addition, the demand for, and wage rates of, qualified drilling rig crews rise as the number of active rigs in service increases. As a result of increasing levels of exploration and production in response to strong prices of oil and natural gas, the demand for oilfield services and equipment has risen, and the costs of these services and equipment are increasing. If the unavailability or high cost of drilling rigs, equipment, supplies or qualified personnel were particularly severe in Wyoming, we could be materially and adversely affected because our operations and properties are concentrated in Wyoming.

We depend on the skill, ability and decisions of third party operators to a significant extent.

The success of the drilling, development and production of the oil properties in which we have or expect to have a working interest is substantially dependent upon the decisions of such third-party operators and their diligence to comply with various laws, rules and regulations affecting such properties. The failure of any third-party operator to make decisions, perform their services, discharge their obligations, deal with regulatory agencies, and comply with laws, rules and regulations, including environmental laws and regulations in a proper manner with respect to properties in which we have an interest could result in material adverse consequences to our interest in such properties, including substantial penalties and compliance costs. Such adverse consequences could result in substantial liabilities to us or reduce the value of our properties, which could negatively affect our results of operations.

10

We are subject to risks arising from the failure to fully identify potential problems related to acquired reserves or to properly estimate those reserves.

Although we perform a review of the acquired properties that we believe is consistent with industry practices, such reviews are inherently incomplete. It generally is not feasible to review in depth every individual property involved in each acquisition. Ordinarily, we will focus our review efforts on the higher-value properties and will sample the remainder, and depend on the representations of previous owners. However, even a detailed review of records and properties may not necessarily reveal existing or potential problems, nor will it permit a buyer to become sufficiently familiar with the properties to assess fully their deficiencies and potential. Inspections may not always be performed on every well, and environmental problems, such as ground water contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, we often assume certain environmental and other risks and liabilities in connection with acquired properties. There are numerous uncertainties inherent in estimating quantities of proved oil reserves and actual future production rates and associated costs with respect to acquired properties, and actual results may vary substantially from those assumed in the estimates.

If we grant employee share options and other share-based compensation, our net income could be adversely affected.

If we grant share purchase options to directors and employees, we will account for options granted in accordance with FASB Statement No. 123 (Revised 2004), “Share-Based Payments,” or SFAS 123R, which requires all companies to recognize, as an expense, the fair value of share options and other share-based compensation to employees. As a result, if we were to grant options to directors and employees, we would have to account for compensation costs for all share options using a fair-value based method and recognize expenses in our consolidated statement of operations in accordance with the relevant rules under U.S. GAAP, which may have a material and adverse effect on our reported earnings. If we try to avoid incurring these compensation costs, we may not be able to attract and retain key personnel, as share options are an important employee recruitment and retention tool. If we grant employee share options or other equity incentive based compensation, our net income could be adversely affected.

We are subject to new corporate governance and internal control reporting requirements, and our costs related to compliance with, or our failure to comply with existing and future requirements, could adversely affect our business.

We may face new corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as new rules and regulations subsequently adopted by the SEC and the Public Company Accounting Oversight Board. These laws, rules and regulations continue to evolve and may become increasingly stringent in the future. In particular, under rules proposed by the SEC on August 6, 2006 we are required to include management's report on internal controls as part of our annual report pursuant to Section 404 of the Sarbanes-Oxley Act. Furthermore, under the proposed rules, an attestation report on our internal controls from our independent registered public accounting firm will be required as part of our annual report for the fiscal year ending December 31, 2009. We strive to continuously evaluate and improve our control structure to help ensure that we comply with Section 404 of the Sarbanes-Oxley Act. The financial cost of compliance with these laws, rules and regulations is expected to remain substantial. We cannot assure you that we will be able to fully comply with these laws, rules and regulations that address corporate governance, internal control reporting and similar matters. Failure to comply with these laws, rules and regulations could materially adversely affect our reputation, financial condition and the value of our securities.

Our Independent Auditors’ Report States that there is a Substantial Doubt that we will be able to Continue as a Going Concern.

Our independent auditors, Malone & Bailey, PC, state in their audit report, dated April 11, 2008 that since we have not established a source of revenue and future operations are dependent on our ability to raise capital from shareholders or other sources, there is a substantial doubt that we will be able to continue as a going concern. Our ability to continue as a going concern is an issue raised as a result of recurring losses from operations. We continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities. Our continued net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

RISK RELATING TO OUR COMMON STOCK:

Nevada law and our articles of incorporation authorize us to issue shares of stock, which shares may cause substantial dilution to our existing shareholders and/or have rights and preferences greater than our common stock.

Pursuant to our Articles of Incorporation, we have, as of the date of this Report, 720,000,000 shares of common stock authorized. As of April 14, 2009, we had 61,173,741 shares of common stock issued and outstanding. As a result, our Board of Directors has the ability to issue a large number of additional shares of common stock without shareholder approval, which if issued could cause substantial dilution to our then shareholders.

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Our Board of Directors may designate and authorize issuance of preferred shares which could have rights, preferences or privileges in priority to our common stock holders, and which may further dilute common stock holders.  Our Board of Directors has the authority to issue shares of Preferred Stock and to determine the price, designation, rights, preferences, privileges, restrictions and conditions, including voting and dividend rights, of these shares of Preferred Stock without any further vote or action by the stockholders. The rights of the holders of Common Stock will be subject to, and may be adversely affected by, the rights of holders of any Preferred Stock that may be issued in the future. The issuance of Preferred Stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could make it more difficult for a third party to acquire a majority of the outstanding voting stock of the Company. At this time, the Company has no present plans to issue any Preferred Stock.

A limited public trading market exists for our common stock, which makes it more difficult for our stockholders to sell their common stock in the public markets.

Although our common stock is quoted on the OTCBB under the symbol “AWEC,” there is a limited public market for our common stock. No assurance can be given that an active market will develop or that a stockholder will ever be able to liquidate its shares of common stock without considerable delay, if at all. Many brokerage firms may not be willing to effect transactions in the securities. Even if a purchaser finds a broker willing to effect a transaction in these securities, the combination of brokerage commissions, state transfer taxes, if any, and any other selling costs may exceed the selling price. Furthermore, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price and liquidity of our common stock.

Our common stock may be subject to the penny stock rules which may make it more difficult to sell our common stock .

The Securities and Exchange Commission has adopted regulations which generally define a “penny stock” to be any equity security that has a market price, as defined, less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors such as, institutions with assets in excess of $5,000,000 or an individual with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with his or her spouse. For transactions covered by this rule, the broker-dealers must make a special suitability determination for the purchase and receive the purchaser’s written agreement of the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also affect the ability of our stockholders to sell their shares in the secondary market.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our headquarters is located at 123 West 1st Ave., Suite 215, Casper, Wyoming.  We lease office space on a month-to-month basis, for monthly costs of $700.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

None.

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Part II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the Over the Counter Bulletin Board under the symbol “AWEC.” Prior to March 6, 2007 there was no established trading market for our common stock.

The following is the range of high and low bid prices for our common stock for the periods indicated. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.

Fiscal 2008	High		Low
First Quarter (January 1-March 31, 2008)	$	0.80	$	0.32
Second Quarter (June 30, 2008)	$	0.76	$	0.45
Third Quarter (September 30, 2008)	$	0.70	$	0.04
Fourth Quarter (December 31, 2008)	$	0.34	$	0.04

The closing price for our common stock on December 31, 2008 was $0.06.

Stockholders

As of February 17, 2009, there were 54,278,002 shares of common stock issued and outstanding held by 18 stockholders of record (not including street name holders).

Dividends

We have not paid dividends to date and do not anticipate paying any dividends in the foreseeable future. Our Board of Directors intends to follow a policy of retaining earnings, if any, to finance our growth. The declaration and payment of dividends in the future will be determined by our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements and other factors.

Equity Compensation Plan Information

The following table sets forth certain information as of December 31, 2008 regarding our equity compensation plans:

Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)		Weighted-average Exercise Price of Outstanding Options, Warrants and Rights (b)		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders (1)		750,000	$	0.38		4,650,000
Equity compensation plans not approved by security holders		-	$	-		-
Total		750,000	$	0.38		4,650,000

(1) Includes securities to be issued under the Company’s 2008 Equity Incentive Plan

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ITEM 6. SELECTED FINANCIAL DATA

Our complete financial statements are included following the signature page to this Form 10-K.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN

OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and notes thereto included elsewhere in this Report. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates, forecasts, and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. We disclaim any obligation to update forward-looking statements.

The discussion and financial statements contained herein are for our fiscal year ended December 31, 2008 and December 31, 2007. The following discussion regarding our financial statements should be read in conjunction with our financial statements included herewith.

We reported total current assets of $84,557 at December 31, 2008, consisting of cash of $51,174, receivables of $6,378 and prepaid expenses and deposits of $27,005.  Total current liabilities reported of $2,352,777 consisted of $1,021,821 in accounts payable and accrued liabilities, of $377,722 in due to related parties and of $953,234 in convertible notes and interest on convertible notes. We had a working capital deficiency of $2,268,220 at December 31, 2008.   We had long term liabilities of $893,127, representing the long term portion of the convertibles notes, and $32,680 for the asset retirement obligation.

Stockholders' equity decreased from $470,139 at December 31, 2007 to a deficiency position of $3,025,672 at December 31, 2008. This change is due to a net loss of $5,631,646 in the period, subscriptions received and the issuance of notes convertible into units of common stock.

Plan of Operation

Background

We were incorporated under the laws of the State of Nevada on January 3, 2001 under the name Henley Ventures Inc. for the purpose of acquiring and developing mineral properties. We acquired certain rights to mineral claims on the Red Bird, Pleasant Surprise and Red Bird Protection in British Columbia, Canada. The Red Bird is a large claim block which covers a number of old gold and copper showings, which were first discovered in the early part of the last century. In July 2006, we commenced Phase I of the exploration program to undertake further geochemical sampling by way of the establishment of a grid to obtain soil and rock samples for assaying as an initial stage. To date, no minerals have yet been discovered on the properties and certain of our rights to such mineral claims expired in September 2007.

In May 2007, we decided to concentrate significant efforts on the exploration, development and production of oil and gas. To facilitate this shift in business focus, on June 12, 2007 Henley Ventures, Inc., a Nevada corporation merged with and into its wholly owned subsidiary, South Sea Energy Corp. resulting in South Sea Energy, Corp. being the surviving corporation. On June 15, 2007, we signed a letter of intent with CBM Asia Development Corp., (“CBM”) as amended, to acquire 40% interest in a participation agreement of a coal bed methane project in East Kalimatan, Indonesia, for $100,000. The letter of intent also provided that our newly appointed directors and officers receive 26,000,000 shares of our common stock. The terms of the acquisition were subject to the parties closing the transaction no later than July 30, 2007. On August 17, 2007, we entered into a memorandum of understanding for the termination of the negotiations with CBM. Pursuant to the memorandum of understanding, the 26,000,000 shares issued to our now former officers and directors were returned to treasury for cancellation and we relinquished any rights we may have had to the underlying project. At December 31, 2007, related acquisition costs totaling $209,230 were written off.

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On August 24, 2007, we entered into an assignment agreement with Pin Petroleum Partners Ltd. (“Pin”), whereby Pin agreed to assign its rights and obligation under a certain letter of intent with Muddy Minerals, LLC (“Muddy”), to a property referred to as the South Glenrock “C” oil field, located in Converse County, Wyoming for the aggregate sum of $550,000. Under the terms of the letter of intent we assumed, we agreed to acquire the oil field, together with a 78% net royalty interest in the oil field for the aggregate sum of $5,000,000. In concert with our intention to focus our business endeavors on the U.S. oil and gas sector, we appointed a new President and director on August 24, 2007, and on August 28, 2007, we merged with and into our wholly owned subsidiary, Ameriwest Energy Corp. resulting in Ameriwest Energy Corp. being the surviving corporation. On May 31, 2008, we entered into an amendment to the agreement with Muddy whereby we agreed to amend the terms of the letter of intent as follows: (i) extend the closing date to September 1, 2008; (ii) $1,750,000 that has been paid to Muddy is non-refundable and deemed earned by Muddy and shall be credited toward the purchase price at closing; and (iii) in consideration for extending the closing date, we agreed to pay Muddy two additional payments in the amounts of $194,575.34 and $105,424.66, respectively. On September 1, 2008, we entered into an amendment agreement with Muddy whereby we agreed to amend the terms of the letter of intent as follows: (i) extend the closing date to December 15, 2008; and (ii) in consideration for extending the closing date, we agreed to pay Muddy the sum of $100,000 including accrued interest on the remaining payments calculated from June 1, 2008 through December 15, 2008.

On March 19, 2008, we entered into an exclusive option agreement with Hot Springs Resources, Ltd. to purchase certain assets of Hot Springs including (i) wells, well bores, leases, contracts, records, books, equipment, buildings, etc., and (ii) not less than a working interest of 95% at a 79.9% net revenue interest in certain acreage inside the Burch Ranch Unit, a working interest of 100% at an 82% net revenue interest in leases outside of the Burch Ranch Unit and all of Hot Springs’ interest in a leasehold attached to or held by unit, other formations and hydrocarbon substances, for the aggregate purchase price of $4,280,000 and the issuance of 400,000 shares of our common stock. The option expired on September 17, 2008. The parties have a verbal agreement to renegotiate the terms of the option when financing for the project is available.

On April 15, 2008, we entered into an exclusive option agreement with Alpha Development Corporation and JK Minerals, Inc. (“Optionors”) to purchase certain assets of its Cold Creek Unit and adjacent leases including (i) wells, well bores, casing, leases, contracts, hydrocarbon substances, records, books, documents, licenses, reports and data, tangible depreciable property and assets such as pumping units and all equipment used in the production of hydrocarbon substances at Cole Creek, and (ii) a working interest of about 35% at the net revenue interest that exists as of April 15, 2008, in all leases and wells in all formations that are below the base of the Shannon Formation, and the sellers’ working interest in all depths and formations from the surface to the base of the Shannon Formation (which was approximately 68% working interest at 77% net revenue interest when the sellers previously purchased that interest), for the aggregate purchase price of $10,000,000. On June 25, 2008, we entered into an amendment agreement with Optionors whereby Optionors agreed to extend the closing of the transaction to October 30, 2008 provided that we made payments of $200,000 to Optionors no later than August 18, 2008 and $150,000 no later than September 17, 2008. In the event we do not exercise the option, such extension payments totaling $350,000 shall be forfeited and retained by Optionors. The option expired on September 17, 2008. The parties have a verbal agreement to renegotiate the terms of the option when financing for the project is available.

On May 1, 2008, we became the official operator of record for the South Glenrock "C" oil field and pursuant to an Assignment of Revenues with Muddy, received the right to all production revenues from the field.

On May 30, 2008 we entered into a Purchase and Sale Agreement with Geochem Exploration, LLC, a Wyoming limited liability company (“Geochem”) and acquired from Geochem, 100% working interest and 80% net royalty interest in the Skull Valley Prospect in Tooele County, Utah for the aggregate purchase price of $400,000. We committed to spud, drill and complete a well on the property no later that March 31, 2009. As of the date of this Report, we have not spudded, drilled and completed a well and as such are in default of our obligations under the agreement, which will likely result in a reversion of our interest in the Prospect back to Geochem.

15

On August 21, 2008, we entered into a Farmout and Area of Mutual Interest (AMI) Agreement with Tyler Rockies Exploration, Ltd., a Texas limited partnership (“TRE”) where in consideration for $50,000, we have the right to earn up to a 50% ownership interest in oil and gas leasehold rights to approximately 2,800 gross acres within the Geary Prospect lands located in Natrona and Converse counties, Wyoming. We agreed to commence drilling of a well within the AMI on or before May 1, 2009. After we have drilled 3 wells to the contract depth of the Dakota Formation, TRE will assign and convey 50% of its interest in the AMI to us. We will operate the wells and receive a 75% Net Revenue Interest.

Subsequent Events

Subsequent to our fiscal year ended December 31, 2008, on February 25, 2009, we entered into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation (“Wold”) where we have the right to earn up to a 100% ownership interest in oil and gas leasehold rights to approximately 320 net acres within certain land located in Natrona and Converse counties, Wyoming. We agreed to commence drilling of a test well within such lands on or before August 1, 2009. After we have drilled an initial test well to the contract depth of 8,000 feet, Wold will assign and convey to us, 100% of its interest in the drillsite spacing unit and participating area, and 65% of its operating rights in the one-half block of the land where the test well was drilled. We will operate the actual well drilled and receive a 80% Net Revenue Interest.

Subsequent to our fiscal year ended December 31, 2008, on March 30, 2009, we entered into an Agreement to Operate South Glenrock Block “C” And Extension of Purchase Agreement with Muddy. Under the agreement, both Muddy and we agreed to (i) extend the closing date to June 1, 2009, (ii) reduce the purchase price to $4,000,000, (iii) confirm that the amount of $1,750,000 we previously paid towards the purchase price is non-refundable, (iv) confirm that we shall operate and manage South Glenrock oilfield until the closing date or upon termination of the agreement and entitled to all revenue generated from such oilfield, and (v) assign all our interest in South Glenrock “C” upon termination of the agreement.

Cash and Cash Equivalents

As of December 31, 2008, we had cash of $51,174.  As such, we anticipate that we will have to raise additional capital through debt or equity financings to fund our operations and execute our business plan during the next 6 to 12 months.

Critical Accounting Policies

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management of our company to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. As the number of variables and assumptions affecting the probable future resolution of the uncertainties increase, these judgments become even more subjective and complex. Our significant accounting policies are discussed in Note 2 to our audited financial statements for the fiscal year ended December 31, 2008. We have identified the following accounting policies, described below, as the most important to an understanding of our current financial condition and results of operations.

Cash and cash equivalents

Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments with an original maturity of ninety days or less.

16

Loss per share

In accordance with SFAS No. 128, Earnings Per Share, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Diluted loss per common share is not presented because it is anti-dilutive. The weighted average number of shares outstanding during all periods has been retroactively restated to reflect the following:

i. A forward stock split of 9 new shares for one old share, effective December 15, 2006;

ii. A forward stock split of 3.6 new shares for one old share, effective May 4, 2007.

Full Cost Method

Ameriwest uses the full cost method of accounting for exploration and development activities as defined by SEC Regulation S-X Rule 4-10. Under this method of accounting, the costs of unsuccessful, as well as successful, exploration and development activities are capitalized as property and equipment. This includes any internal costs that are directly related to exploration and development activities but does not include any costs related to production, general corporate overhead or similar activities. Gain or loss on the sale or other disposition of oil and gas properties is not recognized, unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and natural gas attributable to a country. The application of the full cost method of accounting for oil and gas properties generally results in higher capitalized costs and higher depreciation and amortization rates compared to the successful efforts method of accounting for oil and gas properties.

Costs excluded

Properties and equipment include costs that are excluded from costs being depreciated or amortized. Oil and gas costs excluded represent investments in unproved properties and major development projects in which we own a direct interest. These unproved property costs include nonproducing leasehold, geological and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. Ameriwest excludes these costs on a country-by-country basis until proved reserves are found or until it is determined that the costs are impaired. All costs excluded are reviewed at least quarterly to determine if impairment has occurred.

The amount of any impairment is transferred to the capitalized costs being amortized (the depletion, depreciation and amortization) or a charge is made against earnings for those international operations where a reserve base has not yet been established. Impairments transferred to the depletion, depreciation and amortization increase the depletion, depreciation and amortization rate for that country. For international operations where a reserve base has not yet been established, an impairment requiring a charge to earnings may be indicated through evaluation of drilling results, relinquishing drilling rights or other information.

At December 31, 2008 and 2007, Ameriwest’s oil and gas interests and deferred acquisitions costs were located in one geographical segment, being the United States of America.

Ceiling test

The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. Under full cost accounting rules for each cost center, capitalized costs of unproved and proved properties, less accumulated amortization and related deferred income taxes, shall not exceed an amount (the "cost ceiling") equal to the sum of (a) the present value of future net cash flows from estimated production of proved oil and gas reserves, based on current economic and operating condition, discounted at 10 percent, plus (b) the cost of properties not being amortized, plus (c) the lower of cost or estimated fair value of any unproved properties included in the costs being amortized, less (d) any income tax effects related to differences between the book and tax basis of the properties involved. If capitalized costs exceed this limit, the excess is charged as an impairment expense. As of December 31, 2008 and 2007, total capitalized costs were $3,026,925 and $nil respectively, all of which were subject to the ceiling test for impairment.  At December 31, 2008, Ameriwest has reviewed these capitalized costs for impairment and determined that the total costs were subject to impairment.

Amortization

Capitalized costs within a cost center amortized on the unit-of-production basis using proved oil and gas reserves include: (i) all capitalized costs, less accumulated amortization; (ii) the estimated future expenditures (based on current costs) to be incurred in developing proved reserves; and (iii) estimated dismantlement and abandonment costs, net of estimated salvage values.  Capitalized costs subject to amortization do not include the excluded costs as described above.

17

Impairment of Long-lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets, the carrying value of intangible assets and other long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment.  Ameriwest recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset.  Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.  Oil and gas properties accounted for using the full cost method of accounting; a method utilized by Ameriwest, is excluded from this requirement, but will continue to be subject to the ceiling test limitations.  There were $3,925,066 in impairment losses in 2008 and $nil in 2007.

Income taxes

The Company accounts for income taxes under SFAS No. 109, Accounting for Income Taxes.  Under SFAS No.109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between their financial statement carrying amounts and their respective tax bases.  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.

Accounting for Convertible Instruments

When Ameriwest issues convertible debt with detachable instruments, it allocates the proceeds received on a relative fair value basis pursuant to EITF Issue No. 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios “.  Then, it applies the amount allocated to the convertible instrument, and an effective conversion price is calculated and used to measure the intrinsic value, if any, of the embedded conversion option.  The intrinsic value of the embedded conversion option and the relative fair value of the detachable instruments are recorded as discounts to the convertible debt and amortized over the term of the debt.

When Ameriwest issues convertible debt with non-detachable instruments, the intrinsic value of the conversion option is computed based on a comparison of the proceeds of the convertible instrument allocated to the common stock portion of the conversion option and the fair value at the commitment date of the common stock to be received by the holder upon conversion pursuant to EITF Issue No. 00-27 Application of Issue No. 98-5 to Certain Convertible Instruments”. The excess of the fair value of the common stock at the commitment date over proceeds is the intrinsic value of the embedded conversion option that is recognized by Ameriwest at the issuance date for the convertible debt.  The intrinsic value of the embedded conversion option is recorded as a discount to the convertible debt and amortized over the term of the debt.

Asset Retirement Obligation

Ameriwest recognizes asset retirement obligations in accordance with FAS No 143 Accounting for Asset Retirement Obligation.  The fair value of a liability is recorded for an asset retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made.  The carrying amount of the related long-lived asset is increased by the same amount as the liability.  Changes in the liability for an asset retirement obligation due to the passage of time is measured by applying an interest method of allocation.  The amount is recognized as an increase in the liability and an accretion expense in the statement of operations.  Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease to the carrying amount of the liability and the related long-lived asset.

Stock based compensation

The Company recognizes stock based compensation expense and other forms of employee equity compensation in accordance with SFAS No. 123R, Share-Based Payment, as interpreted by SEC Staff Accounting Bulletin No. 107.

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Results of Operations

For the Fiscal Year Ended December 31, 2008

During the period ended December 31, 2007, we effected a change in our business focus to the acquisition, exploration, development and production of oil and gas assets from the acquisition and development of mineral properties.   During the fiscal year ended December 31, 2008, we impaired all of our oil and gas assets due to the uncertainty to complete the acquisition, and/or to complete the work programs.  Due to these significant changes, part of our results for the year ended December 31, 2008 and 2007 are likely to be in the future, reported as discontinued operations, and we believe that a comparison of results of operations for the fiscal years ended December 31, 2008 and 2007 should not be relied on as an indication of future performance.

	December 31,
	2008			2007
Operator fees, Net	$	28,318		$	-
Expenses
Contribution rent		-			1,650
Contribution services		-			5,534
Compensation		295,272			49,214
Acquisition and exploration costs		3,925,066			183,230
Marketing and investor relations		249,145			148,276
Accretion of asset retirement obligation		2,684			-
Office, general and administrative expenses		175,566			36,789
Professional fees		319,357			135,890
Total operating expenses		(4,967,090	)		(560,583	)
Net income (loss) from operations		(4,938,772	)		(560,583	)
Interest income		83			-
Interest expense		(692,957	)		(254,768	)
Net loss for the period	$	(5,631,646	)	$	(815,351	)

General and administrative expenses

During the fiscal year ended December 31, 2008, we incurred total operating expenses of $4,967,090, as compared to $560,583 for the year ended December 31, 2007. Aside from the impairment charges, these expenses were related mainly to executive compensation and to marketing and investor relations activities. Other expenses were incurred in relation to activities associated with maintaining a public listing, such as legal and accounting fees.

Expenses or other cash flows in this period may not be indicative of future periods as we are in the early development stage.

19

Acquisition costs

In April 2008, we entered into an option agreement with Alpha Development Corporation and JK Minerals, Inc. to purchase certain assets of Alpha.  In September 2008, we wrote off $ $870,846 in acquisition costs related to this agreement.

In June 2007, we entered into a letter of intent to participate in the development and exploration of a coal bed methane project in East Kalimatan, Indonesia. In August 2007, we opted to not complete this acquisition, and accordingly, at December 31, 2007, we wrote off the related acquisition costs totaling $183,230.

In August 21, 2008, we entered into a farmout and area of mutual interest agreement with Tyler Rockies Exploration, Ltd. (“Tyler”) where in consideration for $50,000, we have the right to earn up to a 50% ownership interest in oil and gas leasehold rights to approximately 2,800 gross acres within the Geary Prospect lands located in Natrona and Converse counties, Wyoming.   Under the terms of the agreement, we agreed to commence drilling of a well on or before May 1, 2009.  Upon drilling 3 wells to the contract depth of the Dakota Formation, Tyler will assign and convey 50% of its interest to Ameriwest.

As at December 31, 2008, $50,000 has been paid to Tyler pursuant to the farmout agreement.  However, the  farmout agreements expired on May 1, 2008 and August 1, 2008, respectively. Accordingly, at December 31, 2008, the Geary prospect was fully impaired.

In May 2008, we entered into a Purchase and Sale Agreement with Geochem Exploration, LLC, and acquired an undivided working interest and an eighty percent (80%) net royalty interest in and to the Skull Valley Prospect in Tooele County, Utah, in consideration for an aggregate sum of $400,000.  We have fully impaired the value of our interest in the prospect due to our inability to accurately value such interest in accordance with Guide 2 of the Securities Act.

In August 2007, we entered into a letter of intent, as amended, with Pin Petroleum Partners Ltd. and Muddy Minerals, LLC, to acquire a 99.5% working interest together with a 78% net royalty interest in the property referred to as the South Glenrock “C” Oil Field, located in Converse County, Wyoming, for the aggregate sum of $5,000,000.  Effective May 1, 2008, Muddy assigned its revenues from production to Ameriwest.

Pursuant to the agreement, partial payments are to be credited against the purchase price made by us, giving us the exclusive option to purchase the property.   The current option period will expire on June 1, 2009. We have fully impaired the value of our interest in the oil field due to our inability to accurately value such interest in accordance with Guide 2 of the Securities Act.

Period from inception, January 3, 2001 to December 31, 2008

We have incurred losses in each period since inception and have an accumulated deficit of $6,606,098 at December 31, 2008. We expect to continue to incur losses as a result of expenditures for general and administrative activities.

Liquidity and Capital Resources

As of December 31, 2008, we had cash of $51,174, and working capital deficiency of $2,268,220.  During the period ended December 31, 2008, we funded our operations from limited revenues and the proceeds of private sales of equity and convertible notes. We will need to complete further financings to provide sufficient working capital to fund our operations for at least the next 12 months. Changes in our operating plans, increased expenses, additional acquisitions, or other events, may cause us to seek additional equity or debt financing in the future. Given the current economic downturn, tight credit markets and significant drop in crude oil prices, our ability to raise additional capital or on terms favorable to us, may be significantly hampered.  If we are unable to raise the necessary capital to fund our current operations or raise such capital on terms favorable to us, it may have a significant adverse effect on our financial condition and business objectives.

For the period ended December 31, 2008, we had $603,276 used in cash flows provided by operating activities. Net cash from operating activities reflected $16,650 in prepaid expenses and deposits, $6,378 in receivable and an increase in accounts payable and due to related parties of $472,500.  Investment activities used $1,923,295 in cash during the period.

For the period ended December 31, 2008, we had $603,276 used in cash flows provided by operating activities. Net cash from operating activities reflected $16,650 in prepaid expenses and deposits, $6,378 in receivable and an increase in accounts payable and due to related parties of $472.500.  Investment activities used $1,23,295 in cash during the period.

We raised $2,280,000 during the fiscal year ended December 31, 2008 from the proceeds of convertible notes, $380,000 from the issuance of common stock, and used $82,500 for deferred financing costs.

Our current cash requirements are significant due to contemplated acquisition and planned exploration and development projects. Accordingly, we expect to continue to use cash to fund operations for at least the remaining of our fiscal year ended December 31, 2009, as we look to expand our asset base and fund exploration of our properties.

Recent Financings

Convertible notes – short term

On June 6, 2007, we received convertible loan proceeds of $66,946. The amount is unsecured and is due on demand. The principal amount bears interest at 10% per annum calculated annually. Arrears in payment of the principal or interest will bear interest at 30% per annum, calculated annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to our shares at a rate of $0.60 per unit, each unit consisting of one share of common stock and one purchase warrant. Each warrant may be exercised at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $10,528 in interest in relation to the note.

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On June 13, 2007, we received convertible loan proceeds of $150,000. The amount is unsecured and is due on demand. The principal amount bears interest at 10% per annum calculated annually. Arrears in payment of the principal or interest will bear interest at 30% per annum, calculated annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to our shares at a rate of $0.60 per unit, each unit consisting of one share of common stock and one purchase warrant. Each warrant may be exercised at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $23,301 in interest in relation to the note.

On July 3, 2007, we received loan proceeds of $100,000. The amount is unsecured and is due on demand. The principal amount bears interest at 10% per annum calculated annually. Arrears in payment of the principal or interest will bear interest at 30% per annum, calculated annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to our shares at a rate of $0.60 per unit, each unit consisting of one share of common stock and one purchase warrant. Each warrant may be exercised at $0.60 for the first year and at $0.90 for the second year. An amount of $68,489 was recorded on July 3, 2007 in additional paid-in capital, representing the relative fair value of the beneficial conversion feature in connection with the $100,000 note. At December 31, 2007, this beneficial conversion was fully amortized to interest expense.  At December 31, 2008, we accrued $14,986 in interest in relation to the note.

On August 16, 2007, we received loan proceeds of $30,000. The amount is unsecured and is due on demand. The principal amount bears interest at 10% per annum calculated annually. Arrears in payment of the principal or interest will bear interest at 30% per annum, calculated annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per unit, each unit consisting of one share of common stock and one purchase warrant. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. An amount of $20,804 was recorded on August 16, 2007 in additional paid-in capital, representing the fair value of the beneficial conversion feature in connection with the $30,000 note. At December 31, 2007, this beneficial conversion was fully amortized to interest expense. At December 31, 2008, we accrued $4,134 in interest in relation to the note.

On November 6, 2007, we received loan proceeds of $50,000. The amount is unsecured and is due on demand. The principal amount bears interest at 10% per annum calculated annually. Arrears in payment of the principal or interest will bear interest at 30% per annum, calculated annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per unit, each unit consisting of one share of common stock and one purchase warrant. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. An amount of $35,113 was recorded on November 6, 2007 in additional paid-in capital, representing the fair value of the beneficial conversion feature in connection with the $50,000 note. At December 31, 2007, this beneficial conversion was fully amortized to interest expense. At December 31, 2008, we accrued $5,767 in interest in relation to the note.

On November 20, 2007, we received loan proceeds of $50,000. The amount is unsecured and is due on demand. The principal amount bears interest at 10% per annum calculated annually. Arrears in payment of the principal or interest will bear interest at 30% per annum, calculated annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per unit, each unit consisting of one share of common stock and one purchase warrant. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. An amount of $34,952 was recorded on November 20, 2007 in additional paid-in capital, representing the fair value of the beneficial conversion feature in connection with the $50,000 note. At December 31, 2007, this beneficial conversion was fully amortized to interest expense.. At December 31, 2008, we accrued $5,575 in interest in relation to the note.

On November 26, 2007, we received loan proceeds of $10,000. The amount is unsecured and is due on demand. The principal amount bears interest at 10% per annum calculated annually. Arrears in payment of the principal or interest will bear interest at 30% per annum, calculated annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per unit, each unit consisting of one share of common stock and one purchase warrant. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. An amount of $6,882 was recorded on November 26, 2007 in additional paid-in capital, representing the fair value of the beneficial conversion feature in connection with the $10,000 note. At December 31, 2007, this beneficial conversion was fully amortized to interest expense..  . At December 31, 2008, we accrued $1,098 in interest in relation to the note.

On October 2, 2007, we received loan proceeds of $500,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 833,333 shares of our common stock in connection with this note, expiring on October 2, 2009. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $37,479 in interest in relation to the note. The convertible note is presented net of a discount of $188,098 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

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Convertible notes – long term

On March 3, 2008, we received loan proceeds of $50,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 83,333 shares of our common stock in connection with this note, expiring on March 3, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $2,490 in interest in relation to the note. The convertible note is presented net of a discount of $26,515 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years

On March 3, 2008, we received loan proceeds of $50,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 83,333 shares of our common stock in connection with this note, expiring on March 3, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $2,490 in interest in relation to the note. The convertible note is presented net of a discount of $26,515 at December 31, 2008, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years

On March 10, 2008, we received loan proceeds of $150,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 250,000 shares of our common stock in connection with this note, expiring on March 10, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $7,299 in interest in relation to the note. The convertible note is presented net of a discount of $92,756 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On March 17, 2008, we received loan proceeds of $100,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 166,667 shares of our common stock in connection with this note, expiring on March 17, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $4,751 in interest in relation to the note. The convertible note is presented net of a discount of $48,246 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

22

On March 25, 2008, we received loan proceeds of $250,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 416,667 shares of our common stock in connection with this note, expiring on March 25, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $11,548 in interest in relation to the note. The convertible note is presented net of a discount of $127,006 at December 31, 2008, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On April 15, 2008, we received loan proceeds of $300,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 500,000 shares of our common stock in connection with this note, expiring on April 15, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, 2008, we accrued $12,822 in interest in relation to the note. The convertible note is presented net of a discount of $194,189 at December 31, 2008, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On May 12, 2008, we received loan proceeds of $300,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 500,000 shares of our common stock in connection with this note, expiring on May 12, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $11,490 in interest in relation to the note. The convertible note is presented net of a discount of $169,343 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On May 15, 2008, we received loan proceeds of $100,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 166,667 shares of our common stock in connection with this note, expiring on May 15, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $3,781 in interest in relation to the note. The convertible note is presented net of a discount of $58,669 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On June 2, 2008, we received loan proceeds of $400,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 666,667 shares of our common stock in connection with this note, expiring on June 2, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $13,940 in interest in relation to the note. The convertible note is presented net of a discount of $299,967 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On July 16, 2008, we received loan proceeds of $100,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 166,667 shares of our common stock in connection with this note, expiring on July 16, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $2,762 in interest in relation to the note. The convertible note is presented net of a discount of $66,228 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

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On July 25, 2008, we received loan proceeds of $100,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 166,667 shares of our common stock in connection with this note, expiring on July 25, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $2,614 in interest in relation to the note. The convertible note is presented net of a discount of $55,282 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On August 12, 2008, we received loan proceeds of $100,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 166,667 shares of our common stock in connection with this note, expiring on August 12, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $2,318 in interest in relation to the note. The convertible note is presented net of a discount of $59,094 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On August 13, 2008, we received loan proceeds of $100,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 166,667 shares of our common stock in connection with this note, expiring on August 13, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $2,301 in interest in relation to the note. The convertible note is presented net of a discount of $59,086 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On August 18, 2008, we received loan proceeds of $100,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 166,667 shares of our common stock in connection with this note, expiring on August 18, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $2,219 in interest in relation to the note. The convertible note is presented net of a discount of $49,658 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On October 16, 2008, we received loan proceeds of $60,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.60 per share. The Company also issued a warrant to purchase 100,000 shares of our common stock in connection with this note, expiring on October 16, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year. At December 31, 2008, we accrued $750 in interest in relation to the note. The convertible note is presented net of a discount of $22,586 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

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On November 10, 2008, we received loan proceeds of $50,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.15 per share. The Company also issued a warrant to purchase 333,333 shares of our common stock in connection with this note, expiring on November 10, 2010. The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year. At December 31, 2008, we accrued $419 in interest in relation to the note. The convertible note is presented net of a discount of $48,840 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

On December 27, 2008, we received loan proceeds of $20,000. The amount is unsecured and is due in two years. The principal amount bears interest at 6% per annum calculated and payable annually. At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of the Company at a rate of $0.10 per share. The Company also issued a warrant to purchase 200,000 shares of our common stock in connection with this note, expiring on December 27, 2010. The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year. At December 31, 2008, we accrued $13 in interest in relation to the note. The convertible note is presented net of a discount of $9,409 at December 31, 2008, representing the unamortized relative fair value of the detachable warrants issued in connection with the note. This discount is being amortized to interest expense over two years.

Issuance of common stock

On June 6, 2007, we issued 5,548,000 common shares at $0.01 per share for net proceeds of $55,480.

On June 15, 2006, we issued 26,000,000 to our officers and directors pursuant to the letter of intent with CBM. On August 17, 2007, upon the termination of the letter of intent with CBM, the shares were returned to treasury for cancellation.

On October 7, 2007, we issued 1,083,334 units at a price of $0.60 per unit, for net proceeds of $650,000. Each unit consisting of one share of common stock and one share purchase warrant, each warrant exercisable at $0.60 for the first year and at $0.90 for the second year. We incurred share issue costs of $32,500 associated with this private financing.

On March 19, 2008, we issued and sold 666,668 units of our securities at a price of $0.60 per unit, for net proceeds of $400,000. Each unit consist of one share of our common stock and one share purchase warrant, each warrant is exercisable at $0.60 for the first year and at $0.90 for the second year.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as defined in Item 303(a)(4) of Regulation S-K.  

Capital Expenditures

On May 30, 2008 we acquired from Geochem, 100% working interest and 80% net royalty interest in the Skull Valley Prospect in Tooele County, Utah for the aggregate purchase price of $400,000. Additionally, we had acquisition costs which have been deferred pending closing on property acquisitions totaling $110.

The following table outlines payments due under our significant contractual obligations over the periods shown, exclusive of interest:

	Payments Due by Period
Contract Obligations At December 31, 2008	Total		Less than 1 Year		1-3 years		3-5 years		More than 5 years
Total Debt	$	0	$	0	$	0	$	0	$	0

The above table outlines our obligations as of December 31, 2008 and does not reflect any changes in our obligations that have occurred after that date.

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ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements are included following the signature page to this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9(T)A. CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer along with our Principal Financial Officer, of the effectiveness of the design of the our disclosure controls and procedures (as defined by Exchange Act Rule 13a-15(e) and 15a-15(e)) as of the end of our fiscal year pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer along with our Principal Financial Officer concluded that our disclosure controls and procedures are not effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2008.

In performing this assessment, our management identified the following material weaknesses: absence of adequate segregation of duties relating to oversight and management of our systems. In light of the conclusion that our internal control over financial reporting was not effective, our management designed a plan in the fiscal year ended December 31, 2007, intended to remediate such ineffectiveness and to strengthen our internal controls over financial reporting. Our management has implemented portions of, and is in the process of implementing the remainder of this plan through the implementation of certain remedial measures, which include:

1. Improving the control and oversight of the duties relating to the systems we use in the evaluation and processing of certain accounts and areas and in the posting and recording of journal entries into certain accounts (in which material weaknesses have been identified). We began some of these improvements in November 2007 and will continue to identify and make necessary improvements for the foreseeable future.

2. The segregation of duties relating to the processing of accounts and the recording of journal entries into certain accounts. We completed material improvements in February 2008, specifically segregating daily accounting and administrative duties to more effectively process, record, summarize and report information required to be disclosed in our periodic reports.

3. Retaining the services of an experienced chief financial officer to enhance our financial reporting capabilities. We retained an experienced chief financial officer in June 2008.

4. Establishing an audit committee comprised of independent directors. We estimate establishing such a committee in the second quarter of fiscal year 2009 after we reach a firmer financial position and complete certain key acquisitions.

While our management continues to evaluate the on-going costs of these remediation efforts, we estimate the costs of further improvements may be in excess of $300,000 per year. We believe that our improvements to date have cost approximately $100,000.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Our management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only our management’s report in this annual report.

Changes in Internal Control over Financial Reporting

No additional material remedial measures were taken during the quarter ended December 31, 2008. We have had very limited operations and there were no changes in our internal controls over financial reporting that occurred during the three months ended December 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

ITEM 9B. OTHER INFORMATION

Sale of Securities

On November 10, 2008, we issued a convertible note to a foreign accredited investor for proceeds of $50,000.  The amount is unsecured and is due in two years.  The principal amount bears interest at 6% per annum calculated and payable annually.   At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of our common stock at a rate of $0.15 per share.  We also issued a warrant to purchase 333,333 shares of our common stock in connection with this note, expiring on November 10, 2010.  The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year.    We offered and sold the convertible note in reliance on Section 506 of Regulation D and/or Regulation S of the Securities Act, and comparable exemptions for sales to “accredited” investors under state securities laws.

On December 27, 2008, we issued a convertible note to a foreign accredited investor for proceeds of $20,000.  The amount is unsecured and is due in two years.  The principal amount bears interest at 6% per annum calculated and payable annually.   At any time that the principal and interest shall remain outstanding, the lender has the right to convert such principal and interest to shares of our common stock at a rate of $0.10 per share.  We also issued a warrant to purchase 200,000 shares of our common stock in connection with this note, expiring on December 27, 2010.  The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year.    We offered and sold the convertible note in reliance on Section 506 of Regulation D and/or Regulation S of the Securities Act, and comparable exemptions for sales to “accredited” investors under state securities laws.

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Commercial Agreements

Subsequent to our fiscal year ended December 31, 2008, on February 17, 2009, we entered into an amendment to that certain Assignment of Revenues with Muddy Mineral Exploration, LLC dated May 1, 2008 whereby such assignment would automatically terminate if we apply for the appointment of a receiver, trustee, liquidator or custodian, make a general assignment for the benefit of our creditors, dissolve or liquidate, or commence a voluntary liquidation, reorganization, bankruptcy or insolvency proceeding.

Subsequent to our fiscal year ended December 31, 2008, on February 25, 2009, we entered into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation (“Wold”) where we have the right to earn up to a 100% ownership interest in oil and gas leasehold rights to approximately 320 net acres within certain land located in Natrona and Converse counties, Wyoming. We agreed to commence drilling of a test well within such lands on or before August 1, 2009. After we have drilled an initial test well to the contract depth of 8,000 feet, Wold will assign and convey to us, 100% of its interest in the drillsite spacing unit and participating area, and 65% of its operating rights in the one-half block of the land where the well was drilled.  We have the right, not the obligation, to drill an actual well within 6 months after the initial test well is drilled. We will operate the well and receive a 80% Net Revenue Interest. The Agreement will continue in effect so long as we have the right to earn the ownership interest in oil and gas leasehold rights.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

The following table sets forth the names and ages of our current directors and executive officers, the principal offices and positions held by each person:

Person	Age	Position
Walter Merschat	63	Chairman of the Board; President, Secretary and former Chief Financial Officer
Joseph McQuade	57	Chief Financial Officer
Chris D. Wright	51	Director
Jon Clement Nicolaysen	62	Director

Walter Merschat

Mr. Merschat was appointed as our President, Secretary and Chief Financial Officer effective January 29, 2008.  Prior to joining us, Mr. Merschat is the founder and has served as the President of Scientific Geochemical Services and Merschat Minerals, LLC since 1987. He gained his geochemical experience while employed by Gulf Research and Development Company (Gulf Oil Co.) with over a decade of management, execution and interpretation of geochemical programs in the Rocky Mountain West. Mr. Merschat has conducted numerous geochemical surveys for major and independent oil and gas companies on a worldwide basis. Mr. Merschat received his Masters of Science in Geology from Ohio University in 1971 and his Bachelor of Science in Geology from Ohio University in 1967.

Joseph McQuade

Mr. McQuade was appointed as our Chief Financial Officer effective June 5, 2008. Prior to joining us, Mr. McQuade has participated in the oil and gas industry in various finance, accounting and managerial roles for over 35 years. From 1981 through 1998, he served as Vice President of Finance, President or Chairman of the Board of Hawk Industries, Inc., a public oil and gas exploration company with properties in Wyoming, Utah, Colorado, Montana, New Mexico and Oklahoma. From 1998 to 2002, Mr. McQuade served as President and CEO of Allagesh Oil Company, a group of oil and gas royalty partnerships. Most recently from 2003 to the 2007, he served as Chief Financial Officer of Woodworker’s Supply, Inc. Mr. McQuade holds a Bachelor of Science degree from Brigham Young University and a Masters in Business Administration from the University of Wyoming. Additionally, he is a member of the American Institute of Certified Public Accountants and Wyoming Society of Certified Public Accountants.

Chris D. Wright

Mr. Wright was appointed to our Board on August 24, 2007.  He also served as our President from August 24, 2007 to December 7, 2007.  Mr. Wright has over 20 years of experience in finance and administrative management in both private and public companies. In 1995, he founded Velvet Exploration Ltd., an oil and gas company based in Calgary, Alberta, Canada, which later traded on the Toronto Stock Exchange. Mr. Wright served as the chairman of Velvet Exploration until it was sold to El Paso Corporation in June 2001 for Cdn. $432 million. Since 1997, Mr. Wright has been the president and CEO of First Merit Group Ltd., a private venture capital and investment firm based in Vancouver, British Columbia, Canada. Mr. Wright received a law degree from the University of Victoria in 1986 and a bachelor's degree from the University of Alberta in 1981.

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Jon Clement Nicolaysen

Mr. Nicolaysen was appointed to our Board on February 6, 2008. He has more than 40 years of experience in business, mineral development and agriculture. He has served as president of JK Minerals Inc., a private oil company for 19 years. Under his leadership, JK Minerals consolidated ownership and increased production in the historic Cole Creek Oil field northeast of Casper, Wyoming. In 2001, he became the unit operator of the Cole Creek Oil field. He also is a founding member of Wyoming Mineral Exploration, LLC, and Muddy Mineral Exploration, LLC, and used his expertise in land title and acquisition to consolidate other productive fields in the Powder River Basin of Wyoming. Two of these are the South Glenrock Block “C” unit and the Big Muddy Oil field. Mr. Nicolaysen received his Masters of Science in Business Administration from the University of Wyoming in 1970, Bachelor of Science in Business Administration from Colorado College in 1968, and was an inaugural member of the Wyoming Agriculture Leadership Program, a W.K. Kellogg Foundation-sponsored fellowship from 1984 to 1986.

Audit Committee Financial Expert

Our  Board of Directors  has not  established  a separate  audit committee within the meaning of Section  3(a)(58)(A) of the Securities  Exchange Act of 1934,  as amended  (the  "Exchange  Act").  Instead, the entire Board of Directors acts as the audit committee within the meaning of Section 3(a)(58)(B) of the  Exchange  Act. In  addition,  Chris D. Wright currently  meets  the  definition  of an "audit  committee  financial expert"  within the meaning of Item 407(d)(5) of Regulation SK. Mr. Wright and Mr. Nicolaysen are independent directors.  We are seeking further candidates for outside directors to serve on a separate audit committee when we establish one. Due to our small size and limited operations and resources, it has been difficult to recruit outside directors.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Except as previously disclosed on our annual report for the year ended December 31, 2007, and based solely upon a review of Forms 3, 4 and 5 delivered to us as filed with the Securities Exchange Commission, our executive officers and directors, and persons who own more than 10% of our Common Stock timely filed all required reports pursuant to Section 16(a) of the Securities Exchange Act.

Code of Ethics

We have adopted a Code of Ethics applicable to all employees including our principal executive officer and principal financial officer. A copy of the Code of Ethics is attached to this Report.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation

The summary compensation table below shows certain compensation information for services rendered in all capacities to us by our principal executive officer and by each other executive officer whose total annual salary and bonus exceeded $100,000 during the fiscal periods ended December 31, 2008 and December 31, 2007. Other than as set forth below, no executive officer’s total annual compensation exceeded $100,000 during our last fiscal period.

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Summary Compensation Table

										Non- Equity		Non- qualified
										Incentive		Deferred		All
						Stock		Option		Plan		Compensation		Other
		Salary		Bonus		Awards		Awards		Compensation		Earnings		Compensation		Total
Name and	Year	($)		($)		($)		($)		($)		($)		($)		($)
Principal Position (a)	(b)	(c)		(d)		(e)(2)		(f)		(g)		(h)		(i)		(j)
Walter Merschat,	2008													$	77,500	$	77,500
President, Chairman of the Board, and Former Chief Financial Officer (1)
Joseph J. McQuade,	2008	$	50,625	$	-0-	$	-0-	$	192,252	$	-0-	$	-0-	$	0	$	242,877
Chief Financial Officer (2)
Gregory Leigh Lyons,	2008	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	7,500	$	2,500
Former President, Chief Financial Officer and Director(3)	2007	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	2,500	$	2,500
Chris D. Wright,	2007	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	15,000	$	15,000
Director and Former President(4)
Dennis Mee, Former Chief Financial Officer and Director(5)	2007	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	29,680	$	29,680
Alan Charuk, Former President and Chairman of the Board(6)	2007	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-
Sam Hirji, Former President and Director (7)	2007	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-
Herbert Moeller, Former Chief Financial Officer, Secretary, Treasurer and Director (8)	2007	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-	$	-0-

(1) Merschat resigned as our Chief Financial Officer on [June 5, 2008].

(2) Mr. McQuade became our Chief Financial Officer on June 5, 2008.

(3) Mr. Lyons resigned as our President, Secretary and Treasurer on January 29, 2008 and from our Board on February 6, 2008.

(4) Mr. Wright resigned as our President on December 7, 2007.

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(5) Mr. Mee resigned as our President on August 23, 2007 and as our Chief Financial Officer, Secretary, Treasurer and Director on December 27, 2007.

(6) Mr. Charuk resigned as our President and Director on August 17, 2007.

(7) Mr. Hirji resigned as our President, Chief Executive Officer and Director on June 15, 2007.

(8) Mr. Moeller resigned as our Chief Financial Officer, Secretary, Treasurer and Director on May 28, 2007.

We entered into an employment agreement with Joseph J. McQuade on June 5, 2008 for his employment as our Chief Financial Officer. Pursuant to the terms of the employment agreement, Mr. McQuade shall receive a base salary of $7,500 per month, subject to applicable tax withholdings. After the approval of the 2008 Equity Incentive Plan and subject to Board approval, Mr. McQuade is also to receive a stock option for 500,000 shares of the our common stock, subject to a three-year vesting period. In the event that Mr. McQuade’s employment is terminated without cause, Mr. McQuade shall be eligible to receive a termination payment equal to two (2) months’ base salary.

Pursuant to a management services agreement, we incurred $2,500 in fees to Mr. Lyons for the fiscal year ended December 31, 2007.   The consulting agreement was terminated in January 2008.

Pursuant to a management services agreement, we incurred $15,000 in fees to Mr. Wright for the fiscal year ended December 31, 2007.   The consulting agreement was terminated in November 2007.

Pursuant to a management services agreement, we incurred $29,680 in fees to Mr. Mee for the fiscal year ended December 31, 2007.   The consulting agreement was terminated in December 2007.

Mr. Charuk was issued 20,000,000 shares of our common stock in consideration for his appointment as President and Director, and in accordance with the letter of intent with CBM dated June 15, 2007.  Mr. Charuk is a principal shareholder and officer of CBM.  Upon termination of the letter of intent on August 17, 2007, Mr. Charuk returned to us all of the shares previously issued to him.

There was no compensation paid to Mr. Hirji and Mr. Moeller.

Outstanding Equity Awards at Fiscal Year-End

The following table provides information about outstanding option and stock awards held by the named executive officers as of December 31, 2008. The related compensation cost of awards granted in fiscal 2008 are also disclosed in the Summary Compensation Table.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS											STOCK AWARDS
Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)		Number of Securities Underlying Unexercised Options (#) Unexercisable (c)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)		Option Exercise Price ($) (e)		Option Expiration Date (f)		Number of Shares or Units of Stock That Have Not Vested (#) (g)		Market Value of Shares or Units of Stock That Have Not Vested ($) (h)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)  (j)
Walter Merschat		-		-		-		-		-		-		-		-		-
Joseph J. McQuade		166,667		-		333,333		0.38	9/24/2018			-		-		-		-
Gregory Leigh Lyons		-		-		-		-		-		-		-		-		-
Chris D. Wright		-		-		-		-		-		-		-		-		-
Dennis Mee		-		-		-		-		-		-		-		-		-
Alan Charuk		-		-		-		-		-		-		-		-		-
Sam Hirji		-		-		-		-		-		-		-		-		-
Herbert Moeller		-		-		-		-		-		-		-		-		-

Termination Payments

Under the employment agreement entered into with Joseph McQuade, in the event that Mr. McQuade’s employment is terminated without cause, Mr. McQuade shall be eligible to receive a termination payment equal to two (2) months’ base salary.

Director Compensation

Our directors are reimbursed for actual expenses incurred in attending Board meetings.  There is no other compensation arrangement with directors, and the directors did not receive any compensation in the fiscal years ending December 31, 2008 and 2007.

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

The following table sets forth, as of February 17, 2009, the number and percentage of outstanding shares of our common stock owned by (i) each person known to us to beneficially own more than 5% of our outstanding common stock, (ii) each director, (iii) each named executive officer, and (iv) all executive officers and directors as a group. Share ownership is deemed to include all shares that may be acquired through the exercise or conversion of any other security immediately or within the next sixty days. Such shares that may be so acquired are also deemed outstanding for purposes of calculating the percentage of ownership for that individual or any group of which that individual is a member. Unless otherwise indicated, the stockholders listed possess sole voting and investment power with respect to the shares shown.

Title or Class	Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership (2)			Percent of Class
Common Stock	Walter Merschat(3)		2,000,000	(5)		3.73	%
Common Stock	Pillion Investments Ltd.(4)		4,000,000	(5)		7.46	%
Common Stock	Jon Clement Nicolaysen(3)		4,000,000	(5)		7.46	%
Common Stock	Ownership of all directors and officers as a group		10,000,000			18.42	%

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(1) Unless otherwise noted, the security ownership disclosed in this table is of record and beneficial.

(2) Under Rule 13-d under the Exchange Act, shares not outstanding but subject to options, warrants, rights, conversion privileges pursuant to which such shares may be acquired in the next 60 days are deemed to be outstanding for the purpose of computing the percentage of outstanding shares owned by the persons having such rights, but are not deemed outstanding for the purpose of computing the percentage for such other persons.

(3) Address is 123 West 1st Street, Suite 215, Casper, Wyoming 82601.

(4) Pillion Investments Ltd. is wholly-owned by Chris D. Wright, one of our directors. Address is 2410-650 West Georgia, Vancouver, British Columbia, Canada V6B4N7

(5) These shares are restricted. After these shares have been held for six months, Walter Merschat, Jon Nicolaysen and Pillion Investments Ltd. could sell 1% of the outstanding stock in Ameriwest every three months. Therefore, this stock can be sold after the expiration of six months in compliance with the provisions of Rule 144. There are “stock transfer” instructions placed against these certificates and a legend has been imprinted on the stock certificates themselves.

We do not know of any other shareholder who has more than 5 percent of the issued shares.

There are no voting trusts or similar arrangements known to us whereby voting power is held by another party not named herein. We know of no trusts, proxies, power of attorney, pooling arrangements, direct or indirect, or any other contract arrangement or device with the purpose or effect of divesting such person or persons of beneficial ownership of our common shares or preventing the vesting of such beneficial ownership.

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

Related Party Transactions

Our board of directors has adopted a code of ethics, which prohibits conflicts of interest between a director, officer or employee and the Company. The code requires directors, officers and employees to inform the Company of any transaction that involves related parties and that may give rise to a conflict of interest. Our board reviews related party transactions on an ongoing basis to prevent conflicts of interest. Our board reviews a transaction in light of the affiliations of the director, officer or employee and the affiliations of such person’s immediate family. Transactions are presented to our board for approval before they are entered into or, if this is not possible, for ratification after the transaction has occurred. If our board finds that a conflict of interest exists, then it will determine the appropriate remedial action, if any. Our board approves or ratifies a transaction if it determines that the transaction is consistent with the best interests of the Company.

Our President and Chairman, Walter Merschat, owns fifty percent of Muddy Minerals, LLC, a Wyoming corporation that holds 99.5% working interest in the South Glenrock “C” oil field in Converse County, Wyoming. As previously disclosed in a current report on Form 8-K filed with the SEC on August 27, 2007, we entered into an agreement and subsequent amendments to acquire such interest for $4,000,000. Mr. Merschat’s interest if we conclude the acquisition would be approximately $2,000,000. On May 1, 2008, Muddy assigned all of its ongoing revenues from such oil field to us.  In addition, Mr. Merschat is the sole owner of Geochem Exploration, LLC, a Wyoming limited liability company that holds 100% working interest in the Skull Valley Prospect in Tooele County, Utah. As previously disclosed in a current report on Form 8-K filed with the SEC on June 2, 2008, we acquired such interest for $400,000.

One of our directors, Jon Clement Nicolaysen, owns fifty percent of Muddy Minerals, LLC, a Wyoming corporation that holds 99.5% working interest in the South Glenrock “C” oil field in Converse County, Wyoming. As previously disclosed in a current report on Form 8-K filed with the SEC on August 27, 2007, the Company entered into an agreement and subsequent amendments to acquire such interest for $4,000,000. Mr. Nicolaysen’s interest if the Company concludes the acquisition would be approximately $2,000,000. On May 1, 2008, Muddy assigned all of its ongoing revenues from such oil field to us.

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We entered into an employment agreement with our Operations Manager, Reed Merschat effective August 15, 2008.  Mr. Merschat is a child of our President and Chairman.  Under the terms of the agreement, we agreed to compensate Mr. Merschat $7,000 per month.  Additionally, on September 24, 2008, our Board granted him the option to purchase 500,000 shares of our common stock at an exercise price of $0.38 vesting in equal portions over 2 years.

Director Independence

During 2008, our board of directors evaluated all business relationships between the Company and the Company’s non-employee directors and all other relevant facts and circumstances and, as required by our Code of Ethics, determined that each such director is an independent director as defined by the standards for director independence established by applicable laws, rules, and listing standards including, without limitation, the standards for independent directors established by The New York Stock Exchange, Inc., The NASDAQ National Market, and the Securities and Exchange Commission.

Subject to some exceptions, these standards generally provide that a director will not be independent if (a) the director is, or in the past three years has been, an employee of ours; (b) a member of the director’s immediate family is, or in the past three years has been, an executive officer of ours; (c) the director or a member of the director’s immediate family has received more than $120,000 per year in direct compensation from us other than for service as a director (or for a family member, as a non-executive employee); (d) the director or a member of the director’s immediate family is, or in the past three years has been, employed in a professional capacity by Malone & Bailey, PC, the Company’s independent public accountants, or has worked for such firm in any capacity on the Company’s audit; (e) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where one of our executive officers serves on the compensation committee; or (f) the director or a member of the director’s immediate family is an executive officer of a company that makes payments to, or receives payments from, us in an amount which, in any twelve-month period during the past three years, exceeds the greater of $1,000,000 or two percent of that other company’s consolidated gross revenues.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table shows the fees paid or accrued by us for the audit and other services provided by Cordovano and Honeck, LLP for the fiscal periods shown.

	December 31, 2008		December 31, 2007
Audit Fees	$		$	12,490
Audit — Related Fees		—		—
Tax Fees	__			—
All Other Fees		—		—
Total	$		$	12,490

The following table shows the fees paid or accrued by us for the audit and other services provided by Malone & Bailey, PC for the fiscal periods shown.

	December 31, 2008		December 31, 2007
Audit Fees	$	94,000	$	15,000
Audit — Related Fees				—
Tax Fees				—
All Other Fees				—
Total	$		$	15,000

Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements

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In the absence of a formal audit committee, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of the audit, audit-related and tax services performed by the independent registered public accounting firm in fiscal 2008. The percentage of hours expended on the principal accountant's engagement to audit the Company's financial statements for the most recent fiscal year that were  attributed to work performed by persons other than the principal accountant's full-time, permanent employees was 0%.

36

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibits

The following exhibits are included as part of this report by reference:

3.1(1)	Articles of Incorporation, as amended
3.2(2)	Bylaws
10.1(3)	Assignment Agreement dated August 24, 2007 between South Sea Energy Corp. and Pin Petroleum Partners Ltd.
10.3(5)	Management and governance consultant agreement between Ameriwest Energy Corp. and Sound Energy Advisors LLC, dated December 21, 2007.
10.4(5)	Settlement Agreement dated January 14, 2008
10.5(5)	Settlement Agreement dated January 23, 2008
10.6(5)	Settlement Agreement dated January 23, 2008
10.7(5)	Finder’s Fee Agreement dated March 1, 2008
10.8(6)	Exclusive Option to Purchase dated March 19, 2008 with Hot Springs Resources, Ltd.
10.9(7)	Exclusive Option to Purchase dated April 15, 2008 with Alpha Development Corporation and JK Minerals, Inc.
10.10(8)	Settlement Agreement dated April 16, 2008 with Penson Financial Services Canada, Fordham Financial Management, Inc., First Clearing LLC and Penson Financial Services, Inc.
10.11(9)	Assignment of Revenues dated May 1, 2008 with Muddy Minerals Exploration, LLC
10.12(10)	Purchase and Sale Agreement dated May 30, 2008 with Geochem Exploration, LLC
10.13(10)	Third Amendment to LOI dated May 31, 2008 with Muddy Minerals Exploration, LLC
10.14(11)	Employment Agreement dated June 5, 2008 with Joseph J. McQuade
10.15(12)	Farmout and AMI Agreement dated August 21, 2008 with Tyler Rockies Exploration Ltd.
10.16	Fourth Amendment to LOI dated September 1, 2008 with Muddy Mineral Exploration, LLC
10.17(13)	2008 Equity Incentive Plan
10.18	Amendment No. 1 to Assignment of Revenues, dated February 17, 2009

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10.19	Farmout Agreement dated February 25, 2009 with Wold Oil Properties, Inc.
10.20(14)	Agreement to Operate South Glenrock and Extension of Purchase Agreement dated March 30, 2009 with Muddy Mineral Exploration, LLC
14.1	Code of Ethics
16(4)	Letter regarding change in certifying accountant.
99.1	Rule 13(a) — 14(a)/15(d) — 14(a) Certification (Principal Executive Officer)
99.2	Rule 13(a) — 14(a)/15(d) — 14(a) Certification (Principal Financial Officer)
99.3	Section 1350 Certifications

(1) Incorporated by reference from Registration Statement on Form SB-2 filed on February 1, 2005, Form 8-K filed on June 19, 2007, and Form 8-K filed on August 27, 2007.

(2) Incorporated by reference from Registration Statement on Form SB-2 filed on February 1, 2005.

(3) Incorporated herein by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K, filed on August 27, 2007.

(4) Incorporated herein by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K, filed on December 6, 2007.

(5) Incorporated herein by reference to exhibits previously filed on Registrant’s Annual Report on Form 10-K, filed on April 15, 2008.

(6) Incorporated by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K filed on March 19, 2008.

(7) Incorporated by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K filed on April 17, 2008.

(8) Incorporated by reference to exhibits previously filed on Registrant’s Quarterly Report on Form 10-Q filed on May 15, 2008.

(9) Incorporated by reference to exhibits previously filed on Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2008.

(10) Incorporated by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K filed on June 2, 2008.

(11) Incorporated by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K filed on June 9, 2008.

(12) Incorporated herein by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K filed on August 27, 2008.

(13) Incorporated herein be reference to exhibits previously filed on Registrant’s definitive revised proxy statement on Schedule 14A filed on August 11, 2008 for the Annual Meeting held on September 2, 2008.

(14) Incorporated herein by reference to exhibits previously filed on Registrant’s Current Report on Form 8-K filed on April 2, 2009.

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SIGNATURES

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

AMERIWEST ENERGY CORP.
Dated: April 17, 2009	/s/ Walter Merschat
	By: Walter Merschat
	Its: President and Chairman of the Board (Principal Executive Officer)
Dated: April 17, 2009	/s/ Joseph J. McQuade
	By: Joseph J. McQuade
	Its: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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

Signature	Capacity	Date
/s/Walter Merschat	Director	April 17, 2009
Walter Merschat
/s/Chris D. Wright	Director	April 17, 2009
Chris D. Wright
/s/Jon Clement Nicolaysen	Director	April 17, 2009
Jon Clement Nicolaysen

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Ameriwest Energy Corp.

Index to Financial Statements

December 31, 2008

INDEX

	Page
Independent Registered Public Accounting Firms’ Reports	F-42
Financial Statements
Balance Sheets	F-43
Statements of Operations	F-44
Statements of Stockholder’s Deficiency	F-45
Statements of Cash Flows	F-46
Notes to Financial Statements	F-47

40

Ameriwest Energy Corp.

Financial Statements

December 31, 2008

F-41

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Ameriwest Energy Corporation

We have audited the accompanying balance sheets of Ameriwest Energy Corporation, (“Ameriwest”) as of December 31, 2008 and 2007 and the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for the two years then ended. These financial statements are the responsibility of Ameriwest’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the  financial statements referred to above present fairly, in all material respects, the  financial position of Ameriwest as of December 31, 2008 and 2007 and the  results of its operations and its cash flows for the two years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that Ameriwest will continue as a going concern. As discussed in Note 3 to the financial statements, Ameriwest has negative working capital and suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MALONE & BAILEY, PC

www.malone-bailey.com

Houston, Texas

April 15, 2009

F-42

Ameriwest Energy Corp.

(A Development Stage Company)

Balance Sheets

	December 31, 2008			December 31, 2007
ASSETS
Current
Cash	$	51,174		$	245
Receivable		6,378			-
Prepaid expenses and deposit		27,005			10,355
Total current assets		84,557			10,600
Furniture & equipment, net		4,419			-
Oil and gas properties		-			-
Deferred acquisition costs		-			1,758,653
Restricted cash - reclammation bond		100,000			-
Deferred financing costs		64,116			-
Total assets	$	253,092		$	1,769,253
LIABILITIES and SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities	$	1,021,821		$	753,640
Due to related parties		377,722			-
Interest on convertible notes		184,386			26,968
Current portion of convertible notes, net of discount		768,848			456,946
Total current liabilities		2,352,777			1,237,554
Long term portion of convertible notes, net of discount		893,127			61,560
Asset retirement obligation, net		32,860			-
STOCKHOLDERS' EQUITY
Capital stock 720,000,000 common stock authorized, $0.001 par value 54,278,002 and 53,611,334 shares outstanding at December 31, 2008 and 2007, respectively		54,278			53,611
Additional paid-in capital		3,526,148			1,390,980
Deficit accumulated during development stage		(6,606,098	)		(974,452	)
Total stockholders' equity (deficit)		(3,025,672	)		470,139
Total liabilities and stockholders' equity	$	253,092		$	1,769,253
Commitment and legal claim (notes 12 and 13)

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

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Ameriwest Energy Corp.

(A Development Stage Company)

Statements of Operations

For the Years Ended December 31, 2008 and 2007

And for the Period from January 3, 2001 [Inception] to December 31, 2008

	December 31,						Cumulative from January 3, 2001 [Inception] to
	2008			2007			December 31, 2008
Operator fees, Net	$	28,318		$	-		$	$28,318
Expenses
Contribution rent		-			1,650			41,250
Contribution services		-			5,534			45,621
Compensation		295,272			49,214			344,486
Acquisition and exploration costs		3,925,066			183,230			4,126,761
Marketing and investor relations		249,145			148,276			397,421
Accretion of asset retirement obligation		2,684			-			2,684
Office, general and administrative expenses		175,566			36,789			218,929
Professional fees		319,357			135,890			507,777
Total operating expenses		(4,967,090	)		(560,583	)		(5,941,542	)
Net income (loss) from operations		(4,938,772	)		(560,583	)		(5,913,224	)
Interest income		83			-			83
Interest expense		(692,957	)		(254,768	)		(947,725	)
Net loss for the period	$	(5,631,646	)	$	(815,351	)	$	(6,606,098	)
Loss per share - basic and diluted	$	(0.10	)	$	(0.01	)
Weighted Average Shares Outstanding		54,087,525			54,903,262

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

F-44

Ameriwest Energy Corp.

(A Development Stage Company)

Statement of Shareholders' Equity (Deficit)

For the period from January 3, 2001 [Inception] to December 31, 2008

									Deficit
									Accumulated
							Additional		during			Total
	Common Stock						Paid-In		Exploration			Stockholder's
	Shares			Amount			Capital		Stage			Equity
Balance, December 31, 2006		46,980,000		$	46,980		$	51,207	$	(159,101	)	$	(60,914	)
Contributed rent and services								7,184					7,184
Stock issued for cash at $0.01		5,548,000			5,548			49,932					55,480
Stock issued for cash to related parties at $0.001		26,000,000			26,000								26,000
Discounts and beneficial conversion features on convertible notes								666,240					666,240
Stock returned to treasury		(26,000,000	)		(26,000	)							(26,000	)
Stock issued for cash at $0.60, net of offering costs of $32,500		1,083,334			1,083			616,417					617,500
Net loss for the year										(815,351	)		(815,351	)
Balance, December 31, 2007		53,611,334			53,611			1,390,980		(974,452	)		470,139
Stock issued for cash at $0.60, net of offering costs of $20,000		666,668			667			379,333					380,000
Discounts and beneficial conversion features on convertible notes								1,643,687					1,643,687
Stock based compensation								112,147					112,147
Net loss for the period										(5,631,646	)		(5,631,646	)
Balance, December 31, 2008		54,278,002			54,278			3,526,147		(6,606,098	)		(3,025,673	)

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

F-45

Ameriwest Energy Corp.

(A Development Stage Company)

Statements of Cash Flows

For the Years Ended December 31, 2008 and 2007

And for the Period from January 3, 2001 [Inception] to December 31, 2008

	December 31,							Cumulative from January 3, 2001 [Inception] to
	2008			2007				December 31, 2008
Cash Flows from Operating Activities
Net loss from operations	$	(5,631,646	)	$	(815,351	)	$	(6,606,098	)
Items not affecting cash:
- write-off of deferred acquisition costs		3,925,066			183,230			4,108,296
- contributed rent and services		-			7,184			94,055
- amortization of debt discount		507,156			254,768			761,924
- amortization of deferred financing costs		28,384						28,384
- depreciation		3,461			-			3,461
- accretion of asset retirement obligation		2,684			-			2,684
- stock based compensation		112,147			-			112,147
Changes in non-cash working capital balances related to operations:
- prepaid expenses and deposits		(16,650	)		(8,855	)		(27,005	)
- receivable		(6,378	)		-			(6,378	)
- due to related parties		177,722						177,722
- accounts payable and accrued expenses		294,778			727,341			1,048,417
Cash Flows from Operating Activities		(603,276	)		348,317			(309,575	)
Cash flows from Investing Activities
Acquisition of furniture and equipment		(4,998	)		-			(4,998	)
Cash paid for reclammation bond		(100,000	)		-			(100,000	)
Cash refunded for deferred acquisition costs		22,286			26,000			48,286
Cash paid for acquisition costs		(1,840,583	)		(1,967,883	)		(3,808,466	)
Cash Flows Provided from Investing  Activities		(1,923,295	)		(1,941,883	)		(3,865,178	)
Cash flows from Financing Activities
Proceeds from convertible notes		2,280,000			956,946			3,236,946
Proceeds from related party debt		-			(36,047	)		(36,047	)
Debt issuance costs		(82,500	)		-			(82,500	)
Cash overdraft		-			(68	)		(68	)
Proceeds from issue of common stock		380,000			672,980			1,071,480
Cash Flows from Financing  Activities		2,577,500			1,593,811			4,225,926
Net increase (decrease) in cash		50,929			245			51,174
Cash, beginning of period		245			-			245
Cash, end of period	$	51,174		$	245		$	51,419
SUPPLEMENTAL CASH DISCLOSURES
Cash paid for:
Income taxes	$	-		$	-		$	-
Interest	$	-		$	-		$	-
SUPPLEMENTAL NON-CASH DISCLOSURES
Asset retirement liability	$	30,176		$	-		$	30,176
Acquisition costs included in accounts payable and related party accounts payable	$	330,822						330,822
Discount on convertible notes from beneficial conversion features	$	1,643,688		$	-		$	1,643,688

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

F-46

Ameriwest Energy Corp.

(A Development Stage Company)

Notes to Financial Statements

December 31, 2008

1.    Nature of operations

Ameriwest Energy Corp. was incorporated in Nevada on January 3, 2001 under the name Henley Ventures Inc. for the purpose of acquiring and developing mineral properties. No minerals were discovered on the properties.  During the year ended December 31, 2007, Ameriwest changed its business and commenced concentrating on the acquisition, exploration, development and production of oil and gas assets.  On August 28, 2007, Ameriwest changed its name to Ameriwest Energy Corp.

2. Summary of significant accounting policies

The financial statements of Ameriwest have been prepared in accordance with generally accepted accounting principles in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which have been made using careful judgment.  Actual results may vary from these estimates.

The financial statements have, in management’s opinion, been properly prepared within the framework of the significant accounting policies summarized below:

a. Deferred financing costs

Costs directly associated with issuance of equity are deferred until Ameriwest has issued the shares of common stock.  Costs directly associated with the issuance of debt are capitalized and amortized over the term of the note using the interest method.

b. Full costs method

Ameriwest uses the full cost method of accounting for exploration and development activities as defined by SEC Regulation S-X Rule 4-10. Under this method of accounting, the costs of unsuccessful, as well as successful, exploration and development activities are capitalized as property and equipment. This includes any internal costs that are directly related to exploration and development activities but does not include any costs related to production, general corporate overhead or similar activities. Gain or loss on the sale or other disposition of oil and gas properties is not recognized, unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and natural gas attributable to a country. The application of the full cost method of accounting for oil and gas properties generally results in higher capitalized costs and higher depreciation and amortization rates compared to the successful efforts method of accounting for oil and gas properties.

Costs excluded

Properties and equipment include costs that are excluded from costs being depreciated or amortized. Oil and gas costs excluded represent investments in unproved properties and major development projects in which we own a direct interest. These unproved property costs include nonproducing leasehold, geological and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. Ameriwest excludes these costs on a country-by-country basis until proved reserves are found or until it is determined that the costs are impaired. All costs excluded are reviewed at least quarterly to determine if impairment has occurred.

The amount of any impairment is transferred to the capitalized costs being amortized (the depletion, depreciation and amortization) or a charge is made against earnings for those international operations where a reserve base has not yet been established. Impairments transferred to the depletion, depreciation and amortization increase the depletion, depreciation and amortization rate for that country. For international operations where a reserve base has not yet been established, an impairment requiring a charge to earnings may be indicated through evaluation of drilling results, relinquishing drilling rights or other information.

At December 31, 2008 and 2007, Ameriwest’s oil and gas interests and deferred acquisitions costs were located in one geographical segment, being the United States of America.

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Ceiling test

The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. Under full cost accounting rules for each cost center, capitalized costs of unproved and proved properties, less accumulated amortization and related deferred income taxes, shall not exceed an amount (the "cost ceiling") equal to the sum of (a) the present value of future net cash flows from estimated production of proved oil and gas reserves, based on current economic and operating condition, discounted at 10 percent, plus (b) the cost of properties not being amortized, plus (c) the lower of cost or estimated fair value of any unproved properties included in the costs being amortized, less (d) any income tax effects related to differences between the book and tax basis of the properties involved. If capitalized costs exceed this limit, the excess is charged as an impairment expense. At December 31, 2008, Ameriwest has reviewed these capitalized costs for impairment and determined that the total costs were subject to impairment.

Amortization

Capitalized costs within a cost center amortized on the unit-of-production basis using proved oil and gas reserves include: (i) all capitalized costs, less accumulated amortization; (ii) the estimated future expenditures (based on current costs) to be incurred in developing proved reserves; and (iii) estimated dismantlement and abandonment costs, net of estimated salvage values.  Capitalized costs subject to amortization do not include the excluded costs as described above.

c. Stock based compensation

Ameriwest recognizes stock based compensation expense and other forms of employee equity compensation in accordance with SFAS No. 123R, Share-Based Payment, as interpreted by SEC Staff Accounting Bulletin No. 107.

d. Recent accounting pronouncements

In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in computing earnings per share under the two-class method described in SFAS No. 128, “Earnings Per Share.” FSP EITF 03-6-1 is effective for the Company as of January 1, 2009 and in accordance with its requirements it will be applied retrospectively. The Company does not expect the adoption of FSP EITF 03-6-1 to have a material impact on its consolidated financial statements.  In December 2008, the Securities and Exchange Commission (“SEC”) adopted the final rules regarding amendments to current oil and gas reporting requirements. The amendments are designed to modernize and update the oil and gas disclosure requirements to align them with current practices and changes in technology. The amendments are effective for annual reports on Form 10-K for fiscal years ending on or after December 31, 2009. The Company is currently evaluating the impact of the amendments on its consolidated financial position, results of operations and cash flows.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”, which identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States of America (the GAAP hierarchy).  This Statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”.  The Company does not expect adoption of SFAS 162 to have a material effect on its financial statements or related disclosures.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133”.  SFAS 161 requires entities that utilize derivative instruments to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as any details of credit-risk-related contingent features contained within derivatives.  SFAS 161 also requires entities to disclose additional information about the amounts and location of derivatives located within the financial statements, how the provisions of SFAS 133 has been applied, and the impact that hedges have on an entity’s financial position, financial performance, and cash flows.  SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged.  The Company currently does not anticipate the adoption of SFAS 161 will have a material impact on the disclosures already provided.

In December 2007, the FASB issued SFAS No. 141R, “Business Combinations,” which revises SFAS No. 141 and changes multiple aspects of the accounting for business combinations. SFAS No. 141R requires the acquirer to recognize most identifiable assets acquired, liabilities assumed, and non-controlling interests in the acquiree at their full fair value on the acquisition date. Goodwill is to be recognized as the excess of the consideration transferred plus the fair value of the non-controlling interest over the fair values of the identifiable net assets acquired. Subsequent changes in the fair value of contingent consideration classified as a liability are to be recognized in earnings, while contingent consideration classified as equity is not to be re-measured. Costs such as transaction costs are to be excluded from acquisition accounting, generally leading to recognizing expense and additionally, restructuring costs that do not meet certain criteria at acquisition date are to be subsequently recognized as post-acquisition costs. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company is currently evaluating the impact that this issuance will have on its financial position and results of operations.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157 “Fair Value Measurements”, which provides expanded guidance for using fair value to measure assets and liabilities. SFAS 157 establishes a hierarchy for data used to value assets and liabilities, and requires additional disclosures about the extent to which a company measures assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. Implementation of SFAS 157 is required on January 1, 2008. The adoption of SFAS 157 did not have a material impact on Ameriwest’s results of operations or financial position.

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e. Asset retirement obligation

Ameriwest recognizes asset retirement obligations in accordance with FAS No 143 Accounting for Asset Retirement Obligation.  The fair value of a liability is recorded for an asset retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made.  The carrying amount of the related long-lived asset is increased by the same amount as the liability.  Changes in the liability for an asset retirement obligation due to the passage of time is measured by applying an interest method of allocation.  The amount is recognized as an increase in the liability and an accretion expense in the statement of operations.  Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease to the carrying amount of the liability and the related long-lived asset.

f. Revenue and cost recognition

Ameriwest uses the sales method of accounting for oil revenues. Under this method, revenues are recognized based on the actual volumes of oil sold to purchasers. The volume sold may differ from the volumes to which the Company is entitled based on its interest in the properties. Costs associated with production are expensed in the period incurred.  Operator fees for the year ended December 31, 2008 are recorded net of lease operating expenses, production taxes and royalties.

g. Use of estimates

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing financial statements, Ameriwest makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, Ameriwest reviews its estimates, including those related to such potential matters as litigation, environmental liabilities, income taxes, determination of proved reserves of oil and gas and asset retirement obligations.  Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

h. Impairment of long lived assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets, the carrying value of intangible assets and other long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment.  Ameriwest recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset.  Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.  Oil and gas properties accounted for using the full cost method of accounting; a method utilized by Ameriwest, is excluded from this requirement, but will continue to be subject to the ceiling test limitations.  There were $3,925,066 in impairment losses in 2008 and $nil in 2007.

F-49

i. Convertible instruments

When Ameriwest issues convertible debt with detachable instruments, it allocates the proceeds received on a relative fair value basis pursuant to EITF Issue No. 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios “.  Then, it applies the amount allocated to the convertible instrument, and an effective conversion price is calculated and used to measure the intrinsic value, if any, of the embedded conversion option.  The intrinsic value of the embedded conversion option and the relative fair value of the detachable instruments are recorded as discounts to the convertible debt and amortized over the term of the debt.

When Ameriwest issues convertible debt with non-detachable instruments, the intrinsic value of the conversion option is computed based on a comparison of the proceeds of the convertible instrument allocated to the common stock portion of the conversion option and the fair value at the commitment date of the common stock to be received by the holder upon conversion pursuant to EITF Issue No. 00-27 Application of Issue No. 98-5 to Certain Convertible Instruments”. The excess of the fair value of the common stock at the commitment date over proceeds is the intrinsic value of the embedded conversion option that is recognized by Ameriwest at the issuance date for the convertible debt.  The intrinsic value of the embedded conversion option is recorded as a discount to the convertible debt and amortized over the term of the debt.

3. Going concern

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that Ameriwest will be able to meet its obligations and continue its operations for the next twelve months.  Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should Ameriwest be unable to continue as a going concern.  At December 31, 2008, Ameriwest has not yet achieved profitable operations, has accumulated losses, has a working capital deficiency and expects to incur further losses in the development of its business, all of which casts substantial doubt about Ameriwest’s ability to continue as a going concern. Ameriwest’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Ameriwest expects to continue to incur substantial losses and will require substantial capital to execute its business plan and does not expect to attain profitability in the near future.  Since its inception, Ameriwest has funded operations through short-term borrowings and equity investments in order to meet its strategic objectives.  Ameriwest's future operations are dependent upon external funding and its ability to execute its business plan, realize sales and control expenses.  Management believes that sufficient funding will be available from additional borrowings and private placements to meet its business objectives including anticipated cash needs for working capital, for a reasonable period of time.  However, there can be no assurance that Ameriwest will be able to obtain sufficient funds to continue the development of its business operation.

4. Financial instruments and concentrations of risk

a. Credit risk

Ameriwest maintains cash deposits with financial institutions, which from time to time may exceed federally insured limits. Ameriwest has not experienced any losses in connection with these deposits and believes it is not exposed to any significant credit risk from cash.

F-50

b. Fair values

Financial instruments that are subject to fair disclosure requirements are carried in the financial statements at amounts that approximate fair value and include cash, accounts payable and accrued expenses and notes payable.  Fair values are based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of risk.

c. Liquidity risk

Ameriwest is exposed to liquidity risk as its continued operations are dependent upon obtaining additional capital or achieving profitable operations to satisfy its liabilities as they come due.

d. Major customer

All of Ameriwest’s revenue for the year ended December 31, 2008 was from one customer.

5. Oil and gas interests

a. Skull Valley, Utah

On May 30, 2008, Ameriwest entered into a Purchase and Sale Agreement with Geochem Exploration, LLC, which was based on a Letter of Intent dated November 6, 2007, as amended on March 14, 2008.  Ameriwest acquired an undivided working interest and an eighty percent (80%) net royalty interest in and to the Skull Valley Prospect in Tooele County, Utah, in consideration for an aggregate sum of $400,000, paid as follows:

i. $100,000 paid on November 29, 2007;

ii. $300,000 paid on May 16, 2008.

Pursuant Pursuant to SEC Regulation S-X Rule 3-05 and 11-01 and ETIF 98-3: Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business, Ameriwest determined that the acquisition did not constitute a business combination. The Skull Valley Prospect was a non-producing asset and not in the development stage. As such, the transaction is treated as an acquisition of assets.

By agreement dated August 25, 2008, Geochem and Ameriwest have agreed to extend the obligation to spud, drill and complete a well to November 30, 2008, in consideration for an extension payment of $200,000, due November 30, 2008.

As of December 31, 2008, Ameriwest had incurred $110 in deferred exploration costs associated with authorization for expenditures work (“AFE”).  This sum, in addition to the $400,000 of acquisition costs, has been written down for impairment.

b. Geary Prospect, Wyoming

On August 21, 2008, Ameriwest entered into a farmout and area of mutual interest agreement with Tyler Rockies Exploration, Ltd. (“Tyler”) where in consideration for $50,000, Ameriwest has the right to earn up to a 50% ownership interest in oil and gas leasehold rights to approximately 2,800 gross acres within the Geary Prospect lands located in Natrona and Converse counties, Wyoming.   Under the terms of the agreement, Ameriwest agreed to commence drilling of a well on or before May 1, 2009.  Upon drilling 3 wells to the contract depth of the Dakota Formation, Tyler will assign and convey 50% of its interest to Ameriwest.    Ameriwest will operate the wells and receive a 75% Net Revenue Interest.  After payout, on a well by well basis, Tyler will have the option to back in by furnishing 25% of the actual drilling and completion costs, earning a 25% working interest. If Tyler opts to back in at a 25% working interest, a 21.125% Net Revenue Interest would be earned.

As of December 31, 2008, $50,000 has been paid to Tyler pursuant to the farmout agreement.  Ameriwest has incurred $3,649 in deferred exploration costs associated with legal and surveying work.  These costs have been written down for impairment.

F-51

c. South Glenrock C Field, Wyoming

On August 24, 2007 and as amended on March 19, 2008, on May 31, 2008 and on September 1, 2008, Ameriwest entered into a letter of intent with Pin Petroleum Partners Ltd. and Muddy Minerals, LLC, to acquire a 99.5% working interest together with a 78% net royalty interest in the property referred to as the South Glenrock “C” Oil Field, located in Converse County, Wyoming, for the aggregate sum of $5,000,000, payable to Muddy as follow:

i. $500,000 payable on or before July 15, 2007 (paid by Pin on behalf of Ameriwest);

ii. $500,000 payable on or before September 1, 2007 (paid);

iii. $750,000 payable on or before October 1, 2007 (paid);

iv. $3,250,000 payable on or before December 15, 2008.

Most of the oil and gas properties which are the subject of the letter of intent are non-producing.   In addition, Ameriwest agreed to pay to Muddy $400,000 ($200,000 paid) as consideration for providing extensions on the payment dates as well as for interest on the balance due.  The terms of the acquisition, as amended, are subject to the parties entering into a definitive agreement on or before December 15, 2008.  Since the parties have not yet entered into a definitive agreement, Ameriwest has not recorded obligations or accruals totaling $3,450,000, representing the unpaid amounts pursuant to the letter of intent, as amended, including $200,000 for extension fees.

Ameriwest has accrued $550,000 payable to Pin pursuant to this agreement.

Effective May 1, 2008, Muddy has assigned its revenues from production to Ameriwest.  These revenues, amounting to $135,169, are presented in the statement of operations, net of operating taxes of $22,093 and lease operating expenses amounting to $81,658.

On May 6, 2008, Ameriwest posted a $100,000 reclamation bond with the Office of State Lands and Investments of Wyoming.  The funds are being held in trust by the State, accruing interest at 1.23% per annum.

As of December 31, 2008, $410,129 of the acquisition costs incurred to date have been allocated to oil and gas properties for the value of the three producing wells.  Deferred exploration costs of $161,947 associated with the preparation of reservoir evaluation are also included in oil and gas properties on the balance sheet.   These costs, in addition to the remaining of $1,800,000 in costs accrued to December 31, 2008, have been written down for impairment.

6. Deferred Acquisition Costs – Potential Acquisitions

a. Burke Ranch, Wyoming

On March 19, 2008, Ameriwest entered into an option agreement with Hot Springs Resources, Ltd.,  to purchase certain assets of Hot Springs, including: (i) wells, well bores, leases, contracts, records, books, equipment, buildings, etc., and (ii) not less than a working interest of 95% at a 79.9% net revenue interest in certain acreage inside the Burke Ranch Unit, a working interest of 100% at a 82% net revenue Interest in leases outside of the Burke Ranch Unit and all of Hot Springs’ interest in a leasehold attached to or held by Unit, other formations and hydrocarbon substances, for the issuance of 400,000 shares of common stock and the aggregate sum of $4,280,000, payable as follows:

i. $50,000 payable upon execution of option agreement (paid);

ii. $50,000 payable on or before May 18, 2008 (paid);

iii. $4,180,000 payable within 45 days after the exercise of Ameriwest’s option, concurrent with the issuance of the 400,000 shares of common stock.

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All of the oil and gas properties which are the subject of the option agreement are non-producing.  Upon its expiration on July 17, 2008, Ameriwest has extended this option for an additional 60 calendar days in consideration for $100,000.  Ameriwest may extend the option for 2 additional 30 calendar days periods in consideration of $100,000 for each additional 30 calendar day period, with half the option extension fees creditable against the purchase price.  On September 17, 2008, the parties entered into a verbal agreement to renegotiate the terms of the option when financing for the project is available.

As of December 31, 2008, the first two payments of $50,000 each have been made to Hot Springs pursuant to the option agreement, in addition to the payment of $100,000 for a first extension.  Ameriwest had incurred $1,090 in deferred exploration costs associated with legal work.  These costs are included in deferred acquisition costs have been written down for impairment.

b. Cole Creek, Wyoming

On April 15, 2008, and as amended on June 25, 2008, Ameriwest entered into an exclusive option agreement with Alpha Development Corporation and JK Minerals, Inc. (collectively, “Alpha”) to purchase certain assets of Alpha, including: (i) wells, well bores, leases, contracts, records, books, equipment, buildings, etc., of the Cole Creek Unit and adjacent leases; and (ii) Alpha’s working and net revenue interests in and to all formations that are below the base of the Shannon Formation, for the aggregate purchase price of $10,000,000.

In consideration for the option, Ameriwest agreed to pay option fees of $400,000, payable as follows:

iv. $200,000 payable on April 15, 2008 (paid);

v. $200,000 payable on June 16, 2008 (paid);

vi. $200,000 payable on August 16, 2008 (paid);

vii $150,000 payable on September 17, 2008.

Upon the expiration of the second option period on August 18, 2008, Ameriwest extended this option for an additional 30 calendar days in consideration for $200,000.  Upon the expiration of the extension of the second option period, Ameriwest could have extended the closing date from September 17, 2008 to October 30, 2008 in consideration for $150,000.  However, Ameriwest did not further extend its option, and on September 17, 2008, all option and extension payments were forfeited by Alpha.  Accordingly, as of December 31, 2008, Ameriwest had incurred $600,000 in options and extension fees, and $270,846 in deferred exploration costs associated with reservoir valuation.  These costs are included in deferred acquisition costs have been written down for impairment.

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7. Convertible notes

a. Short-term convertibles notes

Short term convertible notes payable as of December 31, 2008 and 2007 consist of the following:

Description	2008			2007
Convertible note payable originating in 2007 with an original principal amount of $956,946, unsecured and due on demand, bearing interest at 10% per annum (30% per annum if in arrears), convertible at $0.60 into one unit, each unit consisting of one share	$	956,946			456,946
Less: discount attributable to warrants and beneficial conversion feature		(593,642	)		(166,240	)
Add: Accretion of discount		405,544			166,240
Carrying value of short-term convertible notes	$	768,848			456,946

At December 31, 2008, Ameriwest accrued $102,870 (2007 - $19,571) of interest in relation to these notes.

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b. Long-term convertible notes

Long convertible notes payable as of December 31, 2008 and December 31, 2007 consist of the following:

Description	2008			2007
Convertible notes payable originating in 2008 with original principal amounts totalling $2,210,000, unsecured and due in two years, bearing interest at 6% per annum payable annually, convertible at a rate of $0.60 per share into common stock.  Ameriwest also issued warrants to purchase 3,683,333 shares of its common stock in connection with these notes, which start to expire in March 2010.  The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.	$	2,210,000		$	500,000
Convertible note payable originating in 2008 with original principal amount totalling $50,000, unsecured and due in two years, bearing interest at 6% per annum payable annually, convertible at a rate of $0.15 per share into common stock.  Ameriwest also issued warrants to purchase 333,333 shares of its common stock in connection with this note, which start to expire in November 2010.  The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year.		50,000			-
Convertible note payable originating in 2008 with original principal amount totalling $20,000, unsecured and due in two years, bearing interest at 6% per annum payable annually, convertible at a rate of $0.10 per share into common stock.  Ameriwest also issued warrants to purchase 200,000 shares of its common stock in connection with this note, which start to expire in December 2010.  The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year.		20,000			-
Less: Discount attributable to warrants and beneficial conversion feature		(1,643,688	)		(500,000	)
Add:  Accretion of discount		256,815			61,650
Carrying value of long-term convertible notes	$	893,127		$	61,650

During the quarter ended June 30, 2008, Ameriwest made change in some estimates of expected weighted average life and volatility to compute the relative fair value assigned to the beneficial conversion feature of the warrants issued with the convertible notes.  These changes in estimates, along with the adoption of the effective interest method over the straight line method to amortize the discount over the life of the convertible notes resulted in a reduction of $99,542 in discount charged to interest expense for the previous periods.  At December 31, 2008, Ameriwest accrued $81,516 (2007 - $7,397) in interest in relation to these notes.

Ameriwest evaluated the conversion options and detachable warrants issued or issuable pursuant to these long term convertible notes, and concluded that they do not meet the definition of a derivative instrument under SFAS 133 Accounting for Derivative Instruments and Hedging Activities.

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c. Subsequent repricing

Subsequent to December 31, 2008, on January 31, 2009, the Company entered into a series of agreements whereby various lenders have elected to exchange their existing promissory notes and all accrued interest for new convertible promissory notes reflecting a revised conversion price to $0.10 while retaining the original expiry dates as set in the original convertible notes.

8. Asset retirement obligation

Ameriwest estimates its asset retirement obligation for the South Glenrock “C” Field based on its understanding of the requirements to reclaim the currently disturbed areas.

The total undiscounted amount of estimated cash flow required to settle the obligations is approximately $45,000, which was adjusted for inflation at the rate of 2.88% per year and then discounted at 10.06%.  To December 31, 2008, Ameriwest accreted $2,684 of the discount.  These amounts related to asset retirement obligations are expected to be paid out in 7 years.

The asset retirement obligation accrual required management to make significant estimates and assumptions.  Actual results could differ materially from these estimates.

	Asset retirement obligation
Balance, December 31, 2007	$	-
Asset retirement obligation related to South Glenrock C Field		30,176
Accretion of discount		2,684
Balance, December 31, 2008	$	32,860

Ameriwest maintains a bond account fund that was established for the purpose of assuring maintenance and administration of a performance bond which secures certain plugging and abandonment obligations assumed by Ameriwest in the acquisition of oil and gas properties in the State of Wyoming.  At December 31, 2008 and 2007, the amount of the bond totaled $100,000 and $nil, respectively.

8. Capital stock

a. Common stock with warrants

On March 19, 2008, Ameriwest sold 666,668 units at a price of $0.60 per unit, for net proceeds of $400,000.  Each unit consisted of one share of common stock and one share purchase warrant, with each warrant exercisable at $0.60 for the first year and at $0.90 for the second year.  Ameriwest incurred share issue costs of $20,000 associated with this private financing.  The allocation of proceeds from the sale of the 666,668 capital stock units to the share purchase warrants based on the fair value of $156,861 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 119%; ii) risk free interest rate of 1.32%; iii) expected weighted average life of 1 year; and iv) no dividend yield. The relative fair value allocated to the warrants amounted to $112,675 and the relative fair value assigned to the shares amounted to $287,325.

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b. Warrants issued with convertible notes

On March 3, 2008 Ameriwest received convertible loan proceeds of $50,000, and issued 83,334 warrants in connection with this note, expiring March 3, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $50,000 convertible note and corresponding issuance of 83,334 warrants based on the fair value of $29,007 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 122.57%; ii) risk free interest rate of 1.74%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $18,957 and the relative fair value assigned to the beneficial conversion feature amounted to $31,043.

On March 10, 2008 Ameriwest received convertible loan proceeds of $150,000, and issued 250,000 warrants in connection with this note, expiring March 10, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $150,000 convertible note and corresponding issuance of 250,000 warrants based on the fair value of $94,956 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 122.57%; ii) risk free interest rate of 1.46%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $57,559 and the relative fair value assigned to the beneficial conversion feature amounted to $92,441.

On March 17, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued 166,667 warrants in connection with this note, expiring March 17, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $100,000 convertible note and corresponding issuance of 166,667 warrants based on the fair value of $53,868 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 122.57%; ii) risk free interest rate of 1.32%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $37,442 and the relative fair value assigned to the beneficial conversion feature amounted to $62,558.

On March 25, 2008 Ameriwest received convertible loan proceeds of $250,000, and issued 416,667 warrants in connection with this note, expiring March 25, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $250,000 convertible note and corresponding issuance of 416,667 warrants based on the fair value of $138,268 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 122.57%; ii) risk free interest rate of 1.64%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $94,077 and the relative fair value assigned to the beneficial conversion feature amounted to $155,923.

On April 15, 2008 Ameriwest received convertible loan proceeds of $300,000, and issued 500,000 warrants in connection with this note, expiring April 15, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $300,000 convertible note and corresponding issuance of 500,000 warrants based on the fair value of $194,067 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 129.54%; ii) risk free interest rate of 1.84%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $117,838 and the relative fair value assigned to the beneficial conversion feature amounted to $182,162.

On May 12, 2008 Ameriwest received convertible loan proceeds of $300,000, and issued 500,000 warrants in connection with this note, expiring May 12, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $300,000 convertible note and corresponding issuance of 500,000 warrants based on the fair value of $174,040 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 129.54%; ii) risk free interest rate of 2.30%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $116,275 and the relative fair value assigned to the beneficial conversion feature amounted to $183,725.

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On May 15, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued 166,667 warrants in connection with this note, expiring May 15, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $100,000 convertible note and corresponding issuance of 166,667 warrants based on the fair value of $59,422 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 129.54%; ii) risk free interest rate of 2.45%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $38,900 and the relative fair value assigned to the beneficial conversion feature amounted to $61,100.

On June 2, 2008 Ameriwest received convertible loan proceeds of $400,000, and issued 666,667 warrants in connection with this note, expiring June 2, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $400,000 convertible note and corresponding issuance of 666,667warrants based on the fair value of $276,313 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 129.54%; ii) risk free interest rate of 2.51%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $158,729 and the relative fair value assigned to the beneficial conversion feature amounted to $241,271.

On July 16, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued 166,667 warrants in connection with this note, expiring July 16, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $100,000 convertible note and corresponding issuance of 166,667warrants based on the fair value of $64,845 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 150.56%; ii) risk free interest rate of 2.44%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $41,431 and the relative fair value assigned to the beneficial conversion feature amounted to $58,569.

On July 25, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued 166,667 warrants in connection with this note, expiring July 25, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $100,000 convertible note and corresponding issuance of 166,667warrants based on the fair value of $56,446 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 150.56%; ii) risk free interest rate of 2.70%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $40,870 and the relative fair value assigned to the beneficial conversion feature amounted to $59,130.

On August 12, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued 166,667 warrants in connection with this note, expiring August 12, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $100,000 convertible note and corresponding issuance of 166,667warrants based on the fair value of $57,787 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 150.56%; ii) risk free interest rate of 2.45%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $40,949 and the relative fair value assigned to the beneficial conversion feature amounted to $59,051.

On August 13, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued 166,667 warrants in connection with this note, expiring August 13, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $100,000 convertible note and corresponding issuance of 166,667warrants based on the fair value of $57,800 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 150.56%; ii) risk free interest rate of 2.50%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $40,954 and the relative fair value assigned to the beneficial conversion feature amounted to $59,046.

F-58

On August 18, 2008 Ameriwest received convertible loan proceeds of $100,000, and issued 166,667 warrants in connection with this note, expiring August 18, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $100,000 convertible note and corresponding issuance of 166,667warrants based on the fair value of $50,800 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 150.56%; ii) risk free interest rate of 2.35%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $40,381 and the relative fair value assigned to the beneficial conversion feature amounted to $59,619.

On October 16, 2008 Ameriwest received convertible loan proceeds of $60,000, and issued 100,000 warrants in connection with this note, expiring October 16, 2010. The warrants are exercisable at $0.60 for the first year and at $0.90 for the second year.  The allocation of proceeds from the sale of the $60,000 convertible note and corresponding issuance of 100,000 warrants based on the fair value of $14,098 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 178.27%; ii) risk free interest rate of 1.61%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $24,101 and the relative fair value assigned to the beneficial conversion feature amounted to $35,899.

On November 10, 2008 Ameriwest received convertible loan proceeds of $50,000, and issued 333,333 warrants in connection with this note, expiring November 10, 2010. The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year.  The allocation of proceeds from the sale of the $50,000 convertible note and corresponding issuance of 333,333 warrants based on the fair value of $41,459 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 178.27%; ii) risk free interest rate of 1.27%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $21,125 and the relative fair value assigned to the beneficial conversion feature amounted to $28,875.

On December 27, 2008 Ameriwest received convertible loan proceeds of $20,000, and issued 200,000 warrants in connection with this note, expiring December 27, 2010. The warrants are exercisable at $0.30 for the first year and at $0.45 for the second year.  The allocation of proceeds from the sale of the $20,000 convertible note and corresponding issuance of 200,000 warrants based on the fair value of $8,743 was estimated using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 178.27%; ii) risk free interest rate of 0.89%; iii) expected weighted average life of 2 years; and iv) no dividend yield.  The relative fair value allocated to the warrants amounted to $7,621 and the relative fair value assigned to the beneficial conversion feature amounted to $12,379.

F-59

At December 31, 2008, 6,800,006 warrants were outstanding, as follows:

	#of Warrants Issued		Expiry	Exercise Price		Number Outstanding as at December 31,2008		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		#of Warrants Issued		Exercise Price		Expiry
Issued, October 2, 2007		833,333	2-Oct-09	$	0.90		833,333		0.09	$	0.90
Issued, October 7, 2007		1,083,334	7-Oct-09	$	0.90		1,083,334		0.12	$	0.90
Balance, December 31, 2007		1,916,667					1,916,667						-
Issued, March 3, 2008		83,334	3-Mar-09	$	0.60		83,334		0.00	$	0.60		83,334	$	0.90	3-Mar-10
Issued, March 10, 2008		250,000	10-Mar-09	$	0.60		250,000		0.01	$	0.60		250,000	$	0.90	10-Mar-10
Issued, March 17, 2008		166,667	17-Mar-09	$	0.60		166,667		0.01	$	0.60		166,667	$	0.90	17-Mar-10
Issued, March 19, 2008		666,668	19-Mar-09	$	0.60		666,668		0.02	$	0.60		666,668	$	0.90	19-Mar-10
Issued, March 25, 2008		416,667	25-Mar-09	$	0.60		416,667		0.01	$	0.60		416,667	$	0.90	25-Mar-10
Issued, April 15, 2008		500,000	15-Apr-09	$	0.60		500,000		0.02	$	0.60		500,000	$	0.90	15-Apr-10
Issued, May 12, 2008		500,000	12-May-09	$	0.60		500,000		0.03	$	0.60		500,000	$	0.90	12-May-10
Issued, May 15, 2008		166,667	15-May-09	$	0.60		166,667		0.01	$	0.60		166,667	$	0.90	15-May-10
Issued, June 2, 2008		666,667	2-Jun-09	$	0.60		666,667		0.04	$	0.60		666,667	$	0.90	2-Jun-10
Issued, July 16, 2008		166,667	16-Jul-09	$	0.60		166,667		0.01	$	0.60		166,667	$	0.90	16-Jul-10
Issued, July 25, 2008		166,667	25-Jul-09	$	0.60		166,667		0.01	$	0.60		166,667	$	0.90	25-Jul-10
Issued, August 12, 2008		166,667	12-Aug-09	$	0.60		166,667		0.02	$	0.60		166,667	$	0.90	12-Aug-10
Issued, August 13, 2008		166,667	13-Aug-09	$	0.60		166,667		0.02	$	0.60		166,667	$	0.90	13-Aug-10
Issued, August 18, 2008		166,667	18-Aug-09	$	0.60		166,667		0.02	$	0.60		166,667	$	0.90	18-Aug-10
Issued, October 16, 2008		100,000	16-Oct-09	$	0.60		100,000		0.01	$	0.60		100,000	$	0.90	16-Oct-10
Issued, November 10, 2008		333,333	10-Nov-09	$	0.30		333,333		0.04	$	0.30		333,333	$	0.45	10-Nov-10
Issued, December 27, 2008		200,000	27-Dec-09	$	0.30		200,000		0.03	$	0.30		200,000	$	0.45	27-Dec-10
Balance, December 31, 2008		6,800,006					6,800,006

c. Net  loss  per  common  share

Basic net loss per common share is calculated by dividing the net loss applicable to common shares by the weighted- average number of common and common equivalent shares outstanding during the period. For the fiscal year ended December 31, 2008 and 2007, there were no potential common equivalent shares used in the calculation of weighted-average common shares outstanding as the effect would be anti-dilutive because of the net loss. The amounts of common equivalent shares outstanding at each period end are as follows:

	December31,2008		December31,2007
Securities convertible into shares of common stock, not used because the effect would be anti-dilutive:
Stock warrants related to private equity placements		1,750,002		-
Stock warrants related to convertible notes placements		5,050,004		-
Common stock issuable upon conversion of convertible notes		2,349,692		1,639,857
Stock warrants related to conversion of convertible notes placements		851,365		794,195
		10,001,062		2,434,052

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d. Stock based compensation

On September 24, 2008, Ameriwest granted 500,000 options to an officer of the company.  The options are exercisable at $0.38 until September 24, 2018, and vest equally over a period of three years, with the first third vesting upon grant.

On September 24, 2008, Ameriwest granted 250,000 options to an employee of the company.  The options are exercisable at $0.38 until September 24, 2018, and vest equally over a period of two years, with the first half vesting upon grant.

The fair value of the options was estimated at $288,378 using the Black Scholes stock price valuation model with the following assumptions: i) expected volatility of 151%; ii) risk free interest rate of 3.8%; iii) expected option term 5 years calculated pursuant to the terms of SAB 107 as the option grants qualify as “plain vanilla” under that literature; and iv) no dividend yield and no forfeitures.  As at December 31, 2008, Ameriwest has recorded $112,147 in stock based compensation in relation to these options, and another $176,231 will be charged to the statement of operations as the options vest.

	# of Options Issued		Expiry	Exercise Price		Vested		Number Outstanding as at December 31, 2008		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price
Balance, December 31, 2007		-					-		-
Issued, September 24, 2008		250,000	24-Sep-18	$	0.38		125,000		125,000		4.17	$	0.38
Issued, September 24, 2008		500,000	24-Sep-18	$	0.38		166,667		166,667		5.56	$	0.38
Balance, December 31, 2008		750,000					291,667		291,667

9. Related party transactions

a. Pursuant to a management services agreement, Ameriwest paid $7,500 to a former officer and director during the fiscal year ended December 31, 2008.  This agreement was terminated in February 2008;

b. Pursuant to a month-to-month verbal agreement, Ameriwest incurred $77,500 in management fees to an officer and director.  This amount was due at December 31, 2008, and is included in due to related parties on the balance sheet;

c. Pursuant to a month-to-month verbal agreement, Ameriwest incurred $47,500 in management fees to a director.  This amount was due at December 31, 2008 and is included in due to related parties on the balance sheet;

d. Pursuant to an employment agreement effective June 5, 2008, Ameriwest incurred $50,625 in executive compensation to an officer.  Of this amount, $3,750 was due at December 31, 2008 and is included in due to related parties on the balance sheet;

e. On March 19, 2008, Ameriwest signed a letter of intent with Hot Springs Resources, Ltd., a company whose assets are partially owned by Ameriwest’s President and a director;

f. On April 15, 2008 and as amended on June 25, 2008, Ameriwest signed an exclusive option to purchase assets with Alpha Development Corporation and JK Minerals, Inc.  Such assets are partially owned by one of Ameriwest’s directors;

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g. Effective May 1, 2008, Ameriwest entered into an assignment of revenues agreement with Muddy Mineral Exploration LLC, a company whose assets are partially owned by Ameriwest’s President and a director.  Pursuant to this agreement, Ameriwest has accrued $48,972 due to Muddy for oil in tank at May 1, 2008.  This amount is included in due to related parties on the balance sheet at December 31, 2008, in addition to $200,000 that has been accrued for extension fees;

h. On May 30, 2008 Ameriwest signed a Purchase and Sale Agreement with Geochem Exploration, LLC, a company solely owned by Ameriwest’s President.

10. Income taxes

Deferred income taxes reflect the net effect of temporary difference between carrying  amounts of assets and liabilities  for  financial  purposes  and  the  amounts  used  for income taxes reporting  purposes,  and net operating loss carryforwards.

No net provision for refundable U.S.  Federal income tax has been made in the accompanying statement of operations because no recoverable taxes were paid previously. Similarly, no  deferred  tax  asset attributable to the net operating loss carryforward has been  recognized,  as  it  is  not  deemed  likely  to  be  realized.

At December 31, 2008, Ameriwest has accumulated net operating losses in the United States totaling approximately $5,012,000 (2007 - $974,000) which are available to reduce taxable income in future years and begin to expire in 2026.

The significant components of Ameriwest’s deferred tax assets as of December 31, 2008 and 2007 are as follows:

	2008			2007
Deferred tax assets
Net operating loss carry forward	$	2,035,500		$	341,000
Less: valuation allowance		(2,035,500	)		(341,000	)
	$	-		$	-

11. Commitments

a. On June 15, 2007, Ameriwest entered into a one year contract for marketing and communications consulting services.  In consideration, the Company paid a monthly retainer of $5,000.  This commitment was terminated in January 2008;

b. On June 15, 2007, Ameriwest entered into a contract for investor relations services requiring the payment of $10,000 per month, expiring on June 14, 2009.  This commitment can be terminated by either party with 90 days’ written notice;

c. Effective March 1, 2008, Ameriwest entered into a month-to-month lease agreement for office space, for monthly fees of $700.

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12. Legal Proceedings

On or about September 28, 2007, Ameriwest filed a complaint in the Second Judicial District Court of the State of Nevada against Penson Financial Services Canada, PI Financial Corporation, Haywood Securities, Inc., Raymond James, Inc., Westminster Securities Corporation, Pershing LLC, Merrill Lynch & Co., Inc., The Hill Thompson Group, Ltd., Private Equity Securities, Inc., Brokington Securities, Inc., Fordham Financial Management, Inc., Legent Clearing, LLC, First Clearing, LLC, The Depository Trust Company (“DTC”) and National Securities Clearing Corporation (“NSCC”) for declaratory and injunctive relief.  On or about May 4, 2007, Ameriwest announced a 3.6 to 1 forward stock split for stockholders of record and on May 14, 2007, Ameriwest’s transfer agent filed a verification form with NASDAQ verifying the stock split and issued post-split stock certificates.  On or about June 12, 2007, Ameriwest amended its Articles of Incorporation changing its name from “Henley Ventures, Inc.” to “South Sea Energy Corporation.”  On June 29, 2007 NASDAQ announced a 3.6 to 1 forward stock split for Ameriwest’s shares with a record date of July 2, 2007 along with the name change.  As a result of such announcement and despite the stock split already having occurred prior to such announcement by NASDAQ, DTC and/or NSCC made the announcement of the stock split to First Clearing and Legent. First Clearing and Legent then forward split Ameriwest’s shares again 3.6 to 1 which resulted in overdeliveries of Ameriwest’s shares to various purchasers.  Ameriwest has knowledge and believe that over 90% of the overdelivered shares are being held by various purchasers in their unclaimed suspense accounts.  Ameriwest filed an action for declaratory and injunctive relief to cause the overdelivered shares to be returned to their rightful owners, and for all relevant parties to correct their respective ledger accounts.

On April 16, 2008, Ameriwest entered into a settlement agreement with First Clearing, LLC, Fordham Financial Management, Inc., Penson Financial Services Canada and Penson Financial Services, Inc. whereby Penson Financial Services Canada agreed to deliver 221,000 overdelivered shares to Fordham Financial Management, Inc.  Additionally, Ameriwest dismissed all remaining parties from the lawsuit.

13. Subsequent Events

Subsequent to our fiscal year ended December 31, 2008, on February 25, 2009, we entered into a Farmout Agreement with Wold Oil Properties, Inc., a Wyoming corporation (“Wold”) where we have the right to earn up to a 100% ownership interest in oil and gas leasehold rights to approximately 320 net acres within certain land located in Natrona and Converse counties, Wyoming. We agreed to commence drilling of a test well within such lands on or before August 1, 2009. After we have drilled an initial test well to the contract depth of 8,000 feet, Wold will assign and convey to us, 100% of its interest in the drillsite spacing unit and participating area, and 65% of its operating rights in the one-half block of the land where the test well was drilled. We will operate the actual

well drilled and receive a 80% Net Revenue Interest.

Subsequent to our fiscal year ended December 31, 2008, on March 30, 2009, we entered into an Agreement to Operate South Glenrock Block “C” And Extension of Purchase Agreement with Muddy. Under the agreement, both Muddy and we agreed to (i) extend the closing date to June 1, 2009, (ii) reduce the purchase price to $4,000,000, (iii) confirm that the amount of $1,750,000 we previously paid towards the purchase price is non-refundable, (iv) confirm that we shall operate and manage South Glenrock oilfield until the closing date or upon termination of the agreement and entitled to all revenue generated from such oilfield, and (v) assign all our interest in South Glenrock “C” upon termination of the agreement.

Subsequent to our fiscal year ended December 31, 2008, on April 1, 2009, certain of our note holders converted their convertible promissory notes with aggregate outstanding principal balances and accurred interests of $689,572 into 6,895,739 shares of our common stock at a conversion price of $0.10.

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