UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C., 20549

FORM 10-KSB/A

 [   ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

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

For the transition period from         to

Commission File No. 000-51656

ECCO ENERGY CORP.

 (Exact name of registrant as specified in its charter)

Nevada	87-0469497
(State of other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)
3315 Marquart ST, Suite 206
Houston, TX	77027
(Address of Principal Executive Office)	(Zip Code)

Registrant’s telephone number, including area code: (713) 771-5500

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

NONE

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

Common Stock $0.001 par value

Check whether the issuer (1) 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 such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes [ X] No [    ]

Check if there is no disclosures of delinquent filers in response to Item 405 of Regulations S-B not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB[X]

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [    ]  No [ ]

The issuer’s total revenues for the year ended December 31, 2007 were $434,245.

Applicable Only to Corporate Registrants

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

Class	Outstanding as of April 21, 2008
Common Stock, $0.001 par value	9,374,753

Documents Incorporated by Reference

If the following documents are incorporated by reference, briefly describe them and identify the part of the form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (i) any annual report to security holders; (ii) any proxy or information statement; and 9iii) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (the “Securities Act”). The listed documents should be clearly described for identification purposes (e.g. annual report to security holders for fiscal year ended December 24, 1990).

Not applicable.

Transitional Small Business Disclosure Format (check one): Yes [  ] No [ X]

INDEX

Amendment No. 1 to Annual Report on Form 10-KSB

ITEM 1. DESCRIPTION OF BUSINESS

ITEM 2. DESCRIPTION OF PROPERTY

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

ITEM 7. FINANCIAL STATEMENTS

        CONSOLIDATED BALANCE SHEETS

        CONSOLIDATED STATEMENTS OF OPERATIONS

        CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

        CONSOLIDATED STATEMENTS OF CASH FLOWS

        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

ITEM 8A. CONTROL AND PROCEDURES

ITEM 8B. OTHER INFORMATION

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

ITEM 10.EXECUTIVE COMPENSATION

ITEM 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STGOCKHOLDER MATTERS

ITEM 12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

ITEM 13.EXHIBITS

ITEM 13a.CONTROLS AND PROCEDURES – ADDITIONAL INFORMATION

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

SIGNATURES

FORWARD LOOKING STATEMENTS

The statements included or incorporated by reference in this Annual Report, other than statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. In some cases, you can identify forward-looking statements by the words “anticipate,” “estimate,” “expect,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. Such forward-looking statements include, without limitation, the statements herein and therein regarding the timing of future events regarding the operations of the Company and its subsidiaries. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors including without limitation the following risk factors:

-   the cyclical nature of the natural gas and oil industries

-   our ability to obtain additional financing

-   our ability to successfully and profitably find, produce and market oil and natural gas

-   uncertainties associated with the United States and worldwide economies

-   substantial competition from larger companies

-   the loss of key personnel

-   operating interruptions (including leaks, explosions and lack of rig availability)

as well as other such risk factors set forth below.

Available Information

ECCO Energy Corp. files annual, quarterly, current reports, proxy statements, and other information with the Securities and Exchange Commission (the “Commission”). You may read and copy documents referred to in this Annual Report on Form 10-KSB that have been filed with the Commission at the Commission’s Public Reference Room, 450 Fifth Street, N.W., Washington, D.C.  You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. You can also obtain copies of our Commission filings by going to the Commission’s website at http://www.sec.gov.

AMENDMENT NO. 1 TO ANNUAL REPORT ON FORM 10-KSB

The final closing of the Bateman Lake, St. Mary Parish, Louisiana acquisition resulted in a delay in preparing the calculations of reserves and related accounting.

ITEM 1.  DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

ECCO Energy Corp.

We were incorporated under the laws of the State of Utah in 1989 under the name “Bluefield Enterprises Inc.” During July 1992, we merged with Optical Express Inc. wherein our name as changed to “Optical Express Inc.” During August 1993, we then merged with The AppleTree Companies, Inc., whereby we were reincorporated as a Delaware corporation and the operating subsidiary of The AppleTree Company, Inc. and our name was changed to J R Bassett Optical Inc. During April 1997, The AppleTree Companies, Inc. filed chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Virginia. The U.S. Bankruptcy Court subsequently approved the sale of 28,367,500 shares of J R Bassett Optical Inc. owned by record by The AppleTree Companies, Inc. to Robert E. Williams.

On October 19, 2005, Robert E. Williams sold to Samuel Skipper approximately 28,800,000 shares of common stock of J R Bassett Optical Inc. and our name was subsequently changed to Samurai Energy Corp. On June 30, 2006, Samurai Energy Corp. (“Samurai”), ECCO Energy Corp. (“ECCO”) and SEI Acquisition Corp., the wholly owned subsidiary of Samurai (“SEI”), entered into an agreement and plan of merger (the “Merger Agreement”). In accordance with the terms and provisions of the Merger Agreement and Nevada law: (i) each three shares of ECCO were exchanged for one fully paid non-assessable share of the common stock of Samurai, pursuant to which Samurai issued an aggregate of 1,415,999 shares of its common stock to the shareholders of ECCO.; (ii) the separate corporate existence of SEI ceased; and (iii) ECCO was the surviving entity. After completion of the transactions contemplated by the Merger Agreement, ECCO became a wholly-owned subsidiary of Samurai and Samurai merged with and into ECCO for the purpose of reincorporating under the laws of Nevada. On August 28, 2006, the reincorporation became effective resulting in Samurai continuing its corporate existence in the State of Nevada under the name ECCO Energy Corp. (“ECCE”).

The acquisition has been accounted for as a business combination between entities under common control similar to a pooling of interest. Prior to the Merger Agreement, Samurai and ECCO were controlled by the same management group and had certain common ownership interests in their respective common stock. Therefore, ECCE recorded the acquisition of ECCO at the carrying value of the assets acquired with no adjustment for the fair value of the assets acquired.

We are currently an independent oil and gas company actively engaged in oil and gas development, exploration and production with properties and operational focus in the Gulf Coast Region. Our strategy is to grow our asset base by purchasing producing assets at a discount to reserve value, increasing the production rate of reserves, and converting proved developed non-producing reserves to proved developed producing reserves. Acquisitions to date have provided producing assets. Our principal assets are oil and gas properties, including a 100% working interest in the Wilson properties.

On March 14, 2007, our shares of common stock commenced trading on the Over-the-Counter Bulletin Board under the symbol: ECCE.OB.  Please note that throughout this Annual Report, and unless otherwise noted, the words “we,” “our,” “us,” the “Company” or “ECCE” refers to ECCO Energy Corp.

ECCO Biofuels, Inc.

ECCO Biofuels, Inc. was our wholly-owned subsidiary and was formed to offer plant operators the option of financing 100% of the construction of biodiesel plants.  On June 27, 2007, we entered into that certain letter of intent with Saber Energy Corp., a privately held Texas corporation, pursuant to which we would sell the entire total issued and outstanding shares of ECCO Biofuels. After completion of satisfactory due diligence and conditions precedent, we entered into a stock purchase agreement dated June 29, 2007, sold all of the total issued and outstanding shares of ECCO Biofuels; and (ii) in payment, Saber Energy issued us of 250,000 shares of restricted common stock of Saber Energy and to assume all of the liabilities of ECCO Biofuels. As of the date of this Annual Report, we hold of record the 250,000 shares of common stock of Saber Energy.

Our Board of Directors, by unanimous written consent, approved the consummation of the Stock Purchase Agreement. The Board of Directors engaged in a thorough analysis of the sale of its wholly-owned subsidiary, ECCO Biofuels including, but not limited to: (i) maximization of shareholder value relating to the stock Purchase Agreement in comparison with potential shareholder value relating to alternative business strategies retaining ECCO Biofuels; (ii) the process conducted in seeking potential buyers and analysis pertaining to reasonableness of providing equal or greater value to us; and (iii) review of our financial condition, results of operations and business and earning prospects.  Even though the alternative fuel industry is increasing, our Board’s evaluation concluded that we would be required to spend significant employee resources and money to grow the business operations of ECCO Biofuels, therefore, our Board determined that it was in the best interests of the company and its shareholders to concentrate on its core business on the exploration and development of oil and gas properties.

Transfer Agent

Our transfer agent is Atlas Stock Transfer, Salt Lake City, UT.

CURRENT BUSINESS OPERATIONS

Oil and Gas

We are an oil and gas exploration and development company engaged in the exploration and development of properties in the United States. Our strategy is to acquire oil and gas properties that are thought to contain economic quantities of oil and gas and have undergone some degree of exploration but have not yet been drilled. To date, we have acquired interests in 330 gross acres of located in the State of Texas. These properties are producing.   We have also acquired non producing properties, specifically Louisiana State Lease Number 17742 in Block 4, covering 600 acres in East Cameron Area in Cameron Parish Louisiana.  This property was acquired from Louisiana Shelf Partners, LLP.  We also acquired  oil, gas and mineral lease no. 1337 located in the State of Louisiana (the “Bateman Lake Field”), from VTEX Energy, Corp.  We are working to bring both properties online during 2008.

We plan to target additional exploration and developmental properties for acquisition. Our ability to complete any acquisitions will be subject to our obtaining sufficient financing and our being able to conclude agreements with the property owners on terms that are acceptable to us. These potential acquisition properties have not yet been specifically identified. We plan to conduct exploration and developmental programs on these properties with the objective of ascertaining whether any of these properties contain economic reserves of oil and gas that are prospective for drilling. There is no assurance that commercially viable oil and gas reserves exist on any of these future properties, and a great deal of further exploration and development may be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined.

OIL AND GAS PROPERTIES

Wilson Properties Lease – Nueces County, Texas

On July 12, 2006, as part of the merger described above, ECCE acquired through the merger of ECCO an additional 32% working interest in oil and gas producing properties located in Nueces County, Texas.

A description of the lease and properties is as follows:

(1)   Oil, Gas and Mineral Lease dated January 13, 1934 from Ellen C. Wilson to S. F. Hurlbut recorded in Volume 15, Page 608 of the Oil & Gas Lease Records of Nueces County, Texas insofar and only insofar as to 250 acres, more or less, being the eastern 250 acres of the northern 250 acres of the 434.59 acre tract set aside to Leonora Bernard and more fully described in that certain Partition Decree of the Estate of W. W. Wright, Deceased, recorded in Book “H”, Page 313 of the Minutes of District Court of Nueces County, Texas.

(2)   Oil, Gas and Mineral Lease dated December 9, 1950 from the State of Texas to F. William Carr recorded in Volume 116, Page 100 of the Oil & Gas Leases Records of Nueces County, Texas insofar and only insofar as to 5 acres, more or less, being out of Tract 5 of the Nueces River containing 80 acres, said 5 acre tract being more fully described in that certain Gas Unit Pooling Agreement dated November 28, 1966 for the Wilson-State Gas Unit recorded in Volume 263, Page 126 of the Oil & Gas Lease Records of Nueces County, Texas, including all producing, non-producing and shut-in oil and gas wells (hereinafter called “Wells”) located on and/or associated with said Leases, together with all mineral leasehold estates and working interests created by such Leases, together with any interests in contracts, agreements, pipelines, pipeline right-of-ways or easements affecting or relating to said Leases and all material, fixtures, personal property and equipment associated with such Wells.

We completed the workovers during December 2005 and, as of the date of this Annual Report, continue to allow the Wells to to produce at their current production levels.

Wild Tree Enterprises – Wilson Properties

On August 1, 2007, we entered into a mutual release with Dr. Harold Crook and Wild Tree Enterprises (collectively, “Wild Tree”). In accordance with the terms and provisions of the Release: (i) Wild Tree agreed to allow us to retain our 11% net working interest in the E.C. Wilson and Wilson State Tract Leases located in Nueces County, Texas from February 1, 2006 to June 30, 2007; (ii) Wild Tree agreed to allow us to retain the proceeds received by us from our 11% net working interest in the approximate amount of $91,346; (iii) we agreed to issue to Wild Tree an aggregate of 110,000 shares of our restricted Common Stock; and (iv) we and Wild Tree agreed to mutually release one another from any and all past claims, demands, obligations, actions, cause of action, rights, damages of any nature

Ron Reece Revocable Trust – Wilson Properties

On August 1, 2007, we purchased a 20% working interest in the E.C. Wilson and Wilson State Tract Leases located in Nueces County, Texas from Ronald E. Reece M.D. Revocable Trust of 2000 as outlined in the Assignment, Conveyance and Bill of Sale (the Agreement) dated August 1, 2007 with an effective date of February 1, 2006 for the issuance of 141,750 shares of our restricted common stock valued at $36,855 based on a share price of $.26 and a promissory note in the principal amount of $205,548 payable in one lump sum payment on or before July 31, 2008 and interest at the rate of seven (7%) per annum payable in monthly installments on the last day of each month with the first installment due on August 31, 2007. See “Part II. Item 5. Market for Common Equity, Related Stockholder Matters and Recent Sales of Unregistered Securities.”

Samurai Corporation – Wilson Properties

On December 31, 2007, ECCO acquired an 11% interest from Samurai Energy, LLC.  The Samurai Corp. Assets were purchased by us on December 31, 2007 with a promissory note in the principal amount of $100,000 payable in one lump sum payment on or before December 31, 2008 with interest at the rate of 10% per annum.  Prior to the transaction, we owned 89% of working interest of the same property. The principal owner of Samurai Corporation is Sam Skipper, the CEO of ECCO Energy.

As of the date of this Annual Report, our total working interest in the Wilson properties is now 100%.

Louisiana Shelf Partners LP, Louisiana

On September 28, 2007 we executed an agreement pursuant to which we acquired all of the assets of Louisiana Shelf Partners LP, a Delaware limited partnership, for $5,000,000 by issuing to the General Partner and limited partners of Louisiana Shelf Partners, 1,000,000 of Convertible Preferred Series B stock, convertible into our restricted common stock at 1 common share per share of Convertible Preferred Series B Stock. Louisiana Shelf Partners owned Louisiana State Lease Number 17742 in Block 4, covering 600 acres in East Cameron Area in Cameron Parish Louisiana.  The property consists of two wells:  the #1 well, proved developed non-producing (PDNP), and the #2 well, which is a proved undeveloped location (PUD).  The #1 well is not connected to any platform or other pipeline and is currently not in production.  We are currently in negotiations to complete the platform.  See “Part II. Item 5 Market for Common Equity, Related Stockholder Matters and Recent Sale of Unregistered Securities – Recent Sales of Unregistered Securities.”

Bateman Lake, St. Mary Parish, Louisiana

On approximately December 1, 2007, we entered into a share exchange agreement with Old Jersey Oil Ventures LLC, a New Jersey limited liability company and Eugene A. Noser, Jr.,who holds of record 100% of the total issued and outstanding interests in Old Jersey, regarding our acquisition of Old Jersey. In accordance with the terms and provisions of the Share Exchange Agreement, we shall acquire from Noser all of his right, title and interest in and to the Membership Interest in exchange for the issuance of 660,000 shares of our Series C Preferred Stock and 303,936 shares of the Company’s Series D Preferred Stock.

Old Jersey, together with the Moffat Group, was the holder of approximately $5,900,000 in notes payable by VTEX Energy, Inc., a Nevada corporation, relating to that certain oil, gas and mineral lease no. 1337 located in the State of Louisiana (the “Bateman Lake Field”). Therefore, on December 1, 2007, we entered into an assignment of oil, gas and mineral lease with VTEX pursuant to which VTEX assigned to us all of its right, title and interest in and to lease no. 1337 on the Bateman Lake Field in exchange for $1,000. Thus, we held 100% of the right, title and interest in and to lease no. 1337 on the Bateman Lake Field.  We also acquired the debt payable by VTEX to Old Jersey

Simultaneously, we entered into a farmout agreement dated January 11, 2008 with an independent oil & gas corporation (IOG), concerning the right, title and interest of the Company in lease no. 1337 on the Bateman Lake Field. In accordance with the terms and provisions of the farmout agreement, IOG has the exclusive right, but not the obligation, to re-enter the Bateman Lake Field for the purpose of sidetracking, deepening, working over or recompleting any of the wells situated on the Bateman Lake Field. In accordance with the further terms and provisions of the Farmout Agreement: (i) with regards to well nos. 4, 11, 21 and 26, we shall receive a 5% carried interest to the tanks until 120% of payout, at which time such carried interest shall convert to a 25% net profit interest and we shall receive a 25% working interest; (ii) with regards to well nos. 9 and 19 formerly operated by VTEX (the “Partnership Retained Wells”), we shall retain ownership in the Partnership Retained Wells and rights to any proceeds received for the sale of oil and/or gas to which IOG shall have no rights; (iii) with regards to other workover wells, we shall be carried to the tanks to the extent of a 5% working interest in workover operations until 125% of payout and upon 125% of payout, we may elect to continue to receive the 5% carried working interest or convert the 5% carried working interest to a 25% working interest; (iv) with regards to other sidetrack wells, we shall be carried to the tanks to the extent of a 5% working interest in sidetrack operations until 150% of payout and upon 150% of payout, we may elect to continue to receive the 5% carried working interest or convert the 5% carried working interest to a 25% working interest; and (v) we shall receive a 25% working interest upon reaching 150% of payout of all costs related to the first three new drill wells.

Upon consummation of the farmout agreement: (i) IOG agrees to pay an aggregate $750,000 relating to the Debt to us; (ii) we caused the cancellation of the Debt and any other liens on lease no. 1337; and (iii) we entered into an assignment dated January 11, 2008 with IOG pursuant to which we assigned to IOG all of our right, title and interest in and to lease no. 1337 on the Bateman Lake Field. It is our intent that the Series C and D Preferred Stock shall be redeemed out of future earnings generated from lease no. 1337 on the Bateman Lake Field.  See “Part II. Item 5 Market for Common Equity, Related Stockholder Matters and Recent Sale of Unregistered Securities – Recent Sales of Unregistered Securities.”

There are currently no producing wells on this concession.

Oil and Gas Exploration Regulation

Our oil and gas exploration and development activities are, or will be, subject to extensive laws and regulations governing prospecting, development, production, exports, taxes, labor standards, occupational health, waste disposal, protection and remediation of the environment, protection of endangered and protected species, drilling safety, toxic substances and other matters. Oil and gas exploration is also subject to risks and liabilities associated with pollution of the environment and disposal of waste products occurring as a result of exploration, development and production. Compliance with these laws and regulations may impose substantial costs on us and could subject us to significant potential liabilities. Changes in these regulations could require us to expend significant resources to comply with new laws or regulations or changes to current requirements and could have a material adverse effect on our business operations.

Exploration, development and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations. In general, our exploration, development and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. We may be subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry and our current operations have not expanded to a point where either compliance or cost of compliance with environmental regulation is a significant issue for us. Costs may increase with the increasing scale and scope of exploration, development and production operations.

Oil and gas exploration and development operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our business operations. Oil and gas exploration and development operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas exploration and development operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, state, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may elect not to insure against due to prohibitive premium costs and other reasons. As of the date of this Annual Report, other than with respect to the posting of a performance bond, we have not been required to spend material amounts on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations. Environmental regulation is discussed in further detail in the following section.

Environmental Regulation

Our activities will be subject to existing federal, state and local laws and regulations governing environmental quality and pollution control. Our operations will be subject to stringent environmental regulation by state and federal authorities including the Environmental Protection Agency .Such regulation can increase the cost of such activities. In most instances, the regulatory requirements relate to water and air pollution control measures.

Waste Disposal

The Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes, affect minerals exploration and production activities by imposing regulations on the generation, transportation, treatment, storage, disposal and cleanup of “hazardous wastes” and on the disposal of non-hazardous wastes. Under the auspices of the EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements.

Comprehensive Environmental Response, Compensation and Liability

The federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) imposes joint and several liabilities for costs of investigation and remediation and for natural resource damages, without regard to fault or the legality of the original conduct, on certain classes of persons with respect to the release into the environment of substances designated under CERCLA as hazardous substances (“Hazardous Substances”). These classes of persons or potentially responsible parties include the current and certain past owners and operators of a facility or property where there is or has been a release or threat of release of a Hazardous Substance and persons who disposed of or arranged for the disposal of the Hazardous Substances found at such a facility. CERCLA also authorizes the EPA and, in some cases, third parties to take actions in response to threats to the public health or the environment and to seek to recover the costs of such action. We may also in the future become an owner of facilities on which Hazardous Substances have been released by previous owners or operators. We may in the future be responsible under CERCLA for all or part of the costs to clean up facilities or property at which such substances have been released and for natural resource damages.

Air Emissions

Our operations are subject to local, state and federal regulations for the control of emissions of air pollution. Major sources of air pollutants are subject to more stringent, federally imposed permitting requirements. Administrative enforcement actions for failure to comply strictly with air pollution regulations or permits are generally resolved by payment of monetary fines and correction of any identified deficiencies. Alternatively, regulatory agencies could require us to forego construction, modification or operation of certain air emission sources.

Clean Water Act

The Clean Water Act (“CWA”) imposes restrictions and strict controls regarding the discharge of wastes, including mineral processing wastes, into waters of the United States, a term broadly defined. Permits must be obtained to discharge pollutants into federal waters. The CWA provides for civil, criminal and administrative penalties for unauthorized discharges of hazardous substances and other pollutants. It imposes substantial potential liability for the costs of removal or remediation associated with discharges of oil or hazardous substances. State laws governing discharges to water also provide varying civil, criminal and administrative penalties and impose liabilities in the case of a discharge of petroleum or it derivatives, or other hazardous substances, into state waters. In addition, the EPA has promulgated regulations that may require us to obtain permits to discharge storm water runoff. In the event of an unauthorized discharge of wastes, we may be liable for penalties and costs. Management believes that we are in substantial compliance with current applicable environmental laws and regulations.

MATERIAL AGREEMENTS

We are not party to any material agreements other than those described above.

EMPLOYEES

Samuel Skipper is our President and Chief Executive Officer and N. Wilson Thomas is our Chief Financial Officer. These individuals are primarily responsible for all our day-to-day operations. Other services may be provided by outsourcing and consultants and special purpose contracts. We currently employ four persons on a full time basis and contract with approximately two individuals for ongoing services provided to us.

RISK FACTORS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in evaluating our company and its business before purchasing shares of our common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. The risks described below are all of the material risks that we are currently aware of that are facing our company. Additional risks not presently known to us may also impair our business operations. You could lose all or part of your investment due to any of these risks.

Risks Related to the Oil and Gas Industry

We will need to obtain additional financing to complete further exploration.

We will require significant additional financing in order to continue our exploration, development and production activities and our assessment of the commercial viability of our properties. Furthermore, if the costs of our planned exploration, development and production programs are greater than anticipated, we may have to seek additional funds through public or private share offerings or arrangements with corporate partners. There can be no assurance that we will be successful in our efforts to raise these required funds, or on terms satisfactory to us. The continued exploration of properties and the development of our business will depend upon our ability to establish the commercial viability of our oil and gas properties and to ultimately develop cash flow from operations and reach profitable operations. Although we have generated revenue from operations, we are experiencing a negative cash flow. Accordingly, the only other sources of funds presently available to us may be through the sale of equity or through debt financing. It is possible that debt financing may not be an alternative to us. Alternatively, we may finance our business by offering an interest in prospective oil and gas properties to be earned by another party or parties carrying out further exploration and development thereof or to obtain project or operating financing from financial institutions. If we are unable to obtain this additional financing, we will not be able to continue our business activities and our assessment of the commercial viability of our properties. Further, if we are able to establish that development of our properties is commercially viable, our inability to raise additional financing at this stage would result in our inability to place our properties into production and recover our investment.

Although certain of our oil and gas properties contain known reserves, we may not discover commercially exploitable quantities of oil or gas on other potential oil and gas properties that would enable us to enter into commercial production, achieve revenues and recover the money we spend on exploration.

There is no assurance that any prospective oil and gas exploration and development programs will result in establishment of reserves. Although our current oil and gas properties are in the production stage, future prospective properties may be only in the development stage and have no known body of reserves. Unproved or proved reserves on these properties may never be determined to be economical. We plan to conduct further exploration and development activities on properties, which may include the completion of feasibility studies necessary to evaluate whether a commercial reserve exists on any of the properties. There is a substantial risk that these exploration activities will not result in discoveries of commercially recoverable reserves of oil and gas. Any determination that properties contain commercially recoverable quantities of oil and gas may not be reached until such time that final comprehensive feasibility studies have been concluded that establish that a reserve is likely to be economic. There is a substantial risk that any preliminary or final feasibility studies carried out by us will not result in a positive determination that such properties can be commercially developed.

Exploration activities on oil and gas properties may not be commercially successful, which could lead us to abandon our plans to develop the property and our investments in exploration.

Our long-term success depends on our ability to establish commercially recoverable quantities of oil and gas on our properties that can then be developed into commercially viable drilling operations. Oil and gas exploration is highly speculative in nature, involves many risks and is frequently non-productive. These risks include unusual or unexpected geologic formations, and the inability to obtain suitable or adequate machinery, equipment or labor. The success of oil and gas exploration is determined in part by the following factors:

·identification of potential reserves based on superficial analysis;

·availability of government-granted exploration permits;

·the quality of management and geological and technical expertise; and

·the capital available for exploration and development.

Substantial expenditures are required to establish proven and probable reserves through drilling and analysis, and to develop the drilling and processing facilities and infrastructure at any site chosen. Whether a property will be commercially viable depends on a number of factors, which include, without limitation, the particular attributes of the property, such as size, grade and proximity to infrastructure; oil and gas prices, which fluctuate widely; and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of oil and gas and environmental protection. We may invest significant capital and resources in exploration activities and abandon such investments if we are unable to identify commercially exploitable oil and gas reserves. The decision to abandon a project may reduce the future trading price of our common stock and impair our ability to raise financing. We cannot provide any assurance to investors that we will discover or acquire any oil and gas reserves in sufficient quantities on any properties to justify commercial operations. Further, we will not be able to recover the funds that we may spend on exploration if we are not able to establish commercially recoverable quantities of oil and gas.

           We will require additional funding in the future.

Based upon our historical losses from operations, we will require additional funding in the future. If we cannot obtain capital through financings or otherwise, our ability to execute our oil and gas programs and/or alternative resource programs will be greatly limited. Our current plans require us to make capital expenditures for the development of our oil and gas properties. Historically, we have funded our operations through the issuance of equity and short-term debt financing arrangements. We may not be able to obtain additional financing on favorable terms, if at all. Our future cash flows and the availability of financing will be subject to a number of variables, including potential production and the market prices of oil and gas, and our potential success in the alternative fuel industry. Additional financing could lead to a diversion of cash flow to satisfy debt-servicing obligations and create restrictions on business operations. If we are unable to raise additional funds, it would have a material adverse effect upon our operations.

As part of our growth strategy, we intend to acquire additional oil and gas properties.

As part of our growth strategy, we intend to acquire additional oil and gas production properties. Current and subsequent acquisitions may pose substantial risks to our business, financial condition, and results of operations. In pursuing acquisitions, we will compete with other companies, many of which have greater financial and other resources to acquire attractive properties. Even if we are successful in acquiring additional properties, some of the properties may not produce positive results of exploration, or we may not complete exploration of such prospects within specified time periods that may cause the forfeiture of the lease in that prospect. There can be no assurance that we will be able to successfully integrate acquired properties, which could result in substantial costs and delays or other operational, technical, or financial problems. Further, acquisitions could disrupt ongoing business operations. If any of these events occur, it would have a material adverse effect upon our operations and results from operations.

We are a new entrant into the oil and gas exploration and development industry without a profitable operating history.

Our recent activities have been limited to organizational efforts, obtaining working capital and acquiring and developing a very limited number of properties. As a result, there is limited information regarding production or revenue generation. Further, our future revenues may be limited.

The business of oil and gas exploration and development is subject to many risks and if oil and gas is found in economic production quantities, the potential profitability of future possible oil and gas ventures depends upon factors beyond our control. The potential profitability of oil and gas properties if economic quantities of oil and gas are found is dependent upon many factors and risks beyond our control, including, but not limited to: (i) unanticipated ground conditions; (ii) geological problems; (iii) drilling and other processing problems; (iv) the occurrence of unusual weather or operating conditions and other force majeure events; (v) lower than expected reserve quantities; (vi) accidents; (vii) delays in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) labor disputes; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials and equipment; and (xii) the failure of equipment or drilling to operate in accordance with specifications or expectations.

Our drilling operations may not be successful.

In the event we acquire additional oil and gas properties, we intend to test certain zones in wellbores already drilled on the properties and if results are positive and capital is available, drill additional wells and begin production operations from existing and new wells. There can be no assurance that such well re-completion activities or future drilling activities will be successful, and we cannot be sure that our overall drilling success rate or our production operations within a particular area will ever come to fruition and, if it does, will not decline over time. We may not recover all or any portion of our capital investment in the wells or the underlying leaseholds. Unsuccessful drilling activities would have a material adverse effect upon our results of operations and financial condition. The cost of drilling, completing, and operating wells is often uncertain, and a number of factors can delay or prevent drilling operations including: (i) unexpected drilling conditions; (ii) pressure or irregularities in geological formations; (iii) equipment failures or accidents; (iv) adverse weather conditions; and (iv) shortages or delays in availability of drilling rigs and delivery of equipment.

Prospects that we decide to drill may not yield natural gas or oil in commercially viable quantities.

We describe some of our current prospects in this Annual Report. Our prospects are in various stages of preliminary evaluation and assessment and we have not reached the point where we will decide to drill at all on the subject prospects. However, the use of seismic data, historical drilling logs, offsetting well information, and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling and testing whether natural gas or oil will be present or, if present, whether natural gas or oil will be present in sufficient quantities or quality to recover drilling or completion costs or to be economically viable. In sum, the cost of drilling, completing and operating any wells is often uncertain and new wells may not be productive.

We may be unable to identify liabilities associated with the properties or obtain protection from sellers against them.

One of our growth strategies is to capitalize on opportunistic acquisitions of oil and natural gas reserves. However, our reviews of acquired properties are inherently incomplete because it generally is not feasible to review in depth every individual property involved in each acquisition. 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. Further, environmental problems, such as ground water contamination, are not necessarily observable even when an inspection is undertaken. We may not be able to obtain indemnification or other protections from the sellers against such potential liabilities, which would have a material adverse effect upon our results of operations.

The potential profitability of oil and gas ventures depends upon global political and market related factors beyond our control.

World prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These and other changes and events may materially affect our financial performance. The potential profitability of oil and gas properties is dependent on these and other factors beyond our control.

Production or oil and gas resources if found are dependent on numerous operational uncertainties specific to the area of the resource that affects its profitability.

Production area specifics affect profitability. Adverse weather conditions can hinder drilling operations and ongoing production work. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. Production and treatments on other wells in the area can have either a positive or negative effect on our production and wells. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The content of hydrocarbons is subject to change over the life of producing wells. The marketability of oil and gas from any specific reserve which may be acquired or discovered will be affected by numerous factors beyond our control. These factors include, but are not limited to, the proximity and capacity of oil and gas pipelines, availability of room in the pipelines to accommodate additional production, processing and production equipment operating costs and equipment efficiency, market fluctuations of prices and oil and gas marketing relationships, local and state taxes, mineral owner and other royalties, land tenure, lease bonus costs and lease damage costs, allowable production, and environmental protection. These factors cannot be accurately predicted and the combination of these factors may result in us not receiving an adequate return on our invested capital.

We are dependent upon transportation and storage services provided by third parties.

We are dependent on the transportation and storage services offered by various interstate and intrastate pipeline companies for the delivery and sale of our oil and gas supplies.  Both the performance of transportation and storage services by interstate pipelines and the rates charged for such services are subject to the jurisdiction of the Federal Energy Regulatory Commission or state regulatory agencies. An inability to obtain transportation and/or storage services at competitive rates could hinder our processing and marketing operations and/or affect our sales margins.

Our results of operations are dependent upon market prices for oil and gas, which fluctuate widely and are beyond our control.

If and when production from oil and gas properties is reached, our revenue, profitability, and cash flow depend upon the prices and demand for oil and natural gas. The markets for these commodities are very volatile and even relatively modest drops in prices can significantly affect our financial results and impede our growth. Prices received also will affect the amount of future cash flow available for capital expenditures and may affect our ability to raise additional capital. Lower prices may also affect the amount of natural gas and oil that can be economically produced from reserves either discovered or acquired. Factors that can cause price fluctuations include: (i) the level of consumer product demand; (ii) domestic and foreign governmental regulations; (iii) the price and availability of alternative fuels; (iv) technical advances affecting energy consumption; (v) proximity and capacity of oil and gas pipelines and other transportation facilities; (vi) political conditions in natural gas and oil producing regions; (vii) the domestic and foreign supply of natural gas and oil; (viii) the ability of members of Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; (ix) the price of foreign imports; and (x) overall domestic and global economic conditions.

The availability of a ready market for our oil and gas depends upon numerous factors beyond our control, including the extent of domestic production and importation of oil and gas, the relative status of the domestic and international economies, the proximity of our properties to gas gathering systems, the capacity of those systems, the marketing of other competitive fuels, fluctuations in seasonal demand and governmental regulation of production, refining, transportation and pricing of oil, natural gas and other fuels.

The oil and gas industry in which we operate involved many industry related operating and implementation risks that can cause substantial losses, including, but not limited to, unproductive wells, natural disasters, facility and equipment problems and environmental hazards.

Our drilling activities are subject to many risks, including the risk that we will not discover commercially productive reservoirs. Drilling for oil and natural gas can be unprofitable, not only from dry holes, but from productive wells that do not produce sufficient revenues to return a profit. In addition, our drilling and producing operations may be curtailed, delayed or canceled as a result of other drilling and production, weather and natural disaster, equipment and service failure, environmental and regulatory, and site specific related factors, including but not limited to: (i) fires; (ii) explosions; (iii) blow-outs and surface fractures; (iv) uncontrollable flows of underground natural gas, oil, or formation water; (v) natural disasters; (vi) facility and equipment failures; (vii) title problems; (viii) shortages or delivery delays of equipment and services; (ix) abnormal pressure formations; and (x) environmental hazards such as natural gas leaks, oil spills, pipeline ruptures and discharges of toxic gases. 1(xi) weather related events such as hurricanes can cause disruption of deliveries or destruction of producing facilities, either on or off shore.  Such damage may be to our facilities or to facilities operated by other companies needed for the delivery of our production.

If any of these events occur, we could incur substantial losses as a result of: (i) injury or loss of life; (ii) severe damage to and destruction of property, natural resources or equipment; (iii) pollution and other environmental damage; (iv) clean-up responsibilities; (v) regulatory investigation and penalties; (vi) suspension of our operations; or (vii) repairs necessary to resume operations.

If we were to experience any of these problems, it could affect well bores, gathering systems and processing facilities, any one of which could adversely affect our ability to conduct operations. We may be affected by any of these events more than larger companies, since we have limited working capital.

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

The oil and natural gas industry is intensely competitive, and we compete with other companies that have greater resources. Many of these companies not only explore for and produce oil and natural gas, but also carry on refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive oil and natural gas properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low oil and natural gas market prices. Our larger competitors may be able to absorb the burden of present and future federal, state, local and other laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in bidding for exploratory prospects and producing oil and natural gas properties.

The marketability of natural resources will be affected by numerous factors beyond our control, which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our business operations.

Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend material amounts on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations.

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.

We believe that our operations comply, in all material respects, with all applicable environmental regulations. We need insurance to protect our self against risks associated with the leases obtained. The leases allow for entry onto the properties for the purposes of oil and gas exploration. The insurance we require relates solely to developments on the properties for the purposes of oil and gas exploration.

When and if we are convinced that our current leases or those subsequently acquired are capable of hydrocarbon production and sales, and we plan to drill more than one well, we intend to maintain a $2,000,000 per year limit policy on bodily injury and general liability with regard to risks incurred for the drilling of up to 25 wells. This will allow for our growth to contain non contract labor that would require us to carry such additional insurance for risks pertaining to oil and gas exploration conducted directly by us. Such a policy would include coverage for numerous locations for pollution, environmental damage, chemical spills and commercial general liability, fire, and personal injury. Such a policy will not be required until such time and date as we believe that we will begin a sustained drilling and operating program, and that at least one well has been drilled and is producing to justify and warrant further drilling and a sustained drilling and operating program.

We currently maintain commercial general liability and related types of insurance coverage on the recently acquired Louisiana Shelf well.

Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States or any other jurisdiction, may be changed, applied or interpreted in a manner which will fundamentally alter our ability to carry on business. The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate and/or our profitably.

We may be unable to retain key employees or consultants or recruit additional qualified personnel.

Our extremely limited personnel means that we would be required to spend significant sums of money to locate and train new employees in the event any of our employees resign or terminate their employment with us for any reason. Due to our limited operating history and financial resources, we are entirely dependent on the continued service of Samuel Skipper, our Chief Executive Officer, and N. Wilson Thomas, our Chief Financial Officer. Further, we do not have key man life insurance on either of these individuals. We may not have the financial resources to hire a replacement if one or both of our officers were to die. The loss of service of either of these employees could therefore significantly and adversely affect our operations.

Nevada law and our articles of incorporation may protect our directors from certain types of lawsuits.

Nevada law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

Risks Related to Our Common and Preferred Stock

Sales of a substantial number of shares of our common stock into the public market by stockholders may result in significant downward pressure on the price of our common stock and could affect your ability to realize the current trading price of our common stock.

Sales of a substantial number of shares of our common stock in the public market by stockholders could cause a reduction in the market price of our common stock.  As of the date of this Annual Report, we have 9,374,753 shares of common stock issued and outstanding, 100,000 of our Series A Convertible Preferred stock issued and outstanding , 1,000,000 or our Series B Convertible Preferred stock issued and outstanding, 660,000 of our Series C Convertible Preferred stock issued and outstanding, and 303,936 of our Series D Convertible Preferred stock. As of the date of this Annual Report, there are 6,144,183 outstanding shares of our common stock and 2,063,936 outstanding shares of our Convertible Preferred stock that are restricted securities as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Although the Securities Act and Rule 144 place certain prohibitions on the sale of restricted securities, restricted securities may be sold into the public market under certain conditions.  In the event that any of the Convertible Preferred shares of stock are converted into shares of common stock, such shares may be available for immediate resale which could have an adverse effect on the price of our common stock.

Any significant downward pressure on the price of our common stock as stockholders sell their shares of our common stock could encourage short sales by others. Any such short sales could place further downward pressure on the price of our common stock.

The trading price of our common stock on the OTC Bulletin Board will fluctuate significantly and stockholders may have difficulty reselling their shares.

Effective March 14, 2007, our shares of common stock commenced trading on the Over-the-County Bulletin Board. There is a volatility associated with Bulletin Board securities in general and the value of your investment could decline due to the impact of any of the following factors upon the market price of our common stock: (i) disappointing results from our discovery or development efforts; (ii) failure to meet our revenue or profit goals or operating budget; (iii) decline in demand for our common stock; (iv) downward revisions in securities analysts' estimates or changes in general market conditions; (v) technological innovations by competitors or in competing technologies; (vi) lack of funding generated for operations; (vii) investor perception of our industry or our prospects; and (viii) general economic trends.

In addition, stock markets have experienced price and volume fluctuations and the market prices of securities have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of our common stock. As a result, investors may be unable to sell their shares at a fair price and you may lose all or part of your investment.

Additional issuance of equity securities may result in dilution to our existing stockholders.

Our Articles of Incorporation authorize the issuance of 75,000,000 shares of common stock. Common stock is our only authorized class of stock. The board of directors has the authority to issue additional shares of our capital stock to provide additional financing in the future and the issuance of any such shares may result in a reduction of the book value or market price of the outstanding shares of our common stock. If we do issue any such additional shares, such issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders. As a result of such dilution, your proportionate ownership interest and voting power will be decreased accordingly. Further, any such issuance could result in a change of control.

Our common stock is classified as a “penny stock” under SEC rules which limits the market for our common stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks." Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules. If a trading market for our common stock develops, our common stock will probably become subject to the penny stock rules, and shareholders may have difficulty in selling their shares.

ITEM 2. DESCRIPTION OF PROPERTY

We lease our principal office space located at 3315 Marquart St, Ste. 206, Houston, Texas 77027 on a month to month basis, which lease is cancelable with a thirty day notice. We also leased office space in Corpus Christi on a month to month basis through September, 2007.  During fiscal year ended December 31, 2007, aggregate rent expense was $26,871.68. The office space cost in Houston is $1,988 per month.  The building at Marquart Street is partially owned by our CEO, Sam Skipper.

ITEM 3. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Annual Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

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

During fiscal year ended December 31, 2007, there were no matters submitted to a vote by our security holders.

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND RECENT SALE OF UNREGISTERED SECURITIES

Subsequent to consummation of the Merger Agreement, our shares of common stock traded on the Pink Sheets under the symbol: ECCE.PK”. Effective March 14, 2007, our shares of common stock commenced trading on the Over-the-Counter Bulletin Board under the symbol: ECCE.OB”. The market for our common stock is and will be limited and can be volatile. The following table sets forth the high and low bid prices relating to our common stock on a quarterly basis for the periods indicated as compiled by Pink Sheets LLC. These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions, and may not reflect actual transactions.

Quarter Ended	High Bid	Low Bid
December 31, 2007	$1.58	$0.30
September 30, 2007	$  .45	$.26
June 30, 2007	$ .59	$.15
March 31, 2007	$1.04	$.15
December 31, 2006	$1.04	$.10
September 30, 2006	$2.50	$1.04

As of March 1, 2008, we had 233 shareholders of record.

DIVIDEND POLICY

No dividends have ever been declared by the Board of Directors on our common stock. Our losses do not currently indicate the ability to pay any cash dividends, and we do not indicate the intention of paying cash dividends either on our common stock in the foreseeable future. We intend to apply our earnings, if any, in expanding our operations and related activities. The payment of cash dividends in the future will be at the discretion of the Board of Directors, our financial condition and other facts deemed relevant by our Board of Directors. In addition, our ability to pay dividends may be limited under future loan agreements, which restrict or prohibit the payment of dividends.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS

As of the date of this Annual Report, we have one equity compensation plan titled the 2005 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Awards Plan (the “Plan”).  On December 14, 2005, our Board of Directors approved and adopted the Plan. The Plan provides for the issuance of 100,000 shares of common stock, warrants, options, preferred stock or any combination thereof. The shares subject to the Plan shall consist of authorized but unissued shares of common stock and such number of shares shall be and reserved for sale for such purpose.

The purpose of the Plan is to maintain our ability to attract and retain highly qualified and experienced directors, employees and consultants and give to such directors, employees and consultants a continued proprietary interest in our success.

The Plan will be administered by our Board of Directors who shall have sole and absolute discretion authorizing, determining and designating those persons who are to receive common stock, warrants, options, preferred stock or any combination thereof.

As of the date of this Quarterly Report, we have not granted any options under the Plan.

RECENT SALES OF UNREGISTERED SECURITIES

As of the date of this Annual Report and during fiscal year ended December 31, 2006, to provide capital, we sold stock in private placement offerings, issued stock in exchange for our debts or pursuant to contractual agreements as set forth below.

Common Stock

During third quarter 2007, we issued an additional 141,750 shares and 110,000 shares to Ronald E. Reece M.D. in connection with the purchase of the 20% working interest in the E.C. Wilson and Wilson State Tract Leases located in Nueces County, Texas from Ronald E. Reece M.D. Revocable Trust of 2000 as outlined in the Agreement. The securities were issued in reliance on Section 4(2) of the Securities Act. The securities issued have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements.

During fourth quarter of 2007, we offered and issued 75,000 shares of our restricted common stock to an investor for aggregate proceeds of $30,000. The offering was completed in reliance on Regulation D of the Securities Act. Sales were made to only one U.S. resident. The shares were not registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements. The per share price of the offering was arbitrarily determined by our Board of Directors based upon analysis of certain factors including, but not limited to, stage of development, industry status, investment climate, perceived investment risks, our assets and net estimated worth.

Preferred Stock

Convertible Series B Preferred Stock

On September 28, 2007 we executed an agreement pursuant to which we acquired all of the assets of Louisiana Shelf Partners for $5,000,000 by issuing to the General Partner and limited partners of Louisiana Shelf Partners, 1,000,000 of Convertible Preferred Series B stock, convertible into our restricted common stock at 1 common share per share of Convertible Preferred Series B Stock.On approximately September 30, 2007, we filed with the Nevada Secretary of State a First Amended Certificate of Designation of Series B Convertible Preferred Stock designating 1,000,000 shares of the 10,000,000 shares of authorized preferred stock as Series B Preferred Stock, with an initial value of $5.00 (the “Initial Value”). The Series B Preferred Stock had been authorized by our Board of Directors as a new series of preferred stock, which ranks senior and is not subordinated in any respects to the Series A Preferred Stock. So long as any Series B Preferred Stock is outstanding, we are prohibited from issuing any series of stock having rights senior to or ranking on parity with the Series B Preferred Stock without the approval of the holders of 2/3’s of the outstanding Series B Preferred Stock. The holders of the outstanding shares of Series B Preferred Stock shall be entitled to receive in preference to the holders of any other shares of capital stock of the Corporation, cumulative dividends when and as if they may be declared by the Board of Directors at a per share equal to 8% per annum of the Initial Value. Additionally, upon occurrence of our liquidation, dissolution or winding up, the holder of shares of Series B Preferred Stock will be entitled to receive, before any distribution of assets is made to holders of our common stock or any other stock ranking junior to the Series B Preferred Stock Preferred Stock as to dividends or liquidations rights, but only after all distributions to holders of Series B Preferred Stock have been made in an amount per share of Series B Preferred Stock equal to 100% of the Initial Value plus the amount of any accrued but unpaid dividends due for each share of Series B Preferred Stock (the “Liquidation Amount”). Lastly, in addition to the rights discussed above of the holders of the Series B Preferred Stock, at any time after June 15, 2008 and provided a triggering event has occurred, each holder of Series B Preferred Stock shall have the right at such holder’s option to require us to redeem for cash all or a portion of such holder’s shares of Series B Preferred Stock at a price per share equal to the Liquidation Amount. A “triggering event” shall mean that the wells owned or operated by the Limited Partnership have generated an aggregate of 1,500,000,000 cubic feet of natural gas.

Convertible Series C and D Preferred Stock

On approximately December 1, 2007, we entered into the Share Exchange Agreement with Old Jersey and Noser, who holds of record 100% of the total issued and outstanding interests in Old Jersey (the “Membership Interest”), regarding our acquisition of Old Jersey. In accordance with the terms and provisions of the Share Exchange Agreement, we shall acquire from Noser all of his right, title and interest in and to the Membership Interest in exchange for the issuance of 660,000 shares of our Series C Preferred Stock and 303,936 shares of the Company’s Series D Preferred Stock.

On approximately March 27, 2008, we filed with the Nevada Secretary of State a First Amended Certificate of Designation of Series C Convertible Preferred Stock designating 660,000 shares of the 10,000,000 shares of authorized preferred stock as Series C Preferred Stock, with an initial value of $5.00 (the “Initial Value”). The Series C Preferred Stock had been authorized by our Board of Directors as a new series of preferred stock, which ranks senior and is not subordinated in any respects to the Series A or B Preferred Stocks. So long as any Series C Preferred Stock is outstanding, we are prohibited from issuing any series of stock having rights senior to or ranking on parity with the Series C Preferred Stock without the approval of the holders of 2/3’s of the outstanding Series C Preferred Stock. The holders of the outstanding shares of Series C Preferred Stock shall be entitled to receive in preference to the holders of any other shares of capital stock of the Corporation, cumulative dividends when and as if they may be declared by the Board of Directors at a per share equal to 8% per annum of the Initial Value. Additionally, upon occurrence of our liquidation, dissolution or winding up, the holder of shares of Series B Preferred Stock will be entitled to receive, before any distribution of assets is made to holders of our common stock or any other stock ranking junior to the Series C Preferred Stock Preferred Stock as to dividends or liquidations rights, but only after all distributions to holders of Series B Preferred Stock have been made in an amount per share of Series B Preferred Stock equal to 100% of the Initial Value plus the amount of any accrued but unpaid dividends due for each share of Series C Preferred Stock (the “Liquidation Amount).  See exhibit 3.13 for full disclosure information pertaining to Series D Convertible Preferred Stock.

On approximately March 27, 2008, we filed with the Nevada Secretary of State a First Amended Certificate of Designation of Series D Convertible Preferred Stock designating 303,396 shares of the 10,000,000 shares of authorized preferred stock as Series D Preferred Stock, with an initial value of $5.00 (the “Initial Value”). The Series C Preferred Stock had been authorized by our Board of Directors as a new series of preferred stock, which ranks senior and is not subordinated in any respects to the Series A or B or C Preferred Stocks. So long as any Series D Preferred Stock is outstanding, we are prohibited from issuing any series of stock having rights senior to or ranking on parity with the Series C Preferred Stock without the approval of the holders of 2/3’s of the outstanding Series D Preferred Stock. The holders of the outstanding shares of Series D Preferred Stock shall be entitled to receive in preference to the holders of any other shares of capital stock of the Corporation, cumulative dividends when and as if they may be declared by the Board of Directors at a per share equal to 8% per annum of the Initial Value. Additionally, upon occurrence of our liquidation, dissolution or winding up, the holder of shares of Series B or C Preferred Stock will be entitled to receive, before any distribution of assets is made to holders of our common stock or any other stock ranking junior to the Series D Preferred Stock Preferred Stock as to dividends or liquidations rights, but only after all distributions to holders of Series B or C Preferred Stock have been made in an amount per share of Series B or C Preferred Stock equal to 100% of the Initial Value plus the amount of any accrued but unpaid dividends due for each share of Series D Preferred Stock (the “Liquidation Amount).  See exhibit 3.14 for full disclosure information pertaining to Series D Convertible Preferred Stock.

ITEM 6.   MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The summarized financial data set forth below is derived from and should be read in conjunction with our audited consolidated financial statements for fiscal years ended December 31, 2007 and 2006, including the notes to those financial statements which are included in this Annual Report. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report, particularly in the section entitled "Risk Factors". Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

RESULTS OF OPERATION

We have incurred recurring losses to date. Over the next twelve months our strategy is to grow our asset base by acquiring producing properties and investing in working interest in non-operated properties. In addition, we plan to use innovative and sound engineering principles to enhance existing production. We will acquire operated as well as non-operated properties that meet or exceed our rate of return criteria. For acquisitions of properties with additional development, exploitation and exploration potential, our focus has been on acquiring operated properties so that we can better control the timing and implementation of capital spending. We will sell properties when management is of the opinion that the sale price realized will provide an above average rate of return for the property or when the property no longer matches the profile of properties we desire to own.

The execution of our growth strategy is dependent on a number of factors including oil and gas prices, the availability of oil and gas properties that meet our economic criteria and the availability of funds on terms that are acceptable to us, if at all. There is no assurance that these factors will occur. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Fiscal Year Ended December 31, 2007 Compared to Fiscal Year Ended December 31, 2006

Our net loss applicable to common stockholders for 2007 was ($341,155) compared to a net loss of ($234,923) during ended 2006 (a decrease of $106,232). During 2007, we generated revenue of $468,831 compared to revenue of $485,685 generated during 2006 (a decrease of $16,854). The decrease in revenues during 2007 compared to 2006 was attributable to a decline in gas and oil sales resulting from depletion of the Wilson State Track 5-2.   The net loss before the inclusion of Dividend on Preferred Stock, was ($241,155), or ($0.03) per share.  The Dividend on Preferred Stock was $100,000.

During 2007, we incurred operating expenses of $652,992 compared to $682,296 incurred during 2006 (a decrease of $29,304). These operating expenses incurred during fiscal year ended December 31, 2007 consisted of: (i) salaries and compensation expense of $218,703 (2006: $260,983); (ii) professional and consulting fees of $115,247 (2006: $170,917); (iii) depreciation and depletion of $83,064 (2006: $96,154); (iv) general and administrative expenses of $103,619 (2006: $85,304); and (v) lease operating expenses of $132,359 (2006: $68,938). Interest expense of $15,652 (2006: $38,312) decreased during 2007 due to decreased short term borrowing during the first portion of the year.

Salaries and compensation expenses, professional and consulting fees, and general and administrative expenses incurred during 2007 increased, respectively, primarily due to the increase in operating costs associated with the increased development of our oil and gas properties, related infrastructure and overall corporate activity. Accounting and audit fees of $63,423 were paid. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

Depreciation and depletion of oil and gas properties decreased during 2007 primarily due to the decline in gas (23,133 mcf) and oil (1,132 bbl) production from. Interest expense also increased resulting from the long-term debt incurred in 2005 and 2007 for the purchase of our Wilson properties, as well as other debt items.

Our lease operating expenses increased, however, during fiscal year ended December 31, 2007 primarily attributable to higher compressor fees, pumping expenses, insurance and similar costs related to the production of oil and gas.

Of the $652,992 incurred as operating expenses, $128,850 of those expenses entailed compensation to our executive officers or directors. See “Item 10. Executive Compensation.”

LIQUIDITY AND CAPITAL RESOURCES

Fiscal Year Ended December 31, 2007

At December 31, 2007, our current assets were $115,360 and our current liabilities were $913,087, which resulted in a working capital deficiency of ($797,727). At December 31, 2007, current assets were comprised of: cash $80,355 and receivables of $35,005.  At December 31, 2007, current liabilities were comprised of: (i) $62,770 in accounts payable-trade; (ii) $705,548 in current maturities of debt; (iii) $19,886 in accounts payable – related parties, and (iv) $124,883 in accrued expenses, including $100,000 of Dividends Payable on Preferred Stock.

At December 31, 2007, our total assets were $11,078,518 comprised of: (i) $115,360 in current assets; (ii) $11,205,572 in oil and gas properties and equipment, less accumulated depletion and depreciation of ($242,414). The increase in total assets during fiscal year ended December 31, 2007 from fiscal year ended December 31, 2006 was primarily due to the acquisition of oil and gas properties.

At December 31, 2007, our total liabilities were $976,021 comprised of: (i) $913,087 in current liabilities; and (ii) $62,934 in asset retirement obligation. The increase in liabilities during fiscal year ended December 31, 2007 from fiscal year ended December 31, 2006 was primarily due to the increase in current liabilities in accounts payable – trade $43,873 and accrued expenses and short term debt $739,044.

Stockholders’ equity increased from $494,651 for fiscal year ended December 31, 2006 to $10,102,497 for fiscal year ended December 31, 2007 due to the acquisition of properties and the issuance of preferred stock.

Cash Flows from Operating Activities

During 2007, net cash increased by $78,843 consisting of ($12,061) used in operations and ($257,709) used in investing activities, which was offset by $348,613 which was the net provided by financing activities.

For 2007, net cash flows used in operating activities was ($12,061) consisting primarily of a net loss of ($241,155). Net cash flows used in operating activities was adjusted by: (i) $83,064 for the non-cash expense of depreciation, depletion and accretion; (ii) $64,374 for the increase in accounts payable-trade and ($132,609 for accounts payable – related party; (iii) $12,764 from the disposal of inventory and (iv) $34,019 increase in accounts receivable.

For 2007, net cash flow from oil and gas revenue decreased by $16,854, primarily from depletion relating to the Wilson property.

Cash Flows from Investing Activities

For 2007, net cash flows used in investing activities was ($257,709) consisting of the purchase of additional oil and gas properties in the Wilson lease.

Cash Flows from Financing Activities

We have financed some of our operations and all of our acquisitions from the issuance of equity and debt instruments. For 2007, net cash flows provided by financing activities was $348,613, compared to net cash flows used in financing activities of ($29,791) for 2006.  This amount consists of proceeds from common stock sales, $30,000, and debt issuance of $400,000. We paid off a debt of $81,387 which was outstanding at December 31, 2006.

We expect that working capital requirements will continue to be funded through a combination of our future revenues, existing funds and further issuances of securities and debt. Our working capital requirements are expected to increase in line with the growth of our business.

PENDING ACQUISITIONS AND FUNDING

On February 14, 2008, ECCO Energy purchased an additional 25% of the working interest in Louisiana Shelf East Cameron Block 4, bringing the total working interest owned by ECCO to 100%.  The purchase was approved in December by the trustee, and received final approval in February by the court, whereupon the interest was purchased  from the Trustee of the United States Bankruptcy Court.

ECCO Energy entered into a farmout agreement dated January 11, 2008 (the “Farmout Agreement”) with an independent oil & gas corporation (IOG), concerning the right, title and interest of the Company in lease no. 1337 on the Bateman Lake Field. In accordance with the terms and provisions of the Farmout Agreement, IOG has the exclusive right, but not the obligation, to re-enter the Bateman Lake Field for the purpose of sidetracking, deepening, working over or recompleting any of the wells situated on the Bateman Lake Field. In accordance with the further terms and provisions of the Farmout Agreement: (i) with regards to well nos. 4, 11, 21 and 26 (the “Partnership Wells”), the Company shall receive a 5% carried interest to the tanks until 120% of payout, at which time such carried interest shall convert to a 25% net profit interest and the Company shall receive a 25% working interest; (ii) with regards to well nos. 9 and 19 formerly operated by VTEX (the “Partnership Retained Wells”), the Company shall retain ownership in the Partnership Retained Wells and rights to any proceeds received for the sale of oil and/or gas to which IOG shall have no rights; (iii) with regards to other workover wells, the Company shall be carried to the tanks to the extent of a 5% working interest in workover operations until 125% of payout and upon 125% of payout, the Company may elect to continue to receive the 5% carried working interest or convert the 5% carried working interest to a 25% working interest; (iv) with regards to other sidetrack wells, the Company shall be carried to the tanks to the extent of a 5% working interest in sidetrack operations until 150% of payout and upon 150% of payout, the Company may elect to continue to receive the 5% carried working interest or convert the 5% carried working interest to a 25% working interest; and (v) the Company shall receive a 25% working interest upon reaching 150% of payout of all costs related to the first three new drill wells.

Upon consummation of the Farmout Agreement: (i) IOG will pay an aggregate $750,000 relating to the Debt to the Company; (ii) the Company caused the cancellation of the Debt and any other liens on lease no. 1337; and (iii) the Company entered into an assignment dated January 11, 2008 (the “Company Assignment”) with IOG pursuant to which the Company assigned to IOG all of its right, title and interest in and to lease no. 1337 on the Bateman Lake Field. It is the Company’s intent that the Series C and D Preferred Stock shall be redeem out of future earnings generated from lease no. 1337 on the Bateman Lake Field.

Existing working capital, future revenues, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. Generally, we have financed operations to date through generation of revenues from operations and with proceeds from the private placement of equity and debt instruments and funding from related parties. Management anticipates additional increases in operating expenses and capital expenditures relating to: (i) oil and gas operating properties; (ii) possible drilling initiatives on current properties and future properties; and (iii) future property acquisitions. We intend to fund these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

MATERIAL COMMITMENTS

As noted in the December 31, 2006 Annual Report, we had a material commitment for 2007, which consists of a promissory note payable to a related party of $155,000.  The terms of the note required us to make monthly payments of $7,150, including principal and interest at 10% per annum. The unsecured note was paid in full before December 7, 2007.

As noted in the December 31, 2006 Annual Report, we have a promissory note payable to the Reece Revocable Trust in the principal amount of $205,548 payable in one lump sum payment on or before July 31, 2008 with interest accruing at the rate of 7% per annum payable in monthly installments on the last day of each month, with the first payment made on August 31, 2007.

During fiscal year 2008, we have certain short-term unsecured debt aggregating approximately $500,000 payable to certain creditors. In general, the terms include interest at the rate of 10% per annum with monthly payments of principal and interest.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Annual Report, we do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS No.123R, "Accounting for Stock-Based Compensation".  SFAS No.123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  SFAS No.123R requires that the fair value of such equity instruments be recognized as expense in the historical financial statements as services are performed. Prior to SFAS No.123R, only certain pro forma disclosures of fair value were required. ECCE adopted SFAS No. 123R as of January 1, 2006.  As of December 31, 2006, we have not issued any options or warrants.

ITEM 7.  FINANCIAL STATEMENTS

Index to Financial Statements
	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets at December 31, 2007 and 2006	F-2
Consolidated Statements of Operations for the years ended December 31, 2007 and 2006	F-3
Consolidated Statements of Changes in Shareholders’Equity for the years ended December 31, 2007 and 2006	F-4
Consolidated Statements of Cash Flows for the year ended December 31, 2007 and 2006	F-5
Notes to Consolidated Financial Statements	F-6 to 12

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

ECCO Energy Corp.

Houston, Texas

We have audited the accompanying consolidated balance sheets of ECCO Energy Corp. as of December 31, 2007 and 2006, and the related consolidated statements of operations, shareholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of ECCO Energy Corp.’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ECCO Energy Corp., as of December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company 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 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MALONE & BAILEY, PC

www.malone-bailey.com

Houston, Texas

April 22, 2008

F-1

ECCO ENERGY CORP.
CONSOLIDATED BALANCE SHEETS
		December 31,
		2007	2006
ASSETS
CURRENT ASSETS
	Cash and cash equivalents	$                  80,355	$                 1,512
	Accounts Receivable	35,005	-
	Total current assets	115,360	1,512
PROPERTY and EQUIPMENT
	Oil and gas properties, using full cost accounting	11,177,355	945,152
	Equipment	28,217	8,039
	Less accumulated depreciation and depletion	(242,414)	(164,252)
	Total property and equipment	10,963,158	788,939
OTHER ASSETS
	Deposits	-	2,340
TOTAL ASSETS		$           11,078,518	$             792,791
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
	Accounts payable-trade	$                  62,770	$               18,897
	Accounts payable-related parties	19,886	146,456
	Accrued expenses	124,883	10,000
	Current maturities of long-term debt – third parties	555,548	-
	Current maturities of long-term debt - affiliates	150,000	81,387
	Total current liabilities	913,087	256,740
LONG-TERM LIABILITIES
	Asset retirement obligation	62,934	41,400
TOTAL LIABILITIES		976,021	298,140
SHAREHOLDERS’ EQUITY
	Preferred stock, 10,000,000 shares authorized:
	Series A, $.001 par value; 100,000 and no shares issued and outstanding	100	100
	Series B, $.001 par value; 1,000,000 and no shares issued and outstanding	1,000	-
	Series C, $.001 par value; 660,000 and no shares issued and outstanding	660	-
	Series D, $.001 par value; 303,936 and no shares issued and outstanding	304	-
	Common stock, $.001 par value; 75,000,000 shares authorized;
	9,374,753 and 9,048,003 shares issued and outstanding	9,375	9,048
	Additional paid-in-capital	10,820,933	874,223
	Retained deficit	(729,875)	(388,720)
	Total shareholders’ equity	10,102,497	494,651
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$           11,078,518	$           792,791

See summary of significant accounting policies and notes to consolidated financial statements.

F-2

ECCO ENERGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
	Years Ended
	December 31,
	2007	2006
REVENUE	$              468,831	$                485,685
OPERATING EXPENSES
Salaries and compensation expense	218,703	260,983
Professional and consulting fees	115,247	170,917
Depreciation, depletion and accretion	83,064	96,154
General and administrative expenses	103,619	85,304
Lease operating expenses	132,359	68,938
Total operating expenses	652,992	682,296
Net operating loss	(184,161)	(196,611)
OTHER INCOME (EXPENSE
Other Expenses	(41,342)	-
Interest expense	(15,652)	(38,312)
Net loss	(241,155)	(234,923)
Dividend applicable to preferred stock	(100,000)	-
Net loss applicable to common stockholders	$            (341,155)	$             (234,923)
Basic and diluted net loss per share	$                  (0.04)	$                   (0.03)
Weighted average shares outstanding	9,165,575	9,013,175

See summary of significant accounting policies and notes to consolidated financial statements.

F-3

ECCO ENERGY CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Years Ended December 31, 2007, and 2006

	Preferred Shares	Preferred Stock Amount	Common Shares	Common Stock Amount	Additional Paid in Capital	Retained Deficit	Total
Balances, December 31, 2005	-	$             -	7,460,003	$      7,460	$    785,911	$(153,797)	$  639,574
Stock issued for:
Cash	-	-	1,350,000	1,350	88,650	-	90,000
Services	-	-	300,000	300	9,700	-	10,000
Purchase and cancellation of
common stock	-	-	(62,000)	(62)	(36,938)	-	(37,000)
Preferred stock issued as compensation	100,000	100	-	-	26,900	-	27,000
Net loss	-	-	-	-	-	(234,923)	(234,923)
Balances, December 31, 2006	100,000	100	9,048,003	9,048	874,223	(388,720)	494,651
Capital from sale of subsidiary	-	-	-	-	19,271	-	19,271
Common shares issued -
R. Reece 20% interest	-	-	141,750	142	36,713	-	36,855
Common shares issued -
R. Reece 11% interest	-	-	110,000	110	91,236	-	91,346
Series B preferred - Louisiana
Shelf acquisition	1,000,000	1,000	-	-	4,999,000	-	5,000,000
Series C Preferred - Bateman
Lake acquisition	660,000	660	-	-	3,299,340	-	3,300,000
Series D Preferred - Bateman
Lake acquisition	303,936	304	-	-	1,519,376	-	1,519,680
Common shares issued for cash	-	-	75,000	75	29,925	-	30,000
Adjustment from R. Reece -
Wilson acquisition	-	-	-	-	(48,151)	-	(48,151)
Preferred stock dividends	-	-	-	-	-	(100,000)	(100,000)
Net Loss	-	-	-	-	-	(241,155)	(241,155)
Balances, Dec. 31, 2007	2,063,936	$    2,064	9,374,753	$   9,375	$10,820,933	$(729,875)	$10,102,497

See summary of significant accounting policies and notes to consolidated financial statements.

F-4

ECCO ENERGY CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended
	December 31,
	2007	2006
Cash flows from operating activities:
Net loss	$          (241,155)	$           (234,923)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and accretion	83,064	96,154
Stock issued for compensation	-	27,000
Stock issued for services	-	10,000
Changes in assets and liabilities
Accounts receivable	(34,019)	-
Inventory	(12,764)	-
Prepaid expenses	-	8,544
Other assets	2,340	(390)
Accounts payable – Trade	61,374	139,014
Accounts payable – Related parties	132,609	-
Accrued liabilities	(3,510)	(5,000)
Net cash provided by (used in) operating activities	(12,061)	40,399
Cash flows from investing activities:
Acquisitions of oil and gas properties	(17,500)	-
Additions to oil and gas properties	(221,647)	(12,619)
Purchase of equipment	(18,562)	-
Net cash used in investing activities	(257,709)	(12,619)
Cash flows from financing activities:
Proceeds from sale of common stock	30,000	90,000
Purchase and cancellation of common stock	-	(37,000)
Proceeds from issuance of debt	400,000	-
Payments made on long term debt	(81,387)	(79,974)
Payments made on capital lease obligation	-	(2,817)
Net cash provided by (used in) financing activities	348,613	(29,791)
Net change in cash and cash equivalents	78,843	(2,011)
Cash and cash equivalents, at beginning of year	1,512	3,523
Cash and cash equivalents, at end of year	$            80,355	$                1,512
Supplemental cash flow information:
Interest paid	$              9,613	$              38,312
Non cash investing and financial activities:
Contributed capital from sale of subsidiary	$            19,271	$                       -
Equipment purchased on account	18,393	-
Related party payable relieved for oil and gas properties	257,430	-
Asset retirement obligations assumed for oil and gas properties	19,122	-
Debt issued for oil and gas properties	355,548	-
Preferred stock issued for oil and gas properties	9,819,680	-
Common stock issued for oil and gas properties	128,201	-
Purchase price adjustment for oil and gas acquisition	48,151	-
Preferred stock dividends	100,000	-

See summary of significant accounting policies and notes to consolidated financial statements

F-5

ECCO ENERGY CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

ECCO Energy Corp. (“ECCE”) is an independent oil and gas company organized in Nevada actively engaged in oil and gas development, exploration and production with properties and operational focus in the Texas Gulf Coast Region. ECCE’s strategy is to grow its asset base by purchasing producing assets at a discount to reserve value, increasing the production rate of reserves, and converting proved developed non-producing reserves to proved developed producing reserves. Acquisitions to date have provided producing assets.

On July 12, 2006 Samurai Energy Corp., a Delaware corporation, ECCO Energy Corp., a Nevada corporation (“ECCO”), and SEI Acquisition Corp., a Nevada corporation and a wholly owned subsidiary of Samurai (“Samurai Sub”) completed the transactions contemplated by the Agreement and Plan of Merger (“Agreement”), dated June 30, 2006. Samurai Sub merged with and into ECCO. As a result of the Merger, each three shares of ECCO common stock issued and outstanding converted into the right to receive one Samurai common share, the separate corporate existence of Samurai Sub ceased, and ECCO was the surviving corporation in the Merger. Samurai issued 1,415,999 shares to ECCO shareholders.  After completion of the transaction, ECCO became a wholly-owned subsidiary of Samurai and Samurai merged with and into ECCO, for the sole purpose of reincorporating into Nevada. On August 28, 2006, the reincorporation became effective resulting in Samurai continuing its corporate existence in Nevada under the name ECCO Energy Corp.

The acquisition has been accounted for as a business combination between entities under common control similar to a pooling of interests. Prior to the merger, Samurai and ECCO were controlled by the same management group and had certain common ownership interests in their respective common stock. Therefore, ECCE recorded the acquisition of ECCO at the carrying value of the assets acquired with no adjustment for the fair value of the assets acquired.  After the merger on July 12, 2006, ECCE had a 69% working interest in the E.C. Wilson and Wilson State Tract Leases.  In August, 2007 ECCO increased its working interest in the Wilson Lease to 89%, and in December, 2007, the working interest was increased to 100%.

Use of Estimates

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

Cash and Cash Equivalents

ECCE considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Oil and Gas Properties

The Company accounts for its oil and natural gas producing activities using the full cost method of accounting as prescribed by the United States Securities and Exchange Commission (SEC). Accordingly, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, including the costs of abandoned properties, dry holes, geophysical costs, and annual lease rentals are capitalized. All general and administrative corporate costs unrelated to drilling activities are expensed as incurred. Sales or other dispositions of oil and natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of cost to proved reserves would significantly change. Depletion of evaluated oil and natural gas properties is computed on the units of production method based on proved reserves. The net capitalized costs of proved oil and natural gas properties are subject to a full cost ceiling limitation in which the costs are not allowed to exceed their related estimated future net revenues discounted at 10%, net of tax considerations. In accordance with Staff Accounting Bulletin Topic 12.D.3.c., the Company utilizes the prices in effect on a date subsequent to the end of a reporting period in which the full cost ceiling limitation was exceeded at the end of a reporting period.

Costs associated with unevaluated properties are excluded from the full cost pool until the Company has made a determination as to the existence of proved reserves. The Company reviews its unevaluated properties at the end of each quarter to determine whether the costs incurred should be transferred to the full cost pool and thereby subject to amortization.

Revenue and Cost Recognition

ECCE uses the sales method of accounting for natural gas and oil revenues. Under this method, revenues are recognized based on the actual volumes of gas and oil sold to purchasers. The volume sold may differ from the volumes to which ECCE is entitled based on our interest in the properties. Costs associated with production are expensed in the period incurred.

Concentrations

Trade accounts receivables are generated from companies with significant oil and gas marketing activities, which would be impacted by conditions or occurrences affecting that industry. In 2006, approximately 89% of oil and gas revenues were attributable to one customer. ECCE performs ongoing credit evaluations of its customers and, generally, requires no collateral. ECCE is not aware of any significant credit risk relating to its customers and has not experienced any credit loss associated with such receivables. Substantially all receivables were collected shortly after December 31, 2007. Receivables from Samurai Operating Company LLC at December 31, 2007 and 2006 are reflected as a component of Accounts Payable-related party.

Income Taxes

ECCE recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to more likely than not.

Loss per Share

Basic and diluted net loss per share calculations are presented in accordance with Financial Accounting Standards Statement 128, and are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income.

    New Accounting Standards

 We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

2.        GOING CONCERN

 As shown in the accompanying financial statements, we incurred net losses applicable to common shareholders of $341,155 and $234,923 for 2007 and 2006, respectively. In addition, we had an accumulated deficit of $729,875 and a working capital deficit of $797,727 as of December 31, 2007. These conditions raise substantial doubt as to our ability to continue as a going concern. Management is working to raise additional capital through the farmout of oil and gas properties. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

3.       INCOME TAXES

As of December 31, 2007 and 2006 the Company had substantial net operating losses.  Net operating losses and book and tax differences are required by generally accepted accounting standards to be recorded.  Book and tax differences are not required to be recorded when the consequences of these differences might not be realized.  The substantial net operating losses will expire over the next 5 to 15 years.  The net operating losses may or may not be realized which will be dependent on future earnings, which are currently uncertain. All deferred tax assets are fully reserved.

4.       LONG AND SHORT TERM DEBT

A-RELATED PARTY

Note Payable 1 is from Samurai Energy LLC, a company controlled by ECCE’s President, and consisted of the following at December 31, 2007 and 2006:

	2007	2006
Promissory note to a related party- payable in monthly payments of $7,150 including principal and interest at 10% due December 7, 2007; unsecured	$                -	$        81,387

Note Payable 1 was paid in full in December, 2007.

Note Payable 2 is also from Samurai Energy LLC; a company controlled by ECCE’s President, and consisted of the following at December 31, 2007 and 2006

	2007	2006
Promissory note to a related party- payable in lump sum including principal and interest at 10% due November 30, 2008; unsecured	$     100,000	$                     -

Note Payable 3 is from Rick Bobigan, a significant investor in ECCO Energy:

	2007	2006
Promissory note to a related party- Payable in lump sum including principal and interest at 10% due May 13, 2008; unsecured	$      50,000	$                  -

             B- NON RELATED PARTIES

Note Payable 4 is from Ray Nesbitt, and includes the issue of 30,000 warrants, convertible to purchase ECCO common stock at $1.00 per share for 24 months.  ECCO, at its option, may extend the note for 180 day by issuing the lender 5,000 additional negotiable warrants convertible at $1.00 for 24 months.  The fair value of the warrants is immaterial.

	2007	2006
Promissory note to a non-related party- Payable in total plus accrued interest of 12% due February 16, 2008; secured by Oil and Gas Mineral lease Wilson Field.  See Wilson Field for detail.	$     300,000	$                   -

Note Payable 5 is from Bamco Gas, LLC; and relates to the purchase of Louisiana Shelf LLC.

	2007	2006
Promissory note to a non-related party- Payable in total plus accrued interest of 6% due June 26, 2008; not secured.	$       25,000	$                   -

Note Payable 6 is from Louisiana X Investors, LLC; and relates to the purchase of Louisiana Shelf LLC.

	2007	2006
Promissory note to a non-related party- Payable in total plus accrued interest of 6% due June 26, 2008; not secured.	$       25,000	$                   -

Note payable 7 is form Ronald E. Reece Revocable Trust of 2000 with an interest rate of 7% per annum and payable each month and with the principle balance due July 31, 2008.  The notes balance was $205,548 at December 31, 2007 and none at December 31, 2006.

5.       ASSET RETIREMENT OBLIGATION

In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations (SFAS 143). The Company adopted this new standard beginning January 1, 2003. SFAS 143 requires that the fair value of an asset retirement cost, and corresponding liability, should be recorded as part of the cost of the related long-lived asset and subsequently allocated to expense using a systematic and rational method. Upon adoption, the Company recorded an asset retirement obligation to reflect the Company’s legal obligations related to future plugging and abandonment of its oil and natural gas wells. The Company estimated the expected cash flow associated with the obligation and discounted the amount using a credit-adjusted, risk-free interest rate. At least annually, the Company reassesses the obligation to determine whether a change in the estimated obligation is necessary. The Company evaluates whether there are indicators that suggest the estimated cash flows underlying the obligation have materially changed. Should those indicators suggest the estimated obligation may have materially changed on an interim basis (quarterly), the Company will accordingly update its assessment. Additional retirement obligations increase the liability associated with new oil and natural gas wells as these obligations are incurred.

	2007	2006
ARO Liability December 31,	$41,400	$22,200
Wilson Property Purchase	12,337
Wilson Property Purchase	6,785	17,900
ARO Accretion Expense	2,412	1,300
ARO December 31, 2007	$62,934	$41,400

6.       PREFERRED STOCK

Convertible Preferred A:     100,000   shares outstanding

Convertible Preferred B:  1,000,000   shares outstanding

Convertible Preferred C:     660,000   shares outstanding

Convertible Preferred D:     303,936   shares outstanding

On July 17, 2006, in connection with the merger, ECCE issued 100,000 shares of preferred stock to Samuel M. Skipper, a preferred shareholder of ECCO and Chief Executive Officer of ECCE.  The preferred stock of ECCO was valued at $27,000 and recorded as compensation expense.  The preferred stock is entitled to the number of votes equal to all votes of other security holders plus one vote. As a result, Mr. Skipper has voting control of ECCO.

On September 30, 2007, we designated 1,000,000 shares of the 10,000,000 shares of authorized preferred stock as Series B Preferred Stock, with an initial value of $5.00. The Series B Preferred Stock is a new series of preferred stock, which ranks senior and is not subordinated in any respects to the Series A Preferred Stock. So long as any Series B Preferred Stock is outstanding, we are prohibited from issuing any series of stock having rights senior to or ranking on parity with the Series B Preferred Stock without the approval of the holders of 2/3’s of the outstanding Series B Preferred Stock. The holders of the outstanding shares of Series B Preferred Stock shall be entitled to receive in preference to the holders of any other shares of capital stock of the Corporation, cumulative dividends when and as if they may be declared by the Board of Directors at a per share equal to 8% per annum of the Initial Value. Additionally, upon occurrence of our liquidation, dissolution or winding up, the holder of shares of Series B Preferred Stock will be entitled to receive, before any distribution of assets is made to holders of our common stock or any other stock ranking junior to the Series B Preferred Stock Preferred Stock as to dividends or liquidations rights, but only after all distributions to holders of Series B Preferred Stock have been made in an amount per share of Series B Preferred Stock equal to 100% of the Initial Value plus the amount of any accrued but unpaid dividends due for each share of Series B Preferred Stock .  Lastly, in addition to the rights discussed above of the holders of the Series B Preferred Stock, at any time after June 15, 2008 and provided a triggering event has occurred, each holder of Series B Preferred Stock shall have the right at such holder’s option to require us to redeem for cash all or a portion of such holder’s shares of Series B Preferred Stock at a price per share equal to the Liquidation Amount. A “triggering event” shall mean that the wells owned or operated by the Limited Partnership have generated an aggregate of 1,500,000,000 cubic feet of natural gas.

On March 27, 2008, we designated 660,000 shares of authorized preferred stock as Series C Preferred Stock, with an initial value of $5.00. The Series C Preferred Stock is a new series of preferred stock, which ranks on parity with the Series B Preferred Stock. So long as any Series C Preferred Stock is outstanding, the Company is prohibited from issuing any series of stock having rights senior to or ranking on parity with the Series C Preferred Stock without the approval of the holders of 2/3’s of the outstanding Series C Preferred Stock. The holders of the outstanding shares of Series C Preferred Stock shall be entitled to receive in preference to the holders of any other shares of capital stock of the Corporation, cumulative dividends when and as if they may be declared by the Board of Directors at a per share equal to 8% per annum of the Initial Value. Additionally, upon occurrence of a liquidation, dissolution or winding up of the Company, the holder of shares of Series C Preferred Stock will be entitled to receive, before any distribution of assets is made to holders of common stock or any other stock of the Company ranking junior to the Series C Preferred Stock as to dividends or liquidations rights, but only after all distributions to holders of Series C Preferred Stock have been made in an amount per share of Series C Preferred Stock equal to 100% of the Initial Value plus the amount of any accrued but unpaid dividends due for each share of Series C Preferred Stock .  Lastly, upon occurrence of a triggering event (defined as the date when the cumulative market value of production from the property sold or utilized off the premises (after deducting severance, ad valorem and production taxes paid by the Company, plus any royalties, overriding royalties, production payments and similar lease burdens) shall equal the Company’s actual cost of drilling, testing and completing the wells located on the property (including the actual cost of any reworking, deepening or plugging back), plus 100% of the actual cost of operating the well during the payout period), the Company shall have the obligation to redeem on a pro-rata basis for cash in an amount equal to 50.0% of the net proceeds received by the Company from production of the property, all or a portion of the holder’s shares of Series C Preferred Stock at a price per share equal to the liquidation amount. Liquidation amount is generally defined as that amount equal to 100% of the Initial Value plus accrued but unpaid dividends.

On March 27, 2008, the Company we designated 303,936 shares of authorized preferred stock as Series D Preferred Stock, with an initial value of $5.00. The Series D Preferred Stock had been authorized by the Board of Directors of the Corporation as a new series of preferred stock, which ranks on parity with the Series B and Series C Preferred Stock. So long as any Series B or Series C Preferred Stock is outstanding, the Company is prohibited from issuing any series of stock having rights senior to or ranking on parity with the Series D Preferred Stock without the approval of the holders of 2/3’s of the outstanding Series D Preferred Stock. The holders of the outstanding shares of Series D Preferred Stock shall be entitled to receive in preference to the holders of any other shares of capital stock of the Corporation, cumulative dividends when and as if they may be declared by the Board of Directors at a per share equal to 8% per annum of the Initial Value. Additionally, upon occurrence of a liquidation, dissolution or winding up of the Company, the holder of shares of Series D Preferred Stock will be entitled to receive, before any distribution of assets is made to holders of common stock or any other stock of the Company ranking junior to the Series B or Series C Preferred Stock as to dividends or liquidations rights, but only after all distributions to holders of Series B or Series C Preferred Stock have been made in an amount per share of Series B or Series C Preferred Stock equal to 100% of the Initial Value plus the amount of any accrued but unpaid dividends due for each share of Series B or Series C Preferred Stock. Lastly, upon occurrence of a triggering event (defined as the date on which the Company first received proceeds), the Company shall have the obligation to redeem on a pro-rata basis for cash in an amount equal to 29.70% of all proceeds received by the Company under the provisions of the Farmout Agreement, all or a portion of the holder’s shares of Series D Preferred Stock at a price per share equal to the liquidation amount. Liquidation amount is generally defined as that amount equal to 100% of the Initial Value plus accrued but unpaid dividends.

7.       COMMON STOCK -

During third quarter 2007, we issued an additional 141,750 shares to Ronald E. Reece M.D. in connection with the purchase of the 20% working interest in the E.C. Wilson and Wilson State Tract Leases.   We issued another 110,000 shares to Ronald E. Reece, M.D., in connection with the purchase of the 11% interest in the same property.  See Note 8A.

During fourth quarter of 2007, we sold 75,000 common shares to an investor for of $30,000.

8.       ACQUISITIONS AND DISPOSITIONS DURING THE YEAR

The following acquisitions were made during the year.

A.    Acquisition of 20% Interest in Wilson Properties.

On August 1, 2007, ECCE purchased a 20% working interest in the E.C. Wilson and Wilson State Tract Leases located in Nueces County, Texas from Ronald E. Reece M.D. Revocable Trust of 2000 with an effective date of February 1, 2006 in exchange for the issuance of 141,750 common shares valued at $36,855 based on a share price of $.26 and a note in the for $205,548 with interest at 7% per annum and payable in monthly installments on the last day of each month beginning on August 31, 2007.

The results of the acquisition are included in the consolidated financial statements from the date of the acquisition.  Unaudited pro forma operating results for the Wilson Property acquired by ECCO are as follows:

	Year ended December 31,
	2007	2006
Revenue	545,397	637,454
Net Loss	(297,965)	(141,758)
Net Loss per common share	.03	.01

The preliminary purchase price allocation of the assets acquired on August 1, 2007 is as follows:

Assets
Oil and gas properties	$	106,156
Liabilities and equity
Asset retirement obligation	$	(12,337	)

B.   Acquisition of 11% Interest in Wilson Properties, December 2007.

ECCE purchased the remaining 11% of the Wilson tract working interest, giving it 100% of the working interest,  for $100,000 owed Samurai Corp, due on December 1, 2008 with annual interest of 10%. The principal owner of Samurai Corporation is Sam Skipper, the CEO of ECCE. The transaction is accounted for at historical book value as the transaction is between entities under common control.

As this transaction was at the end of 2007, the following pro forma operating results are assuming the acquisition occurred at January 1, 2007:

	Years ended December 31,
	2007	2006
Revenue	536,240	569,158
Net Loss	(306,182)	(182,106)
Net loss per common share	.03	.01

The purchase price allocation of the assets acquired from Samurai Corporation in December 2007 is as follows:

Assets
Oil and gas properties	$ 56,785
Liabilities and equity
Asset Retirement Obligation	(56,785)

C.   Acquisition of Louisiana Shelf Properties, Louisiana

In October 2007, ECCE purchased Shelf Partners, L.P.; a Delaware limited partnership, for 1,000,000 shares of Series B Convertible Preferred Stock. The shares of the Series B Preferred Stock will be convertible at the Sellers’ option into 1,000,000 shares of ECCE’s common stock.  The transaction was valued at $5,000,000 based on the fair value of the properties acquired

There is no current production on the lease.

The preliminary purchase price allocation of the assets acquired on September 27, 2007 is as follows:

Assets
Oil and gas property	$5,000,000
Liabilities and equity
Shareholders’ equity	($5,000,000)

D.   Acquisition of Bateman Lake, St. Mary Parish, Louisiana, December 2007.

On approximately December 1, 2007, ECCE purchased Old Jersey Oil Ventures LLC, a New Jersey limited liability company from Eugene A. Noser, Jr. for 600,000 shares of Series C Preferred Stock and 303,936 shares of Series D Preferred Stock. See “Section 5. Corporate Governance and Management. Item 5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year.”

Old Jersey together with the Moffat Group is the holder of approximately $5,900,000 in notes payable by VTEX Energy, Inc., a Nevada corporation, relating to the oil, gas and mineral lease no. 1337 located in Louisiana known as the Bateman Lake Field. On January 11, 2008, ECCE purchased this lease from VTEX for $1,000 plus assumption of the notes, which was paid off by issuance of Series C and D preferred stock as mentioned in the above paragraph.

The substance of the transaction is to acquire oil and gas properties by issuance of series C and D preferred stock. The following oil and gas properties valuation is based on the fair value of the properties acquired.

See Note 11 for the January farmout agreement discussion.

The preliminary purchase price allocation of the assets acquired on December 1, 2007 is as follows:

Assets
Oil and gas property	$4,819,680
Liabilities and equity
Shareholders’ equity	($4,819,680)

E.  Sale of ECCO Biofuels, Inc.

ECCO Biofuels, Inc. was our wholly-owned subsidiary and was formed to offer plant operators the option of financing 100% of the construction of biodiesel plants.  On June 27, 2007, we entered into that certain letter of intent with Saber Energy Corp., a privately held Texas corporation, pursuant to which we would sell the entire total issued and outstanding shares of ECCO Biofuels. After completion of satisfactory due diligence and conditions precedent, we entered into a stock purchase agreement dated June 29, 2007, sold all of the total issued and outstanding shares of ECCO Biofuels; and (ii) in payment, Saber Energy issued us of 250,000 shares of restricted common stock of Saber Energy and to assume all of the liabilities of ECCO Biofuels.  The loss from the discontinued operations is immaterial and is included in other expenses on the Income Statement.

Our Board of Directors, by unanimous written consent, approved the consummation of the Stock Purchase Agreement. The Board of Directors engaged in a thorough analysis of the sale of its wholly-owned subsidiary, ECCO Biofuels including, but not limited to: (i) maximization of shareholder value relating to the stock Purchase Agreement in comparison with potential shareholder value relating to alternative business strategies retaining ECCO Biofuels; (ii) the process conducted in seeking potential buyers and analysis pertaining to reasonableness of providing equal or greater value to us; and (iii) review of our financial condition, results of operations and business and earning prospects.  Even though the alternative fuel industry is increasing, our Board’s evaluation concluded that we would be required to spend significant employee resources and money to grow the business operations of ECCO Biofuels, therefore, our Board determined that it was in the best interests of the company and its shareholders to concentrate on its core business on the exploration and development of oil and gas properties.

9.       COMMITMENTS AND CONTINGENCIES

Legal Proceedings

ECCE is not a party to any litigation at December 31, 2007.

Operating Leases

During 2007 ECCE leased office space in Houston and Corpus Christi, Texas on a month to month operating lease; cancelable with thirty days written notice. Rent expense was $27,608 and $27,635 for 2007 and 2006, respectively.  The Corpus Christi lease was cancelled in September, 2007.  ECCE moved to its new location 3315 Marquart St., Ste 206, Houston, TX  77027 during 2007.

Environmental Matters

ECCE’s operations and properties are subject to extensive federal, state, and local laws and regulations relating to the generation, storage, handling, emission, transportation, and discharge of materials into the environment. Permits are required for several of ECCE’s operations and these permits are subject to revocation, modification, and renewal by issuing authorities. ECCE’s also is subject to federal, state, and local laws and regulations that impose liability for the cleanup or remediation of property which has been contaminated by the discharge or release of hazardous materials or wastes into the environment. Governmental authorities have the power to enforce compliance with their regulations, and violations are subject to fines or injunctions, or both. Certain aspects of ECCE’s operations may not be in compliance with applicable environmental laws and regulations, and such noncompliance may give rise to compliance costs and administrative penalties. It is not anticipated that ECCE will be required in the near future to expend amounts that are material to the financial condition or operations, but because such laws and regulations are frequently changed and, as a result, may impose increasingly strict requirements, ECCE is unable to predict the ultimate cost of complying with such laws and regulations.

10.       RELATED PARTY TRANSACTIONS

Samurai Operating Company L.L.C., a related party, is the operator of the properties and provides production, engineering and maintenance services and charged an operating fee for its services of $28,800 and $16,560 in 2007 and 2006, respectively.

11.       SUBSEQUENT EVENT

The Company entered into a farmout agreement dated January 11, 2008 with an independent oil & gas corporation (IOG), concerning our lease no. 1337 on the Bateman Lake Field. Under the agreement, IOG has the exclusive right, but not the obligation, to re-enter the Bateman Lake Field for the purpose of sidetracking, deepening, working over or recompleting any of the wells, including (i) with regards to well nos. 4, 11, 21 and 26 (the “Partnership Wells”), the Company shall receive a 5% carried interest to the tanks until 120% of payout, at which time such carried interest shall convert to a 25% net profit interest and the Company shall receive a 25% working interest; (ii) with regards to well nos. 9 and 19 formerly operated by VTEX (the “Partnership Retained Wells”), the Company shall retain ownership in the Partnership Retained Wells and rights to any proceeds received for the sale of oil and/or gas to which IOG shall have no rights; (iii) with regards to other workover wells, the Company shall be carried to the tanks to the extent of a 5% working interest in workover operations until 125% of payout and upon 125% of payout, the Company may elect to continue to receive the 5% carried working interest or convert the 5% carried working interest to a 25% working interest; (iv) with regards to other sidetrack wells, the Company shall be carried to the tanks to the extent of a 5% working interest in sidetrack operations until 150% of payout and upon 150% of payout, the Company may elect to continue to receive the 5% carried working interest or convert the 5% carried working interest to a 25% working interest; and (v) the Company shall receive a 25% working interest upon reaching 150% of payout of all costs related to the first three new drill wells.

Concerning the above, (i) IOG paid $750,000 toward VTEX debt related to this lease; (ii) ECCE paid off all other debt and liens on the lease; and (iii) ECCE assigned the lease to IOG.

12.       SUPPLEMENTAL OIL AND GAS INFORMATION-(Unaudited)

Proved oil and gas reserve quantities are based on estimates prepared internally by ECCE’s engineer in accordance with guidelines established by the Securities Exchange Commission (SEC).

There are numerous uncertainties inherent in estimating quantities of proved reserves and projecting future rates of production. The following reserve data related to the properties represents estimates only and should not be construed as being exact. The reliability of these estimates at any point in time depends on both the quality and quantity of the technical and economic data, the performance of the reservoirs, as well as extensive engineering judgment. Consequently, reserve estimates are subject to revision as additional data becomes available during the producing life of a reservoir. The evolution of technology may also result in the application of improved recovery techniques, such as supplemental or enhanced recovery projects, which have the potential to increase reserves beyond those currently envisioned.

Estimates of proved reserves are derived from quantities of crude oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing operating and economic conditions and rely upon a production plan and strategy.

Statement of Financial Accounting Standards No. 69, Disclosures About Oil and Gas Producing Activities (“FAS 69”), requires calculation of future net cash flows using a 10% annual discount factor and year-end prices, costs and statutory tax rates, except for known future changes such as contracted prices and legislated tax rates. The price used was the NYMEX price at December 31, 2007 of approximately $96.01 per barrel of oil and $7.46 per Mcf of natural gas, less differentials.  Reserves and pricing were calculated by both independent engineers and qualified internal engineers.

	Gas	Oil
	(MMcf)	(MBbls)
Total Proved Reserves:
Balance, December 31, 2006	687.444	3.057
Acquisition of oil and gas properties	1,7560.969	262.739
Production	(38.414)	(.313)
Disposal of oil and gas properties	-	-
Balance, December 31, 2007	1,820.998	265.483

Capitalized Costs of Oil and Gas Producing Activities

The following table sets forth the aggregate amounts of capitalized costs relating to the ECCE's oil and gas producing activities and the related accumulated depletion as of December 31, 2007:

	2007	2006
Asset retirement obligations	$              60,252	41,400
Proved properties being depleted	10,982,349	903,752
Less accumulated depletion	(229,244)	(164,252)
Net capitalized costs	$        10,813,357	$        780,900

Costs Incurred in Oil and Gas Producing Activities

The following table reflects the costs incurred in oil and gas property acquisition, exploration and development activities during the years ended December 31, 2007 and 2006:

	2007	2006
Acquisition costs	$          10,078,597	$                      -
Development costs	125,981	12,169
	$           10,204,578	$            12,169

The following disclosures concerning the standardized measure of future cash flows from proved oil and gas reserves are presented in accordance with FAS 69. As prescribed by FAS 69, the amounts shown are based on prices and costs at the end of each period and a 10 percent annual discount factor.

Future cash flows are computed by applying fiscal year-end prices of natural gas and oil to year-end quantities of proved natural gas and oil reserves. Future operating expenses and development costs are computed primarily by ECCE’s petroleum engineer by estimating the expenditures to be incurred in developing and producing ECCE’s proved natural gas and oil reserves at the end of the year, based on year end costs and assuming continuation of existing economic conditions. Future income taxes are based on currently enacted statutory rates.

The standardized measure of discounted future net cash flows is not intended to represent the replacement costs or fair value of ECCE’s natural gas and oil properties. An estimate of fair value would take into account, among other things, anticipated future changes in prices and costs, and a discount factor more representative of the time value of money and the risks inherent in reserve estimates of natural gas and oil producing operation.

Reserve estimates were prepared by both external and internal sources.

Standardized Measure of Discounted Future Net Cash Flow

	2007	2006
Future cash inflows at December 31,	$     152,559,239	$     4,907,137
Future costs-
Operating	(31,003,304)	(862,035)
Development and abandonment	(12,272,052)	(602,370)
Future net cash flows before income taxes	109,283,883	3,442,732
Future income taxes	(37,156,520)	(1,204,956)
Future net cash flows before income taxes	72,127,363	2,237,776
Discount at 10% annual rate	(20,094,735)	(754,438)
Standardized measure of discounted future net cash flows	$52,032,628	$     1,483,338

The following reconciles the change in the standardized measure of discounted net cash flow for the year ended December 31, 2007 and 2006

	2007	2006
Beginning of the year	$        1,483,338	$      2,989,500
Acquisition of oil and gas properties	50,708,487	0
Sales, net of production costs	(468,831)	(485,694)
Net change in prices and production costs	309,634	(1,301,289)
Change in future development costs	0	12,464
Revision of quantity estimates	0	268,357
Disposal of oil and gas properties	(0)	(128,252)
Ending of year	$52,032,628	$1,355,086

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

None

ITEM 8A.  CONTROLS AND PROCEDURES.

An evaluation was conducted under the supervision and with the participation of our management, including Samuel Skipper, our Chief Executive Officer (“CEO”) and N. Wilson Thomas, our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2007. Based on that evaluation, Messrs. Skipper and Thomas concluded that our disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Such officers also confirm that there was no change in our internal control over financial reporting during the quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We maintain "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the "Evaluation"), under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures ("Disclosure Controls") as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. The evaluation of our disclosure controls and procedures included a review of the disclosure controls’ and procedures’ objectives, design, implementation and the effect of the controls and procedures on the information generated for use in this report. In the course of our evaluation, we sought to identify data errors, control problems or acts of fraud and to confirm the appropriate corrective actions, if any, including process improvements, were being undertaken. Our Chief Executive Officer and our Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and were operating at the reasonable assurance level.

ITEM 8B. OTHER INFORMATION

Not applicable.

PART III

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

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

All of our directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. Our officers are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal.

Our directors and executive officers, their ages, positions held are as follows:

Name	Age	Position with the Company
Samuel Skipper	48	President, Chief Executive Officer and a Director
N. Wilson Thomas	53	Chief Financial Officer

Business Experience

The following is a brief account of the education and business experience of each director, executive officer and key employee during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he or she was employed, and including other directorships held in reporting companies.

Samuel M. Skipper is our President/Chief Executive Officer and a director. For the past sixteen years, Mr. Skipper has assisted in the consolidation of private and public companies and the entry of such companies into the public markets. From 1998 to 2003, Mr. Skipper was the founder, chairman of the board and the chief executive officer of VTEX Energy, Inc., a public oil and gas company with over $100 million in assets. From 1990 to 1993, Mr. Skipper was the founder of and served as the president and chief executive officer of ImageTrust, Inc. a public company in the health care industry. Under his leadership, ImageTrust Inc. assembled over $25 million in assets for owned and operated MRI diagnostic clinics in South Carolina and Texas. In 1993 Mr. Skipper sold ImageTrust, Inc. for seven figures. In 1990, Mr. Skipper served as the founder and the vice president of corporate development of Diagnostic Health Corporation (DHC), where he assisted DHC in the identification and closing of over $100 million of assets until DHC’s acquisition by HealthSouth Corporation in 1994.

N. Wilson Thomas was appointed C.F.O of ECCO Energy Corp., a public oil and gas company trading under the symbol (ECCE.OB) in late November 2007.  Mr. Thomas is a CPA and received a BBA from the University of Texas, Austin in 1976.  Since 2006, Mr. Thomas has worked as a CPA specializing in working with emerging companies.  Prior to 2006, he spent twenty years in the distribution industry, with sixteen of those years working for SYSCO Corporation as a CFO of a SYSCO subsidiary.  As CFO he was involved in the rapid growth of a major subsidiary, with annual sales approaching $350 million.

FAMILY RELATIONSHIPS

There are no family relationships among our directors or officers.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

During the past five years, none of our directors, executive officers or persons that may be deemed promoters is or have been involved in any legal proceeding concerning: (i) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction permanently or temporarily enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity; or (iv) being found by a court, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law (and the judgment has not been reversed, suspended or vacated).

AUDIT COMMITTEE

As of the date of this Annual Report, we have not appointed members to an audit committee and, therefore, the respective role of an audit committee has been conducted by our Board of Directors. When established, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, tax and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as our compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

The Board of Directors has considered whether the regulatory provision of non-audit services is compatible with maintaining the principal independent accountant's independence.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires our directors and officers, and the persons who beneficially own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on the reports received by us and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements during the fiscal year ended December 31, 2007.

ITEM 10.  EXECUTIVE COMPENSATION

The following table sets forth the compensation paid to our Chief Executive Officer and those executive officers that earned in excess of $100,000 during fiscal year ended December 31, 2007 (collectively, the “Named Executive Officers”):

SUMMARY COMPENSATION TABLE

				Stock	Option	Non-Equity Incentive Plan	Non-Qualified Deferred Compensation	All Other
Name and Principal PositioN	Year	Salary	Bonus	Awards	Awards	Compensation	Earnings	Compensation	Total
		($)	($)	($)	($)	($)	($)	($)	($)
Samuel Skipper,
President/CEO	2007	$60,000	$            -	$   0	$            -	$              -	$            -	$           -	$ 60,000
John Vise,
CFO	2007	$68,850	$            -	$            -	$            -	$            -	$            -	$            -	$ 68,850

(1)This amount represents fees paid by us to the Named Executive Officer during the past year pursuant to services provided in connection with their respective position as Chief Executive Officer and Chief Financial Officer.

DIRECTOR COMPENSATION TABLE

During fiscal year ended December 31, 2007, we did not pay any compensation to our directors for their respective position on the Board of Directors.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As of the date of this Annual Report, the following table sets forth certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated. As of the date of this Annual Report, there are 9,374,753 shares of common stock issued and outstanding.

Name and Address	Amount and nature of		Percentage of
of Beneficial Owner (1)	Beneficial Ownership (1)		Beneficial Ownership
Directors and Officers:
Samuel Skipper	5,120,499	(2)	56.59%
3315 Marquart St,  Ste. 206
Houston, TX 77027
John Vise	90,000		*
14231 Kellywood
Houston, TX 77079
All executive officers and directors as a group (2 persons)	5,210,499		57.58%
Major Shareholders:
Richard A. Bobigian	1,180,998	(3)	13.05%
15907 Chilton Circle
Spring, TX 77379

*Less than one percent.

(1)   Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding as of the date of this Annual Report. As of the date of this Annual Report, there are 9,374,753 shares issued and outstanding.

(2)   This figure includes: (i) 2,406,000 shares of common stock held of record by Mr. Skipper; (ii) 2,611,500 shares of common stock held of record by Samurai Corp., of which Mr. Skipper is the sole director and president and has sole dispositive and voting power over the 2,611,500 shares; and (iii) 102,999 shares of common stock held of record by Samurai Energy LLC, of which Mr. Skipper is the sole manager and has sole dispositive and voting power over the 102,999 shares.

(3)    This figure includes: (i) 125,000 shares of common stock held of record by Mr. Bobigian; and (ii) 1,080,999 shares of common stock held of record by RAB Ventures, Inc., of which Mr. Bobigian is the sole director and president and has sole dispositive and voting power over the 1,080,999 shares.

CHANGES IN CONTROL

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Except for the transactions described below, none of our directors, officers or principal stockholders, nor any associate or affiliate of the foregoing, have any interest, direct or indirect, in any transaction or in any proposed transactions, which has materially affected or will materially affect us during fiscal years ended December 31, 2007 and 2006.

SAMURAI OPERATING COMPANY LLC

Samurai Operating Company L.L.C., a related party, is the operator of the properties and provides production, engineering and maintenance services. Accordingly, Samurai Operating Company L.L.C. charged an operating fee for its services of $28,800 and $16,560 in 2007 and 2006, respectively.

ITEM 13. EXHIBITS

The following exhibits are filed with this Annual Report on Form 10-KSB:

Exhibit Number	Description of Exhibit
3.1	Articles of Incorporation, as amended(1)
3.1.1	Certificate of Amendment to Articles of Incorporation(2)
3.1.2	First Amended Certificate of Designation of Convertible Series B Preferred Stock (5)
3.1.3	First Amended Certificate of Designation of Convertible Series C Preferred Stock (6)
3.1.4	First Amended Certificate of Designation of Convertible Series D Preferred Stock (6)
3.2	Bylaws(1)
4.1	Form of Common Stock Certificate (1)
4.2	Agreement and Plan of Merger among Samurai Energy Corp. and ECCO Energy Corp. dated June 26, 2000. (2)
4.4	Assignment, Conveyance and Bill of Sale with respect to 37% working interest in the Wilson Wells. (3)
10.1	2005 Directors, Officers and Consultants Stock Option, Stock Warrants and Stock Awards Plan. (4)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)   Incorporated by reference to our Registration Statement on Form 8-A filed with the Securities and Exchange Commission on December 7, 2005.

(2)   Incorporated by reference to our Report on Form 8-K filed with the Securities and Exchange Commission on  June 30, 2006.

(3)   Incorporated by reference to our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on March 20, 2006.

(4)   Incorporated by reference to our Registration Statement on Form S-8 filed with the Securities and Exchange  Commission on June 26, 2006.

(5)    Incorporated by reference to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2007.

(6)   Incorporated by reference to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 11, 2008.

ITEM 13A – CONTROLS AND PROCEDURES

Annual Evaluation of Controls.  As of the end of the period covered by this annual report on Form 10-KSB, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures ("Disclosure Controls"). This evaluation (“Evaluation”) was performed by our Chief Executive Officer and Chief Financial Officer.  In this section, we present the conclusions based on and as of the date of the Evaluation with respect to the effectiveness of our Disclosure Controls.

CFO Certification.  Attached to this annual report are certain certifications of the CFO, which are required in accordance with the Exchange Act and the Commission's rules implementing such section (the "Rule 13a-14(a)/15d–14(a) Certifications"). This section of the annual report contains the information concerning the Evaluation referred to in the Rule 13a-14(a)/15d–14(a) Certifications. This information should be read in conjunction with the Rule 13a-14(a)/15d–14(a) Certifications for a more complete understanding of the topic presented.

Disclosure Controls. Disclosure Controls are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed with the Commission under the Exchange Act, such as this annual report, is recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms. Disclosure Controls are also designed with the objective of ensuring that material information relating to us is made known to the CEO and the CFO by others, particularly during the period in which the applicable report is being prepared.

Limitations on the Effectiveness of Controls. Our management does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well developed and operated, can provide only reasonable, but not absolute assurance that the objectives of the control system are met.  Further, the design of the control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their design and monitoring costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of a system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Evaluation. The CFO’s evaluation of our Disclosure Controls included a review of the controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect of the controls on the information generated for use in this quarterly report. In the course of the Evaluation, CFO sought to identify data errors, control problems, acts of fraud, and they sought to confirm that appropriate corrective action, including process improvements, was being undertaken. This type of evaluation is done on a quarterly basis so that the conclusions concerning the effectiveness of our controls can be reported in our quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. The overall goals of these various evaluation activities are to monitor our Disclosure Controls, and to make modifications if and as necessary.  Our intent in this regard is that the Disclosure Controls will be maintained as dynamic systems that change (including improvements and corrections) as conditions warrant.

Conclusions. Based upon the Evaluation, our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives. Our CFO has concluded that our disclosure controls and procedures are effective at that reasonable assurance level to ensure that material information relating to the Company is made known to management, including the CFO, particularly during the period when our periodic reports are being prepared, and that our Internal Controls are effective at that assurance level to provide reasonable assurance that our financial statements are fairly presented inconformity with accounting principals generally accepted in the United States. Additionally, there has been no change in our Internal Controls that occurred during our most recent fiscal quarter or fiscal year that has materially affected, or is reasonably likely to affect, our Internal Controls.  

ITEM 13AT - CONTROLS AND PROCEDURES

(a)           The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management has concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2007.  See the discussion under Item 13A above.

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

(c)           There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

During fiscal year ended December 31, 2007, we incurred approximately $55,300 in fees to our principal independent accountant for professional services rendered in connection with the audit of our financial statements for the fiscal year ended December 31, 2007 and for the review of our financial statements for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007.

During fiscal year ended December 31, 2007, we did not incur any other fees for professional services rendered by our principal independent accountant for all other non-audit services which may include, but is not limited to, tax-related services, actuarial services or valuation services.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ECCO ENERGY CORP.
Date: April 23, 2008	By:     /s/ Samuel M. Skipper
	Name: Samuel M. Skipper
	Title: President and CEO
Date: April 23, 2008	By:    /s/ N. Wilson Thomas
	Name: N. Wilson Thomas
	Title: CFO