UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended: February 28, ~~2018~~2019

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

For the transition period from __________________to __________________

Commission file number: 000-52645

FORTEM RESOURCES INC.
(Exact name of registrant as specified in its charter)

Nevada		20-4119257
State or other jurisdiction of		(I.R.S. Employer
incorporation or organization		Identification No.)

Suite 820, 906 12th Avenue S.W.
Calgary, Alberta, Canada T2R 1K7

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (403) 241-8912

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

Title of Each Class Trading Symbol(s) Name of each Exchange on which registered Nil N/A N/A

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

Common Stock, par value $0.001 per share
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes [X] No [ ]

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent~~is ~~filers~~a ~~pursuant~~large toaccelerated ~~Item~~filer, ~~405~~an ofaccelerated ~~Regulation~~filer, Sa non-Kaccelerated (§filer, ~~229.405~~smaller ~~of this chapter) is not contained herein~~reporting company, ~~and~~or ~~will~~an ~~not~~emerging begrowth ~~contained,~~company. toSee the ~~best~~definitions of ~~registrant’s~~“large ~~knowledge~~accelerated filer,” in“accelerated ~~definitive~~filer,” “smaller ~~proxy~~reporting orcompany,” ~~information~~and ~~statements~~“emerging ~~incorporated~~growth bycompany” ~~reference~~ in ~~Part~~Rule ~~III~~12b-2 of ~~this~~the ~~Form~~Exchange ~~10-K or any amendment to this Form 10-K. [ ]~~Act

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, an[ ~~accelerated~~] Accelerated filer, a[X] ~~non~~Non-accelerated filer, a[ ~~smaller~~] ~~reporting~~Smaller ~~company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller~~ reporting company,” ~~and~~[X] ~~“emerging~~Emerging growth company” in[ ~~Rule 12b-2 of the Exchange Act~~]

Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ] (Do not check if a smaller reporting company) Smaller reporting company [] Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

3843,~~651~~329,~~365~~ 489 shares of common stock at a price of $23.6049 per share for an aggregate market value of $~~100~~151,~~493~~219,~~549~~917.~~00.~~

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of ~~June~~October 2815, ~~2018~~2019, there were ~~119~~122,~~171~~571,156 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). Not Applicable

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3
ITEM 1. BUSINESS	3
ITEM 1A. RISK FACTORS	13
ITEM 1B. UNRESOLVED STAFF COMMENTS	20
ITEM 2. PROPERTIES	21
ITEM 3. LEGAL PROCEEDINGS	2826
ITEM 4. MINE SAFETY DISCLOSURES	2926
PART II	2927
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	29
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	27
ITEM 6. SELECTED FINANCIAL DATA	3028
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	28
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3634
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	3735
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	64
ITEM 9A. CONTROLS AND PROCEDURES	6465
ITEM 9B. OTHER INFORMATION	6566
PART III	6667
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	6667
ITEM 11. EXECUTIVE COMPENSATION	7172
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	7374
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	7475
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	7576
PART IV	7677
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	7677
SIGNATURES	80

PART I

ITEM 1. BUSINESS

Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements made in this Form 10-K include statements about:

·● our beliefs regarding the future of our competitors; ● our future capital expenditures; ● our future exploration programs and results; and ● our expectation that we will be able to raise capital when we need it.

~~our~~Assumptions in ~~beliefs~~respect ~~regarding~~of ~~the~~forward-looking ~~future~~statements ofhave ~~our~~been ~~competitors;~~made regarding, among other things:

·● volatility in market prices for oil and natural gas; ● volatility in exchange rates; ● liabilities inherent in oil and natural gas operations; ● changes or fluctuations in production levels; ● unexpected adverse weather conditions; ● stock market volatility and market valuation of our common shares; ● uncertainties associated with estimating oil and natural gas reserves; ● competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; ● incorrect assessments of the value of exploration and development programs; ● geological, technical, drilling, production and processing problems; ● changes in legislation, including changes in tax laws, royalty rates and incentive programs relating to the oil and natural gas industry; and ● our ability to raise capital.

~~our future capital expenditures;~~ 3

·These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

● we may be unable to raise sufficient funds to execute our ~~future~~business ~~exploration~~plan; ~~programs~~● we have a limited operating history; ● we are dependent on a small management team; ● we may be unable to manage any growth; ● market conditions or operation impediments may hinder our access to natural gas and ~~results~~oil markets or delay our production; ● risks inherent in the oil and gas industry; ● competition for, among other things, capital and skilled personnel; and ● other factors discussed under the section entitled “Risk Factors”,

·any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our ~~expectation~~current judgment ~~that~~regarding wethe direction of our business, actual results will bealmost ~~able~~always tovary, ~~raise~~sometimes ~~capital~~materially, ~~when~~from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States and Canada, we ~~need~~do itnot intend to update any of the forward-looking statements to conform these statements to actual results.

~~Assumptions~~Our financial statements are stated in ~~respect~~United ofStates ~~forward-looking~~Dollars ~~statements~~(US$) ~~have~~unless ~~been~~otherwise ~~made~~stated ~~regarding,~~and ~~among~~are ~~other~~prepared ~~things:~~in accordance with United States Generally Accepted Accounting Principles.

·In this annual report, unless otherwise specified, all references to “common shares” refer to the common shares in our capital stock.

~~volatility~~As used in ~~market~~this ~~prices~~annual ~~for~~report ~~oil~~on Form 10-K, the terms “we”, “us” “our”, the “Company” and ~~natural~~“Fortem” ~~gas;~~mean Fortem Resources Inc. and its wholly-owned subsidiaries, Colony Energy, LLC, Black Dragon Energy, LLC, Rolling Rock Resources, LLC, and City of Gold, LLC, unless otherwise specified.

·Recent Developments

~~volatility~~Effective at the opening on August 23, 2018, shares of our common stock were approved for trading on the TSX Venture Exchange in ~~exchange~~Canada under ~~rates;~~the symbol “FTM”. We were approved for listing as a Tier 2 Oil and Gas Reserves Issuer.

·On August 23, 2018, we appointed Konstantine Vatskalis, Sandra Perry, William Via and Brett Matich as directors of the Company and Robert DaCunha resigned as a director of the Company. The Company’s board of directors was comprised of Marc Bruner, Michael Caetano, Konstantine Vatskalis, Sandra Perry, William Via and Brett Matich.

~~liabilities~~On September ~~inherent~~26, in2018, we entered into an asset purchase agreement (the “Agreement”) with a major Canadian oil and ~~natural~~ gas company ~~operations;~~to purchase a 100% working interest in three heavy oil leases (the “Oil Leases”) covering a total of 20,719 hectares (51,200 acres) of heavy oil in north central Alberta (the “Transaction”). The rights to the Oil Leases, cover heavy oil of 12-16 API located near the top of the Viking formation to the base of the Woodbend Group.

·The acquisition of the Oil Leases complements the Company’s existing land holdings of 12,800 acres directly adjacent to and to the south of the Oil Leases. Upon completion of the Transaction, we will own over 62,000 acres of which 48,000 is contiguous land containing extensive heavy oil deposits within the main producing horizon, the Wabiskaw formation, along with a secondary horizon, namely the McMurray formation.

~~changes or fluctuations in production levels;~~4

·As consideration for the Oil Leases, we agreed to pay a purchase price of CDN$3,000,000 plus applicable GST, CDN$200,000 of which was paid as an initial deposit upon the execution of the Agreement. The closing of the Transaction was expected to occur on November 15, 2018 with an option to extend the closing date 60 days upon payment of an additional deposit of CDN$100,000. In November 2018, the Company exercised the option and extended the closing of the Transaction to January 14, 2019 with a payment of CDN$100,000. In December 2018, March, June, and September 2019, the Company and the vendor entered into extension agreements whereby the closing date of the Transaction was extended to a date on or before November 19, 2019 and the deposit increased by an additional CDN$200,000 which was paid. We anticipate that the transaction will constitute an Exempt Transaction in accordance with the policies of the TSX Venture Exchange. The Agreement was entered into on September 26, 2018 but is effective as of August 1, 2018.

~~unexpected~~In addition ~~adverse~~to ~~weather~~the ~~conditions;~~Oil Leases, upon closing of the Transaction, we will also obtain all rights, titles and interests to certain wells and facilities (as set out in the Agreement) located on the Oil Leases. The expiry dates for the three Oil Leases are as follows:

·● September 29, 2028; ● January 26, 2029; and ● March 9, 2029

~~stock~~On July ~~market~~2, ~~volatility~~2019, ~~and~~Sandra ~~market~~Perry ~~valuation~~resigned ofas ~~our~~a ~~common~~director ~~shares;~~of our Company.

·On September 23, 2019, the Company entered into a non-binding term sheet with an arm’s length party (the “Farmee”), pursuant to which the parties agreed to farm-out a portion of the Rolling Rock Property, and to establish a joint venture, subject to the entry of a definitive transaction agreement. Pursuant to the term sheet, the Farmee will commit up to $15,000,000 (the “Commitment Amount”) in up to ten tranches (each, a “Tranche”) in exchange for a 100% operating interest in certain wells located on the Rolling Rock Property (the “Operating Interest”). Upon full payout of the Commitment Amount, the Company will be entitled to a 20% interest in the income generated from the Farmee’s activities, which interest shall be increased to 25% following a 2.0x return of capital of the Farmee’s investment (the “Carry Structure”). The Operating Interest will be conveyed to the Farmee upon the execution of the Definitive Agreement for the Obligation Tranche and upon affirmative election by the Farmee to proceed with any Subsequent Tranche.

~~uncertainties~~A subsidiary ~~associated~~of the Farmee, in collaboration with ~~estimating~~the ~~oil~~Company and ~~natural~~Rolling Rock, is anticipated to be the operator upon formation of the joint venture in regards to the participating wells. All costs related to the wellbores subsequent to re-entry, including plugging and abandonment costs, will be borne in proportion to the carry structure at the time of commencement of wellbore operations. No additional midstream fees are to be charged by the Company, Rolling Rock, any related party or affiliate thereof to the Farmee that are in excess of, or including a margin on top of the necessary operating expenses incurred to gather, compress, process, dehydrate, treat, and/or transport gas ~~reserves;~~to sale. The joint venture and all gas produced as a direct result of the Farmee, the Company and Rolling Rock’s activities will have primary service that takes precedent over any third party gas produce from the subject wells.

·The Oil Leases

~~competition~~We have ~~for,~~commenced ~~among~~the consultation process with the Alberta Energy Regulator (AER) and other ~~things~~Alberta government agencies, ~~capital~~along with Bigstone Cree Nation, ~~acquisitions~~a First Nations band party to Treaty Eight and other interested stakeholders. Accordingly, participation in the consultation process is a pre-requisite to commencing operations on the Oil Leases. Assuming closing of ~~reserves~~the Transaction, we ~~undeveloped~~hope ~~lands~~to commence initial drilling and ~~skilled~~work ~~personnel;~~in the second quarter of 2019, once the consultation process has been completed.

·Compeer Oil and Gas Operations

~~incorrect~~As of ~~assessments~~February of28, ~~the~~2019, ~~value~~we ofhave incurred $720,060 in exploration costs to drill, complete and ~~development~~equip ~~programs;~~the Test Well. We also recorded $29,272 in asset retirement obligations related to the future plugging and abandonment of the Test Well.

·As at October 15, 2019, it is too early to provide stabilized production forecasts.

~~geological,~~Future Development ~~technical,~~Costs ~~drilling,~~for ~~production and processing problems;~~ Compeer

·During fiscal 2019/2020, we plan to focus on the exploration and drilling of the Farmout Lands, identify and complete additional asset acquisition(s), and pursue joint venture agreements with third parties to explore for oil and gas in Canada and the United States.

~~changes in legislation, including changes in tax laws, royalty rates and incentive programs relating to the oil and natural gas industry; and~~ 5

·Colony Energy

~~our~~On April ~~ability~~7, 2017, we entered into and closed two Membership Interest Purchase Agreements with three vendors to ~~raise~~acquire ~~capital~~all the membership interests of Colony Energy, LLC (“Colony Energy”), a Nevada limited liability company. Colony Energy holds a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases, in 20 contiguous sections totaling 12,960 acres located in the Godin area of northern Alberta.

~~These~~The Company ~~statements~~intends ~~are~~to ~~only~~develop ~~predictions~~the ~~and~~Godin ~~involve~~Project ~~known~~in ~~and~~three ~~unknown~~phases ~~risks,~~beginning ~~uncertainties~~with ~~and~~a ~~other~~four ~~factors~~well vertical, ~~including~~followed ~~the~~by ~~risks~~a infour ~~the~~ section ~~entitled~~pad development ~~“Risk Factors” and the risks set out below, any~~ of ~~which~~10 ~~may~~wells ~~cause~~per ~~our~~pad/per orsection. ~~our~~Phase ~~industry’s~~3 ~~actual~~is ~~results,~~intended ~~levels of activity, performance or achievements~~ to be ~~materially~~the ~~different~~full ~~from~~development ~~any future results, levels~~ of ~~activity,~~20 ~~performance or achievements expressed or implied by these forward-looking statements~~sections. ~~These risks include, by way of example and not in limitation:~~

In consideration for the acquisition of Colony Energy, we issued an aggregate of 21,000,000 shares of our common stock to the three vendors on the closing date and agreed to issue an additional 3,000,000 shares on a post-closing basis with 1,000,000 shares to be issued to one of the vendors on the first (issued), second and third anniversaries of the closing date.

·Colony Energy is a party to a Petroleum, Natural Gas and General Rights Conveyance dated as of March 31, 2017 with an arm’s length vendor and the principal shareholder thereof, pursuant to which the vendor is entitled to receive certain milestone payments from Colony Energy in the aggregate amount of up to $210,000 as partial consideration for the original purchase of the oil and gas assets described above. Pursuant to a Milestone Payment Addendum dated April 7, 2017, we agreed that if Colony Energy fails to make timely payment of any milestone payment and does not remedy such failure within 30 days after receipt of written notice from the vendor, the vendor may elect to: (i) have Colony Energy re-convey the purchased assets to the vendor; or (ii) receive 250,000 shares of our common stock, with such re-conveyance or issuance of shares to be in full and final satisfaction of all obligations to make any further milestone payment.

~~we may be unable to raise sufficient funds to execute our business plan;~~Black Dragon

·On April 12 2017, we entered into and closed a Membership Interest Purchase Agreement (the “Black Dragon MPA”) with two vendors to acquire all membership interest of Black Dragon Energy, LLC (“Black Dragon”), a Nevada limited liability company. Black Dragon has the right to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 165,000 acres (258 sections) at an 80% net revenue interest located in the Moenkopi formation of the Carbon and Emery Counties, Utah.

In consideration for the acquisition of Black Dragon, we ~~have~~issued aan ~~limited~~aggregate ~~operating~~of ~~history;~~20,000,000 shares of our common stock to the two vendors on the closing date and paid $100,000 prior to the closing as a non-refundable deposit.

·Black Dragon’s sole asset consists of the rights and obligations arising from a Purchase and Sale Agreement dated effective March 1, 2017 (the “Black Dragon PSA”) between an arm’s length vendor and Black Dragon.

weOn August ~~are~~17, ~~dependent~~2017, onwe entered into a ~~small~~first ~~management~~amendment ~~team;~~to purchase and sale agreement (the “Black Dragon Amendment”), which amended the terms of the Black Dragon PSA. The Black Dragon Amendment had the effect of postponing certain payments relating to the Moenkopi Formation under the Black Dragon PSA until December 31, 2018 while providing for the flexibility of earlier payments in the discretion of our Company. In consideration for the postponement of such payments, we have agreed to certain additional interim payments and stock consideration as set forth below.

·Under the Black Dragon Amendment, we agreed to pay the vendor cash consideration totaling $3.9 million (the “Black Dragon Cash Consideration”) rather than the original US$2.7 million based upon the following revised payment schedule:

we may be unable to manage any growth;

	●	$100,000 as a non-refundable deposit within 5 business days of closing (completed and unchanged); and

	●	the balance of the Black Dragon Cash Consideration by payment to the vendor of an amount equal to 12.5% of any funds received by our Company from any equity, debt or convertible financing thereof (each, a “Financing”) upon the closing of each Financing until such amount is paid. Notwithstanding the foregoing: (a) the first US$1.5 million raised by our Company will be exempt from a 12.5% payment to the vendor if such amount is received prior to our listing on a stock exchange; and (b) the full Black Dragon Cash Consideration is required to be paid in full no later than December 31, 2018 (later extended to the Black Dragon Payment Deadline as described below) regardless of the amount of funds paid in connection with one or more Financings. This change modified the original requirement to pay $900,000 on or before September 1, 2017, $900,000 on or before March 1, 2018 and $800,000 on or before September 1, 2018.

·6

~~market~~In addition ~~conditions~~to orrevising ~~operation~~the ~~impediments~~Black ~~may~~Dragon ~~hinder~~Cash ~~our~~Consideration ~~access~~as set out above, we have agreed to: ~~natural~~(a) ~~gas~~issue ~~and~~250,000 ~~oil~~common ~~markets~~shares of the Company to the vendor on or ~~delay~~prior ~~our~~to ~~production~~September 1, 2017 (issued on September 1, 2017); and (b) pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 until such time as the Black Dragon Cash Consideration is paid in full.

·On May 28, 2018, we entered into a second amendment to purchase and sale agreement (the “Black Dragon Second Amendment”), which amended the terms of the Black Dragon PSA. The Black Dragon Second Amendment has the effect of postponing certain payments relating to the Moenkopi formation under the Black Dragon PSA until August 1, 2019, provided that, if the shares of common stock of our company were not listed on the TSX Venture Exchange on or before August 1, 2018, the payment deadline was to remain December 31, 2018.

~~risks~~On August ~~inherent~~16, in2018, ~~the~~but ~~oil~~effective as of March 1, 2017, we entered into a third amendment to purchase and ~~gas~~sale ~~industry;~~agreement (the “Black Dragon Third Amendment”), which amended the terms of the Black Dragon PSA. The Black Dragon Third Amendment has the effect of postponing certain payments relating to the Moenkopi formation under the Black Dragon PSA until October 1, 2019.

·On May 16, 2019, but effective as of March 1, 2017, we entered into a fourth amendment to purchase and sale agreement (the “Black Dragon Fourth Amendment”), which amended the terms of the Black Dragon PSA. The Black Dragon Fourth Amendment has the effect of:

~~competition~~● ~~for~~postponing payment of the remaining US$3.8 million owed under the Black Dragon PSA relating to the Moenkopi Formation until receipt of the proceeds of one or more financings by the Company, ~~among~~in ~~other~~which ~~things~~case the Company must pay 12.5% of the proceeds of each financing close until payment in full; ● extending the outside date of full payment of the remaining US$3.8 million to May 1, ~~capital~~2020 (the “Black Dragon Payment Deadline”); ● extending the “Obligation Deadline” for drilling obligations to May 1, 2020; ● requiring the Company to re-enter and ~~skilled~~perform ~~personnel~~workover operations reasonably aimed at cleaning out the bore of the Wellington Flats Well and restoring that well to production on or prior to May 1, 2020; and ● extending the deadline for bond replacement to July 1, 2019.

·In consideration of the various extensions provided for under the Black Dragon Fourth Amendment, the Company has agreed to issue 300,000 common shares to the vendor at a deemed price of $1.50 per common share.

~~other factors discussed under the section entitled “Risk Factors”,~~ Carry Obligation

Under the Black Dragon PSA, and in addition to the cash consideration, Black Dragon has agreed to pay all costs and expenses incurred on the assets with respect to any and all exploration, development and production during the carry period. The “Carry Period” continues until the later of ~~which~~either ~~may~~(i) ~~cause~~the ~~our~~date that Black Dragon pays the full cash consideration set out above or ~~our~~(ii) ~~industry’s~~the date ~~actual~~that ~~results~~Black Dragon pays all costs and expenses for the drilling, ~~levels~~logging, oftesting ~~activity~~and completion two new wells, ~~performance~~each well with a horizontal leg extending at least 2,000’ in the target zone within the Moenkopi formation (the “Two Obligation Wells”). Black Dragon is required to drill to completion or ~~achievements~~cause to be ~~materially~~drilled ~~different~~to ~~from~~completion ~~any~~(or ~~future~~plugging ~~results~~and abandonment) the Two Obligation Wells on or before May 1, ~~levels~~2020, offailing ~~activity~~which, ~~performance~~Black Dragon’s right to earn any assignment in and to the assets will terminate immediately. For each vertical well drilled to 200 feet below the top of the Kaibab formation through completion (or ~~achievements~~plugging ~~expressed~~or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or ~~implied~~(ii) by6 ~~these~~months ~~forward-looking~~from ~~statements~~the date the rig that drilled such vertical well to total depth has been removed from the wellsite.

~~While~~Within 10 ~~these~~business ~~forward-looking~~days ~~statements~~after ~~and~~the ~~any~~later ~~assumptions~~of ~~upon~~Black ~~which~~Dragon ~~they~~paying ~~are~~the ~~based~~cash ~~are~~consideration ~~made~~ in ~~good~~full ~~faith~~or ~~and~~Black ~~reflect~~Dragon ~~our~~meeting ~~current~~in ~~judgment~~full ~~regarding~~its ~~the direction of our business~~carry obligation, ~~actual~~the ~~results~~vendor will ~~almost~~convey ~~always~~to ~~vary,~~Black ~~sometimes~~Dragon ~~materially,~~an ~~from~~undivided ~~any~~75% ~~estimates,~~of ~~predictions,~~the ~~projections,~~Vendor’s ~~assumptions or other future performance suggested herein. Except as required by applicable law~~right, ~~including~~title ~~the~~and ~~securities~~interest ~~laws~~in ofand to the ~~United States and Canada~~assets, weat doan ~~not~~80% ~~intend~~Net toRevenue ~~update~~Interest ~~any~~in of the ~~forward-looking~~assets ~~statements~~as tofurther ~~conform~~described ~~these~~in ~~statements~~the toBlack ~~actual~~Dragon ~~results~~PSA.

~~Our financial statements are stated in United States Dollars (US$) unless otherwise stated and are prepared in accordance with United States Generally Accepted Accounting Principles.~~7

InOn August ~~this~~24, ~~annual report~~2017, ~~unless~~our ~~otherwise~~company ~~specified~~indirectly acquired a 75% interest in additional oil and gas leases in the Moenkopi formation covering a total of 3,852.41 ~~all~~acres. ~~references~~The toleases were also acquired at the SITLA auction (the “~~common~~State ~~shares~~of Utah School and Institutional Trust Lands Administration”) ~~refer~~and toare in the ~~common~~region ~~shares~~covered inby ~~our~~an ~~capital~~Area ~~stock~~of Mutual Interest defined under the Black Dragon PSA, which incorporates a form of joint operating agreement that will govern the joint ownership of the newly acquired leases.

~~As used in this annual report on Form 10-K, the terms “we”, “us” “our”, the “Company” and “Fortem” mean our company, Fortem Resources Inc.~~Rolling Rock

~~Corporate~~On April ~~Overview~~17, 2017, we entered into and closed a Membership Interest Purchase Agreement with two vendors to acquire 100% membership interest of Rolling Rock Resources, LLC (“Rolling Rock”), a Nevada limited liability company. Rolling Rock has the right to acquire a 50% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 101,888 acres (160 sections) at an 80% net revenue interest located in the Mancos formation in the Southern Uinta Basin, Utah.

~~Our~~In consideration ~~company~~for ~~was~~the ~~incorporated~~acquisition ~~under~~of ~~the~~Rolling ~~laws~~Rock, we issued an aggregate of ~~Nevada~~20,000,000 shares of our common stock to the two vendors on ~~July~~the 9closing date and paid $100,000 ~~2004~~prior to the closing as a non-refundable deposit.

~~During~~Rolling Rock’s ~~October 2007~~sole weasset ~~amended~~consists ~~our~~of ~~articles~~the ofrights ~~incorporation~~and toobligations ~~increase~~arising ~~the~~from ~~number~~a ofPurchase ~~our~~and ~~authorized~~Sale ~~common~~Agreement ~~shares~~dated ~~from~~effective 75March 1,~~000~~ 2017,~~000~~ toas ~~750~~amended (together,~~000~~ the “Rolling Rock PSA”),~~000~~ between an arm’s length vendor and toRolling ~~forward~~Rock. ~~stock~~Upon the ~~split~~satisfaction ~~our~~of ~~common~~the ~~stock~~payments onand aobligations ~~10-for-1~~by ~~basis.~~Rolling ~~The~~Rock ~~stock~~as ~~split~~set ~~was~~out ~~based~~below, onthe ~~market~~vendor ~~conditions~~has agreed to convey certain leases and ~~upon~~related aassets ~~determination~~(the by“Leases”) ~~our~~to ~~Board~~Rolling ofRock. ~~Directors~~The ~~that~~Leases ~~the~~include ~~stock~~certain ~~split~~leases, ~~was~~hydrocarbons, inwells, ~~our~~agreements, equipment, ~~best~~surface ~~interests~~rights agreements and inassignable ~~the~~permits ~~best~~all ~~interests~~as offurther ~~our~~set ~~shareholders~~out in the Rolling Rock PSA.

~~Effective~~On August ~~March~~ 17, ~~2014~~2017, we ~~conducted~~entered into a ~~one~~second ~~for~~amendment ~~four~~to ~~reverse~~purchase ~~stock split of our issued~~ and ~~outstanding~~sale ~~common~~agreement ~~stock. As a result,~~ (the ~~number~~“Rolling ofRock ~~the issued and outstanding shares of common stock decreased from 111~~Amendment”),~~586,705~~ which ~~shares~~amended tothe ~~27,896,676~~terms ~~shares. Our authorized capital~~ of ~~750,000,000~~the ~~shares~~Rolling ofRock ~~common stock with a par value of $0~~PSA.~~001 was unchanged.~~

~~Effective~~The Rolling ~~March~~Rock ~~30,~~Amendment ~~2017,~~had wethe ~~completed~~effect aof ~~merger~~postponing ~~with~~certain ~~our~~payments ~~wholly-owned~~relating ~~subsidiary,~~to ~~Fortem~~the ~~Resources~~Mancos ~~Inc.,~~formation aunder ~~Nevada~~the ~~corporation~~Rolling Rock PSA until December 31, ~~which~~2018 ~~was~~while ~~incorporated~~providing ~~solely~~for tothe ~~effect~~flexibility aof ~~change~~earlier payments in the discretion of our ~~name~~Company. As aIn ~~result~~consideration for the postponement of such payments, weRolling ~~have~~Rock ~~changed~~agreed ~~our~~to ~~name~~certain ~~from~~additional ~~“Strongbow~~interim ~~Resources~~payments ~~Inc.”~~and tostock ~~“Fortem~~consideration ~~Resources~~as ~~Inc~~set forth below.”.

Under the Rolling Rock Amendment, Rolling Rock has agreed to pay the vendor cash consideration totaling $3.6 million (the “Rolling Rock Cash Consideration”) rather than the original $2.4 million based upon the following revised payment schedule:

~~Our~~● ~~Current~~$100,000 ~~Business~~as a non-refundable deposit within 5 business days of closing (completed and unchanged); ● the balance of the Rolling Rock Cash Consideration by payment to the vendor of an amount equal to 12.5% of any funds received by our Company from any Financing upon the closing of each Financing until such amount is paid. Notwithstanding the foregoing: (a) the first $1.5 million raised by our Company will be exempt from a 12.5% payment to the vendor if such amount is received prior to our listing on a stock exchange; and (b) the full Rolling Rock Cash Consideration is required to be paid in full no later than December 31, 2018 (later extended to the Rolling Rock Payment Deadline as described below) regardless of the amount of funds paid in connection with one or more Financings. This change modified the original requirement to pay $1.3 million on or before September 1, 2017, $500,000 on or before March 1, 2018 and $500,000 on or before September 1, 2018; and ● after payment of the Rolling Rock Cash Consideration, an additional payment of $300,000 (the “Workover Funds”) to the vendor which is payable by an amount equal to 12.5% of any funds received by our company from any Financing until the Workover Funds are paid in full.

~~Compeer~~In addition ~~Oil~~to revising the Rolling Rock Cash Consideration as set out above, we have agreed to: (a) issue 250,000 common shares of the Company to the vendor on or prior to September 1, 2017 (issued on September 1, 2017); and ~~Gas~~(b) ~~Operations~~pay the vendor an additional $25,000 every sixty days commencing September 1, 2017 until such time as the Rolling Rock Cash Consideration and the Workover Funds are paid in full.

As of February 28, 2018, we have incurred $693,503 in exploration costs to drill, complete and equip the Test Well. We also recorded $28,352 in asset retirement obligations related to the future plugging and abandonment of the Test Well. 8

AsOn May ~~at June~~ 28, 2018, itwe isentered ~~too~~into ~~early~~a third amendment to ~~provide~~purchase ~~stabilized~~and ~~production~~sale ~~forecasts~~agreement (the “Rolling Rock Third Amendment”), which amended the terms of the Rolling Rock PSA. The Rolling Rock Third Amendment had the effect of postponing certain payments relating to the Mancos formation under the Rolling Rock PSA until August 1, 2019, provided that, if the shares of common stock of our company were not listed on the TSX Venture Exchange on or before August 1, 2018, the payment deadline was to remain December 31, 2018.

~~Future~~On August ~~Development~~16, ~~Costs~~2018, ~~for~~but ~~Compeer~~effective as of March 1, 2017, we entered into a fourth amendment to purchase and sale agreement (the “Rolling Rock Fourth Amendment”), which amended the terms of the Rolling Rock PSA. The Rolling Rock Fourth Amendment has the effect of postponing certain payments relating to the Mancos formation under the Rolling Rock PSA until October 1, 2019.

~~During~~On May ~~fiscal~~16, ~~2018/19~~2019, webut ~~plan~~effective toas ~~focus~~of onMarch ~~the~~1, ~~exploration~~2017, ~~and~~we ~~drilling~~entered ofinto ~~the~~a ~~Farmout~~fifth ~~Lands,~~amendment ~~identify~~to purchase and ~~complete~~sale ~~additional~~agreement ~~asset acquisition~~(~~s),~~the ~~and~~“Rolling Rock ~~pursue~~Fifth ~~joint~~Amendment”), ~~venture~~which ~~agreements~~amended ~~with~~the ~~third~~terms ~~parties~~of tothe ~~explore~~Rolling ~~for~~Rock ~~oil~~PSA. ~~and~~The ~~gas~~Rolling inRock ~~Canada~~Fifth ~~and~~Amendment has the ~~United States.~~ effect of:

~~Colony~~● ~~Energy~~increasing the percentage interest of all right, title and interest in and to the leases to be acquired by Rolling Rock from the vendor under the Rolling Rock PSA from 50% to 75%; ● postponing payment of the remaining US$5.3 million owed under the Rolling Rock PSA relating to the Mancos Formation until receipt of the proceeds of one or more financings by the Company, in which case the Company must pay 12.5% of the proceeds of each financing close until payment in full; ● extending payment of an additional US$300,000 as the Workover Funds on or before May 1, 2020 (which Workover Funds are separate from and in addition to the cash consideration of US$5.3 million); ● extending the outside date of full payment of the remaining US$5.3 million to May 1, 2020 (the “Rolling Rock Payment Deadline”); ● extending the “Obligation Deadline” for drilling obligations to May 31, 2020; and ● extending the deadline for bond replacement to July 1, 2019.

OnIn consideration ~~April~~of 7,the ~~2017,~~various weextensions ~~entered~~provided ~~into~~for ~~and~~under ~~closed two Membership Interest Purchase Agreements with three arm’s length vendors to acquire all~~ the ~~membership~~Rolling ~~interests~~Rock ofFifth ~~Colony Energy~~Amendment, ~~LLC,~~the aCompany ~~Nevada~~has ~~limited~~agreed ~~liability company. Colony Energy holds a 100% interest in and~~ to ~~certain~~issue ~~petroleum~~300,000 common ~~natural~~shares ~~gas~~to ~~and~~the ~~general~~vendor ~~rights,~~at ~~including~~a ~~Alberta~~deemed ~~Crown~~price ~~Petroleum~~of ~~and~~$1.50 ~~Oil~~per ~~Leases,~~common ~~in 20 contiguous sections totaling 12,960 acres located in the Godin area of northern Alberta~~share.

The Company intends to develop the Godin Project in three phases beginning with a four well vertical, followed by a four section pad development of 10 wells per pad/per section. Phase 3 is intended to be the full development of 20 sections.Carry Obligation

InUnder the Rolling Rock PSA, and in addition to the cash consideration, ~~for~~Rolling Rock has agreed to pay all costs and expenses incurred on the ~~acquisition~~Leases ofwith ~~Colony~~respect to any and all exploration, wedevelopment ~~issued~~and anproduction ~~aggregate~~during ofthe ~~21,000,000~~carry ~~shares~~period. ofThe ~~our~~“Carry ~~common~~Period” continues ~~stock~~until tothe later of either (i) the ~~three~~date ~~vendors~~that onRolling Rock pays the ~~closing~~full cash consideration set out above or (ii) the date ~~and~~that ~~agreed~~Rolling toRock ~~issue~~pays anall ~~additional~~costs 3and expenses for the drilling,~~000~~ logging,~~000~~ ~~shares~~testing onand acompletion ~~post-closing~~of ~~basis~~three new wells in each of the three Federal Units, each well with a horizontal leg extending at least 1,000~~,000~~’ ~~shares~~in the target zone within the Mancos formation (the “Three Obligation Wells”). Rolling Rock is required to drill to completion or cause to be ~~issued~~drilled to completion ~~one~~(or ofplugging and abandonment) the ~~vendors~~Three Obligation Wells on ~~the~~or ~~first~~before May 1, ~~second~~2020, ~~and~~failing ~~third~~which, ~~anniversaries~~Rolling ofRock’s right to earn any assignment in and to the ~~closing~~Leases ~~date~~will terminate immediately. AsFor ateach ~~June~~vertical ~~28,~~well ~~2018,~~drilled ~~our~~to ~~company~~the ~~and~~top of the Dakota ~~vendor~~formation ~~have~~through ~~agreed~~completion to(or ~~postpone~~plugging ~~the~~or ~~2018~~abandonment) ~~share~~within ~~issuance~~a ofFederal 1Unit,~~000,000~~ ~~shares~~the obligation deadline will be amended to athe later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite.

~~Colony~~The obligation ~~Energy~~well isin athe ~~party~~Grand toMancos aUnit ~~Petroleum,~~will ~~Natural~~be ~~Gas~~a ~~and~~vertical ~~General~~well ~~Rights~~drilled ~~Conveyance~~to ~~dated~~a asdepth ofsufficient ~~March~~to ~~31,~~test ~~2017~~the ~~with~~Granite anWalsh ~~arm’s~~formation within ~~length~~such ~~vendor~~Federal ~~and~~Unit. ~~the~~For ~~principal~~this ~~shareholder thereof~~well, ~~pursuant~~completion to(or ~~which~~plugging ~~the~~and ~~vendor~~abandonment) is ~~entitled~~expected to ~~receive~~take ~~certain~~place ~~milestone~~no ~~payments~~later ~~from~~than ~~Colony~~2 ~~Energy~~months after in the ~~aggregate~~rig ~~amount~~that ofdrilled up to ~~$210,000~~total asdepth ~~partial~~has ~~consideration~~been ~~for~~removed ~~the~~from ~~original purchase of~~ the ~~oil~~wellsite and ~~gas~~for ~~assets described above. Pursuant to~~ a ~~Milestone~~period ~~Payment~~of ~~Addendum~~6 ~~dated~~months ~~April~~after 7,completion ~~2017,~~of this weobligation ~~agreed~~well ~~that~~(or ifplugging ~~Colony~~and ~~Energy~~abandonment), ~~fails to make timely payment of any milestone payment~~ and ~~does~~Rolling ~~not~~Rock ~~remedy~~will ~~such~~have ~~failure~~the ~~within~~exclusive 30option ~~days~~to ~~after~~purchase ~~receipt~~an additional 25% of ~~written notice from~~ the vendor’s right, ~~the~~title ~~vendor~~and ~~may~~interest ~~elect~~in and to: ~~(i) have Colony Energy re-convey~~ the ~~purchased~~leases ~~assets~~with respect to the ~~vendor;~~Granite orWalsh ~~(ii)~~formation ~~receive~~within ~~250,000~~the boundary ~~shares~~ of ~~our~~the ~~common~~Grand ~~stock,~~Mancos ~~with~~Unit ~~such~~for ~~re-conveyance~~an oradditional ~~issuance~~payment of ~~shares~~$10 ~~to be in full and final satisfaction of all obligations to make any further milestone payment~~million.

~~Black Dragon~~ 9

OnWithin 10 ~~April~~business 12days ~~2017,~~after wethe ~~entered~~later ~~into~~of ~~and~~Rolling ~~closed~~Rock apaying ~~Membership~~the ~~Interest~~cash ~~Purchase~~consideration ~~Agreement~~in (full or Rolling Rock meeting in full its carry obligation, the ~~“Black Dragon MPA”)~~ ~~with~~vendor ~~two~~agreed ~~arm~~to convey to Rolling Rock an undivided 75% of the vendor’s ~~length~~right, ~~vendors~~title and interest in and to ~~acquire~~the ~~all~~Leases, ~~membership~~or a 80% net revenue interest in the Leases as further described in the Rolling Rock PSA. Notwithstanding this transfer, within 10 business days after the later of ~~Black~~payment ~~Dragon~~of ~~Energy~~$300,000 ~~LLC~~on or before May 1, 2020 (~~“Black Dragon”~~which amount is in addition to the deposit and included in the cash consideration set out above), aand ~~Nevada~~the ~~limited~~replacement ~~liability~~of ~~company.~~the ~~Black~~vendor’s ~~Dragon~~bonds ~~has~~on or before July 1, 2019, the ~~right~~vendor agreed to ~~acquire~~convey ato Rolling Rock an undivided 75% ~~working~~of the vendor’s right, title and interest in and to ~~certain~~the Cisco Dome leases, ~~hydrocarbons,~~and ~~wells,~~related ~~agreements,~~assets ~~equipment,~~as ~~surface~~further ~~rights~~set ~~agreements~~out ~~and~~in ~~assignable~~the ~~permits~~Rolling ~~totaling~~Rock ~~approximately~~PSA. ~~165~~However,~~000~~ ~~acres~~if ~~(258~~Rolling ~~sections)~~Rock atfails anto timely ~~80%~~meet ~~net~~any ~~revenue~~of ~~interest~~its ~~located~~obligations inunder the ~~Moenkopi~~Rolling ~~formation~~Rock PSA, after having taken assignment of the ~~Carbon~~Cisco Dome leases and ~~Emery~~assets, then, ~~Counties~~if the vendor elects in its sole discretion, ~~Utah~~Rolling ~~(“Black~~Rock ~~Dragon~~is ~~Property”).~~required to reassign the Cisco Dome leases and assets to the vendor without any additional encumbrances.

InOn August ~~consideration~~24, ~~for~~2017, ~~the~~our ~~acquisition~~company ofindirectly ~~Black~~acquired ~~Dragon,~~an weundivided ~~issued~~75% aninterest ~~aggregate~~in additional oil and gas leases in the Mancos formation covering a total of 202,~~000,000~~313.09 ~~shares~~acres. ofThe ~~our~~leases ~~common~~were ~~stock~~acquired at a SITLA auction. Pursuant to the ~~two~~Rolling ~~vendors~~Rock onPSA, the ~~closing~~parties have ~~date~~agreed ~~and~~to ~~paid~~enter ~~$100~~into a joint operating agreement covering the new leases,~~000~~ ~~prior~~which toare outside the ~~closing~~AMI as(Area aof ~~non-refundable~~Mutual ~~deposit.~~Interest) of their original joint venture lease holdings.

Based on a separate transaction, our company and the vendor have acquired an additional 5,174 acres in the Mancos formation and hold a 50/50 partnership, which is part of the AMI and its original agreement.

~~Black Dragon’s sole asset consists~~ City of ~~the rights and obligations arising from a Purchase and Sale Agreement dated effective March 1, 2017 (the “Black Dragon PSA”) between an arm’s length vendor and Black Dragon.~~ Gold

On May ~~August~~ 17, 2017, we ~~entered~~acquired ~~into~~100% aof ~~first~~the ~~amendment~~membership tointerest ~~purchase~~in ~~and~~City ~~sale~~of ~~agreement~~Gold, ~~(the~~LLC, ~~“Black~~a ~~Dragon~~Nevada ~~Amendment”),~~limited ~~which~~liability ~~amended~~company, ~~the~~from ~~terms~~two ofNevada limited ~~the~~liability ~~Black~~companies ~~Dragon~~pursuant ~~PSA.~~to ~~The~~a ~~Black~~Membership ~~Dragon~~Interest ~~Amendment~~Purchase ~~had~~Agreement ~~the~~dated ~~effect~~as of ~~postponing~~May ~~certain~~17, ~~payments~~2017. ~~relating~~The toMembership ~~the~~Interest Purchase ~~Moenkopi~~Agreement ~~Formation~~provides ~~under~~for ~~the~~a ~~Black~~total ~~Dragon~~purchase ~~PSA~~price ~~until~~consisting ~~December~~of ~~31,~~an ~~2018~~aggregate ~~while~~of ~~providing~~30,000,000 ~~for~~common shares in the ~~flexibility~~capital of our ~~earlier~~company. ~~payments~~15,000,000 inof ~~the~~these ~~discretion~~shares ofwere ~~our~~issued ~~Company. In~~at ~~consideration~~closing ~~for~~(7,500,000 ~~the~~to ~~postponement~~each oftransferor); ~~such~~the ~~payments~~other 15,000,000 weshares ~~have~~are to ~~agreed~~be toissued ~~certain~~within ~~additional~~ten ~~interim~~Business ~~payments~~Days ~~and~~after ~~stock~~City ~~consideration~~of asGold, ~~set~~LLC ~~forth~~earns the Option (as defined below).

~~Under~~City of ~~the~~Gold, ~~Black~~LLC’s ~~Dragon~~sole ~~Amendment~~asset consists of 2,930,259 wecommon ~~agreed~~shares toand ~~pay~~2,930,259 share purchase warrants in the ~~vendor~~capital ~~cash~~of ~~consideration~~Asia Pacific ~~totaling~~Mining ~~$3.9~~Limited ~~million~~(“Asia Pacific”) and its rights under a binding financing and option agreement (the “~~Black~~Option ~~Dragon Cash Consideration~~Agreement”) ~~rather~~with ~~than~~Asia ~~the~~Pacific ~~original~~and ~~US$2~~an individual named Nyi Nyi Lwin.7 ~~million~~City ~~based~~of ~~upon~~Gold, ~~the~~LLC’s only ~~following~~liabilities ~~revised~~consist ~~payment~~of ~~schedule:~~three demand notes for an aggregate of $1,500,000.

·Under the Option Agreement, Asia Pacific and Nyi Nyi Lwin have agreed to grant to City of Gold, LLC the option (the “Option”) to purchase 100% of the ownership interest in a wholly-owned subsidiary of Asia Pacific (the “Project Subsidiary”) which, in turn, owns 100% of the rights to the City of Gold mineral exploration project located in Myanmar which covers an area of approximately 465 square kilometers in close proximity to hydropower, water, and infrastructure to accommodate exploration and development of the property (the “City of Gold Project”). City of Gold, LLC will be granted the Option upon satisfaction of the following:

● Subscription of 976,753 units of Asia Pacific for a purchase price of $~~100~~500,000 ason aor ~~non-refundable~~prior ~~deposit~~to ~~within~~March 52, ~~business~~2017 ~~days~~(completed); ● Subscription of ~~closing~~976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to March 16, 2017 (completed); ~~and~~● ~~unchanged~~Subscription of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to April 28, 2017 (completed); and ● Subscription of 2,930,261 units of Asia Pacific for a purchase price of $1,500,000 (the “Final Funding Tranche”), due within 60 days of issuance of an exploration license for the City of Gold Project by the Government of Myanmar (the “License”).

·10

Each share purchase warrant is exercisable for a term equal to the ~~balance~~greater of two years from the ~~Black~~closing ~~Dragon~~of ~~Cash~~the ~~Consideration~~Final byFunding ~~payment~~Tranche or to18 months from the ~~vendor~~issuance of anthe ~~amount~~License ~~equal~~at toan ~~25%~~exercise price of ~~any~~$0.51 ~~funds~~for ~~received~~the byfirst ~~our~~year ~~Company~~and ~~from~~$1.02 ~~any~~for ~~equity~~the second year. Asia Pacific utilized $500,000 ~~debt~~of orthe ~~convertible~~initial ~~financing~~three ~~thereof~~tranches ~~(each,~~towards aan ~~“Financing”)~~exploration ~~upon~~program of the ~~closing~~City of ~~each~~Gold ~~Financing~~Project. ~~until~~Asia Pacific ~~such~~is ~~amount~~required isto ~~paid. Notwithstanding~~use all proceeds for the ~~foregoing:~~Final ~~(a)~~Funding Tranche towards exploration of the ~~first~~Project USSubsidiary’s mining interests, including no less than $1500,000 towards drilling the City of Gold Project (the “Drilling Program”).5 ~~million~~Upon the ~~raised~~closing byof ~~our~~the ~~Company~~Final Funding Tranche, City of Gold, LLC will behave ~~exempt~~earned ~~from~~the aOption. ~~25%~~We ~~payment~~anticipate tothat the ~~vendor~~normal ifcourse of ~~such~~receiving ~~amount~~the isLicense ~~received~~will ~~prior~~take tolonger ~~our~~than ~~listing~~12 onmonths. As a ~~stock~~result, ~~exchange;~~we ~~and~~do ~~(b)~~not ~~the~~anticipate ~~full~~commencing ~~Black~~the ~~Dragon~~Drilling ~~Cash~~Program ~~Consideration~~or incurring isadditional ~~required~~expenses related to bethe ~~paid~~project inwithin ~~full~~the nonext ~~later~~12 ~~than~~month ~~December~~period. ~~31,~~We ~~2018~~anticipate ~~(later~~holding ~~extended~~our tointerest in the City ~~Black~~of ~~Dragon~~Gold ~~Payment~~Project ~~Deadline~~for asthe ~~described~~long ~~below)~~term. ~~regardless~~If ofcircumstances warrant, we intend to exercise the ~~amount~~Option by transferring the City of Gold ~~funds~~Project ~~paid~~into ina ~~connection~~subsidiary (“Spinco”) with ~~one~~the oraim ~~more~~of ~~Financings.~~completing ~~This~~a ~~change~~“spin-off” ~~modified~~transaction ~~the~~of ~~original~~its ~~requirement~~anticipated 70% tointerest ~~pay~~in ~~$900,000~~Spinco onunder orthe ~~before~~plan ~~September~~of 1,arrangement ~~2017,~~provisions ~~$900,000~~in onaccordance orwith ~~before~~applicable ~~March~~securities 1,and ~~2018~~corporate ~~and~~laws ~~$800,000~~in order onto orrealize ~~before~~a ~~September~~benefit 1,for ~~2018~~our company and/or our stockholders.

InOnce City ~~addition~~of Gold, LLC has earned the Option, it will have the right to ~~revising~~exercise the ~~Black~~Option ~~Dragon~~for ~~Cash~~a ~~Consideration~~period asof ~~set~~120 ~~out~~days ~~above~~from completion of the Drilling Program, wewhich ~~have~~City ~~agreed~~of Gold, LLC can extend for an additional 120 days if it can demonstrate that all conditions to: ~~(a)~~exercise ~~issue~~of ~~250,000~~the ~~common~~Option are complete other than approval from the applicable stock exchange upon which the shares of Spinco are to be listed. To exercise the ~~Company~~Option, Asia Pacific has agreed to transfer the ~~vendor~~Project Subsidiary to Spinco for an exercise price consisting of $7,000,000 in cash and 30% of the issued and outstanding share capital of Spinco (calculated on ora ~~prior~~fully diluted basis, excluding up to ~~September~~10% 1in stock options, ~~2017~~but (including shares Spinco may have issued onin ~~September~~order 1to raise the exercise price of $7,000,000 ~~2017~~and an additional $5,000,000 in working capital). Half of the cash portion of the exercise price must be paid upon exercise of the Option; the balance is to be paid on the first anniversary of the exercise and ~~(b)~~is ~~pay~~to be evidenced by a one-year secured term note. Although City of Gold, LLC has the ~~vendor~~right anto ~~additional~~select Spinco, Spinco must meet the following criteria: at exercise of the Option, Spinco must have less than $25100,000 ~~every~~in ~~sixty~~liabilities ~~days~~and ~~commencing~~$5,000,000 ~~September~~or 1more in working capital and Asia Pacific will have the right to nominate 30% of its directors. Although we currently anticipate that the exercise of the Option will be structured as a “spin-off” transaction, ~~2017~~we ~~until~~have the flexibility under the Option Agreement to structure the transaction in other ways provided the conditions to exercise are met. However, we anticipate that such ~~time~~a asstructure will result in the ~~Black~~most ~~Dragon~~efficient way ~~Cash~~to ~~Consideration~~monetize isour ~~paid~~interest in ~~full~~the City of Gold Project at this time.

As an added incentive for early payment of the Black Dragon Cash Consideration, such sum will be reduced by $100,000 for each calendar month it is paid in full prior to December 31, 2018 for a maximum discount of 12 months or $1.2 million.Competition

InThe petroleum ~~connection~~and ~~with~~natural ~~the~~gas ~~Black~~industry ~~Dragon~~is ~~Amendment~~highly competitive. Numerous independent oil and gas companies, weoil ~~entered~~and ~~into~~gas asyndicates ~~Ratification~~and major ofoil ~~Purchase~~and gas companies actively seek out and ~~Sale~~bid ~~Agreement~~for ~~with~~oil ~~the~~and ~~vendor~~gas onproperties ~~August~~as ~~17,~~well ~~2017~~as ~~but~~for ~~effective~~the ~~March~~services 1of third party providers, such ~~2017~~as drilling companies, ~~whereby~~upon which we ~~ratified,~~rely. ~~adopted~~A ~~and~~substantial ~~approved~~number ~~the~~of ~~Black~~our ~~Dragon~~competitors ~~Amendment~~have longer operating histories and ~~further~~substantially greater ~~guaranteed~~financial ~~all~~and personnel resources than we do, and have demonstrated the ~~obligations~~ability ofto ~~our~~operate ~~company~~through industry cycles.

OnSome of ~~May~~our ~~28,~~competitors ~~2018,~~not weonly ~~entered~~explore ~~into~~for, aproduce ~~second~~and ~~amendment~~market topetroleum ~~purchase~~ and ~~sale~~natural ~~agreement~~gas, ~~(the~~but ~~“Second~~also ~~Black~~carry ~~Dragon~~out ~~Amendment”),~~refining ~~which~~operations and ~~amended~~market the ~~terms~~resultant ofproducts ~~the~~on ~~Black~~a ~~Dragon~~worldwide ~~PSA.~~basis ~~The~~which ~~Second~~may ~~Black~~provide ~~Dragon~~them ~~Amendment~~with ~~has~~additional ~~the~~sources ~~effect~~ of ~~postponing~~capital. ~~certain~~Larger ~~payments~~and ~~relating~~better capitalized tocompetitors ~~the~~may ~~Moenkopi~~be ~~formation~~in ~~under~~a ~~the~~position ~~Black~~to ~~Dragon~~outbid ~~PSA~~us ~~until~~for ~~August~~particular 1,prospect ~~2019,~~rights. ~~provided~~These ~~that,~~competitors ifmay ~~the~~also ~~shares~~be ofbetter able ~~common~~to ~~stock~~withstand ofsustained ~~our~~periods ~~company~~of ~~are~~unsuccessful ~~not~~drilling. ~~listed~~Larger oncompetitors ~~the~~may ~~TSX~~be ~~Venture~~able ~~Exchange~~to onabsorb orthe ~~before~~burden ~~August~~of 1,any ~~2018,~~changes in ~~the~~laws ~~payment~~and ~~deadline~~regulations ~~will~~more ~~remain~~easily ~~December~~than 31we can, ~~2018~~which ~~(the~~would ~~“Black~~adversely ~~Dragon~~affect ~~Payment~~our ~~Deadline”)~~competitive position.

InPetroleum and ~~connection~~natural gas producers also compete with ~~the~~other ~~Second~~suppliers ~~Black~~of ~~Dragon~~energy ~~Amendment~~and fuel to industrial, wecommercial ~~entered~~and ~~into~~individual acustomers. Competitive ~~Ratification~~conditions may be substantially affected by various forms of ~~Purchase~~energy legislation and/or ~~Sale~~regulation ~~Agreement~~considered ~~with~~from time to time by the ~~vendor~~governments onand/or ~~May~~their ~~28,~~agencies ~~2018~~and ~~but~~other ~~effective~~factors ~~March~~which 1,are ~~2017~~out of our control including, ~~whereby~~international political weconditions, ~~ratified~~terrorism, ~~adopted~~overall ~~and~~levels ~~approved~~of ~~the~~supply ~~Second~~and ~~Black~~demand ~~Dragon~~for ~~Amendment~~oil and ~~further~~gas, ~~guaranteed~~and ~~all~~ the ~~obligations~~markets offor ~~our~~synthetic ~~company~~fuels and alternative energy sources.

6To better deal with the competition, we target high potential exploration properties which are too small for our largest competitors. We rely upon the technical experience of our officers and engineers to select those properties on which our exploration expertise provides a differentiating advantage.

~~Carry Obligation~~Customers

~~Under~~There are ~~the~~no ~~Black~~contracts ~~Dragon~~obligating ~~PSA,~~our ~~and~~company ~~in addition~~ to ~~the~~provide ~~cash~~a ~~consideration,~~fixed ~~Black~~quantity Dragon has agreed to pay all costs and expenses incurred on the assets with respect to any and all exploration, development and production during the carry period. The “Carry Period” continues until the later of ~~either~~oil ~~(i) the date that Black Dragon pays the full cash consideration set out above or (ii) the date that Black Dragon pays all costs~~ and ~~expenses~~gas for the drilling, logging, testing and completion two new wells, each well with a horizontal leg extending at least 2,000’ in the target zone within the Moenkopi formation (the “Two Obligation Wells”). Black Dragon is required to ~~drill to completion or cause to be drilled to completion (or plugging and abandonment) the Two Obligation Wells on or before February 28, 2019, failing which, Black Dragon’s right to earn~~ any ~~assignment in and to the assets will terminate immediately~~party. For each vertical well drilled to 200 feet below the top of the Kaibab formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite.

Within 10 business days after the later of Black Dragon paying the cash consideration in full or Black Dragon meeting in full its carry obligation, the vendor will convey to Black Dragon an undivided 75% of the Vendor’s right, title and interest in and to the assets, at an 80% Net Revenue Interest in the assets as further described in the Black Dragon PSA.11

On August 24, 2017, our company indirectly acquired a 75% interest in additional oil and gas leases in the Moenkopi formation covering a total of 3,852.41 acres. The leases were also acquired at the SITLA auction (the “State of Utah School and Institutional Trust Lands Administration”) and are in the region covered by an Area of Mutual Interest defined under the Black Dragon PSA, which incorporates a form of joint operating agreement that will govern the joint ownership of the newly acquired leases.Regulation

~~Rolling~~The exploration, ~~Rock~~production and sale of oil and gas are extensively regulated by governmental authorities. Applicable legislation is under constant review for amendment or expansion. These efforts frequently result in an increase in the regulatory burden on companies in our industry and consequently an increase in the cost of doing business and decrease in profitability. Numerous governmental departments and agencies are authorized to, and have, issued rules and regulations imposing additional burdens on the oil and gas industry that often are costly to comply with and carry substantial penalties for non-compliance. Production operations are affected by changing tax and other laws relating to the petroleum industry, constantly changing administrative regulations and possible interruptions or termination by government authorities.

OnOil and ~~April~~gas ~~17,~~mineral ~~2017,~~rights wemay ~~entered~~be ~~into~~held ~~and~~by ~~closed~~individuals, acorporations ~~Membership~~or ~~Interest~~governments ~~Purchase~~having ~~Agreement~~jurisdiction ~~with~~over ~~two~~the ~~arm’s~~area ~~length~~in ~~vendors~~which tosuch mineral ~~acquire~~rights ~~100%~~are ~~membership~~located. ~~interest~~As ofa ~~Rolling~~general ~~Rock Resources~~rule, ~~LLC~~parties ~~(“Rolling~~holding ~~Rock”),~~such amineral ~~Nevada~~rights ~~limited~~grant ~~liability~~licenses ~~company.~~or ~~Rolling~~leases ~~Rock~~to ~~has~~third parties to facilitate the ~~right~~exploration toand ~~acquire~~development aof ~~50%~~these ~~working~~mineral ~~interest~~rights. inThe ~~and~~terms toof ~~certain~~the leases, ~~hydrocarbons,~~and ~~wells,~~licenses ~~agreements,~~are ~~equipment,~~generally ~~surface~~established to ~~rights~~require ~~agreements~~timely ~~and~~development. ~~assignable~~Notwithstanding ~~permits~~the ~~totaling~~ownership ~~approximately~~of ~~101~~mineral rights,~~888~~ ~~acres~~the ~~(160~~government ~~sections)~~of atthe anjurisdiction ~~80%~~in ~~net~~which ~~revenue~~mineral rights ~~interest~~are located ingenerally ~~the~~retains ~~Mancos~~authority ~~formation~~over in the ~~Southern~~drilling ~~Uinta~~and ~~Basin,~~operation ~~Utah~~of ~~(“Rolling~~oil ~~Rock~~and ~~Property”)~~gas wells.

InEach province ~~consideration~~and ~~for~~ the ~~acquisition~~federal government of ~~Rolling~~Canada ~~Rock,~~have welegislation ~~issued~~and anregulations ~~aggregate~~governing ofland 20tenure,~~000~~ royalties,~~000~~ ~~shares~~production ofrates and ~~our~~taxes, ~~common~~environmental ~~stock~~protection toand other matters under their respective jurisdictions. The royalty regime is a significant factor in the ~~two~~profitability ~~vendors~~of oil and natural gas production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the ~~closing~~parties. ~~date~~Crown royalties are determined by government regulation and ~~paid~~are ~~$100~~generally calculated as a percentage of the value of the gross production with the royalty rate dependent in part upon prescribed reference prices,~~000~~ ~~prior~~well productivity, geographical location, field discovery date and the type and quality of the petroleum product produced. From time to time, the ~~closing~~governments of Canada and Alberta have established incentive programs such as aroyalty ~~non-refundable~~rate ~~deposit~~reductions, royalty holidays, tax credits and drilling royalty credits. These incentives are for the purpose of encouraging oil and natural gas exploration or enhanced recovery projects. These incentives generally increase cash flow.

~~Rolling~~Effective January ~~Rock’s~~1, ~~sole~~2009, ~~asset~~oil ~~consists~~sands ofroyalties ~~the~~in ~~rights~~Alberta ~~and~~are ~~obligations~~calculated ~~arising~~using ~~from~~ a ~~Purchase~~sliding ~~and~~scale ~~Sale~~for ~~Agreement~~royalty ~~dated~~rates ~~effective~~ranging ~~March~~from 1,% ~~2017,~~to as9% ~~amended~~pre-payout and ~~(together,~~25% to 40% post-payout depending on the ~~“Rolling~~world ~~Rock~~oil ~~PSA~~price. Project “payout”), ~~between~~refers anto ~~arm’s~~the ~~length~~point ~~vendor~~in ~~and~~which ~~Rolling~~we ~~Rock.~~earn sufficient ~~Upon~~revenues ~~the~~to ~~satisfaction~~recover all of the ~~payments~~allowed costs for the project plus a return allowance. The base royalty starts at 1% and ~~obligations~~increases byfor ~~Rolling~~every ~~Rock~~dollar asthe ~~set~~world ~~out~~oil ~~below~~price, as reflected by the ~~vendor~~WTI, ~~has~~is ~~agreed~~priced above $55 per barrel, to ~~convey~~a ~~certain~~maximum ~~leases~~of ~~and~~9% when ~~related~~oil ~~assets~~is ~~(the~~priced ~~“Leases”)~~at to$120 ~~Rolling~~per ~~Rock~~barrel or greater. The ~~Leases~~net ~~include~~royalty ~~certain~~starts ~~leases,~~at ~~hydrocarbons,~~25% ~~wells,~~and ~~agreements,~~increases ~~equipment,~~for ~~surface~~every ~~rights~~dollar ~~agreements~~oil ~~and~~is ~~assignable~~priced ~~permits~~above $55 ~~all~~per asbarrel ~~further~~to ~~set~~40% ~~out~~when inoil ~~the~~is ~~Rolling~~priced ~~Rock~~at ~~PSA.~~$120 or higher.

OnThe exploration ~~August~~and 17development of oil and gas properties is subject to various United States federal, ~~2017~~state and local governmental regulations. Our company may, wefrom ~~entered~~time ~~into~~to atime, ~~second~~be ~~amendment~~required to ~~purchase~~obtain licenses and ~~sale~~permits ~~agreement~~from (various governmental authorities in regards to the ~~“Rolling~~exploration ~~Rock~~of ~~Amendment”)~~our property interests. Matters subject to regulation include discharge permits for drilling operations, ~~which~~drilling ~~amended~~and abandonment bonds, reports concerning operations, the ~~terms~~spacing of ~~the~~wells, ~~Rolling~~and ~~Rock~~pooling ~~PSA~~of properties and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas.

The Rolling Rock Amendment had the effect of postponing certain payments relating to the Mancos formation under the Rolling Rock PSA until December 31, 2018 while providing for the flexibility of earlier payments in the discretion of our Company. In consideration for the postponement of such payments, Rolling Rock agreed to certain additional interim payments and stock consideration as set forth below.Environmental Considerations

7The oil and natural gas industry is subject to environmental laws and regulations pursuant to United States and Canadian local, state, provincial and federal legislation. Environmental legislation provides for restrictions and prohibitions on releases or emissions of various substances produced or utilized in association with certain oil and gas industry operations. In addition, legislation requires that well and facility sites be monitored, abandoned and reclaimed to the satisfaction of provincial authorities. A breach of such legislation may result in the imposition of fines and penalties. Under these laws and regulations, we could be liable for personal injury, clean-up costs and other environmental and property damages as well as administrative, civil and criminal penalties. Accordingly, we could be liable or could be required to cease production on properties if environmental damage occurs. Although we maintain insurance coverage, the costs of complying with environmental laws and regulations in the future may harm our business. Furthermore, future changes in environmental laws and regulations could occur that result in stricter standards and enforcement, larger fines and liability, and increased capital expenditures and operating costs, any of which could have a material adverse effect on our financial condition or results of operations. We maintain commercial property and general liability insurance coverage on the properties we operate. We also maintain operators extra expense insurance which provides coverage for well control incidents specifically relating to regaining control of a well, seepage, pollution, clean-up and containment. No coverage is maintained with respect to any fine or penalty required to be paid due to a violation of the regulations set out by the federal and provincial regulatory authorities. We are committed to meeting our responsibilities to protect the environment and anticipate making increased expenditures of both a capital and expense nature as a result of the increasingly stringent laws relating to the protection of the environment.

·Alberta’s new climate change regulation, effective July 1, 2007, requires Alberta facilities that emit more than 100,000 tonnes of greenhouse gases a year to reduce emissions intensity by 12 per cent. Companies have four choices to meet their reductions: (1) they can make operating improvements to their operations that will result in greenhouse gas emission reductions; (2) purchase Alberta based offset credits; (3) contribute to the Climate Change and Emissions Management Fund; and (4) purchase or use emission performance credits, also called EPCs, these credits are generated by facilities that have gone beyond the 12% mandatory intensity reduction. EPCs can be banked for future use or sold to other facilities that need to meet the reduction target.

~~$100~~On June 18,~~000~~ as2009, athe ~~non-refundable~~Canadian ~~deposit~~government ~~within~~passed 5the ~~business~~new ~~days~~Environmental Enforcement Act (“EEA”). The EEA was created to strengthen and amend nine existing Statutes that relate to the environment and to enact provisions respecting the enforcement of ~~closing~~certain Statutes that relate to the environment. The EEA amends various enforcement, offence, penalty and sentencing provisions to deter offenders from committing offences under the EEA by setting minimum and maximum fines for serious offences. The EEA also gives enforcement officers new powers to investigate cases and grants courts new sentencing authorities that ensure penalties reflect the seriousness of the pollution and wildlife offences. The EEA also expands the authority to deal with environmental offenders by: (~~completed~~1) specifying aggravating factors such as causing damage to wildlife or wildlife habitat, or causing damage that is extensive, persistent or irreparable; (2) providing fine ranges that are higher for corporate offenders than for individuals; (3) doubling fine ranges for repeat offenders; (4) authorizing the suspension and ~~unchanged~~cancellation of licenses, permits or other authorizations upon conviction; (5) requiring corporate offenders to report convictions to shareholders; and (6) mandating the reporting of corporate offences on a public registry.

·The production, handling, storage, transportation and disposal of oil and gas, by-products thereof, and other substances and materials produced or used in connection with oil and gas operations are also subject to regulation under United States federal, state and local laws and regulations relating primarily to the protection of human health and the environment. Additionally, we may incur expenditures related to compliance with such laws, and may incur costs in connection with the remediation of any environmental contamination. The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations.

the balance of the Rolling Rock Cash Consideration by payment to the vendor of an amount equal to 25% of any funds received by our Company from any Financing upon the closing of each Financing until such amount is paid. Notwithstanding the foregoing: (a) the first $1.5 million raised by our Company will be exempt from a 25% payment to the vendor if such amount is received prior to our listing on a stock exchange; Research and ~~(b)~~Development the full Rolling Rock Cash Consideration is required to be paid in full no later than December 31, 2018 (later extended to the Rolling Rock Payment Deadline as described below) regardless of the amount of funds paid in connection with one or more Financings. This change modified the original requirement to pay $1.3 million on or before September 1, 2017, $500,000 on or before March 1, 2018 and $500,000 on or before September 1, 2018; andExpenditures

·Other than seismic, engineering, geochemical and geophysical programs capitalized in connection with our oil and gas concessions, we have devoted no substantial efforts to research and development within the last two fiscal years.

after payment of the Rolling Rock Cash Consideration, an additional payment of $300,000 (the “Workover Funds”) to the vendor which is payable by an amount equal to 25% of any funds received by our company from any Financing until the Workover Funds are paid in full.Employees

InAs at ~~addition~~October to15, ~~revising the Rolling Rock Cash Consideration as set out above~~2019, we have ~~agreed~~three ~~to:~~executive ~~(a)~~officers ~~issue~~and ~~250,000~~no ~~common~~full-time ~~shares~~employees. ofHowever, ~~the~~we ~~Company~~use toconsultants ~~the~~and ~~vendor on or prior~~ contractors to ~~September~~provide 1us, ~~2017~~among ~~(issued~~other onthings, ~~September~~with 1,executive ~~2017);~~management and ~~(b)~~accounting ~~pay the vendor an additional $25~~services,~~000~~ ~~every sixty days commencing September 1, 2017 until such time as the Rolling Rock Cash Consideration~~ and ~~the~~technical ~~Workover~~engineering ~~Funds are paid in full~~support.

As an added incentive for early payment of the Rolling Rock Cash Consideration, such sum will be reduced by $100,000 for each calendar month it is paid in full prior to December 31, 2018 for a maximum discount of 12 months or $1.2 million.Subsidiaries

InAs at ~~connection~~October ~~with~~15, ~~the Rolling Rock Amendment~~2019, we ~~entered~~have ~~into~~4 awholly ~~Ratification~~owned ~~of Purchase and Sale Agreement with the vendor on August 17~~subsidiaries, ~~2017~~Colony ~~but effective March 1~~Energy, ~~2017~~LLC, ~~whereby~~Black weDragon ~~ratified~~Energy, ~~adopted~~LLC, ~~and approved the~~ Rolling Rock ~~Amendment~~Resources, LLC, and ~~further~~City ~~guaranteed all the obligations~~ of ~~our~~Gold, ~~company~~LLC.

On May 28, 2018, we entered into a third amendment to purchase and sale agreement (the “Third Rolling Rock Amendment”), which amended the terms of the Rolling Rock PSA. The Third Rolling Rock Amendment has the effect of postponing certain payments relating to the Mancos formation under the Rolling Rock PSA until August 1, 2019, provided that, if the shares of common stock of our company are not listed on the TSX Venture Exchange on or before August 1, 2018, the payment deadline will remain December 31, 2018 (the “Rolling Rock Payment Deadline”).Intellectual Property

InWe do ~~connection~~not ~~with~~own ~~the~~any ~~Third~~intellectual Rolling Rock Amendment, we entered into a Ratification of Purchase and Sale Agreement with the vendor on May 28, 2018 but effective March 1, 2017, whereby we ratified, adopted and approved the Third Rolling Rock Amendment and further guaranteed all the obligations of our companyproperty.

8ITEM 1A. RISK FACTORS

~~Carry~~An investment ~~Obligation~~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 this report in evaluating our company and its business before purchasing shares of our company’s common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.

Under the Rolling Rock PSA, and in addition to the cash consideration, Rolling Rock has agreed to pay all costs and expenses incurred on the Leases with respect to any and all exploration, development and production during the carry period. The “Carry Period” continues until the later of either (i) the date that Rolling Rock pays the full cash consideration set out above or (ii) the date that Rolling Rock pays all costs and expenses for the drilling, logging, testing and completion of three new wells in each of the three Federal Units, each well with a horizontal leg extending at least 1,000’ in the target zone within the Mancos formation (the “Three Obligation Wells”). Rolling Rock is required to drill to completion or cause to be drilled to completion (or plugging and abandonment) the Three Obligation Wells on or before February 28, 2019, failing which, Rolling Rock’s right to earn any assignment in and to the Leases will terminate immediately. For each vertical well drilled to the top of the Dakota formation through completion (or plugging or abandonment) within a Federal Unit, the obligation deadline will be amended to the later of (i) the current obligation deadline or (ii) 6 months from the date the rig that drilled such vertical well to total depth has been removed from the wellsite.13

~~The~~Risks Related ~~obligation well in the Grand Mancos Unit will be a vertical well drilled~~ to aOur depth sufficient to test the Granite Walsh formation within such Federal Unit. For this well, completion (or plugging and abandonment) is expected to take place no later than 2 months after the rig that drilled to total depth has been removed from the wellsite and for a period of 6 months after completion of this obligation well (or plugging and abandonment), and Rolling Rock will have the exclusive option to purchase an additional 25% of the vendor’s right, title and interest in and to the leases with respect to the Granite Walsh formation within the boundary of the Grand Mancos Unit for an additional payment of $10 million. Company

~~Within~~We have 10a ~~business~~history ~~days after the later~~ of ~~Rolling~~losses ~~Rock paying the cash consideration in full or Rolling Rock meeting in full its carry obligation, the vendor agreed to convey to Rolling Rock an undivided 50% of the vendor’s right, title~~ and ~~interest in and to the Leases, or a 80% net revenue interest in the Leases as further described in the Rolling Rock PSA. Notwithstanding~~ this ~~transfer,~~trend ~~within~~may 10continue ~~business days after the later of payment of $300,000 on or before September 1, 2017 (which amount is in addition to the deposit~~ and ~~included~~may innegatively ~~the~~impact ~~cash~~our ~~consideration~~ability ~~set out above) and the replacement of the vendor’s bonds on or before September 1, 2017, the vendor agreed~~ to ~~convey~~achieve toour ~~Rolling~~business ~~Rock an undivided 50% of the vendor’s right, title and interest in and to the Cisco Dome leases and related assets as further set out in the Rolling Rock PSA~~objectives. However, if Rolling Rock fails to timely meet any of its obligations under the Rolling Rock PSA, after having taken assignment of the Cisco Dome leases and assets, then, if the vendor elects in its sole discretion, Rolling Rock is required to reassign the Cisco Dome leases and assets to the vendor without any additional encumbrances.

OnWe have ~~August~~experienced 24net losses since inception, ~~2017~~and expect to continue to incur substantial losses for the foreseeable future. Our accumulated deficit was $39,072,069 ~~our~~as ~~company~~at ~~indirectly~~February ~~acquired~~28, an2019. ~~undivided~~We ~~75%~~may ~~interest~~not inbe ~~additional~~able ~~oil~~to ~~and~~generate ~~gas~~significant ~~leases~~revenues in the ~~Mancos~~future. As ~~formation~~a ~~covering~~result, aour ~~total~~management ofexpects 2our business to continue to experience negative cash flow for the foreseeable future and cannot predict when,~~313.09~~ ~~acres~~if ever, our business might become profitable. ~~The~~ ~~leases~~We ~~were~~will ~~acquired~~need atto araise ~~SITLA~~additional ~~auction~~funds, and such funds may not be available on commercially acceptable terms, if at all. ~~Pursuant~~If we are unable to ~~the~~raise ~~Rolling~~funds ~~Rock~~on ~~PSA~~acceptable terms, ~~the~~we ~~parties~~may ~~have~~not ~~agreed~~be able to ~~enter~~execute ~~into~~our abusiness ~~joint~~plan, ~~operating~~take ~~agreement~~advantage ~~covering~~of ~~the~~future ~~new leases~~opportunities, ~~which~~or ~~are~~respond ~~outside~~to ~~the~~competitive ~~AMI~~pressures ~~(Area~~or ofunanticipated ~~Mutual~~requirements. This ~~Interest)~~may ofseriously ~~their~~harm ~~original~~our ~~joint~~business, ~~venture~~financial ~~lease~~condition ~~holdings~~and results of operations.

~~Based~~We have on a ~~separate~~limited ~~transaction,~~operating ~~our company and the vendor have acquired an additional 5~~history,~~174~~ ~~acres in the Mancos formation and hold a 50/50 partnership,~~ which ismay ~~part~~hinder ofour ~~the~~ability ~~AMI~~to ~~and~~successfully ~~its~~meet ~~original~~our ~~agreement~~objectives.

~~City~~We have a limited operating history upon which to base an evaluation of ~~Gold~~our current business and future prospects. We do not have an established history of operating producing properties or locating and developing properties that have oil and gas reserves. As a result, the revenue and income potential of our business is unproven. In addition, because of our limited operating history, we have limited insight into trends that may emerge and affect our business. Errors may be made in predicting and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.

OnOur operations ~~May~~and ~~17,~~proposed ~~2017,~~exploration weactivities ~~acquired~~will ~~100%~~require ofsignificant ~~the~~capital ~~membership~~expenditures ~~interest~~for inwhich ~~City~~we ofmay ~~Gold,~~not ~~LLC,~~have asufficient funding ~~Nevada~~and ~~limited~~if ~~liability~~we ~~company,~~do ~~from~~obtain ~~two~~additional ~~Nevada limited liability companies pursuant to a Membership Interest Purchase Agreement dated as of May 17~~financing, ~~2017. The Membership Interest Purchase Agreement provides for a total purchase price consisting of an aggregate of 30,000,000 common shares in the capital of~~ our ~~company.~~existing ~~15,000,000~~shareholders ofmay ~~these~~suffer ~~shares~~substantial ~~were issued at closing (7,500,000 to each transferor); the other 15,000,000 shares are to be issued within ten Business Days after City of Gold, LLC earns the Option (as defined below)~~dilution.

~~City~~We intend ofto ~~Gold,~~make ~~LLC’s~~capital ~~sole~~expenditures ~~asset~~far ~~consists~~in excess of ~~2,930,259~~our ~~common~~existing ~~shares~~capital ~~and~~resources 2to develop,~~930,259~~ ~~share~~acquire ~~purchase~~and ~~warrants~~explore inoil ~~the~~and ~~capital~~gas properties. ofWe ~~Asia~~intend ~~Pacific~~to ~~Mining~~rely ~~Limited~~on ~~(“Asia~~funds ~~Pacific”)~~from operations and ~~its~~external ~~rights~~sources ~~under~~of afinancing ~~binding~~to ~~financing~~meet ~~and~~our ~~option~~capital ~~agreement~~requirements ~~(the~~to ~~“Option~~continue acquiring, ~~Agreement”)~~exploring ~~with~~and ~~Asia~~developing ~~Pacific~~oil and angas ~~individual~~properties ~~named~~and ~~Nyi~~to ~~Nyi~~otherwise ~~Lwin~~implement our business plan. ~~City~~We ofplan ~~Gold~~to obtain additional funding through the debt and equity markets, ~~LLC’s~~but ~~only~~we ~~liabilities~~can ~~consist~~offer ofno ~~three~~assurance ~~demand~~that ~~notes~~we ~~for~~will anbe ~~aggregate~~able ofto $1obtain additional funding when it is required or that it will be available to us on commercially acceptable terms,~~500~~ if at all. In addition,~~000~~ any additional equity financing may involve substantial dilution to our then existing shareholders.

9The successful implementation of our business plan is subject to risks inherent in the oil and gas business, which if not adequately managed could result in additional losses.

~~Under~~Our oil and gas operations are subject to the ~~Option~~economic ~~Agreement,~~risks ~~Asia~~typically ~~Pacific~~associated with exploration and ~~Nyi~~development ~~Nyi~~activities, ~~Lwin~~including the ~~have~~necessity ~~agreed~~of tomaking ~~grant~~significant expenditures to ~~City~~locate ofand ~~Gold,~~acquire ~~LLC~~properties ~~the~~and ~~option~~to ~~(the~~drill ~~“Option”)~~exploratory towells. ~~purchase~~In ~~100%~~addition, the availability of ~~the~~drilling ~~ownership~~rigs ~~interest~~and inthe acost ~~wholly-owned~~and ~~subsidiary~~timing of ~~Asia~~drilling, ~~Pacific~~completing ~~(the “Project Subsidiary”) which~~and, inif ~~turn~~warranted, ~~owns~~operating ~~100%~~wells ofis ~~the~~often uncertain. ~~rights~~In toconducting exploration and development activities, the ~~City~~presence of ~~Gold~~unanticipated ~~mineral~~pressure ~~exploration~~or ~~project~~irregularities ~~located~~ in ~~Myanmar~~formations, miscalculations ~~which~~or ~~covers~~accidents anmay ~~area~~cause ofour ~~approximately~~exploration, ~~465~~development ~~square~~and, ~~kilometers~~if inwarranted, ~~close~~production ~~proximity~~activities to ~~hydropower,~~be ~~water,~~unsuccessful. This ~~and~~could ~~infrastructure~~result toin ~~accommodate~~a ~~exploration~~total ~~and~~loss ~~development~~ of ~~the~~our ~~property~~investment ~~(the~~in ~~“City~~a ofparticular ~~Gold Project”)~~well. ~~City~~ ofIf ~~Gold,~~exploration ~~LLC~~efforts ~~will~~are beunsuccessful ~~granted~~in ~~the~~establishing proved ~~Option~~reserves ~~upon~~and ~~satisfaction~~exploration ofactivities cease, the ~~following:~~amounts accumulated as unproved costs will be charged against earnings as impairments.

·In addition, market conditions or the unavailability of satisfactory oil and gas transportation arrangements may hinder our access to oil and gas markets and delay our production. The availability of a ready market for our prospective oil and gas production depends on a number of factors, including the demand for and supply of oil and gas and the proximity of reserves to pipelines and other facilities. Our ability to market such production depends in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities, in most cases owned and operated by third parties. Our failure to obtain such services on acceptable terms could materially harm our business. We may be required to shut in wells for lack of a market or a significant reduction in the price of oil or gas or because of inadequacy or unavailability of pipelines or gathering system capacity. If that occurs, we would be unable to realize revenue from those wells until arrangements are made to deliver such production to market.

~~Subscription of 976,753 units of Asia Pacific for a purchase price of $500,000 on or prior to March 2, 2017 (completed);~~14

·Our future performance is dependent upon our ability to identify, acquire and develop oil and gas properties, the failure of which could result in under use of capital and losses.

~~Subscription~~Our future ofperformance ~~976~~depends upon our ability to identify,~~753~~ ~~units~~acquire ofand ~~Asia~~develop ~~Pacific~~additional ~~for~~oil aand ~~purchase~~gas ~~price~~reserves that are economically recoverable. Our success will depend upon our ability to acquire working and revenue interests in properties upon which oil and gas reserves are ultimately discovered in commercial quantities, and our ability to develop prospects that contain proven oil and gas reserves to the point of ~~$500~~production. Without successful acquisition and exploration activities,~~000~~ onwe will not be able to develop additional oil and gas reserves or ~~prior~~generate revenues. We cannot provide you with any assurance that we will be able to identify ~~March~~and 16acquire additional oil and gas reserves on acceptable terms, ~~2017~~or ~~(completed);~~that oil and gas deposits will be discovered in sufficient quantities to enable us to recover our exploration and development costs or sustain our business.

·The successful acquisition and development of oil and gas properties requires an assessment of recoverable reserves, future oil and gas prices and operating costs, potential environmental and other liabilities, and other factors. Such assessments are necessarily inexact and their accuracy inherently uncertain. In addition, no assurance can be given that our exploration and development activities will result in the discovery of additional reserves. Our operations may be curtailed, delayed or cancelled as a result of lack of adequate capital and other factors, such as lack of availability of rigs and other equipment, title problems, weather, compliance with governmental regulations or price controls, mechanical difficulties, or unusual or unexpected formations, pressures and or work interruptions. In addition, the costs of exploitation and development may materially exceed our initial estimates.

~~Subscription~~We have ofa ~~976,753~~very ~~units~~small ofmanagement ~~Asia~~team ~~Pacific~~and ~~for~~the aloss ~~purchase~~of ~~price~~any member of ~~$500,000~~our onteam ormay ~~prior~~prevent tous ~~April~~from ~~28,~~implementing ~~2017~~our ~~(completed);~~business ~~and~~plan in a timely manner.

·We have three executive officers and a limited number of additional consultants upon whom our success largely depends. We do not maintain key person life insurance policies on our executive officers or consultants, the loss of which could seriously harm our business, financial condition and results of operations. In such an event, we may not be able to recruit personnel to replace our executive officers or consultants in a timely manner, or at all, on acceptable terms.

~~Subscription~~Future growth ofcould ~~2,930,261~~strain ~~units~~our ofpersonnel ~~Asia~~and ~~Pacific~~infrastructure ~~for a purchase price of $1~~resources,~~500,000~~ ~~(the~~and ~~“Final~~if ~~Funding~~we ~~Tranche”),~~are ~~due~~unable ~~within~~to 60implement ~~days~~appropriate ofcontrols ~~issuance~~and ofprocedures to anmanage ~~exploration~~our ~~license~~growth, ~~for~~we ~~the~~may ~~City~~not ofbe ~~Gold~~able ~~Project~~to bysuccessfully ~~the~~implement ~~Government~~our ofbusiness ~~Myanmar (the “License”)~~plan.

~~Each~~We may ~~share~~experience ~~purchase~~rapid ~~warrant~~growth isin ~~exercisable~~our ~~for~~operations, awhich ~~term~~will ~~equal~~place toa ~~the~~significant ~~greater~~strain ofon ~~two~~our ~~years~~management, ~~from~~administrative, ~~the closing of the Final Funding Tranche or 18 months from the issuance of the License at an exercise price of $0.51 for the first year~~ operational and ~~$1.02~~financial ~~for the second year~~infrastructure. ~~Asia~~Our ~~Pacific~~future ~~utilized~~success ~~$500,000~~will ofdepend ~~the~~in ~~initial~~part ~~three~~upon ~~tranches towards an exploration program of~~ the ~~City~~ability of ~~Gold~~our ~~Project.~~management ~~Asia Pacific is required~~ to ~~use~~manage ~~all~~growth proceeds for the Final Funding Tranche towards exploration of the Project Subsidiary’s mining interests, including no less than $500,000 towards drilling the City of Gold Project (the “Drilling Program”)effectively. This ~~Upon~~may ~~the~~require ~~closing~~us ofto ~~the~~hire ~~Final~~and ~~Funding~~train ~~Tranche,~~additional ~~City~~personnel ofto ~~Gold,~~manage ~~LLC~~our ~~will~~expanding ~~have earned the Option~~operations. WeIn ~~anticipate that the normal course of receiving the License will take longer than 12 months. As a result~~addition, we domust ~~not~~continue ~~anticipate commencing the Drilling Program or incurring additional expenses related~~ to improve ~~the~~our ~~project~~operational, ~~within~~financial ~~the~~and ~~next~~management 12controls ~~month~~and ~~period. We anticipate holding~~ our ~~interest~~reporting insystems ~~the~~and ~~City of Gold Project for the long term~~procedures. If ~~circumstances warrant,~~ we ~~intend~~fail to ~~exercise~~successfully manage ~~the~~our ~~Option~~growth, bywe ~~transferring~~may ~~the~~be ~~City~~unable of Gold Project into a subsidiary (“Spinco”) with the aim of completing a “spin-off” transaction of its anticipated 70% interest in Spinco under the plan of arrangement provisions in accordance with applicable securities and corporate laws in order to ~~realize~~execute aupon ~~benefit for~~ our ~~company~~business ~~and/or our stockholders~~plan.

Once City of Gold, LLC has earned the Option, it will have the right to exercise the Option for a period of 120 days from completion of the Drilling Program, which City of Gold, LLC can extend for an additional 120 days if it can demonstrate that all Market conditions toor ~~exercise~~operation ofimpediments the Option are complete other than approval from the applicable stock exchange upon which the shares of Spinco are to be listed. To exercise the Option, Asia Pacific has agreed to transfer the Project Subsidiary to Spinco for an exercise price consisting of $7,000,000 in cash and 30% of the issued and outstanding share capital of Spinco (calculated on a fully diluted basis, excluding up to 10% in stock options, but including shares Spinco may ~~have~~hinder ~~issued~~our inaccess ~~order~~ to ~~raise~~natural ~~the~~gas ~~exercise price of $7,000,000~~ and anoil ~~additional~~markets $5,000,000 in working capital). Half of the cash portion of the exercise price must be paid upon exercise of the Option; the balance is to be paid on the first anniversary of the exercise and is to be evidenced by a one-year secured term note. Although City of Gold, LLC has the right to select Spinco, Spinco must meet the following criteria: at exercise of the Option, Spinco must have less than $100,000 in liabilities and $5,000,000 or ~~more~~delay in working capital and Asia Pacific will have the right to nominate 30% of its directors. Although we currently anticipate that the exercise of the Option will be structured as a “spin-off” transaction, we have the flexibility under the Option Agreement to structure the transaction in other ways provided the conditions to exercise are met. However, we anticipate that such a structure will result in the most efficient way to monetize our ~~interest in the City of Gold Project at this time~~production.

~~Competition~~The marketability of production from our properties depends in part upon the availability, proximity and capacity of pipelines, natural gas gathering systems and processing facilities. This dependence is heightened where this infrastructure is less developed. Therefore, if drilling results are positive in certain areas of our oil and gas properties, a new gathering system would need to be built to handle the potential volume of gas produced. We might be required to shut in wells, at least temporarily, for lack of a market or because of the inadequacy or unavailability of transportation facilities. If that were to occur, we would be unable to realize revenue from those wells until arrangements were made to deliver production to market.

~~The~~Our ability ~~petroleum~~to ~~and~~produce ~~natural gas industry is highly competitive. Numerous independent oil~~ and ~~gas~~market ~~companies,~~natural ~~oil and~~ gas ~~syndicates~~ and ~~major~~ oil ~~and~~is ~~gas~~affected ~~companies actively seek out~~ and ~~bid~~also ~~for~~may ~~oil~~be ~~and~~harmed gas properties as well as for the services of third party providers, such as drilling companies, upon which we rely. A substantial number of our competitors have longer operating histories and substantially greater financial and personnel resources than we do, and have demonstrated the ability to operate through industry cycles.by:

10● the lack of pipeline transmission facilities or carrying capacity; ● government regulation of natural gas and oil production; ● government transportation, tax and energy policies; ● changes in supply and demand; and ● general economic conditions.

Some of our competitors not only explore for, produce and market petroleum and natural gas, but also carry out refining operations and market the resultant products on a worldwide basis which may provide them with additional sources of capital. Larger and better capitalized competitors may be in a position to outbid us for particular prospect rights. These competitors may also be better able to withstand sustained periods of unsuccessful drilling. Larger competitors may be able to absorb the burden of any changes in laws and regulations more easily than we can, which would adversely affect our competitive position.15

~~Petroleum~~We might ~~and~~incur ~~natural~~additional ~~gas~~debt ~~producers~~in ~~also~~order ~~compete~~to ~~with~~fund ~~other~~our ~~suppliers~~exploration ~~of energy~~ and ~~fuel~~development ~~to industrial~~activities, ~~commercial~~which ~~and~~would ~~individual~~continue ~~customers. Competitive conditions may be substantially affected by various forms of energy legislation and/or regulation considered from time~~ to ~~time~~reduce byour ~~the~~financial flexibility ~~governments~~ and~~/or~~ ~~their~~could ~~agencies~~have ~~and~~a ~~other~~material ~~factors~~adverse ~~which~~effect ~~are~~on ~~out of~~ our ~~control including~~business, ~~international~~financial ~~political~~condition ~~conditions,~~or ~~terrorism,~~results ~~overall levels~~ of ~~supply and demand for oil and gas, and the markets for synthetic fuels and alternative energy sources~~operations.

ToIf we ~~better~~incur ~~deal~~indebtedness, ~~with~~ the ~~competition~~ability to meet our debt obligations and reduce our level of indebtedness depends on future performance. General economic conditions, weoil ~~target~~and ~~high~~gas ~~potential~~prices ~~exploration~~and ~~properties~~financial, ~~which~~business ~~are~~and ~~too~~other ~~small~~factors ~~for~~affect our ~~largest~~operations ~~competitors~~and future performance. Many of these factors are beyond our control. We ~~rely~~cannot ~~upon~~assure you that we will be able to generate sufficient cash flow to pay the ~~technical~~interest ~~experience~~on our current or future debt or that future working capital, borrowings or equity financing will be available to pay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our ~~officers~~capital stock or a refinancing of our debt include financial market conditions, the value of our assets and ~~engineers~~performance at the time we need capital. We cannot assure you that we will have sufficient funds to ~~select~~make ~~those~~such ~~properties~~payments. onIf ~~which~~we do not have sufficient funds and are otherwise unable to negotiate renewals of our ~~exploration~~borrowings ~~expertise~~or ~~provides~~arrange new financing, we might have to sell significant assets. Any such sale could have a ~~differentiating~~material ~~advantage~~adverse effect on our business and financial results.

~~Customers~~Our properties and/or future properties might not produce, and we might not be able to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them, which could cause us to incur losses.

~~There~~Although we ~~are~~have noreviewed ~~contracts~~and ~~obligating~~evaluated our ~~company~~properties in a manner consistent with industry practices, such review and evaluation might not necessarily reveal all existing or potential problems. This is also true for any future acquisitions made by us. Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, a seller may be unwilling or unable to provide effective acontractual ~~fixed~~protection ~~quantity~~against all or part of ~~oil~~those problems, and ~~gas~~we tomay ~~any~~assume ~~party.~~environmental and other risks and liabilities in connection with the acquired properties.

~~Regulation~~ If we or our operators fail to maintain adequate insurance, our business could be materially and adversely affected.

~~The~~Our operations ~~exploration,~~are ~~production~~subject ~~and~~to ~~sale~~risks ofinherent in the oil and gas ~~are~~industry, ~~extensively~~such ~~regulated~~as byblowouts, ~~governmental~~cratering, ~~authorities.~~explosions, ~~Applicable~~uncontrollable flows ~~legislation~~of isoil, ~~under~~gas ~~constant review for amendment~~ or ~~expansion.~~well ~~These~~fluids, ~~efforts~~fires, ~~frequently~~pollution, ~~result~~earthquakes inand another ~~increase~~environmental inrisks. ~~the~~These ~~regulatory~~risks ~~burden~~could onresult ~~companies~~ in ~~our~~substantial losses ~~industry~~due ~~and~~to ~~consequently~~injury anand ~~increase~~loss ~~in the cost~~ of ~~doing~~life, ~~business~~severe ~~and~~damage ~~decrease~~to ~~in profitability. Numerous governmental departments~~ and ~~agencies~~destruction ~~are~~of ~~authorized~~property ~~to,~~ and ~~have~~equipment, ~~issued~~pollution ~~rules~~ and ~~regulations~~other ~~imposing~~environmental damage, ~~additional burdens on the oil~~ and ~~gas~~suspension ~~industry~~of ~~that~~operations. ~~often~~We ~~are~~could ~~costly~~be toliable ~~comply~~for ~~with~~environmental ~~and~~damages ~~carry~~caused ~~substantial~~by ~~penalties~~previous ~~for~~property ~~non-compliance~~owners. ~~Production~~As ~~operations~~a ~~are~~result, substantial ~~affected~~liabilities byto ~~changing~~third ~~tax~~parties ~~and~~or ~~other~~governmental ~~laws~~entities ~~relating~~may tobe incurred, the ~~petroleum~~payment ~~industry,~~of ~~constantly~~which ~~changing~~could ~~administrative~~have ~~regulations~~a ~~and~~material adverse ~~possible~~effect ~~interruptions~~on orour ~~termination~~financial bycondition ~~government~~and ~~authorities~~results of operations.

~~Oil~~Any prospective ~~and~~drilling ~~gas~~contractor ~~mineral~~or ~~rights~~operator ~~may~~which bewe ~~held~~hire bywill ~~individuals,~~be ~~corporations~~required orto ~~governments~~maintain ~~having~~insurance ~~jurisdiction~~of ~~over~~various ~~the~~types ~~area~~to incover ~~which~~our operations ~~such~~with ~~mineral~~policy ~~rights~~limits ~~are~~and ~~located.~~retention Asliability acustomary ~~general~~in ~~rule,~~the ~~parties~~industry. ~~holding~~We ~~such~~also ~~mineral~~have ~~rights~~acquired ~~grant~~our ~~licenses~~own orinsurance ~~leases~~coverage for tosuch ~~third~~prospects. ~~parties~~The tooccurrence ~~facilitate the exploration and development~~ of ~~these~~a ~~mineral~~significant ~~rights.~~adverse ~~The~~event ~~terms~~on ofsuch ~~the~~prospects ~~leases~~that ~~and~~is ~~licenses~~not ~~are~~fully ~~generally~~covered ~~established~~by toinsurance ~~require~~could result ~~timely~~in ~~development. Notwithstanding~~ the ~~ownership~~loss of ~~mineral~~all ~~rights,~~or ~~the~~part ~~government~~ of ~~the~~our ~~jurisdiction~~investment in ~~which~~a ~~mineral~~particular ~~rights~~prospect ~~are~~which ~~located~~could ~~generally~~have ~~retains~~a ~~authority~~material ~~over~~adverse ~~the~~effect ~~drilling~~on ~~and~~our financial ~~operation~~condition ~~of oil~~ and ~~gas~~results ~~wells~~of operations.

Each province and the federal government of Canada have legislation and regulations governing land tenure, royalties, production rates and taxes, environmental protection and other matters under their respective jurisdictions. The ~~royalty regime is a significant factor in the profitability of~~ oil and ~~natural~~ gas ~~production.~~industry ~~Royalties~~is ~~payable~~highly on production from lands other than Crown lands are determined by negotiations between the parties. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production with the royalty rate dependent in part upon prescribed reference pricescompetitive, ~~well productivity, geographical location, field discovery date~~ and ~~the~~we ~~type~~may ~~and~~not ~~quality~~have ofsufficient ~~the~~resources ~~petroleum product produced. From time~~ to ~~time,~~compete ~~the governments of Canada and Alberta have established incentive programs such as royalty rate reductions, royalty holidays, tax credits and drilling royalty credits~~effectively. ~~These incentives are for the purpose of encouraging oil and natural gas exploration or enhanced recovery projects. These incentives generally increase cash flow.~~

~~Effective~~The oil ~~January~~and 1gas industry is highly competitive. We compete with oil and natural gas companies and other individual producers and operators, many ~~2009~~of which have longer operating histories and substantially greater financial and other resources than we do, ~~oil~~as ~~sands~~well ~~royalties~~as companies in ~~Alberta~~other ~~are~~industries ~~calculated~~supplying ~~using~~energy, afuel ~~sliding~~and ~~scale~~other ~~for~~needs ~~royalty~~to ~~rates~~consumers. ~~ranging~~Our ~~from~~larger 1%competitors, toby 9%reason ~~pre-payout~~of their size and ~~25%~~relative financial tostrength, ~~40%~~can ~~post-payout~~more ~~depending~~easily onaccess capital markets than we can and may enjoy a competitive advantage in the ~~world~~recruitment of ~~oil~~qualified ~~price~~personnel. ~~Project~~They ~~“payout”~~may ~~refers~~be able to absorb the ~~point~~burden of any changes in ~~which~~laws and regulation in the jurisdictions in which we ~~earn~~do ~~sufficient~~business ~~revenues~~and tohandle ~~recover~~longer ~~all~~periods of ~~the~~reduced ~~allowed~~prices ~~costs~~ for ~~the~~oil ~~project~~and ~~plus~~gas amore ~~return~~easily ~~allowance~~than we can. ~~The~~Our ~~base~~competitors ~~royalty~~may ~~starts~~be atable to 1%pay more for oil and ~~increases~~gas ~~for~~leases ~~every~~and ~~dollar~~properties ~~the~~and ~~world~~may ~~oil~~be ~~price~~able to define, asevaluate, ~~reflected~~bid byfor ~~the~~and ~~WTI,~~purchase isa ~~priced~~greater ~~above~~number ~~$55~~of leases ~~per~~and ~~barrel~~properties than we can. Further, tothese acompanies ~~maximum~~may ofenjoy 9%technological ~~when~~advantages ~~oil~~and ismay ~~priced~~be atable ~~$120~~to ~~per~~implement ~~barrel~~new technologies ormore ~~greater~~rapidly than we can. ~~The~~Our ~~net~~ability ~~royalty~~to ~~starts~~acquire atadditional ~~25%~~properties ~~and~~in ~~increases~~the ~~for~~future ~~every~~will ~~dollar~~depend ~~oil~~upon isour ~~priced~~ability to ~~above~~conduct ~~$55~~efficient ~~per~~operations, ~~barrel~~evaluate toand ~~40%~~select ~~when~~suitable ~~oil~~properties, isimplement ~~priced~~advanced attechnologies ~~$120~~and orconsummate ~~higher~~transactions in a highly competitive environment.

1116

~~The~~Complying with ~~exploration~~environmental and ~~development~~other ofgovernment ~~oil and gas properties is subject to various United States federal, state and local governmental~~ regulations. ~~Our~~could ~~company may, from time to time,~~ be ~~required~~costly ~~to obtain licenses~~ and ~~permits~~could ~~from~~negatively ~~various~~impact ~~governmental authorities in regards to the exploration of~~ our property interests. Matters subject to regulation include discharge permits for drilling operations, drilling and abandonment bonds, reports concerning operations, the spacing of wells, and pooling of properties and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production ~~by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas~~.

~~Environmental~~Our business ~~Considerations~~is governed by numerous laws and regulations at various levels of government. These laws and regulations govern the operation and maintenance of our facilities, the discharge of materials into the environment and other environmental protection issues. Such laws and regulations may, among other potential consequences, require that we acquire permits before commencing drilling and restrict the substances that can be released into the environment with drilling and production activities.

The oil and natural gas industry is subject to environmental laws and regulations pursuant to United States and Canadian local, state, provincial and federal legislation. Environmental legislation provides for restrictions and prohibitions on releases or emissions of various substances produced or utilized in association with certain oil and gas industry operations. In addition, legislation requires that well and facility sites be monitored, abandoned and reclaimed to the satisfaction of provincial authorities. A breach of such legislation may result in the imposition of fines and penalties. Under these laws and regulations, we could be liable for personal injury, clean-up costs and other environmental and property damages , as well as administrative, civil and criminal penalties. ~~Accordingly,~~Prior ~~we could be liable or could be required~~ to ~~cease~~commencement ~~production~~of ondrilling ~~properties~~operations, ifwe ~~environmental~~may ~~damage~~secure ~~occurs.~~limited ~~Although we maintain~~ insurance coverage, ~~the~~for ~~costs~~sudden ofand ~~complying~~accidental ~~with~~ environmental ~~laws~~damages ~~and~~as ~~regulations~~well inas ~~the~~environmental ~~future~~damage ~~may~~that ~~harm~~occurs ~~our~~over ~~business~~time. ~~Furthermore~~However, ~~future~~we ~~changes~~do not inbelieve ~~environmental laws and regulations could occur~~ that ~~result~~insurance incoverage ~~stricter~~for ~~standards~~the ~~and~~full ~~enforcement,~~potential ~~larger fines and~~ liability, ~~and~~of ~~increased~~environmental ~~capital~~damages ~~expenditures~~is ~~and~~available ~~operating~~at ~~costs, any of which could have~~ a ~~material~~reasonable ~~adverse effect on our financial condition or results of operations~~cost. Accordingly, ~~We maintain commercial property and general liability insurance coverage on the properties~~ we ~~operate.~~could Webe ~~also maintain operators extra expense insurance which provides coverage for well control incidents specifically relating to regaining control of a well~~liable, ~~seepage, pollution, clean-up and containment. No coverage is maintained with respect to any fine~~ or ~~penalty~~could ~~required to~~ be ~~paid~~required ~~due~~ to acease ~~violation~~production ofon ~~the~~properties, ~~regulations~~if ~~set~~environmental ~~out~~damage ~~by the federal and provincial regulatory authorities~~occurs. We are committed to meeting our responsibilities to protect the environment and anticipate making increased expenditures of both a capital and expense nature as a result of the increasingly stringent laws relating to the protection of the environment.

~~Alberta’s~~The costs ~~new~~of ~~climate~~complying ~~change~~with ~~regulation,~~environmental ~~effective~~laws ~~July~~and 1,regulations ~~2007,~~in ~~requires~~the ~~Alberta~~future ~~facilities~~may ~~that~~harm ~~emit~~our ~~more~~business. ~~than 100~~Furthermore,~~000~~ ~~tonnes~~future ofchanges ~~greenhouse~~in environmental ~~gases~~laws aand ~~year~~regulations tocould ~~reduce emissions intensity by 12 per cent. Companies have four choices to meet their reductions: (1) they can make operating improvements to their operations that will~~ result in ~~greenhouse~~stricter ~~gas~~standards ~~emission~~and ~~reductions;~~enforcement, ~~(2)~~larger ~~purchase~~fines ~~Alberta~~and ~~based~~liability, ~~offset credits; (3) contribute to the Climate Change~~ and ~~Emissions~~increased capital ~~Management~~expenditures ~~Fund;~~ and ~~(4)~~operating ~~purchase or use emission performance credits~~costs, ~~also~~any ~~called~~of ~~EPCs,~~which ~~these~~could ~~credits are generated by facilities that~~ have ~~gone~~a ~~beyond~~material ~~the~~adverse ~~12%~~effect ~~mandatory~~on ~~intensity~~our ~~reduction.~~financial ~~EPCs~~condition ~~can be banked for future use~~ or ~~sold~~results of ~~to other facilities that need to meet the reduction target~~operations.

On June 18, 2009, the Canadian government passed the new Environmental Enforcement Act (“EEA”). The EEA was created to strengthen and amend nine existing Statutes that relate to the environment and to enact provisions respecting the enforcement Shortages of ~~certain Statutes that relate to the environment. The EEA amends various enforcement~~rigs, ~~offence~~equipment, ~~penalty~~supplies and ~~sentencing~~personnel ~~provisions~~could todelay deter offenders from committing offences under the EEA by setting minimum and maximum fines for serious offences. The EEA also gives enforcement officers new powers to investigate cases and grants courts new sentencing authorities that ensure penalties reflect the seriousness of the pollution and wildlife offences. The EEA also expands the authority to deal with environmental offenders by: (1) specifying aggravating factors such as causing damage to wildlife or ~~wildlife~~otherwise ~~habitat,~~adversely oraffect ~~causing~~our ~~damage~~cost that is extensive, persistent or irreparable; (2) providing fine ranges that are higher for corporate offenders than for individuals; (3) doubling fine ranges for repeat offenders; (4) authorizing the suspension and cancellation of ~~licenses,~~operations ~~permits~~ or ~~other~~our ~~authorizations~~ability ~~upon conviction; (5) requiring corporate offenders~~ to operate ~~report~~according ~~convictions~~ to ~~shareholders;~~our ~~and~~business ~~(6) mandating the reporting of corporate offences on a public registry~~plans.

~~The~~If drilling ~~production,~~activity ~~handling~~increases in Alberta, ~~storage~~Canada, ~~transportation~~Utah ~~and~~or ~~disposal~~the ofUnited ~~oil~~States ~~and gas~~generally, ~~by-products~~a ~~thereof,~~shortage ~~and~~of ~~other~~drilling ~~substances~~ and ~~materials~~completion ~~produced~~rigs, field orequipment ~~used in connection with oil~~ and ~~gas~~qualified ~~operations~~personnel ~~are~~could ~~also~~develop. ~~subject~~The todemand ~~regulation~~for ~~under~~and ~~United~~wage ~~States~~rates ~~federal,~~of ~~state~~qualified ~~and~~drilling ~~local~~rig ~~laws~~crews ~~and~~generally rise ~~regulations~~in ~~relating~~response ~~primarily~~ to the ~~protection~~increasing number of ~~human~~active ~~health~~rigs ~~and~~in ~~the~~service ~~environment. Additionally, we may incur expenditures related to compliance with such laws,~~ and ~~may~~could ~~incur~~increase ~~costs~~sharply in ~~connection with~~ the ~~remediation~~event of ~~any~~a ~~environmental contamination~~shortage. ~~The~~Shortages of ~~requirements~~drilling ~~imposed by such laws~~ and ~~regulations~~completion ~~are frequently changed and subject to interpretation~~rigs, ~~and~~field weequipment ~~are~~or ~~unable~~qualified topersonnel ~~predict~~could ~~the~~delay, ~~ultimate~~restrict ~~cost~~or ofcurtail ~~compliance~~our ~~with~~exploration ~~these~~and ~~requirements~~development operations, orwhich ~~their~~could ~~effect~~in onturn harm our ~~operations~~operating results.

12We will be required to replace, maintain or expand our reserves in order to prevent our reserves and production from declining, which would adversely affect cash flows and income.

~~Research~~In general, production from natural gas and ~~Development~~oil ~~Expenditures~~properties declines over time as reserves are depleted, with the rate of decline depending on reservoir characteristics. If we are not successful in our exploration and development activities, our proved reserves will decline as reserves are produced. Our future natural gas and oil production is highly dependent upon our ability to economically find, develop or acquire reserves in commercial quantities.

~~Other~~To the ~~than~~extent ~~seismic,~~cash ~~engineering~~flow from operations is reduced, ~~geochemical~~either by a decrease in prevailing prices for natural gas and ~~geophysical~~oil ~~programs~~or ~~capitalized~~an increase in ~~connection~~exploration ~~with~~and ~~our~~development ~~oil~~costs, and ~~gas~~external ~~concessions~~sources of capital become limited or unavailable, weour ~~have~~ability ~~devoted~~to nomake ~~substantial~~the ~~efforts~~necessary capital investment to ~~research~~maintain or expand our asset base of natural gas and oil reserves would be impaired. Even with sufficient available capital, our future exploration and development ~~within~~activities ~~the~~may ~~last~~not ~~two~~result ~~fiscal~~in ~~years.~~additional proved reserves, and we might not be able to drill productive wells at acceptable costs.

~~Employees~~ 17

AsThe oil atand ~~June~~gas ~~28,~~exploration ~~2018, we have three executive officers~~ and noproduction ~~full-time~~industry ~~employees.~~historically ~~However,~~is wea ~~use~~cyclical ~~consultants~~industry and ~~contractors~~market tofluctuations ~~provide~~in ~~us,~~the ~~among~~prices ~~other~~of ~~things, with executive management~~ oil and ~~accounting~~gas ~~services,~~could ~~and~~adversely ~~technical~~affect ~~engineering~~our ~~support~~business.

~~Subsidiaries~~Prices for oil and gas tend to fluctuate significantly in response to factors beyond our control. These factors include:

As● atweather ~~June~~conditions; ~~28,~~● ~~2018~~economic conditions, weincluding ~~have~~demand 4for ~~wholly~~petroleum-based ~~owned~~products; ~~subsidiaries,~~● ~~Colony~~actions ~~Energy,~~by ~~LLC~~OPEC, ~~Black~~the ~~Dragon~~Organization ~~Energy,~~of ~~LLC~~Petroleum Exporting Countries; ● political instability in the Middle East and other major oil and gas producing regions; ● governmental regulations, ~~Rolling~~both ~~Rock~~domestic ~~Resources~~and foreign; ● domestic and foreign tax policy; ● the pace adopted by foreign governments for the exploration, ~~LLC~~development, and ~~City~~production of ~~Gold~~their national reserves; ● the price of foreign imports of oil and gas; ● the cost of exploring for, ~~LLC.~~producing and delivering oil and gas; ● the discovery rate of new oil and gas reserves; ● the rate of decline of existing and new oil and gas reserves; ● available pipeline and other oil and gas transportation capacity; ● the ability of oil and gas companies to raise capital; ● the overall supply and demand for oil and gas; and ● the availability of alternate fuel sources.

~~Intellectual~~Changes in ~~Property~~commodity prices may significantly affect our capital resources, liquidity and expected operating results. Price changes will directly affect revenues and can indirectly impact expected production by changing the amount of funds available to reinvest in exploration and development activities. Reductions in oil and gas prices not only reduce revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable. Significant declines in prices could result in non-cash charges to earnings due to impairment.

Changes in commodity prices may also significantly affect our ability to estimate the value of producing properties for acquisition and divestiture and often cause disruption in the market for oil and gas producing properties, as buyers and sellers have difficulty agreeing on the value of the properties. Price volatility also makes it difficult to budget for and project the return on acquisitions and the exploration and development of projects. We doexpect ~~not~~that ~~own~~commodity ~~any~~prices ~~intellectual~~will ~~property~~continue to fluctuate significantly in the future.

~~ITEM~~Our ability ~~1A.~~to ~~RISK~~produce ~~FACTORS~~oil and gas from our properties may be adversely affected by a number of factors outside of our control which may result in a material adverse effect on our business, financial condition or results of operations.

AnThe business ~~investment~~of inexploring ~~our~~for ~~common~~and ~~stock~~producing oil and gas involves a ~~number~~substantial risk of ~~very~~investment ~~significant risks~~loss. ~~You~~Drilling ~~should~~oil ~~carefully~~and ~~consider~~gas wells involves the ~~following~~risk ~~risks~~that ~~and~~the ~~uncertainties~~wells may be unproductive or that, although productive, the wells may not produce oil or gas in ~~addition~~economic quantities. toOther hazards, such as unusual or unexpected geological formations, pressures, fires, blowouts, loss of circulation of drilling fluids or other ~~information~~conditions inmay ~~this~~substantially ~~report~~delay inor ~~evaluating~~prevent ~~our~~completion ~~company~~of ~~and~~any ~~its~~well. ~~business~~Adverse ~~before~~weather ~~purchasing~~conditions ~~shares~~can also hinder drilling operations. A productive well may become uneconomic if water or other deleterious substances are encountered that impair or prevent the production of ~~our~~oil ~~company’s~~or ~~common~~gas ~~stock~~from the well. ~~Our~~In ~~business~~addition, ~~operating~~production ~~results~~from ~~and~~any ~~financial~~well ~~condition~~may ~~could~~be unmarketable if it is impregnated with water or other deleterious substances. There can be ~~seriously~~no ~~harmed~~assurance ~~due~~that tooil ~~any~~and ofgas will be produced from the ~~following~~properties ~~risks~~in which we have interests. ~~You~~In ~~could~~addition, ~~lose~~the ~~all~~marketability of oil and gas that may be acquired or ~~part~~discovered ofmay be ~~your~~influenced ~~investment~~by ~~due~~numerous tofactors ~~any~~beyond our control. These factors include the proximity and capacity of ~~these~~oil ~~risks~~and gas, gathering systems, pipelines and processing equipment, market fluctuations in oil and gas prices, taxes, royalties, land tenure, allowable production and environmental protection. We cannot predict how these factors may affect our business.

~~Risks Related to Our Company~~18

We may ~~have~~be aunable ~~history~~to ofretain ~~losses~~our leases and ~~this~~working ~~trend~~interests ~~may~~in ~~continue~~our ~~and~~leases, ~~may~~which ~~negatively~~would ~~impact~~result ~~our~~in ~~ability~~significant tofinancial ~~achieve~~losses to our ~~business objectives~~company.

WeOur properties ~~have~~are ~~experienced~~held ~~net~~under ~~losses~~oil ~~since~~and ~~inception,~~gas ~~and~~leases. ~~expect~~If towe ~~continue~~fail to ~~incur~~meet ~~substantial losses for~~ the ~~foreseeable~~specific ~~future.~~requirements ~~Our~~of ~~accumulated~~each ~~deficit was $14~~lease,~~650,095~~ assuch atlease ~~February~~may ~~28,~~terminate or ~~2018~~expire. We ~~may~~cannot ~~not~~assure beyou ~~able~~that toany ~~generate~~of ~~significant revenues in~~ the ~~future. As~~obligations arequired ~~result, our management expects our business~~ to ~~continue~~maintain toeach ~~experience~~lease ~~negative~~will ~~cash~~be ~~flow~~met. ~~for~~The ~~the~~termination ~~foreseeable~~or ~~future~~expiration of ~~and~~our ~~cannot~~leases ~~predict~~may ~~when,~~harm ~~if ever,~~ our business. ~~might~~Our ~~become~~property ~~profitable.~~interests We will ~~need~~terminate tounless ~~raise~~we ~~additional~~fulfill ~~funds,~~certain ~~and~~obligations ~~such~~under ~~funds~~the ~~may~~terms of ~~not~~our beleases ~~available~~and onother ~~commercially~~agreements ~~acceptable~~related ~~terms,~~to ifsuch ~~at all~~properties. If we are unable to ~~raise~~satisfy ~~funds~~these conditions on ~~acceptable~~a ~~terms,~~timely basis, we may ~~not~~lose beour ~~able~~rights toin ~~execute~~these properties. The termination of our ~~business~~interests ~~plan,~~in ~~take~~these ~~advantage~~properties ofmay ~~future~~harm ~~opportunities~~our business. In addition, we orwill ~~respond~~need tosignificant ~~competitive~~funds ~~pressures~~to ormeet ~~unanticipated~~capital requirements. ~~This~~for ~~may~~the ~~seriously~~exploration ~~harm~~activities ~~our~~that ~~business,~~we ~~financial~~intend ~~condition~~to ~~and~~conduct ~~results~~on ofour ~~operations~~properties.

WeOur Godin ~~have~~project ais ~~limited~~complex ~~operating~~undertakings ~~history,~~and ~~which~~ may ~~hinder~~not ~~our~~be ~~ability~~completed toat ~~successfully~~our ~~meet~~estimated ~~our~~cost ~~objectives~~or at all.

We, through ~~have~~our awholly ~~limited~~owned ~~operating~~subsidiary ~~history~~Colony ~~upon~~Energy, ~~which~~LLC, toholds ~~base~~a an100% ~~evaluation~~interest ofin ~~our current business~~ and ~~future~~to ~~prospects.~~certain Wepetroleum, donatural ~~not~~gas ~~have~~and angeneral rights, ~~established~~including ~~history~~Alberta ofCrown ~~operating~~Petroleum ~~producing properties or locating~~ and ~~developing~~Oil ~~properties~~Leases, ~~that~~in ~~have~~20 ~~oil~~contiguous ~~and~~sections ~~gas~~totaling ~~reserves.~~12,960 Asacres alocated ~~result,~~in the ~~revenue~~Godin area ~~and income potential~~ of ~~our~~Northern ~~business is unproven~~Alberta. InThe ~~addition,~~Godin ~~because~~project ofis ~~our limited operating history~~complex, wesubject ~~have~~to ~~limited~~extensive ~~insight~~governmental ~~into~~regulation ~~trends that may emerge~~ and ~~affect~~will ~~our~~require ~~business~~significant additional financing. ~~Errors~~There ~~may~~can be ~~made~~no inassurance ~~predicting~~that ~~and~~the ~~reacting~~necessary togovernmental ~~relevant~~approvals ~~business trends and we~~ will be ~~subject~~granted toor ~~the~~that ~~risks,~~such ~~uncertainties~~financing could ~~and~~be ~~difficulties~~obtained ~~frequently~~on ~~encountered~~commercially byreasonable ~~early-stage~~terms ~~companies~~or inat ~~evolving~~all, ~~markets.~~or Wethat ~~may~~if ~~not~~one ~~be able to successfully address any~~ or ~~all~~more of these ~~risks~~projects ~~and~~are ~~uncertainties.~~completed ~~Failure~~that tothey will ~~adequately~~be dosuccessful soor ~~could~~that ~~cause~~we ~~our~~realize ~~business,~~a ~~results~~return ofon ~~operations~~our ~~and financial condition to suffer~~investment.

13Risks Related to Our Common Stock

~~Our~~A decline ~~operations~~in ~~and~~the ~~proposed~~price ~~exploration~~of ~~activities~~our ~~will~~common ~~require~~stock ~~significant~~could ~~capital~~affect ~~expenditures~~our ~~for~~ability ~~which~~to weraise ~~may~~further ~~not~~working ~~have~~capital ~~sufficient funding~~ and ifadversely weimpact ~~do obtain additional financing,~~ our ~~existing~~ability to ~~shareholders~~continue ~~may suffer substantial dilution~~operations.

WeA prolonged ~~intend~~decline toin ~~make~~the ~~capital~~price ~~expenditures~~of ~~far~~our common stock could result in ~~excess~~a reduction in the liquidity of our ~~existing~~common ~~capital~~stock ~~resources~~and a reduction in our ability to ~~develop,~~raise ~~acquire~~capital. ~~and~~Because ~~explore~~a ~~oil~~significant portion of our operations have been and ~~gas~~will ~~properties.~~be Wefinanced ~~intend~~through tothe ~~rely~~sale of onequity ~~funds~~securities, ~~from~~a ~~operations~~decline ~~and~~in ~~external~~the ~~sources~~price of ~~financing~~our common stock could be especially detrimental to ~~meet~~our liquidity and our ~~capital~~operations. Such ~~requirements~~reductions may force us to ~~continue~~reallocate ~~acquiring,~~funds ~~exploring~~from ~~and~~other ~~developing~~planned ~~oil~~uses and ~~gas~~may ~~properties~~have ~~and~~a tosignificant ~~otherwise~~negative ~~implement~~effect on our business plan. Weand ~~plan~~operations, toincluding ~~obtain~~our ~~additional~~ability ~~funding~~to ~~through~~develop ~~the~~new ~~debt~~properties and ~~equity~~continue ~~markets,~~our ~~but~~current operations. If our stock price declines, we can offer no assurance that we will be able to ~~obtain~~raise additional ~~funding~~capital ~~when~~or itgenerate isfunds ~~required~~from oroperations ~~that~~sufficient itto ~~will~~meet our beobligations. ~~available~~If towe usare onunable ~~commercially~~to ~~acceptable~~raise ~~terms,~~sufficient ifcapital atin ~~all.~~the ~~In addition~~future, ~~any~~we ~~additional~~may ~~equity~~not ~~financing~~be ~~may~~able ~~involve~~to ~~substantial~~have ~~dilution~~the resources to continue our ~~then~~normal ~~existing shareholders~~operations.

The market ~~successful~~price ~~implementation~~for of our ~~business~~common ~~plan~~stock ismay ~~subject~~also be affected by our ability to ~~risks~~meet ~~inherent~~or inexceed ~~the~~expectations ~~oil~~of ~~and~~analysts ~~gas~~or ~~business~~investors. Any failure to meet these expectations, ~~which~~even if ~~not~~minor, ~~adequately~~may ~~managed~~have ~~could~~a ~~result~~material inadverse ~~additional~~effect ~~losses~~on the market price of our common stock.

~~Our~~If we ~~oil~~issue ~~and~~additional ~~gas~~shares ~~operations~~in ~~are subject to~~ the ~~economic risks typically associated with exploration and development activities~~future, ~~including~~it ~~the~~will necessity of making significant expenditures to locate and acquire properties and to drill exploratory wells. In addition, the availability of drilling rigs and the cost and timing of drilling, completing and, if warranted, operating wells is often uncertain. In conducting exploration and development activities, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause our exploration, development and, if warranted, production activities to be unsuccessful. This could result in athe ~~total~~dilution ~~loss~~ of our ~~investment~~existing ~~in a particular well~~shareholders. ~~If exploration efforts are unsuccessful in establishing proved reserves and exploration activities cease, the amounts accumulated as unproved costs will be charged against earnings as impairments.~~

InOur articles ~~addition~~of incorporation, ~~market~~as ~~conditions~~amended, orauthorize the ~~unavailability~~issuance of ~~satisfactory~~up ~~oil and gas transportation arrangements may hinder our access~~ to ~~oil~~750,000,000 ~~and~~shares ~~gas~~of ~~markets~~common ~~and~~stock ~~delay~~with ~~our~~a ~~production.~~par ~~The~~value ~~availability~~ of $0.001. aOur ~~ready~~board ~~market for our prospective oil and gas production depends on a number~~ of ~~factors,~~directors ~~including~~may ~~the~~choose ~~demand~~to ~~for~~issue ~~and~~some ~~supply~~or ofall ~~oil and gas and the proximity~~ of ~~reserves~~such shares to ~~pipelines~~acquire ~~and~~one ~~other~~or ~~facilities.~~more ~~Our~~businesses ~~ability~~or to ~~market~~provide additional ~~such~~financing ~~production depends~~ in ~~substantial part on~~ the ~~availability~~future. ~~and~~The ~~capacity~~issuance of ~~gathering~~any ~~systems,~~such ~~pipelines~~shares ~~and~~will ~~processing~~result ~~facilities,~~ in ~~most~~a ~~cases~~reduction ~~owned~~of ~~and~~the ~~operated~~book byvalue ~~third~~and ~~parties.~~market ~~Our~~price of ~~failure~~the tooutstanding ~~obtain~~shares ~~such~~of ~~services on acceptable terms could materially harm~~ our ~~business~~common stock. WeIf ~~may~~we beissue ~~required~~any tosuch ~~shut~~additional inshares, ~~wells~~such ~~for~~issuance ~~lack~~will ofcause a ~~market or a significant~~ reduction in the ~~price~~proportionate ofownership ~~oil~~and orvoting ~~gas~~power ~~or because~~ of ~~inadequacy~~all orcurrent ~~unavailability of pipelines or gathering system capacity~~shareholders. ~~If that occurs~~Further, wesuch ~~would~~issuance bemay ~~unable~~result toin ~~realize~~a ~~revenue~~change ~~from~~of ~~those~~control of ~~wells~~our ~~until arrangements are made to deliver such production to market~~corporation.

~~Our future performance is dependent upon our ability to identify, acquire and develop oil and gas properties, the failure of which could result in under use of capital and losses.~~19

~~Our~~Trading of ~~future performance depends upon~~ our ~~ability~~stock tomay ~~identify,~~be ~~acquire~~restricted ~~and~~by ~~develop~~the ~~additional~~Securities ~~oil~~Exchange ~~and~~Commission’s ~~gas~~penny ~~reserves~~stock ~~that~~regulations, ~~are economically recoverable. Our success will depend upon our ability to acquire working and revenue interests in properties upon~~ which ~~oil~~may ~~and~~limit ~~gas~~a ~~reserves are ultimately discovered in commercial quantities, and our~~ stockholder’s ability to ~~develop~~buy ~~prospects that contain proven oil~~ and ~~gas~~sell reserves to the point of production. Without successful acquisition and exploration activities, we will not be able to develop additional oil and gas reserves or generate revenues. We cannot provide you with any assurance that we will be able to identify and acquire additional oil and gas reserves on acceptable terms, or that oil and gas deposits will be discovered in sufficient quantities to enable us to recover our ~~exploration and development costs or sustain our business~~stock.

14The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these 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 level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial ~~successful~~Industry ~~acquisition~~Regulatory ~~and development of oil and gas properties requires an assessment of recoverable reserves~~Authority, ~~future~~or ~~oil and gas prices and operating costs~~FINRA, ~~potential~~has ~~environmental~~adopted ~~and~~sales ~~other~~practice ~~liabilities,~~requirements ~~and~~which other factors. Such assessments are necessarily inexact and their accuracy inherently uncertain. In addition, no assurance can be given that our exploration and development activities will result in the discovery of additional reserves. Our operations may bealso ~~curtailed,~~limit ~~delayed or cancelled as~~ a ~~result~~stockholder’s ability ofto ~~lack~~buy ~~of adequate capital~~ and ~~other~~sell factors, such as lack of availability of rigs and other equipment, title problems, weather, compliance with governmental regulations or price controls, mechanical difficulties, or unusual or unexpected formations, pressures and or work interruptions. In addition, the costs of exploitation and development may materially exceed our ~~initial estimates~~stock.

WeIn addition ~~have~~to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a ~~very~~customer, ~~small~~a ~~management~~broker-dealer ~~team~~must ~~and~~have reasonable grounds for believing that the ~~loss~~investment ofis ~~any~~suitable ~~member~~for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our ~~team~~common stock, which may ~~prevent~~limit usyour ~~from~~ability ~~implementing~~to buy and sell our ~~business~~stock ~~plan~~and inhave aan ~~timely~~adverse ~~manner~~effect on the market for our shares.

WeOur common ~~have~~stock ~~three~~is ~~executive~~illiquid ~~officers~~ and athe ~~limited~~price ~~number~~ of ~~additional consultants upon whom~~ our ~~success~~common ~~largely~~stock ~~depends.~~may Webe donegatively ~~not~~impacted ~~maintain~~by ~~key~~factors ~~person life insurance policies on our executive officers or consultants, the loss of~~ which ~~could~~are ~~seriously~~unrelated ~~harm~~to our ~~business, financial condition and results of~~ operations. ~~In such an event, we may not be able to recruit personnel to replace our executive officers or consultants in a timely manner, or at all, on acceptable terms.~~

~~Future~~Our common ~~growth~~stock ~~could~~currently ~~strain~~trades on a limited basis on OTCQB operated by the OTC Markets Group and TSX Venture Exchange. Trading of our ~~personnel~~stock through OTCQB and ~~infrastructure~~TSX ~~resources,~~Venture Exchange is frequently thin and ifhighly wevolatile. ~~are~~There ~~unable~~is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to ~~implement~~sell ~~appropriate~~their ~~controls~~stock. ~~and~~The ~~procedures~~market price of our common stock could fluctuate substantially due to ~~manage~~a variety of factors, including market perception of our ability to achieve our planned growth, wequarterly ~~may~~operating ~~not~~results beof ~~able~~our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to ~~successfully~~extreme ~~implement~~price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our ~~business~~common ~~plan~~stock.

~~We may experience rapid growth in our operations, which will place a significant strain on our management, administrative, operational and financial infrastructure~~Item 1B. ~~Our~~Unresolved ~~future~~Staff success will depend in part upon the ability of our management to manage growth effectively. This may require us to hire and train additional personnel to manage our expanding operations. In addition, we must continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we may be unable to execute upon our business plan.Comments

~~Market conditions or operation impediments may hinder our access to natural gas and oil markets or delay our production~~None.

The marketability of production from our properties depends in part upon the availability, proximity and capacity of pipelines, natural gas gathering systems and processing facilities. This dependence is heightened where this infrastructure is less developed. Therefore, if drilling results are positive in certain areas of our oil and gas properties, a new gathering system would need to be built to handle the potential volume of gas produced. We might be required to shut in wells, at least temporarily, for lack of a market or because of the inadequacy or unavailability of transportation facilities. If that were to occur, we would be unable to realize revenue from those wells until arrangements were made to deliver production to market.20

~~Our~~ITEM 2. ~~ability to produce and market natural gas and oil is affected and also may be harmed by:~~PROPERTIES

·Executive Offices and Registered Agent

~~the~~Our operational ~~lack~~office ofis ~~pipeline~~located ~~transmission~~at ~~facilities~~Suite or1020, ~~carrying~~909 ~~capacity;~~11th Avenue, S.W., Calgary, Alberta Canada T2R 0E7. Our administrative office is located at Suite 1588, 609 Granville Street, Vancouver, British Columbia, Canada V7Y 1G5.

·Property

~~government regulation of natural gas and oil production;~~ Reserves

·The following table discloses our gross and net proved reserves with the totals itemized as per Canada and the United States, estimated using forecast prices and costs, by product type. “Forecast prices and costs” means future prices and costs that are generally accepted as being a reasonable outlook of the future, or fixed or currently determinable future prices or costs to which we are bound.

government transportation, tax and energy policies;

Canada

Volumes in Imperial Units

Oil

Natural Gas

Light/Medium Crude

Heavy
Crude

Bitumen

Solution
Gas

Conventional

Total
BOE

W.I. Co. Share

CATEGORY

Gross Mstb

Net Mstb

Gross Mstb

Net Mstb

Gross Mstb

Net Mstb

Gross MMCF

Net MMCF

Gross MMCF

Net MMCF

Gross Mboe

Net
Boe

PDNP

32.9

29.3

32.9

29.3

PUD

34.5

30.8

34.5

30.8

67.4

60.1

67.4

60.1

27,720

23,839

27,720

23,839

P+P

67.4

60.1

27,720

23,839

27,787

23,899

POSS

47,889

45,184

47,889

45,184

P+P+P

67.4

60.1

75,609

69,023

76,676

69,083

·Light/Medium includes Tight and Synthetic, Heavy includes Godin oil

changes in supply and demand; and

Volumes in Metric Units

Oil

Natural Gas

Light/Medium Crude

Heavy
Crude

Bitumen

Solution
Gas

Conventional

Total
BOE

W.I. Co. Share

CATEGORY

Gross E3m3

Net E3m3

Gross E3m3

Net E3m3

Gross E3m3

Net E3m3

Gross E6m3

Net E6m3

Gross E6m3

Net E6m3

Gross Mboe

Net
Boe

PDNP

5.2

4.7

5.2

4.7

PUD

5.5

4.9

5.5

4.9

10.7

9.6

10.7

9.6

4,407

3,790

4,407

3,790

P+P

10.7

9.6

4,407

3,790

4,418

3,800

POSS

7,614

7,183

7,614

7,183

P+P+P

10.7

9.6

12,021

10,973

12,032

10,983

·Light/Medium includes Tight and Synthetic, Heavy includes Godin oil

~~general economic conditions.~~ 21

United States

Volumes in Imperial Units

Oil

Natural Gas

Light/Medium Crude

Heavy
Crude

Bitumen

Solution
Gas

Conventional

Total
BOE

W.I. Co. Share

CATEGORY

Gross Mstb

Net Mstb

Gross Mstb

Net Mstb

Gross Mstb

Net Mstb

Gross MMCF

Net MMCF

Gross MMCF

Net MMCF

Gross Mboe

Net Boe

PDNP

198

168

PUD

189

160

387

329

1,350

1,147

P+P

1,737

1,476

POSS

P+P+P

1,737

1,476

WeLight/Medium ~~might~~includes ~~incur~~Tight ~~additional debt in order to fund our exploration~~ and ~~development activities, which would continue to reduce our financial flexibility and could have a material adverse effect on our business, financial condition or results of operations.~~Synthetic

If we incur indebtedness, the ability to meet our debt obligations and reduce our level of indebtedness depends on future performance. General economic conditions, oil and gas prices and financial, business and other factors affect our operations and future performance. Many of these factors are beyond our control. We cannot assure you that we will be able to generate sufficient cash flow to pay the interest on our current or future debt or that future working capital, borrowings or equity financing will be available to pay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our capital stock or a refinancing of our debt include financial market conditions, the value of our assets and performance at the time we need capital. We cannot assure you that we will have sufficient funds to make such payments. If we do not have sufficient funds and are otherwise unable to negotiate renewals of our borrowings or arrange new financing, we might have to sell significant assets. Any such sale could have a material adverse effect on our business and financial results.

Volumes in Metric Units

Oil

Natural Gas

Light/Medium Crude

Heavy
Crude

Bitumen

Solution
Gas

Conventional

Total
BOE

W.I. Co. Share

W.l. Co. Share

CATEGORY

Gross E3m3

Net E3m3

Gross E3m3

Net E3m3

Gross E3m3

Net E3m3

Gross E6m3

Net E6m3

Gross E6m3

Net E6m3

Gross Mboe

Net Boe

PDNP

31.5

26.7

PUD

30.0

25.4

61.5

52.1

214.6

182.4

P+P

276.2

234.7

POSS

P+P+P

276.2

234.7

~~Our properties and~~Light/orMedium ~~future~~includes ~~properties~~Tight ~~might not produce,~~ and ~~we might not be able to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them, which could cause us to incur losses.~~ Synthetic

~~Although~~The following wetable ~~have~~discloses, ~~reviewed and evaluated our properties~~ in athe ~~manner consistent with industry practices~~aggregate, ~~such~~the ~~review~~net ~~and~~present ~~evaluation~~value ~~might~~of ~~not~~our ~~necessarily reveal all existing or potential problems. This is also true for any~~ future ~~acquisitions~~net ~~made~~revenue byattributable ~~us.~~to ~~Inspections~~the ~~may~~reserves ~~not~~categories in ~~always~~the beprevious ~~performed on every well~~table, ~~and~~estimated ~~environmental~~using ~~problems,~~forecast ~~such~~prices asand ~~groundwater contamination~~costs, ~~are~~before ~~not~~and ~~necessarily~~after ~~observable~~deducting ~~even~~future ~~when~~income antax ~~inspection is undertaken. Even when problems are identified~~expenses, aand ~~seller~~calculated without ~~may~~discount beand ~~unwilling~~using ordiscount ~~unable~~rates ~~to provide effective contractual protection against all or part~~ of ~~those~~0 ~~problems~~percent, ~~and~~5 wepercent, ~~may~~10 ~~assume~~percent, ~~environmental~~15 ~~and~~percent ~~other risks~~ and ~~liabilities~~20 ~~in connection with the acquired properties~~percent.

If we or our operators fail to maintain adequate insurance, our business could be materially and adversely affected.

CANADA	Net Present Value of Future Cash Flow
	BEFORE TAX
Reserve Category	0.00%		5.00%		10.00%		15.00%		20.00%
	MM$C		MM$C		MM$C		MM$C		MM$C
Total Proved		1.6		1.3		1.1		0.9		0.8
Total Probable		818		655		530		433		358
Total Proved + Probable		818		655		530		433		358
Total Possible		1,627		1,237		954		745		589
Total Proved + Prob. + Poss.		2,445		1,892		1,484		1,179		946

Our operations are subject to risks inherent in the oil and gas industry, such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires, pollution, earthquakes and other environmental risks. These risks could result in substantial losses due to injury and loss of life, severe damage to and destruction of property and equipment, pollution and other environmental damage, and suspension of operations. We could be liable for environmental damages caused by previous property owners. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could have a material adverse effect on our financial condition and results of operations.

UTAH – Moenkopi	Net Present Value of Future Cash Flow
	BEFORE TAX
Reserve Category	0.00%		5.00%		10.00%		15.00%		20.00%
	MM$C		MM$C		MM$C		MM$C		MM$C
Total Proved		14,368		11,356		9,192		7,635		6,469
Total Probable		57,643		44,373		35,292		29,201		23,987
Total Proved + Probable		57,643		44,373		35,292		29,201		23,987
Total Possible
Total Proved + Prob. + Poss.		57,643		44,373		35,292		29,201		23,987

Any prospective drilling contractor or operator which we hire will be required to maintain insurance of various types to cover our operations with policy limits and retention liability customary in the industry. We also have acquired our own insurance coverage for such prospects. The occurrence of a significant adverse event on such prospects that is not fully covered by insurance could result in the loss of all or part of our investment in a particular prospect which could have a material adverse effect on our financial condition and results of operations. 22

The following ~~oil~~two ~~and~~tables ~~gas~~provide ~~industry~~additional isinformation ~~highly~~regarding ~~competitive~~the future net revenue attributable to total proved reserves outlined in the previous table. This table discloses, ~~and~~in wethe ~~may~~aggregate, ~~not~~certain ~~have~~elements ~~sufficient~~of ~~resources~~our future net revenue attributable to ~~compete~~our proved ~~effectively~~reserves and our proved plus probable reserves, estimated using forecast prices and costs, and calculated without discount.

~~The~~Effective: ~~oil~~March ~~and gas industry is highly competitive. We compete with oil and natural gas companies and other individual producers and operators~~01, ~~many~~2019 of which have longer operating histories and substantially greater financial and other resources than we do, as well as companies in other industries supplying energy, fuel and other needs to consumers. Our larger competitors, by reason of their size and relative financial strength, can more easily access capital markets than we can and may enjoy a competitive advantage in the recruitment of qualified personnel. They may be able to absorb the burden of any changes in laws and regulation in the jurisdictions in which we do business and handle longer periods of reduced prices for oil and gas more easily than we can. Our competitors may be able to pay more for oil and gas leases and properties and may be able to define, evaluate, bid for and purchase a greater number of leases and properties than we can. Further, these companies may enjoy technological advantages and may be able to implement new technologies more rapidly than we can. Our ability to acquire additional properties in the future will depend upon our ability to conduct efficient operations, evaluate and select suitable properties, implement advanced technologies and consummate transactions in a highly competitive environment.Canada

Reserve Category	Undiscounted Company Share Cash Flow
	Revenue		Royalties/Burdens		Op. Costs		Abandonment		Net Op. Income		Capital Costs		BT Cash Flow
	MM$CDN		MM$CDN		MM$CDN		MM$CDN		MM$CDN		MM$CDN		MM$CDN
Total Proven		5.8		0.6		1.1		0.1		3.9		1.2		2.8
Total Probable		1,930		270		661		4.8		994		118		876
Total Proved + Prob		1,936		271		662		4.8		998		119		879
Total Possible		3,601.6		504		1,214.7		3.6		1,878.9		137.1		1,741.8
Total Proved + Prob. + Poss.		5,537.6		775		1,876.7		8.5		2,872.9		255.3		2,617.4

~~Complying~~Effective: ~~with~~March ~~environmental~~01, ~~and~~2019 ~~other~~United ~~government regulations could be costly and could negatively impact our production.~~States

Our business is governed by numerous laws and regulations at various levels of government. These laws and regulations govern the operation and maintenance of our facilities, the discharge of materials into the environment and other environmental protection issues. Such laws and regulations may, among other potential consequences, require that we acquire permits before commencing drilling and restrict the substances that can be released into the environment with drilling and production activities.

Reserve Category	Undiscounted Company Share Cash Flow
	Revenue		Royalties/Burdens		Op. Costs		Abandonment		Net Op. Income		Capital Costs		BT Cash Flow
	MM$CDN		MM$CDN		MM$CDN		MM$CDN		MM$CDN		MM$CDN		MM$CDN
Total Proven		36.0		5.3		7.9		0.15		21.8		2.4		19.4
Total Probable		125.7		18.9		27.6		0.5		78.7		10.8		68.6
Total Proved + Prob		161.9		24.2		35.4		0.7		101		13.2		88.0
Total Possible
Total Proved + Prob. + Poss.		161.9		24.2		35.4		0.7		101		13.2		88.0

~~Under~~Cdn $ these laws and regulations, we could be liable for personal injury, clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. Prior to commencement of drilling operations, we may secure limited insurance coverage for sudden and accidental environmental damages as well as environmental damage that occurs over time. However, we do not believe that insurance coverage for the full potential liability of environmental damages is available at ~~a reasonable cost~~$0.75 ~~Accordingly, we could be liable, or could be required to cease production on properties, if environmental damage occurs.~~US/$Cdn

~~The~~This table ~~costs~~discloses, ofby ~~complying~~production ~~with~~group, ~~environmental~~the ~~laws~~net ~~and~~present ~~regulations~~value inof ~~the~~our future ~~may~~net ~~harm~~revenue ~~our~~attributable ~~business.~~to ~~Furthermore,~~our ~~future~~proved ~~changes in environmental laws~~ and ~~regulations~~our ~~could~~proved plus ~~result~~probable inreserves, ~~stricter~~before ~~standards~~deducting ~~and~~future ~~enforcement,~~income ~~larger~~tax ~~fines and liability~~expenses, ~~and~~estimated ~~increased~~using ~~capital~~forecast ~~expenditures~~prices and ~~operating~~ costs, ~~any~~and ofcalculated using ~~which could have~~ a ~~material~~10 ~~adverse~~percent ~~effect~~discount ~~on our financial condition or results of operations~~rate.

Shortages of rigs, equipment, supplies and personnel could delay or otherwise adversely affect our cost of operations or our ability to operate according to our business plans.

Effective March 01, 2019

Canada

Product Net Rev

Unit Value

MM$C

$/Primary product

TOTAL PROVED

Light and Medium Crude Oil (including solution gas and by-products)

5.1

85.9

Heavy Oil

Total

5.1

85.9

TOTAL PROVED + PROBABLE

Light and Medium Crude Oil (including solution gas and by-products)

5.1

85.9

Heavy Oil

1,659

69.6

Total

1,664

69.8

If drilling activity increases in Alberta, Canada, Utah or the United States generally, a shortage of drilling and completion rigs, field equipment and qualified personnel could develop. The demand for and wage rates of qualified drilling rig crews generally rise in response to the increasing number of active rigs in service and could increase sharply in the event of a shortage. Shortages of drilling and completion rigs, field equipment or qualified personnel could delay, restrict or curtail our exploration and development operations, which could in turn harm our operating results.

	United States
		Product Net Rev MM$C		Unit Value $/Primary product
TOTAL PROVED
Tight Oil (including solution gas and by-products)			30.4		92.8

Total			30.4		92.8

TOTAL PROVED + PROBABLE
Tight Oil (including solution gas and by-products)			137.7		93.1

WeConversion of ~~will~~US$ beat ~~required to replace, maintain or expand our reserves in order to prevent our reserves and production from declining, which would adversely affect cash flows and income~~$US0.75/$Cdn.

In general, production from natural gas and oil properties declines over time as reserves are depleted, with the rate of decline depending on reservoir characteristics. If we are not successful in our exploration and development activities, our proved reserves will decline as reserves are produced. Our future natural gas and oil production is highly dependent upon our ability to economically find, develop or acquire reserves in commercial quantities.23

ToWhen used ~~the~~in ~~extent~~this ~~cash~~report, ~~flow~~“Bbls” ~~from~~means ~~operations~~barrels isof ~~reduced,~~oil. ~~either~~We byalso use a ~~decrease~~number inof ~~prevailing~~terms ~~prices~~when ~~for~~describing ~~natural~~reserves. ~~gas~~“Proved reserves” ~~and~~are the quantities of oil orthat, anby ~~increase~~analysis inof ~~exploration~~geosciences and ~~development~~engineering ~~costs~~data, ~~and~~can ~~external~~be ~~sources~~estimated ofwith ~~capital~~reasonable certainty ~~become~~to ~~limited~~be oreconomically ~~unavailable,~~producible. ~~our~~We ~~ability~~provide toinformation ~~make~~on ~~the~~two ~~necessary~~types ~~capital~~of ~~investment~~proved toreserves ~~maintain~~- ordeveloped ~~expand~~and ~~our~~undeveloped. ~~asset~~“Proved developed ~~base~~reserves” ofare ~~natural~~reserves ~~gas~~that ~~and~~can ~~oil~~be ~~reserves~~expected ~~would~~to be ~~impaired.~~recovered ~~Even~~through ~~with~~existing ~~sufficient~~wells ~~available~~with ~~capital,~~existing ~~our~~equipment ~~future~~and operating ~~exploration~~methods. ~~and~~“Proved ~~development~~undeveloped ~~activities~~reserves” ~~may~~are ~~not~~reasonably ~~result~~certain reserves in ~~additional~~drilling ~~proved~~units ~~reserves,~~immediately ~~and~~adjacent to wethe ~~might~~drilling ~~not~~unit becontaining ~~able~~a toproducing ~~drill~~well ~~productive~~as ~~wells~~well atas ~~acceptable~~areas ~~costs~~beyond one offsetting drilling unit from a producing well.

17Under SEC rules we are also permitted to provide information about probable and possible reserves. “Probable reserves” are additional reserves that are less certain to be recovered than proved reserves but which, in sum with proved reserves, are as likely as not to be recovered. “Possible reserves” are additional reserves that are less certain to be recovered than probable reserves. The various reserve categories have different risks associated with them. Proved reserves are more likely to be produced than probable reserves and probable reserves are more likely to be produced than possible reserves. Because of these risks, the different reserve categories should not be considered to be directly additive.

The term ~~oil~~“Boe” ~~and~~may be misleading, particularly if used in isolation. A Boe conversion ratio of eight thousand cubic feet of natural gas ~~exploration~~to ~~and~~barrels ~~production~~of ~~industry~~oil ~~historically~~(8 Mcf: 1 Bbl) is abased ~~cyclical~~on ~~industry~~an energy equivalency conversion method primarily applicable at the burner tip and ~~market~~does ~~fluctuations~~not inrepresent a value equivalency at the ~~prices~~wellhead. Given the value ratio based on the current price of crude oil ~~and~~as compared to natural gas ~~could~~is ~~adversely~~significantly ~~affect~~different ~~our~~from ~~business~~the energy equivalency of 8 Mcf :1 Bbl, utilizing a conversion ratio at 8 Mcf: 1 Bbl may be misleading as an indication of value.

~~Prices~~It should ~~for~~not ~~oil~~be ~~and~~assumed ~~gas~~that ~~tend~~the topresent ~~fluctuate~~worth ~~significantly~~of estimated future net revenue represents the fair market value of the reserves. There is no assurance that the escalating price and cost assumptions contained in ~~response~~the toApex ~~factors~~2017 ~~beyond~~Report ~~our~~will ~~control~~be attained and variances could be material. ~~These~~The ~~factors~~reserve ~~include:~~and revenue estimates set forth below are estimates only and the actual reserves and realized revenue may be greater or less than those calculated.

·All reserve definitions comply with the applicable definitions of the rules of the SEC. The reserves were estimated using engineering and geological methods widely accepted in the oil and gas industry. The accuracy of the reserve estimates is dependent upon the quality of available data and upon independent geological and engineering interpretation of that data. For proved developed producing, the estimates considered to be definitive, using performance methods that utilize extrapolations of various historical data including oil and water production and pressure history. For other than proved producing, proved undeveloped reserves and probable and possible reserve estimates were made using volumetric methods.

~~weather~~Our policies ~~conditions;~~regarding internal controls over reserve estimates require reserves to be in compliance with the SEC definitions and guidance and for reserves to be prepared under the supervision of our Chief Executive Officer. There was no conversion of undeveloped reserves to prove reserves during the fiscal year ended February 28, 2019.

·2019 Price assumptions were used to determine cash flows in the non- fixed price tables.

economic conditions, including demand for petroleum-based products;

Price Deck	APEX 2019
Price Set	US Base
Product	Oil		Moenkopi		Moenkopi		Oil		Godin		Compeer
Item Type	Parent		Offset & Trans.		Result		Parent		Result		Result
Name	WTI		Differential		Oil		WCS		Oil		Oil
Unit	$US/bbl		$US/bbl		$US/bbl		$C/bbl		$C/bbl		$C/bbl
Jan-19		65		7		58		59.26		59.26		73.27
Jan-20		70		7		63		62.35		62.35		75.89
Jan-21		73		7		66		65.88		65.88		80.25
Jan-22		74.46		7		67.46		67.60		67.60		82.79
Jan-23		75.95		7		68.95		69.35		69.35		85.39
Jan-24		77.47		7		70.47		71.14		71.14		87.14
Jan-25		79.02		7		72.02		72.96		72.96		88.92

·24

~~actions~~Proved undeveloped byreserves ~~OPEC,~~and ~~the~~Probable ~~Organization of Petroleum Exporting Countries;~~ Reserves.

·Canadian Assets

~~political~~As at ~~instability~~February 28, 2019, we modified the proven reserves in the ~~Middle~~Compeer ~~East~~property ~~and~~from proven producing to proven non-producing. No other ~~major~~categories ~~oil~~of reserves were modified with the Compeer Property. As of February 28, 2019, we had seven sections of probable reserves within the Godin property to be developed, and ~~gas~~thirteen ~~producing~~sections ~~regions;~~of possible reserves to be developed within the Godin property.

·United States Assets

~~governmental~~From the ~~regulations~~testing of the Wellington Flats 15-1811E well, ~~both~~it ~~domestic~~was decided that Section 18 had proven reserves in the TXS. Half of the section was deemed proven developed and ~~foreign;~~the other half proven undeveloped. Surrounding Section 18 there were six sections that were deemed probable reserves in the TXS.

·There were no material changes in proved undeveloped reserves that occurred during the year ended February 28, 2019, including proved undeveloped reserves converted into proved developed reserves.

~~domestic~~We have ~~and~~no ~~foreign~~proved ~~tax~~undeveloped ~~policy;~~reserves in individual fields or countries that remain undeveloped for five years or more.

·One producing well was drilled Big Lake Compeer 100/04-32-033-02W4/00 in the fiscal year ending February 28, 2013. The well was shut-in for most of 2018-19 as the market price was too low to justify operations. Production for the fiscal year was zero barrels. We intend to workover the well in September of 2019.

~~the~~Oil and ~~pace~~gas ~~adopted by foreign governments for the exploration~~production, ~~development,~~production prices and production ~~of their national reserves;~~ costs.

·During the year ended February 28, 2019, we have not had any oil sales or production.

~~the~~Drilling and ~~price~~other ofexploratory ~~foreign imports of oil~~ and ~~gas;~~development activities.

·The number of net productive and dry exploratory wells drilled was one productive (but non-producing at this time) well in the Compeer area of eastern Alberta, Canada in the fiscal year ended February 28, 2019. There was no previous drilling or exploratory activities.

~~the cost of exploring for, producing and delivering oil and gas;~~ Present activities.

·There are no current drilling activities.

~~the discovery rate of new oil and gas reserves;~~ Delivery commitments.

·We have no oil or gas delivery commitments.

~~the~~Oil and ~~rate~~gas ofproperties, ~~decline~~wells, ofoperations, ~~existing~~ and ~~new oil and gas reserves;~~ acreage.

·Canadian Assets

~~available~~Compeer – ~~pipeline~~We ~~and~~have ~~other~~one ~~oil~~well on 160 developed acres. We have 2,400 gross acres and ~~gas~~2,240 ~~transportation~~net ~~capacity;~~undeveloped acres at Compeer.

·Godin – We have twenty sections (~12,800 acres) of undeveloped acres at Godin with an ownership of 100%.

~~the~~United States ~~ability of oil and gas companies to raise capital;~~ Assets

·Black Dragon - Moenkopi – We own a 75 percent joint venture working interest and are the operator in which holds 150,178 (net acres) of land in the Unita Basin of Utah.

~~the overall supply and demand for oil and gas; and~~ 25

·Rolling Rock - We own a 75 percent interest in a joint venture containing 130,942 (65,471 net) acres of land (as of February 28, 2018). We place a value on the land of $1,527,729 on our land interests at this time. We are in the process of having a valuation of hydrocarbon potential carried out. As of the effective date of the valuation of hydrocarbons was not complete. Therefore no value of hydrocarbon potential is available as of our year end for the Mancos Project.

~~the availability of alternate fuel sources~~ITEM 3. LEGAL PROCEEDINGS

~~Changes~~Other than inas ~~commodity~~disclosed ~~prices may significantly affect our capital resources~~below, ~~liquidity~~we ~~and~~know ~~expected~~of ~~operating~~no ~~results.~~material ~~Price~~pending ~~changes~~legal ~~will~~proceedings ~~directly~~to ~~affect~~which ~~revenues~~our ~~and~~company ~~can~~or ~~indirectly~~our ~~impact~~subsidiary ~~expected~~is ~~production~~a byparty ~~changing~~or of ~~the~~which ~~amount~~any of ~~funds~~our ~~available to reinvest in exploration and development activities. Reductions in oil and gas prices not only reduce revenues and profits~~properties, ~~but~~or ~~could also reduce~~ the ~~quantities~~properties of ~~reserves~~our ~~that~~subsidiary, ~~are~~is ~~commercially~~the ~~recoverable~~subject. ~~Significant~~In ~~declines~~addition, inwe ~~prices~~do ~~could~~not ~~result~~know inof ~~non-cash~~any ~~charges~~such toproceedings contemplated ~~earnings~~by ~~due~~any togovernmental ~~impairment~~authorities.

~~Changes~~We know ~~in commodity prices may also significantly affect our ability to estimate the value~~ of ~~producing~~no ~~properties~~material ~~for~~proceedings ~~acquisition and divestiture and often cause disruption~~ in ~~the~~which ~~market~~any ~~for~~of ~~oil~~our ~~and~~directors, ~~gas~~officers ~~producing~~or ~~properties~~affiliates, asor ~~buyers~~any ~~and~~registered ~~sellers~~or ~~have~~beneficial ~~difficulty~~stockholder is ~~agreeing~~a onparty ~~the~~adverse ~~value of the properties. Price volatility also makes it difficult~~ to ~~budget~~our ~~for~~company ~~and~~or ~~project~~our ~~the~~subsidiary ~~return~~or onhas ~~acquisitions~~a ~~and~~material ~~the~~interest ~~exploration~~adverse ~~and development of projects. We expect that commodity prices will continue~~ to ~~fluctuate~~our ~~significantly~~company inor ~~the~~our ~~future~~subsidiary.

~~Our~~We were ~~ability~~subject to ~~produce~~the ~~oil~~following and gas from our properties may be adversely affected by a number of factors outside of our control which may result in a material adverse effect on our business, financial condition or results of operations.claims:

The business of exploring for and producing oil and gas involves a substantial risk of investment loss. Drilling oil and gas wells involves the risk that the wells may be unproductive or that, although productive, the wells may not produce oil or gas in economic quantities. Other hazards, such as unusual or unexpected geological formations, pressures, fires, blowouts, loss of circulation of drilling fluids or other conditions may substantially delay or prevent completion of any well. Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic if water or other deleterious substances are encountered that impair or prevent the production of oil or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. There can be no assurance that oil and gas will be produced from the properties in which we have interests. In addition, the marketability of oil and gas that may be acquired or discovered may be influenced by numerous factors beyond our control. These factors include the proximity and capacity of oil and gas, gathering systems, pipelines and processing equipment, market fluctuations in oil and gas prices, taxes, royalties, land tenure, allowable production and environmental protection. We cannot predict how these factors may affect our business.

Court/Registry

Date Instituted

Principal Parties

Description of Claim

Court of Queen’s Bench of Alberta

July 23, 2013

Plaintiff: Baker Hughes Canada Company;

Defendant: Fortem Resources Inc., also known as Big Lake Energy Ltd.

A Statement of Claim was filed July 23, 2013, whereby the Plaintiff is suing the Defendant for the sum of CAD$281,267.68 representing the amount owing for oil-field services and equipment, including cementing and fishing products and services provided by the Plaintiff.

In December 2015, the Company reached a settlement agreement for a total of $149,784 (CAD$200,000) in eight equal monthly installments of $18,723 (CAD$25,000) starting February 1, 2016. Upon receipt of the final installment, the vendor agreed to discontinue the claim and provide a release to the Company. The Company only made one instalment payment of CAD$25,000 applied against the original claim and the settlement agreement was defaulted. As a result, there was a balance owing of CAD$256,267 as at February 28, 2019.

18ITEM 4. MINE SAFETY DISCLOSURES

~~We may be unable to retain our leases and working interests in our leases, which would result in significant financial losses to our company~~Not applicable.

Our properties are held under oil and gas leases. If we fail to meet the specific requirements of each lease, such lease may terminate or expire. We cannot assure you that any of the obligations required to maintain each lease will be met. The termination or expiration of our leases may harm our business. Our property interests will terminate unless we fulfill certain obligations under the terms of our leases and other agreements related to such properties. If we are unable to satisfy these conditions on a timely basis, we may lose our rights in these properties. The termination of our interests in these properties may harm our business. In addition, we will need significant funds to meet capital requirements for the exploration activities that we intend to conduct on our properties. 26

~~Our Godin project is complex undertakings and may not be completed at our estimated cost or at all.~~ PART II

We, through our wholly owned subsidiary Colony Energy, LLC, holds a 100% interest in and to certain petroleum, natural gas and general rights, including Alberta Crown Petroleum and Oil Leases, in 20 contiguous sections totaling 12,960 acres located in the Godin area of Northern AlbertaITEM 5. ~~The~~MARKET ~~Godin~~FOR ~~project~~REGISTRANT’S isCOMMON ~~complex~~EQUITY, ~~subject~~RELATED toSTOCKHOLDER ~~extensive~~MATTERS ~~governmental~~AND ~~regulation~~ISSUER ~~and~~PURCHASES ~~will~~OF ~~require~~EQUITY significant additional financing. There can be no assurance that the necessary governmental approvals will be granted or that such financing could be obtained on commercially reasonable terms or at all, or that if one or more of these projects are completed that they will be successful or that we realize a return on our investment. SECURITIES

~~Risks Related to Our Common Stock~~Market information

AOur common ~~decline~~stock inis quoted on OTC Markets Group’s OTCQB under the ~~price~~trading symbol “FTMR”. Effective at the opening on August 23, 2018, shares of our common stock ~~could~~have ~~affect~~been ~~our~~approved ~~ability~~for totrading ~~raise~~on ~~further~~the ~~working~~TSX ~~capital~~Venture ~~and~~Exchange ~~adversely~~in ~~impact~~Canada ~~our~~under ~~ability~~the symbol ~~to continue operations~~“FTM.”

ASet forth ~~prolonged~~below ~~decline~~are in the ~~price~~range of ~~our~~high ~~common~~and ~~stock~~low ~~could~~bid ~~result~~quotations infor ~~a reduction in the liquidity of~~ our common stock ~~and~~from athe ~~reduction~~OTCQB inand ~~our~~high ~~ability to raise capital. Because a significant portion of our operations have been~~ and ~~will~~low beclosing ~~financed~~prices ~~through the sale of equity securities, a decline in the price of~~ for our common stock ~~could~~from bethe ~~especially~~TSX ~~detrimental~~Venture toExchange ~~our~~for ~~liquidity~~the ~~and~~periods ~~our operations~~indicated. ~~Such~~The ~~reductions~~market ~~may~~quotations ~~force~~reflect usinter-dealer ~~to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations~~prices, ~~including~~without retail ~~our ability to develop new properties and continue our current operations. If our stock price declines~~mark-up, wemark-down ~~can offer no assurance that we will be able to raise additional capital~~ or ~~generate~~commissions ~~funds~~and ~~from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we~~ may not benecessarily ~~able~~represent toactual ~~have the resources to continue our normal operations.~~transactions:

The market price for our common stock may also be affected by our ability to meet or exceed expectations of analysts or investors. Any failure to meet these expectations, even if minor, may have a material adverse effect on the market price of our common stock.

	OTCQB (U.S. dollars)				TSX Venture Exchange (Canadian dollars)
Quarter Ended	High		Low		High		Low
February 28, 2019	$	2.55	$	2.01	$	3.30	$	2.75
November 30, 2018	$	3.95	$	1.84	$	5.50	$	2.89
August 31, 2018	$	3.49	$	2.22	$	4.15	$	3.90
May 31, 2018	$	3.75	$	2.01		N/A		N/A
February 28, 2018	$	3.25	$	1.98		N/A		N/A
November 30, 2017	$	3.00	$	2.08		N/A		N/A
August 31, 2017	$	3.00	$	1.25		N/A		N/A
May 31, 2017	$	3.25	$	0.60		N/A		N/A

~~If we issue additional shares in the future, it will result in the dilution of our existing shareholders.~~Transfer Agent

Our ~~articles of incorporation, as amended, authorize the issuance of up to 750,000,000~~ shares of common stock ~~with~~are aissued ~~par~~in ~~value~~registered ~~of $0~~form.~~001.~~ ~~Our~~The ~~board~~transfer ofagent ~~directors~~and ~~may~~registrar ~~choose~~for toour ~~issue~~common ~~some~~stock oris ~~all~~Transhare ofCorporation, located ~~such~~at ~~shares~~2849 toExecutive ~~acquire~~Suite ~~one~~200, orClearwater, ~~more~~Florida ~~businesses or to provide additional financing in the future~~33762. The ~~issuance~~co-transfer ofagent ~~any~~for ~~such shares will result in a reduction of the book value and market price of the outstanding shares of~~ our common stock. Ifis weTSX ~~issue~~Trust ~~any such additional shares~~Company, located ~~such~~at ~~issuance~~650 ~~will~~West ~~cause~~Georgia aStreet, ~~reduction~~Suite in2700, ~~the~~Vancouver, ~~proportionate~~British ~~ownership~~Columbia ~~and~~V6B ~~voting power of all current shareholders. Further~~4N9, ~~such issuance may result in a change of control of our corporation~~Canada.

19Holders of Common Stock

~~Trading~~ As of ~~our~~October ~~stock~~15, ~~may~~2019, bethere ~~restricted~~were byapproximately ~~the~~75 ~~Securities~~holders ~~Exchange~~of ~~Commission’s~~record ~~penny~~of ~~stock~~our ~~regulations,~~common ~~which~~stock. ~~may~~As ~~limit~~of asuch ~~stockholder’s~~date, ~~ability~~122,571,156 toshares ~~buy~~were issued and ~~sell our stock~~outstanding.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these 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 level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.Dividends

~~The~~We have ~~Financial~~never ~~Industry~~declared ~~Regulatory~~or ~~Authority,~~paid any cash dividends or ~~FINRA,~~distributions ~~has~~on ~~adopted~~our ~~sales~~capital ~~practice~~stock. ~~requirements~~We ~~which~~currently ~~may~~intend ~~also~~to ~~limit~~retain aour ~~stockholder’s~~future earnings, ~~ability~~if any, to ~~buy~~support operations and ~~sell~~to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

InThere are ~~addition~~no torestrictions ~~the “penny stock” rules described above, FINRA has adopted rules that require that~~ in ~~recommending~~our anarticles ~~investment~~of toincorporation aor ~~customer,~~bylaws ~~a broker-dealer must have reasonable grounds for believing~~ that ~~the~~prevent ~~investment~~us isfrom ~~suitable~~declaring ~~for that customer~~dividends. ~~Prior~~The toNevada ~~recommending~~Revised ~~speculative~~Statutes, however, ~~low~~do ~~priced~~prohibit ~~securities~~us tofrom ~~their~~declaring ~~non-institutional~~dividends ~~customers~~where, ~~broker-dealers~~after ~~must~~giving ~~make~~effect ~~reasonable efforts~~ to ~~obtain information about~~ the ~~customer’s~~distribution ~~financial status, tax status, investment objectives and other information. Under interpretations~~ of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the ~~market for our shares.~~dividend:

~~Our~~● ~~common~~we ~~stock~~would isnot ~~illiquid~~be ~~and~~able to pay our debts as they become due in the ~~price~~usual course of business; or ● our ~~common~~total ~~stock~~assets ~~may~~would be ~~negatively~~less ~~impacted~~than bythe ~~factors~~sum ~~which~~of ~~are~~our ~~unrelated~~total liabilities plus the amount that would be needed to ~~our~~satisfy ~~operations~~the rights of stockholders who have preferential rights superior to those receiving the distribution.

Our common stock currently trades on a limited basis on OTCQB operated by the OTC Markets Group. Trading of our stock through OTCQB is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.27

~~Item~~Securities authorized ~~1B.~~for ~~Unresolved~~issuance ~~Staff~~under ~~Comments~~equity compensation plans.

~~Not~~The following ~~Applicable.~~table summarizes certain information regarding our equity compensation plans as at February 28, 2019:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		Nil		N/A		Nil
Equity compensation plans not approved by security holders⁽¹⁾		2,000,000	$	0.10		7,777,115
Total		2,000,000	$	0.10		7,777,115

~~ITEM~~(1) 2Effective August 23, 2018, our board of directors approved the 2018 Stock Option Plan, pursuant to which we may grant stock options to purchase up to 9,777,115 shares of our common stock. ~~PROPERTIES~~The purpose of the 2018 Stock Option is to retain the services of valued key employees and consultants of our company and such other persons as our board of directors select, and to encourage such persons to acquire a greater proprietary interest in our company, thereby strengthening their incentive to achieve the objectives of our stockholders, and to serve as an aid and inducement in the hiring of new employees and to provide an equity incentive to consultants and other persons selected by our board of directors.

~~Executive~~Recent sales ~~Offices~~of ~~and~~unregistered ~~Registered Agent~~ securities

~~Our~~Since the ~~operational~~beginning ~~office~~of isour ~~located~~fiscal atyear ~~Suite~~ended ~~820~~February 28, ~~906~~2019, ~~12th~~we ~~Avenue,~~have ~~S.W.,~~not ~~Calgary,~~sold ~~Alberta~~any ~~Canada~~equity ~~T2R~~securities ~~1K7.~~that ~~Our~~were ~~administrative~~not ~~office~~registered isunder the ~~located~~Securities atAct ~~Suite~~of ~~1588,~~1933 ~~609~~that ~~Granville~~were ~~Street,~~not ~~Vancouver,~~previously ~~British~~reported ~~Columbia,~~in ~~Canada~~a ~~V7Y~~quarterly ~~1G5.~~report on Form 10-Q or in a current report on Form 8-K.

~~Property~~Purchases of Equity Securities by the Issuer and Affiliated Purchasers

~~Reserves~~None.

~~The following table discloses our gross and net proved reserves with the totals itemized as per Canada and the United States, estimated using forecast prices and costs, by product type~~ITEM 6. ~~"Forecast~~SELECTED ~~prices~~FINANCIAL ~~and costs" means future prices and costs that are generally accepted as being a reasonable outlook of the future, or fixed or currently determinable future prices or costs to which we are bound.~~DATA

21Not applicable.

22ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following ~~table~~discussion ~~discloses,~~should inbe ~~the~~read ~~aggregate,~~in ~~the~~conjunction ~~net~~with ~~present~~our ~~value~~financial ofstatements ~~our~~and ~~future~~the ~~net~~related ~~revenue~~notes ~~attributable~~that toappear ~~the~~elsewhere ~~reserves~~in this ~~categories~~annual inreport. ~~the~~The ~~previous~~following ~~table,~~discussion ~~estimated~~contains ~~using~~forward-looking ~~forecast~~statements ~~prices~~that ~~and~~reflect ~~costs~~our plans, ~~before~~estimates and ~~after~~beliefs. Our ~~deducting~~actual ~~future~~results ~~income~~could ~~tax~~differ ~~expenses,~~materially ~~and~~from ~~calculated~~those ~~without~~discussed ~~discount~~in ~~and~~the ~~using~~forward ~~discount~~looking ~~rates~~statements. ofFactors 0that ~~percent,~~could 5cause ~~percent,~~or contribute 10to ~~percent,~~such 15differences ~~percent~~include those discussed below and 20elsewhere ~~percent~~in this annual report on Form 10-K.

CANADA	Net Present Value of Future Cash Flow
	BEFORE TAX
Reserve Category	0.00%	5.00%	10.00%	15.00%	20.00%
	MM$C	MM$C	MM$C	MM$C	MM$C
Total Proved	1.6	1.3	1.1	0.9	0.8
Total Probable	818	655	530	433	358
Total Proved + Probable	818	655	530	433	358
Total Possible	1,627	1,237	954	745	589
Total Proved + Prob. + Poss.	2,445	1,892	1,484	1,179	946

UTAH – Moenkopi	Net Present Value of Future Cash Flow
	BEFORE TAX
Reserve Category	0.00%	5.00%	10.00%	15.00%	20.00%
	MM$C	MM$C	MM$C	MM$C	MM$C
Total Proved	14,368	11,356	9,192	7634.6667	6469.3333
Total Probable	57,643	44,373	35,292	29,201	23,987
Total Proved + Probable	57,643	44,373	35,292	29,201	23,987
Total Possible
Total Proved + Prob. + Poss.	57,643	44,373	35,292	29,201	23,987

General

~~The~~We are ~~following~~focused ~~two~~on ~~tables provide additional information regarding~~ the ~~future net revenue attributable to total proved reserves outlined in the previous table. This table discloses~~acquisition, ~~in the aggregate~~exploration, ~~certain~~and ~~elements~~development of ~~our~~oil ~~future~~and ~~net~~gas ~~revenue~~properties ~~attributable~~in tothe ~~our~~United ~~proved~~States ~~reserves~~ and ~~our~~Canada. ~~proved~~As ~~plus~~of February ~~probable reserves~~28, ~~estimated~~2019 ~~using~~we ~~forecast~~did ~~prices~~not ~~and~~have ~~costs,~~any ~~and~~revenue ~~calculated~~from ~~without~~commercial ~~discount~~production.

23Results of Operations

~~This~~Years Ended ~~table~~February ~~discloses~~28, by2019 ~~production group, the net present value of our future net revenue attributable to our proved~~ and ~~our~~February ~~proved plus probable reserves~~28, ~~before deducting future income tax expenses, estimated using forecast prices and costs, and calculated using a 10 percent discount rate.~~2018

24The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended February 28, 2019 and February 28, 2018 which are included herein:

When used in this report, “Bbls” means barrels of oil. We also use a number of terms when describing reserves. “Proved reserves” are the quantities of oil that, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible. We provide information on two types of proved reserves - developed and undeveloped. “Proved developed reserves” are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. “Proved undeveloped reserves” are reasonably certain reserves in drilling units immediately adjacent to the drilling unit containing a producing well as well as areas beyond one offsetting drilling unit from a producing well.

	February 28, 2019			February 28, 2018
Revenue	$	-		$	-
Expenses		(1,377,152	)		(1,131,791	)
Net Loss	$	(1,549,470	)	$	(31,177,573	)

Under SEC rules we are also permitted to provide information about probable and possible reserves. “Probable reserves” are additional reserves that are less certain to be recovered than proved reserves but which, in sum with proved reserves, are as likely as not to be recovered. “Possible reserves” are additional reserves that are less certain to be recovered than probable reserves. The various reserve categories have different risks associated with them. Proved reserves are more likely to be produced than probable reserves and probable reserves are more likely to be produced than possible reserves. Because of these risks, the different reserve categories should not be considered to be directly additive.Revenues

~~The~~During the ~~term~~years ~~"Boe"~~ended ~~may~~February ~~be misleading~~28, ~~particularly~~2019 ifand ~~used~~February in28, ~~isolation.~~2018, Awe ~~Boe~~did ~~conversion ratio of eight thousand cubic feet of natural gas to barrels of oil (8 Mcf: 1 Bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does~~ not ~~represent~~generate aany ~~value~~revenues ~~equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different~~ from ~~the~~commercial ~~energy equivalency of 8 Mcf :1 Bbl, utilizing a conversion ratio at 8 Mcf: 1 Bbl may be misleading as an indication of value~~production.

25Expenses

ItExpenses decreased ~~should~~significantly ~~not~~during ~~be assumed that~~ the ~~present~~year ~~worth~~ended ofFebruary ~~estimated~~28, ~~future~~2019 ~~net~~to ~~revenue~~$1,377,152 ~~represents~~as ~~the~~compared ~~fair~~to ~~market~~$1,131,791 ~~value~~during of the ~~reserves.~~year ~~There~~ended February is28, ~~no assurance that the escalating price and cost assumptions contained in the Apex 2017 Report will be attained and variances could be material~~2018. ~~The reserve and revenue estimates set forth below are estimates only and the actual reserves and realized revenue may be greater or less than those calculated.~~

~~All~~The table ~~reserve~~below ~~definitions~~details ~~comply with~~ the ~~applicable~~changes ~~definitions of the rules of the SEC. The reserves were estimated using engineering and geological methods widely accepted~~ in ~~the~~major ~~oil~~expenditures ~~and~~for ~~gas industry. The accuracy of~~ the ~~reserve~~year ~~estimates~~ended isFebruary ~~dependent upon the quality of available data and upon independent geological and engineering interpretation of that data. For proved developed producing~~28, ~~the~~2019 ~~estimates~~as ~~considered~~compared to bethe ~~definitive,~~corresponding ~~using~~year ended ~~performance~~February ~~methods that utilize extrapolations of various historical data including oil and water production and pressure history. For other than proved producing~~28, ~~proved undeveloped reserves and probable and possible reserve estimates were made using volumetric methods.~~ 2018:

Our policies regarding internal controls over reserve estimates require reserves to be in compliance with the SEC definitions and guidance and for reserves to be prepared under the supervision of our Chief Executive Officer. There was no conversion of undeveloped reserves to prove reserves during the fiscal year ended February 28, 2018.

Expenses	Increase / Decrease in Expenses	Explanation for Change
Consulting fees	Increase of $72,755	Increased due to additional consultants were hired.
Management fees	Increase of $149,310	Increase due to compensation to CEO.
Office, travel and general expenses	Increase of $96,782	Increase due to increases in insurance, general office expenses, office rent, and travel expenses as the Company completed a few acquisitions in fiscal 2018.
Professional fees	Decrease of $86,547	Decrease due to fewer professional services used for corporate filings, accounting, and legal services related to the acquisitions.

~~2018~~For the ~~Price~~year ~~assumptions~~ended ~~were~~February ~~used~~28, to2018, ~~determine~~we ~~cash~~recorded ~~flows~~an inimpairment to right to the ~~non-~~mineral ~~fixed~~exploration ~~price~~project ~~tables~~of $39,530,233.

2629

~~Proved undeveloped reserves~~ Liquidity and ~~Probable~~Capital ~~Reserves.~~Resources

~~Canadian Assets~~Working Capital

As at February 28, 2018, we modified the proven reserves in the Compeer property from proven producing to proven non-producing. No other categories of reserves were modified with the Compeer Property. As of February 28, 2018, we had seven sections of probable reserves within the Godin property to be developed, and thirteen sections of possible reserves to be developed within the Godin property.

	At February 28, 2019			At February 28, 2018
Current assets	$	129,661		$	222,382
Current liabilities		1,290,159			1,757,303
Working capital deficit	$	(1,160,498	)	$	(1,534,921	)

~~United~~We had ~~States~~cash ~~Assets~~of $35,171 and a working capital deficit of $1,160,498 as of February 28, 2019 compared to cash of $176,895 and a working capital deficit of $1,534,921 as of February 28, 2018.

~~From~~In connection ~~the~~with ~~testing~~oil ofand ~~the~~gas ~~Wellington~~operations ~~Flats~~and ~~15-1811E~~the ~~well,~~new itacquisitions ~~was~~mentioned ~~decided~~above, ~~that~~we ~~Section~~intend 18to ~~had~~increase ~~proven~~number ~~reserves~~of inexecutive ~~the TXS~~officers. As ~~Half~~a ofresult, ~~the~~we ~~section~~estimate ~~was~~our ~~deemed~~general ~~proven developed~~ and ~~the~~administrative ~~other~~expense ~~half~~will ~~proven~~be ~~undeveloped.~~higher ~~Surrounding Section 18 there were six sections that were deemed probable reserves~~ in ~~the~~fiscal ~~TXS~~2020.

Our company’s cash will not be sufficient to meet our working capital requirements for the next twelve month period. Our company plans to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the issuance of our equity securities. There ~~were~~is no ~~material~~assurance that ~~changes~~our incompany ~~proved~~will ~~undeveloped~~be ~~reserves~~able ~~that~~to ~~occurred~~obtain ~~during~~further funds required for our continued working capital requirements. The ability of our company to meet our financial liabilities and commitments is primarily dependent upon the ~~year~~continued ~~ended~~financial ~~February~~support ~~28,~~of ~~2018~~our directors and shareholders, ~~including~~the ~~proved~~continued ~~undeveloped~~issuance ~~reserves~~of ~~converted~~equity ~~into~~to ~~proved~~new ~~developed~~shareholders, ~~reserves~~and our ability to achieve and maintain profitable operations.

WeThere is ~~have~~substantial nodoubt ~~proved~~about ~~undeveloped~~our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful exploration of our property interests, the identification of reserves insufficient ~~individual~~enough to ~~fields~~warrant ordevelopment, ~~countries~~successful ~~that~~development ~~remain~~of ~~undeveloped~~our ~~for~~property ~~five~~interests ~~years~~and, orfinally, ~~more~~achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

~~One~~Due to ~~producing~~the ~~well~~uncertainty ~~was~~of ~~drilled~~our ~~Big~~ability ~~Lake~~to ~~Compeer~~meet ~~100/04-32-033-02W4/00~~our current operating and capital expenses, in ~~the~~their ~~fiscal~~report on our audited financial statements for the year ~~ending~~ended February 28, ~~2013. The~~2019, ~~well~~our ~~was~~independent ~~shut-in~~auditors ~~for~~included ~~most~~an ofexplanatory ~~2016-17~~paragraph asregarding ~~the~~substantial doubt ~~market~~about ~~price~~our ~~was~~ability ~~too~~to ~~low~~continue toas ~~justify~~a ~~operations~~going concern. ~~Production~~ ~~for~~Our ~~the~~financial ~~fiscal~~statements ~~year~~contain ~~was~~additional ~~zero~~note ~~barrels.~~disclosures Wedescribing the ~~intend~~circumstances tothat ~~workover~~lead ~~the~~to ~~well~~this indisclosure ~~September~~by ofour ~~2018~~independent auditors.

~~Oil and gas production, production prices and production costs.~~Cash Flows

During the year ended February 28, 2018, we have not had any oil sales or production.

	Year ended February 28, 2019			Year ended February 28, 2018
Cash used in operating activities	$	(1,241,180	)	$	(613,981	)
Cash provided by financing activities		1,993,737			2,340,295
Cash used in investing activities		(894,281	)		(2,008,900	)
Change in cash	$	(141,724	)	$	(282,586	)

~~Drilling~~Cash Used ~~and~~in ~~other~~Operating ~~exploratory and development activities.~~Activities

~~The~~Our cash ~~number~~used ofin ~~net~~operating ~~productive~~activities ~~and~~for ~~dry~~the ~~exploratory~~year ~~wells~~ended ~~drilled~~February ~~was~~28, ~~one~~2019, ~~productive~~compared ~~(but~~to ~~non-producing~~our atcash ~~this~~used ~~time)~~in ~~well~~operating inactivities for the ~~Compeer~~year ~~area~~ended ofFebruary ~~eastern~~28, ~~Alberta~~2018, ~~Canada~~increased inby ~~the~~$627,199, ~~fiscal~~primarily ~~year~~due ~~ending~~to ~~February~~increased ~~28,~~used ~~2018. There~~of ~~was~~cash noin ~~previous~~general ~~drilling~~and oradministrative expenses ~~exploratory~~from ~~activities~~operations in the current year.

~~Present activities.~~30

~~There~~Cash Provided ~~are~~by noFinancing ~~current drilling activities.~~ Activities

~~Delivery~~Our cash ~~commitments~~provided by financing activities for the year ended February 28, 2019, compared to our cash provided by financing activities for the year ended February 28, 2018, decreased by $346,558 mainly due to repayment due to related parties of $888,074 in the current year.

WeCash Used ~~have~~in noInvesting ~~oil or gas delivery commitments.~~Activities

~~Oil~~Our cash ~~and~~used ~~gas~~in ~~properties~~investing activities for the year ended February 28, ~~wells~~2019, ~~operations~~compared to our cash used in investing activities for the year ended February 28, 2018, decreased by $1,114,619 due to a decrease in expenditures on oil and ~~acreage~~gas properties and investments in Asia Pacific in fiscal 2018.

~~Canadian~~Outstanding Shares, ~~Assets~~Options, Warrants and Convertible Securities

~~Compeer~~As of –October We15, ~~have~~2019, ~~one~~we ~~well~~have on122,571,156 ~~160~~shares ~~developed~~of ~~acres.~~common Westock ~~have~~outstanding, 32,~~200~~000,000 ~~gross~~stock ~~acres~~options outstanding and 3250,~~040~~000 ~~net undeveloped acres at Compeer~~warrants outstanding.

~~Godin~~Off-Balance Sheet ~~– We have twenty sections (~12,800 acres) of undeveloped acres at Godin with an ownership of 100%.~~Arrangements

~~United~~We have ~~States~~no ~~Assets~~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 is material to our stockholders.

~~Dragon- Moenkopi – We own a 75 percent joint venture working interest and are the operator in which holds 150,178 (net acres) of land in the Unita Basin of Utah.~~Going Concern

27Our audited financial statements and information for the year ended February 28, 2019 have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have generated no revenues to date and have incurred a net loss of $1,549,470 during the year ended February 28, 2019, and $39,072,069 from inception (July 9, 2004) through February 28, 2019. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.

~~Rolling Rock - We own a 50 percent interest in a joint venture containing 130,942 (65,471 net) acres~~ Application of ~~land~~Critical ~~(as~~Accounting of February 28, 2018). We place a value on the land of $1,527,729.00 on our land interests at this time. We are in the process of having a valuation of hydrocarbon potential carried out. As of the effective date of the valuation of hydrocarbons was not complete. Therefore no value of hydrocarbon potential is available as of our year end for the Mancos Project.Policies

~~ITEM~~Use of ~~3. LEGAL PROCEEDINGS~~Estimates

~~Other~~The preparation ~~than~~of asfinancial ~~disclosed~~statements ~~below,~~in weconformity ~~know~~with US GAAP requires management to make estimates and assumptions that affect the reported amounts of noassets ~~material~~and ~~pending~~liabilities ~~legal~~and ~~proceedings~~disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which ~~our~~form ~~company~~the orbasis ~~our~~for ~~subsidiary~~making isjudgments aabout ~~party~~the orcarrying values of ~~which~~assets ~~any~~and liabilities and the accrual of ~~our~~costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these financial statements relate to carrying values of oil and gas properties and investments, the orassumptions used to record asset retirement obligations, the ~~properties~~assumptions used to determine the fair value of ~~our~~derivative ~~subsidiary~~financial assets and liabilities, isand ~~the~~valuation ~~subject~~of share-based payments. InThe ~~addition,~~most wesignificant dojudgements ~~not~~include ~~know~~valuation of ~~any~~assets ~~such~~acquired for ~~proceedings~~shares ~~contemplated~~– byprior ~~any~~to ~~governmental~~August ~~authorities~~31, 2019, the valuation was based on the original net asset cost and thereafter, when the Company commenced trading on the TSX-V, on share value.

WeForeign Currency know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder is a party adverse to our company or our subsidiary or has a material interest adverse to our company or our subsidiary. Translation

WeThe Company ~~were~~changed ~~subject~~its functional currency from Canadian Dollars to United States Dollars as at March 1, 2017. Management determined that the ~~following~~Company’s ~~claims:~~functional currency had changed during the year ended February 28, 2018 based on the assessment related to significant changes of the Company’s economic facts and circumstances. These significant changes included the fact that the Company’s equity and debt financings as well as the majority of the Company’s expenses are denominated in US dollars. The previous foreign exchange translation adjustments remain in other comprehensive income and translated amounts of non-monetary assets and liabilities and as at February 28, 2017 become the accounting basis for these items in future periods.

Court/Registry	Date Instituted	Principal Parties	Description of Claim
Court of Queen’s Bench of Alberta	July 23, 2013	Plaintiff: Baker Hughes Canada Company; Defendant: Fortem Resources Inc., also known as Big Lake Energy Ltd.	A Statement of Claim was filed July 23, 2013, whereby the Plaintiff is suing the Defendant for the sum of CAD$281,267.68 representing the amount owing for oil-field services and equipment, including cementing and fishing products and services provided by the Plaintiff. In December 2015, the Company reached a settlement agreement for a total of $149,784 (CAD$200,000) in eight equal monthly installments of $18,723 (CAD$25,000) starting February 1, 2016. Upon receipt of the final installment, the vendor agreed to discontinue the claim and provide a release to the Company. The Company only made one instalment payment of CAD$25,000 applied against the original claim and the settlement agreement was defaulted. As a result, there was a balance owing of $256,267 as at February 28, 2018.

28Foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders’ equity (deficiency), whereas gains or losses resulting from foreign currency transactions are included in the results of operations.

~~ITEM~~Oil and 4.Gas ~~MINE SAFETY DISCLOSURES~~Properties

~~Not~~The Company ~~applicable~~utilizes the full cost method to account for its investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs, interest costs relating to unproved properties, geological expenditures, tangible and intangible development costs including direct internal costs are capitalized to the full cost pool. When the Company commences production from established proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. Costs of unproved properties are not amortized until the proved reserves associated with the projects can be determined or until impairment occurs. If an assessment of such properties indicates that properties are impaired, the amount of impairment is added to the capitalized cost base to be amortized.

~~PART~~The capitalized IIcosts included in the full cost pool are subject to a “ceiling test”, which limits such costs to the aggregate of the (i) estimated present value, using a ten percent discount rate, of the future net revenues from proved reserves, based on current economic and operating conditions, (ii) the lower of cost or estimated fair value of unproven properties included in the costs being amortized, (iii) the cost of properties not being amortized, less (iv) income tax effects related to differences between the book and tax basis of the cost of properties not being amortized and the cost or estimated fair value of unproved properties included in the costs being amortized.

~~ITEM~~Sales of 5.proved ~~MARKET~~and ~~FOR~~unproved ~~REGISTRANT’S~~properties ~~COMMON~~are ~~EQUITY~~accounted for as adjustments of capitalized costs with no gain or loss recognized, ~~RELATED~~unless such ~~STOCKHOLDER~~adjustments ~~MATTERS~~would ~~AND~~significantly ~~ISSUER~~alter ~~PURCHASES~~the OFrelationship ~~EQUITY~~between ~~SECURITIES~~capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations. The Company’s oil and gas properties are under development with minimal production to date. Accordingly, no amortization is being recorded.

~~Market~~Asset Retirement ~~information~~ Obligations

~~Our~~The Company ~~common~~records ~~stock~~the isfair ~~quoted~~value onof ~~OTC~~an ~~Markets~~asset ~~Group’s~~retirement ~~OTCQB~~obligation ~~under~~as a liability in the ~~trading~~period ~~symbol~~in ~~“FTMR”.~~which ~~The~~it ~~following~~incurs ~~chart~~an ~~shows~~obligation associated with the ~~high~~retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal ~~low~~use ~~bid~~of ~~prices~~the asassets. ~~quoted~~The byestimated fair value of the ~~OTCQB~~asset ~~for~~retirement ~~each~~obligation ~~quarter~~is ~~for~~based on the ~~fiscal~~current ~~years~~cost ~~ended~~escalated ~~February 28,~~at an ~~2018~~inflation rate and ~~2017~~discounted at a credit adjusted risk-free rate. ~~Such~~This ~~prices~~liability ~~represent~~is ~~quotations~~capitalized ~~between~~as ~~dealers,~~part ~~without~~of ~~dealer~~the ~~markup,~~cost ~~markdown~~of orthe related ~~commissions,~~asset and ~~may~~amortized ~~not~~over ~~represent~~its ~~actual~~useful ~~transactions~~life. The liability accretes until the Company settles the obligation.

Quarter Ended	High	Low
February 28, 2018	$3.25	$1.98
November 30, 2017	$3.00	$2.08
August 31, 2017	$3.00	$1.25
May 31, 2017	$3.25	$0.60
February 28, 2017	$0.77	$0.25
November 30, 2016	$0.45	$0.13
August 31, 2016	$0.20	$0.11
May 31, 2016	$0.22	$0.10

Equipment

OnEquipment is ~~June~~recorded ~~27,~~at ~~2018,~~cost ~~the~~and ~~closing~~amortized ~~price~~on ofa ~~our~~straight ~~common~~line ~~stock~~basis asover ~~reported~~20 ~~by the OTCQB was $3~~years.~~01 per share.~~

~~Transfer~~Deferred Income ~~Agent~~Taxes

~~Our~~The Company ~~shares~~recognizes deferred tax assets and liabilities for both the expected impact of ~~common~~differences ~~stock~~between ~~are~~the ~~issued~~financial instatement amount ~~registered~~and ~~form.~~the ~~The~~tax ~~transfer~~basis ~~agent~~of assets and ~~registrar~~liabilities and for ~~our~~the ~~common~~expected ~~stock~~future tax benefit to be derived from tax losses and tax credit carryforwards. The Company records a valuation allowance against deferred tax assets when it is ~~Island~~considered ~~Stock~~more ~~Transfer,~~likely than ~~located~~not atthat ~~15500~~all ~~Roosevelt~~or ~~Boulevard,~~a ~~Suite~~portion ~~301~~of our deferred tax assets will not be realized. In making this determination, ~~Clearwater~~the Company is required to give significant weight to evidence that can be objectively verified. It is generally difficult to conclude that a valuation allowance is not needed when there is significant negative evidence, ~~Florida~~such ~~33760~~as cumulative losses in recent years. Forecasts of future taxable income are considered to be less objective than past results.

~~Holders of Common Stock~~32

AsIn addition to considering forecasts of ~~June~~future ~~28,~~taxable ~~2018~~income, ~~there~~the ~~were~~Company ~~approximately~~is 83also ~~holders~~required to evaluate and quantify other possible sources of ~~record~~taxable income in order to assess the realization of ~~our~~the ~~common~~Company’s ~~stock.~~deferred Astax assets, namely the reversal of existing ~~such~~deferred ~~date~~tax liabilities, ~~119~~the carry back of losses and credits as allowed under current tax law,~~171,156~~ ~~shares~~and ~~were~~the ~~issued~~implementation of tax planning strategies. Evaluating and ~~outstanding~~quantifying these amounts involves significant judgments. Each source of income must be evaluated based on all positive and negative evidence; this evaluation involves assumptions about future activity. Certain taxable temporary differences that are not expected to reverse during the carry forward periods permitted by tax law cannot be considered as a source of future taxable income that may be available to realize the benefit of deferred tax assets.

~~Dividends~~Environmental Expenditures

WeOil and ~~have~~gas ~~never~~activities ~~declared~~are orsubject ~~paid~~to ~~any~~extensive ~~cash~~federal ~~dividends~~and orstate ~~distributions~~environmental onlaws ~~our~~and ~~capital stock~~regulations. WeThese ~~currently~~laws, ~~intend~~which toare ~~retain~~constantly changing, ~~our~~regulate ~~future~~the ~~earnings,~~discharge ifof ~~any,~~materials tointo ~~support~~the ~~operations~~environment and tomay ~~finance~~require ~~expansion~~the ~~and~~Company ~~therefore~~to weremove door ~~not~~mitigate ~~anticipate~~the ~~paying~~environmental effects ~~any~~of ~~cash~~the ~~dividends~~disposal onor ~~our~~release ~~common~~of ~~stock~~petroleum inor ~~the~~chemical ~~foreseeable~~substances ~~future~~at various sites.

~~There~~Environmental expenditures are noexpensed ~~restrictions~~or incapitalized ~~our~~depending ~~articles~~on oftheir ~~incorporation~~future oreconomic ~~bylaws~~benefit. Expenditures that ~~prevent~~relate usto ~~from~~an ~~declaring~~existing ~~dividends.~~condition caused ~~The~~by ~~Nevada~~past ~~Revised~~operations ~~Statutes,~~and ~~however,~~that dohave ~~prohibit~~no usfuture ~~from~~economic ~~declaring~~benefits ~~dividends~~are ~~where,~~expensed. ~~after~~Expenditures ~~giving~~that ~~effect~~have tofuture ~~the~~economic ~~distribution~~benefits are capitalized. Liabilities for expenditures of a non-capital nature are recorded when an environmental assessment and/or remediation is probable, and the ~~dividend:~~costs can be reasonably estimated.

•Impairment of Long-Term Assets

weThe Company ~~would~~assesses its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be ~~able~~recoverable. toOil ~~pay~~and ~~our~~gas ~~debts~~interests asaccounted ~~they~~for ~~become~~under ~~due~~the infull ~~the~~cost ~~usual~~method ~~course~~are ofsubject ~~business;~~to ora ceiling test, described above, and are excluded from this requirement.

•Loss per share

~~our~~We present ~~total~~both ~~assets~~basic ~~would~~and bediluted ~~less~~earnings ~~than~~(loss) per share (EPS) on the ~~sum~~face of ~~our~~the ~~total~~statements ~~liabilities~~of ~~plus~~operations. ~~the~~Basic ~~amount~~EPS ~~that~~is ~~would~~computed by bedividing ~~needed~~net earnings (loss) available to ~~satisfy~~common shareholders by the ~~rights~~weighted average number of ~~stockholders~~shares ~~who~~outstanding ~~have~~during ~~preferential~~the period. ~~rights~~Diluted ~~superior~~EPS gives effect to ~~those~~all ~~receiving~~dilutive potential common shares outstanding during the ~~distribution~~period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Diluted EPS figures are equal to those of basic EPS for each period since we have incurred losses since inception.

29Share-Based Payments

~~Securities~~The Company ~~authorized~~follows the fair value recognition provisions in ASC 718, Stock Compensation (“ASC 718”) and the provisions of ASC 505 (“ASC 505”) for ~~issuance~~stock-based ~~under~~transactions ~~equity~~with non-employees. Stock based compensation ~~plans~~expense recognized during the year includes compensation expense for all share-based payments based on a grant date fair value estimated in accordance with the provisions in the FASB guidance for stock compensation. The grant date is the date at which an employer and employee reach a mutual understanding of the key terms and conditions of a share based payment award. Pursuant to ASC 505, “Equity – Equity Based Payments to Non-Employees” (“ASC 505-50”), for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date which is the grant date. Until the measurement date is reached, the total amount of compensation expense remains uncertain.

~~The~~Derivative Financial ~~following table summarizes certain information regarding our equity compensation plans as at February 28, 2018:~~ Instruments

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	Nil	N/A	Nil
Equity compensation plans not approved by security holders(1)	2,300,000	$0.10	3,279,335
Total	2,300,000	$0.10	3,279,335

The Company evaluates the financial instruments such as convertible notes to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

~~(1)~~ 33

~~Effective~~Recently issued ~~April~~accounting 19, 2014, our board of directors approved the 2014 Stock Option Plan, pursuant to which we may grant stock options to purchase up to 5,579,335 shares of our common stock. The purpose of the 2014 Stock Option is to retain the services of valued key employees and consultants of our company and such other persons as our board of directors select, and to encourage such persons to acquire a greater proprietary interest in our company, thereby strengthening their incentive to achieve the objectives of our stockholders, and to serve as an aid and inducement in the hiring of new employees and to provide an equity incentive to consultants and other persons selected by our board of directors.pronouncements

~~Recent~~In February ~~sales~~2016, the FASB issued ASU 2016-02, Leases (Topic 842). The FASB issued this standard to increase transparency and comparability among organizations by recognizing right-of-use ~~unregistered~~lease ~~securities~~assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. In July 2018, the FASB issued ASU 2018-11, Targeted Improvements, which provides entities with optional transition relief by allowing entities to use the effective date of the new lease standard as the date of initial application on transition, instead of at the beginning of the earliest comparative period presented. The Company will adopt this standard using this optional transition method beginning in the first quarter of fiscal year 2020, when the updated guidance is effective for us, and accordingly, the Company will not adjust prior periods for the effects of the new lease standard. Additionally, the Company will elect to apply the package of practical expedients, which allows the Company to carryforward the Company’s historical lease classification, the Company’s assessment on whether a contract is or contains a lease, and Company’s assessment of initial direct costs for any leases that exist prior to adoption of the new lease standard. The Company assessed the effect of the new standard and concluded that it has no effect on the Company’s consolidated financial statements and related disclosures.

~~Except~~In June as2016, ~~disclosed~~the ~~below~~FASB issued ASU 2016-13, ~~since~~Financial Instruments—Credit Losses (Topic 326). The standard changes the methodology ~~beginning~~for measuring credit losses on financial instruments and the timing of ~~our~~when ~~fiscal~~such ~~year~~losses ~~ended~~are ~~February~~recorded. ~~28,~~This ~~2018,~~update replaces wethe ~~have~~existing ~~not~~incurred ~~sold~~loss ~~any~~impairment ~~equity~~model with an expected loss model. It also requires credit losses related to available-for-sale debt securities ~~that~~to ~~were~~be ~~not~~recognized ~~registered~~as ~~under~~an allowance for credit losses rather than as a reduction to the ~~Securities~~carrying ~~Act~~value of ~~1933~~the ~~that~~securities. ASU ~~were~~2016-13 ~~not~~is ~~previously~~effective ~~reported~~for us beginning in athe ~~quarterly~~first ~~report~~quarter onof ~~Form~~fiscal ~~10-Q~~year or2021. inThe aCompany ~~current~~is ~~report~~currently evaluating the impact of this new standard on ~~Form~~the ~~8-K~~Company’s consolidated financial statements and related disclosures.

OnIn August ~~March 14,~~ 2018, wethe FASB issued anASU ~~aggregate~~2018-13, ofFair ~~1,273,698~~Value ~~shares~~Measurement of(Topic ~~our~~820): ~~common~~Disclosure ~~stock~~Framework—Changes to the aDisclosure ~~warrant~~Requirements ~~holder~~for ~~upon~~Fair ~~the~~Value ~~exercise~~Measurement. ofThis ~~1,273,698~~update ~~outstanding~~changes ~~warrants~~the atfair anvalue ~~exercise~~measurement ~~price~~disclosure ~~of $0~~requirements.40 It ~~per~~summarizes ~~share~~the ~~for~~key ~~aggregate~~provisions ~~gross~~including ~~proceeds~~the ofnew, ~~$509~~eliminated,~~479.20.~~ Weand ~~issued~~modified ~~these~~disclosure ~~shares to one U~~requirements.S. ~~person~~This ~~(as~~update ~~that~~is ~~term~~effective for isus ~~defined~~beginning in ~~Regulation~~the Sfirst quarter of ~~the~~fiscal ~~Securities~~year ~~Act~~2021. ofEarly ~~1933,~~adoption asis ~~amended)~~permitted. inThe ~~reliance~~Company ~~upon~~is ~~Rule~~currently ~~506~~evaluating the timing of ~~Regulation~~adoption Dand impact of this new standard on the ~~Securities~~Company’s ~~Act~~consolidated offinancial ~~1933,~~statements asand ~~amended~~related disclosures.

~~Purchases~~ITEM 7A. ofQUANTITATIVE ~~Equity~~AND ~~Securities~~QUALITATIVE byDISCLOSURES ~~the~~ABOUT ~~Issuer~~MARKET ~~and Affiliated Purchasers~~ RISK

~~None~~Not Applicable.

~~ITEM 6. SELECTED FINANCIAL DATA~~34

~~Not applicable~~ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

30CONSOLIDATED FINANCIAL STATEMENTS

~~ITEM~~FOR THE 7.YEAR ~~MANAGEMENT’S~~ENDED ~~DISCUSSION~~FEBURARY ~~AND~~28, ~~ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~2019

The following discussion should be read in conjunction with our 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 those discussed below and elsewhere in this annual report on Form 10-K.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	36

CONSOLIDATED BALANCE SHEETS	39

CONSOLIDATED STATEMENTS OF OPERATIONS	40

CONSOLIDATED STATEMENTS OF CASH FLOWS	41

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	43

~~General~~35

~~We are focused on the acquisition, exploration, and development~~ Report of ~~oil~~Independent ~~and~~Registered ~~gas~~Public ~~properties~~Accounting ~~in the United States and Canada. As of June 28, 2018 we did not have any revenue from commercial production.~~Firm

~~Results~~To the ofShareholders ~~Operations~~and Directors of

~~Years~~Fortem Resources ~~Ended February 28, 2018 and February 28, 2017~~ Inc.

~~The~~Opinion on ~~following summary of our results of operations should be read in conjunction with our audited financial statements for~~ the ~~years~~Consolidated ~~ended~~Financial ~~February 28, 2018 and February 28, 2017 which are included herein:~~Statements

	February 28, 2018	February 28, 2017
Revenue	$ -	$ -
Expenses	(1,964,443)	(493,657)
Net Loss	(8,305,069)	$ (2,724,306)

We have audited the accompanying consolidated balance sheets of Fortem Resources Inc. (the “Company”), as of February 28, 2019 and 2018, and the related consolidated statements of operations, cash flows, and stockholders’ equity for the years ended February 28, 2019 and 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Fortem Resources Inc. as of February 28, 2019 and 2018, and the results of its operations and its cash flows for the years ended February 28, 2019 and 2018 in conformity with accounting principles generally accepted in the United States of America.

~~Revenues~~Report on Internal Control Over Financial Reporting

~~During~~We also have audited, in accordance with the ~~years~~standards ~~ended~~of ~~February~~the 28Public Company Accounting Oversight Board (United States), ~~2018~~the ~~and~~Company’s internal control over financial reporting as of February 28, ~~2017~~2019, webased ~~did~~on ~~not~~the ~~generate~~criteria ~~any~~established ~~revenues~~in ~~from~~Internal ~~commercial~~Control ~~production.~~– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated October 15, 2019 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of material weaknesses.

31Going Concern

~~Expenses~~The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not achieved profitable operations, has incurred losses in developing its business, and further losses are anticipated, all which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Expenses~~Restatement of ~~increased significantly during the year ended February 28,~~ 2018 toConsolidated ~~$1,964,443~~Financial ~~as compared to $493,657 during the year ended February 28, 2017.~~ Statements

~~The~~As discussed ~~table~~in ~~below~~Note ~~details~~1 ~~the~~and ~~changes~~Note in22 ~~major~~to ~~expenditures for~~ the ~~year~~consolidated ~~ended~~financial ~~February 28~~statements, the 2018 asconsolidated ~~compared~~financial tostatements ~~the~~have ~~corresponding~~been restated ~~year~~to ~~ended~~correct ~~February~~various ~~28, 2017:~~misstatements.

Expenses	Increase / Decrease in Expenses	Explanation for Change
Consulting fees	Increase of $957,840	Increase due to issuance of 400,000 shares at $2.00 per share to a consultant with regards to the Colony acquisitions during the year and increased activities as the Company completed several acquisitions in fiscal 2018.
Management fees	Decrease of $83,096	Decrease due to decrease in CEO compensation.
Office, travel and general expenses	Increase of $266,128	Increase due to increases in insurance, general office expenses, office rent, and travel expenses as the Company completed a few acquisitions in fiscal 2018.
Professional fees	Increase of $305,206	Increase due to more professional services used for corporate filings, accounting, and legal services related to the acquisitions.

Basis for Opinion

~~For~~These consolidated ~~the~~financial ~~year~~statements ~~ended~~are ~~February 28, 2018, we recorded a loss on~~ the ~~fair~~responsibility ~~value adjustment~~ of ~~derivative~~the ~~financial~~Company’s ~~liability~~management. ofOur ~~$6,325,077~~responsibility ~~(February~~is ~~28,~~to ~~2017~~express –an opinion ~~$1,197,268)~~on ~~The derivative liability consists of~~ the ~~fair~~Company’s ~~value~~consolidated offinancial ~~share~~statements ~~purchase~~based ~~warrants~~on ~~that~~our ~~were~~audits. ~~issued~~We inare ~~unit~~a ~~private~~public ~~placements~~accounting ~~that~~firm ~~have~~registered with anthe ~~exercise~~Public ~~price~~Company inAccounting aOversight ~~currency~~Board ~~other~~(United ~~than~~States) ~~the~~(“PCAOB”) ~~functional~~and ~~currency~~are ofrequired ~~our~~to ~~company~~be asindependent ~~well~~with respect asto the ~~embedded~~Company ~~conversion feature~~ in ~~the~~accordance ~~convertible~~with ~~debenture issued and subsequently settled during~~ the ~~year~~U. ~~The~~S. ~~derivative~~federal ~~liability~~securities islaws aand ~~non-cash~~the ~~liability~~applicable asrules weand ~~will~~regulations ~~not~~of bethe ~~required~~Securities and toExchange ~~expend~~Commission ~~any~~and ~~cash~~the PCAOB.

~~Liquidity~~We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and ~~Capital~~perform ~~Resources~~the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

~~Working~~Our audits ~~Capital~~included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

	At February 28, 2018	At February 28, 2017
Current assets	$ 319,804	$ 510,683
Current liabilities	1,757,304	2,995,639
Working capital deficit	$ (1,437,500)	$ (2,484,956)

We have served as the Company’s auditor since 2018.

We had cash of $176,895 and a working capital deficit of $1,437,500 as of February 28, 2018 compared to cash of $459,481 and working capital deficit of $2,484,956 as of February 28, 2017.

	“DAVIDSON &COMPANY LLP”

Vancouver, Canada	Chartered Professional Accountants

October 15, 2019

We anticipate general and administrative expense, excluding impairment of oil and gas property, if any, will be lower than fiscal 2018 during the upcoming fiscal year. In connection with oil and gas operations and the new acquisitions mentioned above, we intend to increase number of executive officers. As a result, we estimate our general and administrative expense will be higher in fiscal 2018.36

32REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~Our company’s cash will not be sufficient to meet our working capital requirements for~~ To the ~~next~~Shareholders ~~twelve month period. Our company plans to raise the capital required to satisfy our immediate short-term needs~~ and ~~additional~~Directors ~~capital required to meet our estimated funding requirements for the next twelve months primarily through the issuance~~ of our equity securities. There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements. The ability of our company to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new shareholders, and our ability to achieve and maintain profitable operations.

~~There~~Fortem Resources is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful exploration of our property interests, the identification of reserves sufficient enough to warrant development, successful development of our property interests and, finally, achieving a profitable level of operationsInc. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

~~Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report~~ Opinion on ~~our~~Internal ~~audited~~Control ~~financial~~over ~~statements~~Financial for the year ended February 28, 2018, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.Reporting

~~Cash~~We have ~~Flows~~audited Fortem Resources Inc.’s (the “Company”) internal control over financial reporting as of February 28, 2019, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of February 28, 2019, based on the COSO criteria.

	12 months	12 months
	ended	ended
	February 28,	February 28,
	2018	2017
Cash used in operating activities	$ (548,676)	$ (197,894)
Cash provided by financing activities	2,246,881	698,351
Cash used in investing activities	(1,980,791)	(63,402)
Change in cash	$ (282,586)	$ 437,055

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s consolidated balance sheet as of February 28, 2019, and the related consolidated statements of operations, cash flows, and stockholders’ equity for the year ended February 28, 2019, and the related notes and our report dated October 15, 2019 expressed an unqualified opinion thereon.

~~Cash~~Basis for ~~Used in Operating Activities~~ Opinion

~~Our~~The Company’s ~~cash~~management ~~used~~is inresponsible ~~operating~~for ~~activities~~maintaining effective internal control over financial reporting and for its assessment of the ~~year~~effectiveness ~~ended~~of ~~February~~internal ~~28,~~control ~~2018,~~over ~~compared~~financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our ~~cash~~audit. ~~used~~We inare ~~operating~~a ~~activities~~public ~~for~~accounting ~~the~~firm ~~year~~registered ~~ended~~with ~~February~~the ~~28,~~PCAOB ~~2017,~~and ~~increased~~are byrequired ~~$350,782,~~to ~~primarily~~be ~~due~~independent with respect to ~~increase~~the Company in ~~non-cash~~accordance ~~items~~with ~~and~~the ~~non-cash~~U.S. ~~working~~federal ~~capital~~securities ~~items~~laws ~~from~~and ~~operations~~the inapplicable rules and regulations of the ~~current~~Securities and ~~year~~Exchange Commission and the PCAOB.

~~Cash~~We conducted ~~Provided~~our byaudit ~~Financing~~in ~~Activities~~accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit ~~cash~~included ~~provided~~obtaining byan ~~financing~~understanding ~~activities~~of ~~for~~internal control over financial reporting, assessing the ~~year~~risk ~~ended~~that ~~February~~a ~~28,~~material ~~2018~~weakness exists, ~~compared~~testing toand ~~our~~evaluating ~~cash~~the ~~provided~~design byand ~~financing~~operating ~~activities~~effectiveness ~~for~~of ~~the~~internal ~~year~~control ~~ended~~based ~~February~~on ~~28,~~the ~~2017~~assessed risk, ~~increased~~and byperforming such ~~$1,548,530~~other ~~mainly~~procedures ~~due~~as towe ~~higher~~considered ~~proceeds~~necessary ~~received~~in ~~from~~the ~~common~~circumstances. ~~stock~~We ~~issued~~believe ~~for~~that ~~cash~~our ~~and~~audit ~~proceeds~~provides ~~due~~a toreasonable ~~related~~basis ~~parties~~for our opinion.

~~Cash~~Definition and ~~Used~~Limitations inof ~~Investing~~Internal ~~Activities~~Control Over Financial Reporting

~~Our~~A company’s ~~cash~~internal ~~used~~control inover ~~investing~~financial ~~activities~~reporting ~~for~~is a process designed to provide reasonable assurance regarding the reliability ~~year~~of ~~ended~~financial ~~February~~reporting ~~28,~~and ~~2018,~~the ~~compared~~preparation toof ~~our~~financial ~~cash~~statements ~~used~~for external purposes in ~~investing~~accordance ~~activities~~with ~~for~~generally accepted ~~the~~accounting ~~year~~principles. ~~ended~~A ~~February~~company’s ~~28,~~internal ~~2017,~~control ~~increased~~over byfinancial $reporting includes those policies and procedures that (1~~,917,389~~) ~~due~~pertain to ~~investment~~the maintenance of records that, in ~~Asia~~reasonable ~~Pacific~~detail, accurately and ~~expenditures~~fairly onreflect ~~oil~~the transactions and dispositions ~~gas~~of ~~properties~~the assets of the company; (2) provide reasonable assurance that transactions are recorded as ~~compared~~necessary to ~~minor~~permit preparation ~~expenditure~~of onfinancial ~~oil~~statements in accordance with generally accepted accounting principles, and ~~gas~~that ~~properties~~receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the ~~prior~~company; ~~period~~and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

33Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Outstanding Shares, Options, Warrants and Convertible Securities~~Material Weaknesses

AsA material ofweakness ~~June~~is 28a deficiency, ~~2018~~or a combination of deficiencies, wein ~~have~~internal ~~119~~control over financial reporting,~~171,156~~ ~~shares~~such that there is a reasonable possibility that a material misstatement of ~~common~~the ~~stock~~Company’s ~~outstanding,~~annual ~~2,300,000~~or ~~stock~~interim ~~options~~financial ~~outstanding~~statements ~~and~~will ~~1,750,000~~not be ~~warrants~~prevented ~~outstanding~~or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:

~~Off-Balance~~(a) ~~Sheet~~not ~~Arrangements~~maintaining its tax compliance requirements for which the Company determined that the appropriate tax accounting under ASC 740, Income Taxes was not performed impacting the deferred tax asset accounts and related financial statement disclosures. (b) review and approval of supplier and vendor invoices and the related oversight and accuracy of recording the associated charges in the Company’s books. (c) lack of adequate oversight related to the development and performance of internal controls. Due to the limited number of personnel in the company, there are inherent limitations to segregation of duties amongst personnel to perform adequate oversight.

WeThese material ~~have~~weaknesses nowere ~~off-balance~~considered ~~sheet~~in ~~arrangements~~determining ~~that~~the ~~have~~nature, ortiming ~~are~~and ~~reasonably~~extent ~~likely~~of toaudit ~~have~~tests aapplied ~~current~~in orour ~~future~~audit ~~effect~~of onthe ~~our~~ consolidated financial ~~condition,~~statements ~~changes~~as inof ~~financial~~and ~~condition,~~for ~~revenues~~the oryear ~~expenses~~ended February 28, ~~results~~2019, of ~~operations,~~the ~~liquidity~~Company, ~~capital~~and ~~expenditures~~this orreport ~~capital~~does ~~resources~~not ~~that~~affect isour ~~material~~report on tosuch ~~our~~financial ~~stockholders~~statements.

Going Concern

	“DAVIDSON &COMPANY LLP”

Vancouver, Canada	Chartered Professional Accountants

October 15, 2019

Our audited financial statements and information for the year ended February 28, 2018, have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have generated no revenues to date and have incurred a net loss of $8,305,069 during the 12 month period ended February 28, 2018, and $14,650,095 from inception (July 9, 2004) through February 28, 2018. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity. 37

~~Application~~REPORT OF ofINDEPENDENT ~~Critical~~REGISTERED ~~Accounting~~PUBLIC ~~Policies~~ACCOUNTING FIRM

~~Use~~To the ofShareholders ~~Estimates~~and Directors of

~~The~~Fortem Resources preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periodInc. We regularly evaluate estimates and assumptions. We base our estimates and assumptions on current facts, historical experience and various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Our actual results may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these financial statements relate to carrying values of oil and gas properties, the assumptions used to record asset retirement obligations and the estimated useful life of financial instruments.

~~Fair~~Opinion on ~~Value~~Internal ofControl over Financial ~~instruments~~Reporting

~~The~~We have ~~estimated~~audited ~~fair~~Fortem ~~values~~Resources ~~for~~Inc.’s ~~financial~~(the ~~instruments~~“Company”) ~~are~~internal ~~determined~~control atover ~~discrete~~financial ~~points~~reporting inas ~~time~~of February 28, 2018, based on ~~relevant~~criteria ~~market~~established ~~information.~~in ~~These~~Internal ~~estimates~~Control ~~involve~~— ~~uncertainties~~Integrated ~~and~~Framework ~~cannot~~issued beby ~~determined~~the ~~with~~Committee ~~precision~~of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). ~~The~~ ~~estimated~~In ~~fair~~our ~~value~~opinion, because of ~~cash,~~the ~~receivables,~~effect ~~loan~~of ~~receivable,~~the ~~accounts~~material weaknesses ~~payable~~identified ~~and~~below ~~accrued~~on ~~liabilities,~~the ~~amounts~~achievement ~~due~~of tothe ~~related~~objectives ~~parties~~of the control criteria, ~~related~~the ~~party~~Company ~~loan~~has ~~payable,~~not ~~note~~maintained ~~payable~~effective internal ~~and~~control ~~advance~~over ~~payable~~financial ~~approximates~~reporting ~~their~~as ~~carrying~~of ~~value~~February ~~due~~28, to2018, ~~their~~based ~~short-term~~on ~~nature~~the COSO criteria.

~~Foreign~~We also ~~Currency~~have ~~Translation~~audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s consolidated balance sheet as of February 28, 2018, and the related consolidated statements of operations, cash flows, and stockholders’ equity for the year ended February 28, 2018, and the related notes and our report dated October 15, 2019 expressed an unqualified opinion thereon.

The Company has changed its functional currency from Canadian Dollars to United States Dollars as at March 1, 2017. Management determined that the Company’s functional currency had changed during the year ended February 28, 2018 based on the assessment related to significant changes of the Company’s economic facts and circumstances. These significant changes included the fact that the Company’s equity and debt financings as well as the majority of the Company’s expenses are denominated in US dollars. The previous foreign exchange translation adjustments remain in other comprehensive income and translated amounts of non-monetary assets and liabilities as at February 28, 2017 become the accounting basis Basis for ~~these items in future periods.~~ Opinion

34The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~Oil~~We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and ~~Gas~~perform ~~Properties~~the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

~~The~~Our audit ~~Company~~included ~~utilizes~~obtaining ~~the~~an ~~full~~understanding ~~cost method to account for its investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development~~ of ~~oil~~internal ~~and~~control ~~gas~~over ~~reserves,~~financial ~~including such costs as leasehold acquisition costs~~reporting, ~~interest~~assessing ~~costs~~the ~~relating~~risk tothat ~~unproved~~a ~~properties,~~material ~~geological expenditures~~weakness exists, ~~tangible~~testing and ~~intangible~~evaluating ~~development costs including direct internal costs are capitalized to~~ the ~~full~~design ~~cost pool. When the Company commences production from established proven oil~~ and ~~gas~~operating ~~reserves,~~effectiveness ~~capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, net~~ of ~~salvage,~~internal ~~will~~control bebased ~~depleted~~ on the ~~units-of-production~~assessed ~~method~~risk, ~~using~~and ~~estimates~~performing such ofother ~~proved~~procedures ~~reserves.~~as ~~Costs~~we ofconsidered ~~unproved~~necessary ~~properties~~in ~~are not amortized until~~ the ~~proved reserves associated with the projects can be determined or until impairment occurs~~circumstances. IfWe anbelieve ~~assessment of such properties indicates~~ that ~~properties~~our ~~are~~audit ~~impaired,~~provides ~~the~~a ~~amount~~reasonable ofbasis ~~impairment~~for our ~~is added to the capitalized cost base to be amortized~~opinion.

The capitalized costs included in the full cost pool are subject to a “ceiling test”, which limits such costs to the aggregate of the (i) estimated present value, using a ten percent discount rate, of the future net revenues from proved reserves, based on current economic Definition and ~~operating~~Limitations ~~conditions, (ii) the lower~~ of ~~cost~~Internal orControl ~~estimated~~Over ~~fair~~Financial value of unproven properties included in the costs being amortized, (iii) the cost of properties not being amortized, less (iv) income tax effects related to differences between the book and tax basis of the cost of properties not being amortized and the cost or estimated fair value of unproved properties included in the costs being amortized. Reporting

~~Sales~~A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of ~~proved~~financial reporting and ~~unproved~~the ~~properties~~preparation ~~are~~of ~~accounted~~financial statements for asexternal ~~adjustments~~purposes ofin ~~capitalized~~accordance ~~costs~~ with nogenerally accepted ~~gain~~accounting orprinciples. ~~loss~~A ~~recognized,~~company’s ~~unless~~internal ~~such~~control ~~adjustments~~over ~~would~~financial ~~significantly~~reporting ~~alter~~includes ~~the~~those ~~relationship~~policies ~~between~~and ~~capitalized~~procedures that ~~costs~~(1) ~~and~~pertain ~~proved~~to ~~reserves~~the maintenance of ~~oil~~records ~~and gas~~that, in ~~which~~reasonable ~~case~~detail, accurately and fairly reflect the ~~gain~~transactions orand dispositions ~~loss~~of isthe ~~recognized~~assets inof the ~~statement~~company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of ~~operations.~~financial ~~The~~statements ~~Company’s~~in ~~oil~~accordance with generally accepted accounting principles, and ~~gas~~that ~~properties~~receipts and expenditures of the company are ~~under~~being ~~development~~made only in accordance with ~~minimal~~authorizations ~~production~~of tomanagement ~~date.~~and ~~Accordingly~~directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, nouse, ~~amortization~~or isdisposition ~~being~~of ~~recorded~~the company’s assets that could have a material effect on the financial statements.

~~Equipment~~Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Equipment is recorded at cost and amortized on a straight line basis over 20 years.~~Material Weaknesses

~~Income~~A material ~~Taxes~~weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:

~~Income~~(a) ~~taxes~~not ~~are~~maintaining ~~determined~~its ~~using the liability method. Deferred~~ tax ~~assets~~compliance ~~and~~requirements ~~liabilities,~~for ifwhich ~~any,~~the ~~are~~Company ~~recognized~~determined ~~for~~that the ~~future~~appropriate tax ~~consequences~~accounting ~~attributable~~under toASC ~~differences~~740, ~~between~~Income ~~the~~Taxes ~~financial~~was ~~statement~~not ~~carrying~~performed ~~amounts~~impacting ofthe ~~assets~~deferred ~~and~~tax ~~liabilities~~asset accounts and ~~their~~related ~~respective~~financial ~~tax~~statement ~~basis~~disclosures. ~~Deferred~~(b) ~~tax~~review ~~assets~~ and ~~liabilities~~approval ~~are~~of ~~measured~~supplier ~~using~~and vendor invoices and the ~~enacted~~related ~~tax~~oversight ~~rates~~and ~~expected~~accuracy toof ~~apply~~recording tothe ~~taxable~~associated ~~income~~charges in the ~~years~~Company’s inbooks. ~~which~~(c) ~~those~~lack ~~temporary~~of ~~differences~~adequate ~~are~~oversight ~~expected~~related to bethe ~~recovered~~development orand ~~settled.~~performance ~~The~~of ~~effect~~internal oncontrols. ~~deferred~~Due ~~tax~~to ~~assets~~the ~~and~~limited ~~liabilities~~number of apersonnel ~~change~~ in ~~tax~~the ~~rates~~company, isthere ~~recognized~~are ininherent ~~income~~limitations into ~~the~~segregation ~~period~~of ~~that~~duties ~~includes~~amongst ~~that~~personnel ~~date~~to ofperform ~~enactment~~adequate oversight. In(d) ~~addition,~~lack aof ~~valuation~~oversight ~~allowance~~regarding issignificant ~~established~~transactions toincluding ~~reduce~~the ~~any~~acquisitions ~~deferred~~of ~~tax~~City ~~asset~~of ~~for~~Gold, ~~which~~LLC, itBlack isDragon ~~determined~~Energy, ~~that~~LLC, itColony isEnergy, ~~more~~LLC, ~~likely~~and ~~than~~Rolling ~~not~~Rock ~~that~~Resources, ~~some~~LLC, ~~portion~~which ofresulted in the ~~deferred~~restatement ~~tax~~of ~~asset~~certain ~~will~~prior ~~not~~period bereported ~~realized~~figures.

WeThese material ~~account~~weaknesses ~~for~~were ~~uncertainty~~considered in ~~income~~determining ~~taxes~~the ~~by applying a two-step method. First~~nature, wetiming ~~evaluate~~and ~~whether~~extent aof ~~tax~~audit ~~position~~tests ~~has~~applied ~~met~~in aour ~~more~~audit ~~likely~~of ~~than~~the ~~not~~consolidated financial ~~recognition~~statements ~~threshold,~~as of and ~~second,~~for ~~it measures that tax position to determine~~ the ~~amount~~year ofended ~~benefit~~February 28, ~~if any~~2018, toof ~~be recognized in~~ the ~~financial~~Company, ~~statements.~~and ~~The application of~~ this ~~method~~report ~~did~~does not ~~have~~affect aour ~~material effect~~ report on ~~our~~such financial statements.

Asset Retirement Obligations

	“DAVIDSON &COMPANY LLP”

Vancouver, Canada	Chartered Professional Accountants

October 15, 2019

The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs an obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The estimated fair value of the asset retirement obligation is based on the current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate. This liability is capitalized as part of the cost of the related asset and amortized over its useful life. The liability accretes until the Company settles the obligation.38

35FORTEM RESOURCES INC.

~~Loss~~CONSOLIDATED BALANCE ~~per share~~SHEETS

~~We present both basic and diluted earnings~~ (~~loss)~~Expressed in ~~per~~US ~~share (EPS~~dollars) on the face of the statements of operations. Basic EPS is computed by dividing net earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including convertible debt, stock options, and warrants, using the treasury stock method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Diluted EPS figures are equal to those of basic EPS for each period since we have incurred losses since inception.

Recently issued accounting pronouncements

	February 28, 2019			February 28, 2018
	$			$
				(Restated –Note 22)

ASSETS
Current assets
Cash		35,171			176,895
Receivables		12,221			9,681
Prepaid expense and deposit (Note 10)		69,753			35,806
Due from related parties (Note 10)		12,516			-
Total current assets		129,661			222,382

Loan receivable from related party (Notes 3 and 10)		-			97,422
Deposit (Note 7)		43,498			43,961
Equipment (Note 5)		51,090			54,654
Investment in Asia Pacific Mining Ltd. (Note 4)		1,500,000			1,500,000
Deferred acquisition costs (Note 16)		229,994			-
Right to the acquisition of mineral exploration project (Note 8)		1			1
Oil and gas properties, full cost method (Note 7)		140,881,572			140,051,279
Total assets		142,835,816			141,969,699

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities (Note 9)		1,172,602			731,638
Due to related parties (Note 10)		40,354			445,912
Related party loan payable (Note 10)		57,261			555,753
Note payable (Note 11)		19,942			19,942
Advance payable (Note 12)		-			4,058
Total current liabilities		1,290,159			1,757,303

Note payable (Note 11)		500,000			-
Asset retirement obligation (Note 13)		29,272			28,352
Deferred tax liability (Notes 6 and 20)		16,215,677			16,215,677
Total liabilities		18,035,108			18,001,332

Stockholders’ equity
Share capital (Note 14)
Authorized:
750,000,000 common shares, par value $0.001 per share
Issued and outstanding:
122,071,156 common shares (117,872,458 at February 28, 2018)		122,070			117,873
Additional paid in capital		160,533,964			156,556,350
Obligation to issue shares (Note 6)		3,600,000			5,400,000
Share subscriptions receivable		-			(200,000	)
Accumulated other comprehensive loss		(383,257	)		(383,257	)
Accumulated deficit		(39,072,069	)		(37,522,599	)
Total stockholders’ equity		124,800,708			123,968,367
Total stockholders’ equity and liabilities		142,835,816			141,969,699

In January 2017, the FASB issued ASU No. 2017-1, “Business Combinations: Clarifying the Definition of a Business.” The pronouncement changes the definition of a business to assist entities with evaluating when a set of transferred assets Nature and ~~activities~~Continuance ~~is a business. The pronouncement requires an entity to evaluate if substantially all~~ of ~~the~~Operations ~~fair~~(Note value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company adopted the provisions of ASU 2017-1 ~~effective March 1~~), ~~2017.~~Subsequent ~~For~~Events ~~the~~(Note Company’s acquisitions during the year, it was concluded substantially all of the fair value of the assets acquired with each property acquisition was concentrated in a single identifiable asset and did not meet the definition of a business.21)

~~Other~~The accompanying ~~recent~~notes ~~accounting~~are ~~pronouncements~~an ~~issued~~integral bypart ~~the FASB (including its Emerging Issues Task Force), the American Institute~~ of ~~Certified~~these ~~Public~~consolidated ~~Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future~~ financial ~~position, results of operations or cash flows.~~statements

~~ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~39

~~Not~~FORTEM RESOURCES ~~Applicable~~INC.

36CONSOLIDATED STATEMENTS OF OPERATIONS

~~ITEM~~(Expressed in 8.US ~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~dollars)

CONSOLIDATED FINANCIAL STATEMENTS

	For the year ended February 28,
	2019			2018
	$			$
				(Restated – Note 22)
General and administrative expenses
Accretion of asset retirement obligation (Note 13)		2,736			2,534
Consulting		301,187			228,432
Depreciation (Note 5)		3,564			4,297
Investor relations		37,961			24,369
Management fees		300,000			150,690
Office, travel and administration		413,464			316,682
Professional fees		318,240			404,787

Loss from operations		(1,377,152	)		(1,131,791	)

Impairment to right to the mineral exploration project (Note 8)		-			(39,530,233	)
Foreign exchange gain (loss)		(5,187	)		10,815
Gain on settlement of debt (Note 12)		4,058			13,599
Interest income (Note 3)		17,761			721
Interest expense		(83,690	)		(40,684	)
Loss on write off on loan receivable (Note 3)		(105,260	)		-
		(172,318	)		(39,545,782	)

Loss before income tax		(1,549,470	)		(40,677,573	)

Deferred tax recovery (Notes 6 and 20)		-			9,500,000

Loss and comprehensive loss for the year		(1,549,470	)		(31,177,573	)

Basic and diluted loss per share		(0.01	)		(0.29	)

Weighted average number of basic and diluted common shares outstanding		120,566,476			105,978,163

~~FEBRUARY~~The accompanying ~~28,~~notes ~~2018~~are an integral part of these consolidated financial statements

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~40

~~CONSOLIDATED~~FORTEM RESOURCES ~~BALANCE SHEETS~~INC.

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~CASH FLOWS

~~CONSOLIDATED~~(Expressed in ~~STATEMENTS~~US OFdollars) ~~CASH FLOWS~~

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

	For the year ended February 28
	2019			2018
	$			$
				(Restated – Note 22)
Cash flows used in operating activities
Loss and comprehensive loss for the year		(1,549,470	)		(31,177,573	)
Non-cash items
Accretion of asset retirement obligation		2,736			2,534
Depreciation		3,564			4,297
Gain on settlement of debt		(4,058	)		(13,599	)
Interest income accrued		(16,268	)		(369	)
Interest expense		1,508			39,451
Accrued management fees		-			150,000
Loss on write off of loan receivable		105,260			-
Unrealized foreign exchange		7,077			(2,041	)
Impairment to right to the mineral exploration project		-			39,530,233
Deferred tax recovery		-			(9,500,000	)
Changes in non-cash working capital items
Receivable		(2,540	)		17,422
Prepaid expenses and deposit		(33,947	)		(11,707	)
Accounts payable and accrued liabilities		244,958			347,371
Cash used in operating activities		(1,241,180	)		(613,981	)
Cash flows used in investing activities
Deposit on oil and gas properties		-			(9,431	)
Investments in Asia Pacific Mining Ltd.		-			(1,000,000	)
Expenditures on oil and gas properties		(664,287	)		(902,047	)
Loan receivable		-			(97,422	)
Deferred acquisition costs		(229,994	)		-
Cash used in investing activities		(894,281	)		(2,008,900	)
Cash flows from financing activities
Issuance of share capital, net of issuance costs		1,242,332			1,809,800
Proceeds from warrants exercised		909,479			280,000
Proceeds from options exercised		30,000			-
Share subscription receivable		200,000			-
Advances payable		500,000			4,058
Net proceeds from (repaid to) related parties		(888,074	)		246,437
Cash provided by financing activities		1,993,737			2,340,295

Change in cash		(141,724	)		(282,586	)
Cash, beginning of year		176,895			459,481
Cash, end of year		35,171			176,895
Non-cash transactions
Common stock issued for acquisitions		-			146,770,000
Advance payable for oil and gas properties		-			60,000
Oil and gas properties expenditures in accounts payable		288,067			122,061
Common stock issued for obligation to issue shares		1,800,000			-
Obligation to issue shares for acquisitions		-			5,400,000
Deferred tax on acquisitions		-			16,215,677

~~NOTES~~The accompanying TOnotes ~~CONSOLIDATED~~are ~~FINANCIAL~~an ~~STATEMENTS~~integral part of these consolidated financial statements

3741

~~Report~~FORTEM RESOURCES ~~of Independent Registered Public Accounting Firm~~INC.

ToCONSOLIDATED STATEMENTS ~~the~~OF ~~shareholders~~STOCKHOLDERS’ ~~and director of Fortem Resources Inc.~~ EQUITY

~~Opinion~~(Expressed in onUS ~~the Financial Statements~~dollars)

We have audited the accompanying consolidated balance sheets of Fortem Resources Inc. (the “Company”) as of February 28, 2018 and 2017 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2018 and 2017, 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.

															Accumulated
	Share Capital				Additional		Obligation		Share						Other			Total
	Number				Paid In		To Issue		Subscriptions						Comprehensive			Stockholders’
	of Shares		Amount		Capital		Shares		Receivable			Deficit			Loss			Equity
			$		$		$		$			$			$			$
					(Restated – Note 22)		(Restated – Note 22)					(Restated – Note 22)						(Restated – Note 22)
Balance, February 28, 2017		37,537,556		29,428		5,028,885		-		(110,000	)		(6,345,026	)		(383,257	)		(1,779,970	)

Common stock issued for cash		2,597,142

Filing Compare · Fortem Resources Inc.