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<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                            ------------------------


                                    FORM 8-K
                                 CURRENT REPORT

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



       Date of Report (date of earliest event reported):  January 1, 2002



                        Aspen Group Resources Corporation
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


        Yukon, Canada                  0-28814                   98-0164357
----------------------------       ----------------        ---------------------
(State or other jurisdiction         (Commission               (IRS Employer
      of incorporation)              File Number)            Identification No.)


         3000 Bank One Center
          100 North Broadway
       Oklahoma City, Oklahoma                                      73102
 --------------------------------------                           ---------
(Address of principal executive offices)                          (Zip code)


       Registrant's telephone number, including area code:  (405) 606-8500
                                                            ----------------

                                       N/A
           ----------------------------------------------------------
          (Former name or former address, if changed since last report)


<PAGE>
ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.

     Effective  January  1,  2002,  Aspen  Group  Resources  Corporation  (  the
"Registrant")  acquired  39,314,048 shares, representing approximately 79.8%, of
the  outstanding  common  stock  of  Endeavour  Resources, Inc. ("Endeavour"), a
corporation  incorporated under the Business Corporations Act of the Province of
Alberta,  Canada,  in  exchange for approximately 9,337,086 shares, representing
approximately  31.6%, of the outstanding Common Stock of the Registrant together
with  share  purchase warrants entitling the tendering Endeavour shareholders to
purchase  an  additional 4,668,543 shares of the Common Stock of the Registrant.
Each  whole  share purchase warrant entitles the holder to purchase one share of
Common  Stock  of the Registrant at a price of US$1.25 until September 30, 2002,
or  US$1.75  thereafter  until  June  30,  2003.

     In  addition,  effective  January  1,  2002, the Registrant acquired common
share  purchase  warrants  of  Endeavour  entitling  the  holder  to  acquire
approximately  3,750,000  additional  shares  of  Endeavour  common  stock.  In
exchange  for these warrants, the Registrant issued 890,625 Class B common share
purchase warrants (the "Class B Warrants"), each whole Class B Warrant entitling
the  holder  to  purchase  one  share of the Common Stock of the Registrant at a
price  of US$1.33 per share until June 28, 2002.  The Endeavour common stock and
warrants  are  herein  referred  to  as  the  "Endeavour  Securities."

     The  Registrant  and  Endeavour  are  publicly-owned  independent  energy
companies  engaged  in  the  exploration  for,  development  and  production  of
petroleum and natural gas in Canada and the United States.  The Registrant's oil
and  gas  operations are located primarily in the States of Oklahoma, Kansas and
Texas.  Endeavour's oil and gas operations are located primarily in the Province
of  Alberta.  The Registrant made the offer to purchase the Endeavour Securities
in  order  to  acquire  control  of  or  to own all of the outstanding Endeavour
Securities  and  thereby  to increase its oil and gas production, and to acquire
the  growth  potential  of  Endeavour's  oil  and  gas  production.

     The Registrant's offer for Endeavour Securities will continue until January
31,  2002.  Upon completion of its offer, the Registrant intends to complete the
acquisition of 100% of the Endeavour Securities through a compulsory transaction
permitted  under applicable law upon the same terms included in the offer.  Upon
completion  of  the  acquisition  of  the  Endeavour  Securities, the Registrant
estimates  that  it  will  have  issued an aggregate of approximately 11,944,811
shares,  representing  approximately  37.2%  of its Common Stock and warrants to
purchase  an  aggregate  of  6,863,030  shares  of  its  Common  Stock.

     Prior  to  making  the  offer  to  purchase  the  Endeavour Securities, the
Registrant  and  a  group  of  14  Endeavour  shareholders  holding collectively
19,419,873  shares,  or  48.9%,  of Endeavour's outstanding common stock entered
into various agreements in which, among other things, the Endeavour shareholders
committed  to  tender  their  shares  to the Registrant.  Upon completion of the
transaction,  assuming  that  the  Registrant  acquires  all  of  the  Endeavour
Securities,  such 14 Endeavour shareholders will hold in the aggregate, directly
or  indirectly,  5,379,741  shares,  or  approximately 16.7%, of the outstanding
Common  Stock  of the Registrant and warrants to acquire an additional 2,689,870
shares.


                                        2
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

     (a)  Financial statements of business acquired.

     (b)  Pro forma financial information.

Items  (a)  and  (b) above shall be provided by amendment to this Form 8-K filed
within  60  days  of  the  date  this  report  is  required  to  be  filed.

     (c)  Exhibits.

          1.   Offer to Purchase dated November 23, 2001.

          2.   Notice of Change and Extension to offer to Purchase dated
               December 21, 2001.




                                    SIGNATURE

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned,  hereunto  duly  authorized.

                                         ASPEN GROUP RESOURCES CORPORATION



Dated:  January 14, 2002                 By:  /s/  Jack E. Wheeler
                                              --------------------------------
                                              Name:  Jack E. Wheeler
                                              Title: Chairman of the Board and
                                                     Chief Executive Officer



                                        3
<PAGE>
                                INDEX TO EXHIBITS



EXHIBIT
NUMBER         DESCRIPTION
-------        -----------

(2)A.          Offer to Purchase, dated November 23, 2001.

(2)B.          Notice of Change and Extension to Offer to Purchase, dated
               December 21, 2001



                                        4
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>3
<FILENAME>doc2.txt
<TEXT>
                                                                    EXHIBIT (2)A

THIS  DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN
ANY  DOUBT AS TO HOW TO DEAL WITH IT, YOU SHOULD CONSULT YOUR INVESTMENT DEALER,
STOCKBROKER,  BANK  MANAGER, LAWYER OR OTHER PROFESSIONAL ADVISOR. NO SECURITIES
COMMISSION  OR SIMILAR AUTHORITY IN CANADA HAS IN ANY WAY PASSED UPON THE MERITS
OF THE SECURITIES OFFERED HEREUNDER AND ANY REPRESENTATION TO THE CONTRARY IS AN
OFFENCE.

                                                               November 23, 2001



                        ASPEN GROUP RESOURCES CORPORATION

                                OFFER TO PURCHASE

   all of the outstanding common shares, 5,000,000 Series I special warrants and
                      3,750,000 Series II special warrants

                                       of

                            ENDEAVOUR RESOURCES INC.

                     on the basis of, subject to adjustment,

     0.2375 common shares of Aspen Group Resources Corporation plus 0.11875
       share purchase warrants of Aspen Group Resources Corporation (each
        whole share purchase warrant entitling the holder to purchase one
       common share of Aspen Group Resources Corporation at US$1.25 until
     September 30, 2002 or US$1.75 thereafter until June 30, 2003) for each
                    common share of Endeavour Resources Inc.

                                     - and -

     0.2375 common shares of Aspen Group Resources Corporation plus 0.11875
       share purchase warrants of Aspen Group Resources Corporation (each
        whole share purchase warrant entitling the holder to purchase one
       common share of Aspen Group Resources Corporation at US$1.25 until
     September 30, 2002 or US$1.75 thereafter until June 30, 2003) for each
              Series I special warrant of Endeavour Resources Inc.

                                     - and -

     0.2375 common shares of Aspen Group Resources Corporation plus 0.11875
       share purchase warrants of Aspen Group Resources Corporation (each
        whole share purchase warrant entitling the holder to purchase one
       common share of Aspen Group Resources Corporation at US$1.25 until
        September 30, 2002 or US$1.75 thereafter until June 30, 2003) and
      0.2375 Class B purchase warrants of Aspen Group Resources Corporation
      (each whole Class B purchase warrant entitling the holder to acquire
        one common share of Aspen Group Resources Corporation for the US
     dollar equivalent of Cdn.$2.11 until June 28, 2002) for each Series II
                  special warrant of Endeavour Resources Inc.


This  offer  (the  "OFFER")  by  Aspen Group Resources Corporation ("ASPEN"), to
purchase  common  shares  (including  common shares which may become outstanding
after the date of this Offer upon the exercise of currently outstanding options,
warrants or other rights to purchase common shares) ("ENDEAVOUR SHARES"), Series
I special warrants ("ENDEAVOUR SERIES I SPECIAL WARRANTS") and Series II special
warrants  ("ENDEAVOUR  SERIES  II  SPECIAL  WARRANTS")  (and  collectively  the
"ENDEAVOUR  SPECIAL  WARRANTS"  and  collectively with the Endeavour Shares, the
"ENDEAVOUR  SECURITIES")  of Endeavour Resources Inc. ("ENDEAVOUR") will be open
for  acceptance  until  5:00  p.m.  (Toronto time) (3:00 p.m. Calgary time) (the
"EXPIRY  TIME")  on  December  31,  2001 (the "EXPIRY DATE") unless withdrawn or
extended.


<PAGE>
The  ratio  of  0.2375  common  shares of Aspen (the "ASPEN SHARES") and 0.11875
purchase  warrants  of  Aspen (the "ASPEN PURCHASE WARRANTS") for each Endeavour
Share  and Endeavour Special Warrant (the "RATIO") was determined by negotiation
between  Aspen  and  Endeavour.  The  Ratio will be adjusted, if necessary, such
that,  assuming  all of the outstanding Endeavour Securities are tendered to the
Offer,  64.1%  of  the  Aspen Shares will be held by the current shareholders of
Aspen  and  35.9% of the Aspen Shares will be held by the former shareholders of
Endeavour  after closing of the Offer (provided, however, that there shall be no
adjustments  in  the  Ratio if any share purchase warrants of Endeavour or Aspen
are exercised and shares issued by Endeavour or Aspen therefor, or in respect of
1,000,000  Endeavour  Shares to be issued to Thames Capital Corp. pursuant to an
agreement  dated  July  4,  2001).

The  Offer  is conditional (unless waived or amended by Aspen) upon, among other
things,  there  being  validly  deposited  under  the Offer and not withdrawn, a
number  of  Endeavour  Securities  which,  when  included  with  the  Endeavour
Securities  then  held  by  Aspen  and  anyone  acting  in  concert  with Aspen,
constitute at least 50.01% of the outstanding Endeavour Securities on the Expiry
Date.  This  condition  and  the  other conditions to the Offer are described in
Section  4  of  the  Offer,  "Conditions  of  the  Offer".

THE BOARD OF DIRECTORS OF ENDEAVOUR HAS UNANIMOUSLY DETERMINED THAT THE OFFER IS
FAIR  TO THE HOLDERS OF THE ENDEAVOUR SECURITIES AND HAS UNANIMOUSLY RESOLVED TO
RECOMMEND  THAT  HOLDERS  OF  SUCH  SECURITIES  ACCEPT  THE  OFFER.  FOR FURTHER
INFORMATION,  REFER  TO  THE  DIRECTORS'  CIRCULAR  OF  ENDEAVOUR.

Aspen  and  Endeavour  have entered into a Pre-Acquisition Agreement relating to
the  Offer.  See  "Background  to  and  Reasons  for the Offer - Pre-Acquisition
Agreement"  in  the  Circular.

Aspen,  Endeavour  and  certain  holders  of  Endeavour Securities (the "SELLING
SECURITYHOLDERS")  have entered in a Lock-up and Break-Up Fee Agreement relating
to  the  Offer.  See  "Background  to  and  Reasons  for the Offer - Lock-Up and
Break-Up  Fee  Agreement"  in  the  Circular.

Holders of Endeavour Securities ("SECURITYHOLDERS") who wish to accept the Offer
must  properly  complete and execute the accompanying Letter of Transmittal or a
manually  executed  facsimile  thereof  and  deposit  it,  together  with  the
certificate(s)  representing  their  Endeavour  Securities,  at  the  office  of
Computershare  Trust  Company  of  Canada  (the  "DEPOSITARY") identified on the
Letter  of Transmittal and on the last page of this document, in accordance with
the  instructions  in  the Letter of Transmittal. Alternatively, Securityholders
who  desire  to  deposit  their  securities  and  whose certificate(s) for their
securities  are  not  immediately  available  may deposit such certificate(s) by
completing  the  accompanying  Notice  of  Guaranteed Delivery and following the
procedures  for  guaranteed  delivery  set  forth  in  the  Notice of Guaranteed
Delivery  and  Section  3  of  the  Offer,  "Manner  of  Acceptance".

The  Aspen  Shares  are listed on The Toronto Stock Exchange (the "TSE") and the
NASD  Electronic  Over-the-Counter  Bulletin  Board  (the  "OTCBB"). The TSE has
conditionally  approved the listing of the Aspen Shares issuable pursuant to the
Offer,  subject to Aspen fulfilling all of the requirements of such exchange. On
October  23,  2001, the last trading day prior to the public announcement of the
Offer,  the closing price of the Aspen Shares on the TSE and the OTCBB was $0.85
and  US$0.60,  respectively.

The  Endeavour  Shares are listed on the Canadian Venture Exchange (the "CDNX").
On  October  23,  2001, the last trading day prior to the public announcement of
the  Offer,  the  closing  price  of the Endeavour Shares on the CDNX was $0.14.

Questions and requests for assistance may be directed to the Depositary, or your
broker  or  other financial advisor, and additional copies of this document, the
Letter  of  Transmittal  and  the  Notice of Guaranteed Delivery may be obtained
without  charge  on request from those persons at their respective offices shown
on  the  Letter  of  Transmittal  and on the last page of this document. Persons
whose  Endeavour  Securities  are  registered  in  the  name of a nominee should
contact  their  stockbroker,  investment  dealer,  bank,  trust company or other
nominee  for  assistance  in  depositing  their  Endeavour  Securities.


<PAGE>
                         NOTICE TO UNITED STATES HOLDERS
                             OF ENDEAVOUR SECURITIES

The Offer is made for the securities of an Alberta, Canada corporation and while
the  Offer  is subject to the disclosure requirements of Canada, Securityholders
should  be  aware  that  such  requirements  are  different  from  disclosure
requirements  in the United States.  Aspen is permitted to prepare the Offer and
Circular  in  accordance  with  Canadian  disclosure  requirements.  Financial
statements included herein, if any, have been prepared in accordance with United
States  generally  accepted accounting principles with the material differences,
if  any,  between  such  principles  and  Canadian generally accepted accounting
principles  disclosed  in  the  notes  to  such  financial  statements.

Securityholders should be aware that the acquisition of the Endeavour Securities
described herein may have tax consequences both in the United States and Canada.
Such  consequences for investors who are resident in, or citizens of, the United
States  may  not  be  described  fully  herein.

The  enforcement  by  investors  of  civil  liabilities  under the United States
federal  securities  laws  may  be  affected adversely by the fact that Aspen is
continued  under the laws of the Yukon Territory, that some of the directors and
officers  of  Aspen  may  be  residents  of  Canada  and that some or all of the
Depositary  and  the  experts named in the Offer or Circular may be residents of
Canada  and  that all or a substantial portion of the assets of such persons may
be  located  outside  the  United  States.

Securityholders  should  be  aware  that  Aspen  or  its Affiliates, directly or
indirectly,  may  bid  for  or make purchases of Endeavour Securities or related
securities  of  Endeavour  during  the  period  of  the  Offer,  as permitted by
applicable  Canadian  federal  or  provincial  laws  or  regulations.

No  broker,  dealer, salesperson or other person has been authorized to give any
information  or  make  any  representation  other  than  those contained in this
document  and,  if given or made, such information or representation must not be
relied  upon  as  having  been  authorized  by  Aspen  or  the  Depositary.

THIS  TRANSACTION  HAS  NOT  BEEN  APPROVED  OR  DISAPPROVED  BY  ANY SECURITIES
REGULATORY  AUTHORITY  IN  CANADA  OR  THE  UNITED STATES NOR HAS ANY SECURITIES
REGULATORY  AUTHORITY IN CANADA OR THE UNITED STATES PASSED UPON THE FAIRNESS OR
MERITS  OF  SUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED  IN  THIS  DOCUMENT,  ANY  REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THIS  DOCUMENT  DOES  NOT CONSTITUTE AN OFFER OR A SOLICITATION TO ANY PERSON IN
ANY  JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.  THE OFFER IS
NOT  BEING  MADE  TO,  NOR  WILL  DEPOSITS  BE  ACCEPTED  FROM  OR ON BEHALF OF,
SECURITYHOLDERS  IN  ANY  JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF
WOULD  NOT  BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.  HOWEVER, ASPEN
MAY, IN ITS SOLE DISCRETION, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO EXTEND
THE  OFFER  TO  HOLDERS  OF  ENDEAVOUR  SHARES  IN  SUCH  JURISDICTION.

                           CURRENCY AND EXCHANGE RATES

All  dollar  amounts  stated in the Offer and Circular are expressed in Canadian
currency,  except  where  otherwise  indicated.  On  November  21, 2001 the noon
buying rate in New York for cable transfers in Canadian dollars as certified for
customs  purposes  by the Federal Reserve Bank of New York was US$1.00 = $1.6018
(Cdn.),  $1.00  (Cdn.)  =  US$0.6243.

                           FORWARD LOOKING STATEMENTS

The  accompanying  Circular contains statements about expected future events and
financial and operating results of Aspen that are forward-looking and subject to
risks  and  uncertainties.  Accordingly,  Aspen's actual results, performance or
achievements  could  differ  materially  from those expressed or implied by such
statements.  Such  statements  are  qualified  in their entirety by the inherent
risks  and  uncertainties  surrounding  future  expectations.


<PAGE>
<TABLE>
<CAPTION>
                                        i


                                TABLE OF CONTENTS


                                                                      PAGE
<S>                                                                   <C>
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1

SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4
The Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     4
Purpose of and Reasons for the Offer . . . . . . . . . . . . . . . .     5
Aspen. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5
Endeavour. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     5
Pre-Acquisition Agreement. . . . . . . . . . . . . . . . . . . . . .     5
Lock-Up and Break-Up Fee Agreement . . . . . . . . . . . . . . . . .     5
Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .     5
Plans for Endeavour. . . . . . . . . . . . . . . . . . . . . . . . .     6
Conditions of the Offer. . . . . . . . . . . . . . . . . . . . . . .     6
Time for Acceptance. . . . . . . . . . . . . . . . . . . . . . . . .     6
Manner of Acceptance . . . . . . . . . . . . . . . . . . . . . . . .     6
Withdrawal of Deposited Endeavour Securities . . . . . . . . . . . .     7
Payment for Deposited Endeavour Securities . . . . . . . . . . . . .     7
Acquisition of Endeavour Securities Not Deposited. . . . . . . . . .     7
Price Range and Trading Volumes of Aspen Shares and Endeavour Shares     7
Canadian Federal Income Tax Considerations . . . . . . . . . . . . .     8
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8

OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
1.   The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . .     9
2.   Time of Acceptance. . . . . . . . . . . . . . . . . . . . . . .    10
3.   Manner of Acceptance. . . . . . . . . . . . . . . . . . . . . .    10
          Letter of Transmittal. . . . . . . . . . . . . . . . . . .    10
          Procedure for Guaranteed Delivery. . . . . . . . . . . . .    10
          General. . . . . . . . . . . . . . . . . . . . . . . . . .    11
4.   Conditions of the Offer . . . . . . . . . . . . . . . . . . . .    12
5.   Extension and Variation of the Offer. . . . . . . . . . . . . .    13
6.   Payment for Deposited Endeavour Securities. . . . . . . . . . .    13
7.   Withdrawal of Deposited Endeavour Securities. . . . . . . . . .    15
8.   Return of Deposited Endeavour Securities. . . . . . . . . . . .    16
9.   Changes in Capitalization, Distributions and Liens. . . . . . .    16
10.  Mail Service Interruption . . . . . . . . . . . . . . . . . . .    17
11.  Notice and Delivery . . . . . . . . . . . . . . . . . . . . . .    17
12.  Acquisition of Endeavour Securities Not Deposited . . . . . . .    17
13.  Market Purchases and Sales of Endeavour Securities. . . . . . .    18
14.  Other Terms of the Offer. . . . . . . . . . . . . . . . . . . .    18

CIRCULAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
Background to and Reasons for the Offer. . . . . . . . . . . . . . .    20
     Background to the Offer . . . . . . . . . . . . . . . . . . . .    20
     Reasons for the Offer . . . . . . . . . . . . . . . . . . . . .    20
     Pre-Acquisition Agreement . . . . . . . . . . . . . . . . . . .    20
     Lock-Up and Break-Up Fee Agreement. . . . . . . . . . . . . . .    21
     Voting Agreement. . . . . . . . . . . . . . . . . . . . . . . .    22
Purpose of the Offer and Plans for Endeavour . . . . . . . . . . . .    23
     Purpose of the Offer. . . . . . . . . . . . . . . . . . . . . .    23
     Plans for Endeavour . . . . . . . . . . . . . . . . . . . . . .    23
Ownership of Securities of Endeavour . . . . . . . . . . . . . . . .    24


<PAGE>
                                       ii


Trading in Securities of Endeavour . . . . . . . . . . . . . . . . .    24
Commitments to Acquire Securities of Endeavour . . . . . . . . . . .    24
Arrangements, Agreements or Understandings . . . . . . . . . . . . .    24
Material Changes in the Affairs of Endeavour and Other Information .    25
Acceptance of the Offer .. . . . . . . . . . . . . . . . . . . . . .    25
Effect of the Offer on Market and Listings . . . . . . . . . . . . .    25
Acquisition of Endeavour Securities Not Deposited. . . . . . . . . .    25
     Compulsory Acquisition. . . . . . . . . . . . . . . . . . . . .    26
     Subsequent Acquisition Transaction. . . . . . . . . . . . . . .    26
     Other Alternatives. . . . . . . . . . . . . . . . . . . . . . .    28
     Judicial Developments . . . . . . . . . . . . . . . . . . . . .    28
Stock Exchange Listings .. . . . . . . . . . . . . . . . . . . . . .    29
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    29
Thames Capital Report . .. . . . . . . . . . . . . . . . . . . . . .    29
Expenses of the Offer. . . . . . . . . . . . . . . . . . . . . . . .    29
Information Concerning Aspen . . . . . . . . . . . . . . . . . . . .    29
     Corporate Information . . . . . . . . . . . . . . . . . . . . .    29
     Business of Aspen . . . . . . . . . . . . . . . . . . . . . . .    30
     Selected Consolidated Financial Information . . . . . . . . . .    39
     Management's Discussion and Analysis. . . . . . . . . . . . . .    40
     Authorized and Issued Share Capital . . . . . . . . . . . . . .    42
     Capitalization of Aspen . . . . . . . . . . . . . . . . . . . .    42
     Stock Compensation Plan . . . . . . . . . . . . . . . . . . . .    43
     Price Range and Trading Volume of Aspen Shares. . . . . . . . .    44
     Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . .    45
     Prior Sales . . . . . . . . . . . . . . . . . . . . . . . . . .    45
     Principal Shareholders. . . . . . . . . . . . . . . . . . . . .    46
     Directors and Officers. . . . . . . . . . . . . . . . . . . . .    46
     Compensation of Directors and Executive Officers. . . . . . . .    48
     Interests of Management and Others in Material Transactions . .    49
     Material Contracts. . . . . . . . . . . . . . . . . . . . . . .    50
     Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .    50
     Auditors, Transfer Agent and Registrar. . . . . . . . . . . . .    50
Information Concerning Endeavour . . . . . . . . . . . . . . . . . .    51
     Reliance on Endeavour . . . . . . . . . . . . . . . . . . . . .    51
     Corporate Information . . . . . . . . . . . . . . . . . . . . .    51
     Business of Endeavour . . . . . . . . . . . . . . . . . . . . .    51
     Selected Consolidated Financial Information . . . . . . . . . .    53
     Authorized and Issued Share Capital . . . . . . . . . . . . . .    53
     Capitalization of Endeavour . . . . . . . . . . . . . . . . . .    54
     Price Range and Trading Volume of Endeavour Shares. . . . . . .    55
     Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . .    55
     Principal Shareholders. . . . . . . . . . . . . . . . . . . . .    55
     Directors and Officers. . . . . . . . . . . . . . . . . . . . .    56
     Interests of Management and Others in Material Transactions . .    57
     Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .    57
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . .    58
Canadian Federal Income Tax Considerations . . . . . . . . . . . . .    62
Statutory Rights . . . . . . . . . . . . . . . . . . . . . . . . . .    64

PROFORMA CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . .   A-1

FINANCIAL STATEMENTS OF ASPEN. . . . . . . . . . . . . . . . . . . .   B-1

APPROVAL AND CERTIFICATE OF ASPEN. . . . . . . . . . . . . . . . . .   C-1
</TABLE>


<PAGE>
                                        1


                                   DEFINITIONS

In  the  Offer  and  the  Circular,  unless  the  subject  matter  or context is
inconsistent  therewith,  the  following terms shall have the meanings set forth
below:

"ABCA"  means  the  Business  Corporations  Act  (Alberta),  as  amended.

"AFFILIATE"  has  the  meaning ascribed thereto in the Securities Act (Alberta),
except  as  otherwise  provided  herein.

"ASPEN"  means  Aspen Group Resources Corporation, a corporation continued under
the  laws  of  Yukon  Territory.

"ASPEN  CLASS  B  PURCHASE  WARRANTS"  means purchase warrants of Aspen, each of
which  entitles  the holder thereof to acquire one Aspen Share at a price of the
US  dollar equivalent of Cdn.$2.11 (as calculated on the Expiry Date) until June
28,  2002.

"ASPEN  PURCHASE  WARRANTS"  means  purchase  warrants  of  Aspen, each of which
entitles  the  holder  thereof  to acquire one Aspen Share at a price of US$1.25
until  September  30,  2002  or  US$1.75  thereafter  until  June  30,  2003.

"ASPEN  SHARES"  means  the  common  shares  of Aspen as constituted on the date
hereof.

"ASSOCIATE" has the meaning ascribed thereto in the Securities Act (Alberta), as
amended  except  as  otherwise  provided  herein.

"BUSINESS  DAY"  means any day other than a Saturday, a Sunday or a day on which
banking  institutions  in Toronto, Ontario are authorized or obligated by law to
close.

"CDNX"  means  The  Canadian  Venture  Exchange.

"CIRCULAR" means the take-over bid circular accompanying and forming part of the
Offer.

"COMPULSORY  ACQUISITION" has the meaning ascribed thereto in the Circular under
"Acquisition  of  Endeavour  Securities  Not Deposited - Compulsory Acquisition"

"DEPOSITARY"  means  Computershare  Trust  Company  of  Canada  at  the  office
identified  in  the Letter of Transmittal and on the last page of this document.

"ELIGIBLE  INSTITUTION"  means  a  Canadian  chartered  bank, a trust company in
Canada  or  a member firm of the TSE or the CDNX, a national securities exchange
in  the  United  States or the National Association of Securities Dealers, Inc.,
which  is  a member of the Securities Transfer Agents Medallion Program (STAMP).

"ENDEAVOUR" means Endeavour Resources Inc., a corporation incorporated under the
ABCA.

"ENDEAVOUR  SECURITIES"  means  the  Endeavour  Shares and the Endeavour Special
Warrants.

"ENDEAVOUR  SERIES  I  SPECIAL  WARRANTS"  means  the 5,000,000 Series I special
warrants  of  Endeavour  currently  outstanding,  each of which was issued at an
issue  price  of  $0.25 per special warrant and is exercisable for no additional
consideration  for  one  Series  I Unit comprised of one Endeavour Share and one
Series  1 Purchase Warrant entitling the holder to acquire on Endeavour Share at
a  price  of  $0.40  until  November  30,  2001.

"ENDEAVOUR  SERIES  II  SPECIAL  WARRANTS" means the 3,750,000 Series II special
warrants  of  Endeavour  currently  outstanding,  each of which was issued at an
issue  price  of  $0.30 per special warrant and is exercisable for no additional
consideration  for  one  Series II Unit comprised of one Endeavour Share and one
Series  II  Purchase Warrant entitling the holder to acquire one Endeavour Share
at  a  price  of  $0.50  until  June  28,  2002.

"ENDEAVOUR  SHARES"  means  the common shares of Endeavour as constituted on the
date  hereof,  and  all  common  shares issued prior to the Expiry Time upon the
exercise  of currently outstanding options, warrants or other rights to purchase
Endeavour  Shares.


<PAGE>
                                        2


"ENDEAVOUR  SPECIAL  WARRANTS" means the Endeavour Series I Special Warrants and
the  Endeavour  Series  II  Special  Warrants.

"EXPIRY  DATE"  means  December  31, 2001, or such later date or dates as may be
fixed  by Aspen from time to time pursuant to Section 5 of the Offer, "Extension
and  Variation  of  the  Offer".

"EXPIRY  TIME"  means  5:00  p.m. (Toronto time) (3:00 p.m. Calgary time) on the
Expiry  Date,  or such later time or times as may be fixed by Aspen from time to
time pursuant to Section 5 of the Offer, "Extension and Variation of the Offer".

"LETTER  OF  TRANSMITTAL" means the letter of transmittal in the form printed on
blue  paper  accompanying  the  Offer  and  Circular.

"LOCK-UP  AND  BREAK-UP  FEE  AGREEMENT"  means  the  lock-up  and  break-up fee
agreement dated as of October 23, 2001 entered into between Aspen, Endeavour and
the  Selling  Securityholders  as described in the Circular under "Background to
and  Reasons  for  the  Offer  -  Lock-Up  and  Break-Up  Agreement".

"MINIMUM  CONDITION"  has  the  meaning  ascribed  thereto  in subsection (a) of
Section  4  of  the  Offer,  "Conditions  of  the  Offer".

"NOTICE  OF GUARANTEED DELIVERY" means the notice of guaranteed delivery printed
on  yellow  paper  in  the  form  accompanying  the  Offer  and  Circular.

"OFFER"  means the offer to purchase all of the issued and outstanding Endeavour
Securities  made  hereby  to  the  Securityholders.

"OFFER  PERIOD" means the period commencing on the date hereof and ending at the
Expiry  Time.

"OSC"  means  the  Ontario  Securities  Commission.

"OSC  RULE  61-501"  means  Rule  61-501 of the OSC, as the same may be amended.

"OTCBB"  means  the  NASD  Electronic  Over-the-Counter  Bulletin  Board.

"PERSON" includes an individual, body corporate, partnership, syndicate or other
form  of  unincorporated  entity.

"PRE-ACQUISITION  AGREEMENT"  means  the  pre-acquisition  agreement dated as of
October  23, 2001 between Aspen and Endeavour relating to the Offer as described
in the Circular under "Background to and Reasons for the Offer - Pre-Acquisition
Agreement".

"RATIO"  means  the  ratio  of  0.2375  Aspen  Shares and 0.11875 Aspen Purchase
Warrants  for  each  Endeavour  Share  and  Endeavour  Special  Warrant.

"SECURITYHOLDERS"  means  collectively  the  holders  of  Endeavour  Securities.

"SELLING  SECURITYHOLDERS"  means  Jeffrey  J.  Chad, Susan Chad, Allan J. Kent,
Susan  Kent,  Robert  D.  Cudney, Ruth I. Chad, Dennis P. Besler, 567895 Alberta
Ltd.,  DI Investments Ltd., Pachanga Corp., Riechad Incorporated, 615433 Alberta
Ltd.,  Northfield  Capital  Corporation  and  114161  Alberta  Ltd.

"SUBSEQUENT  ACQUISITION  TRANSACTION"  means  any  amalgamation,  statutory
arrangement  or  other  transaction involving Aspen and/or an Affiliate of Aspen
and  Endeavour  and/or  Securityholders  for the purposes of Endeavour becoming,
directly  or  indirectly,  a  wholly-owned  Subsidiary  of Aspen or affecting an
amalgamation  or  merger  of  Endeavour's business and assets with or into Aspen
and/or  an  Affiliate  of  Aspen.


<PAGE>
                                        3


"SUBSIDIARY"  has  the meaning ascribed thereto in the Securities Act (Alberta),
as  amended.

"TAX  ACT"  means  the  Income  Tax  Act  (Canada),  as  amended.

"TSE"  means  The  Toronto  Stock  Exchange.

"VOTING  AGREEMENT"  means  the  voting  agreement  dated as of October 23, 2001
between  certain  of  the  Selling  Securityholders, Jack E. Wheeler, Randall B.
Kahn,  Aspen  and  Endeavour  relating to the Offer as described in the Circular
under  "Background  to  and  Reasons  for  the  Offer  -  Voting  Agreement".

"YBCA"  means  the  Business  Corporations  Act  (Yukon),  as  amended.



<PAGE>
                                        4


                                     SUMMARY

The  following  is a summary only of the attached Offer and Circular, the Letter
of  Transmittal  and  the  Notice of Guaranteed Delivery and is qualified in its
entirety  by  the  more  detailed  information and provisions contained therein.
Securityholders are urged to read the Offer and Circular in their entirety.  The
information  concerning Endeavour contained herein and in the Offer and Circular
has been extracted from or is based upon publicly available documents or records
on  file  with  Canadian  securities  regulatory  authorities  and  other public
sources.

THE  OFFER

Aspen is offering, upon the terms and subject to the conditions of the Offer, to
purchase:

(a)  all  Endeavour  Shares  currently  outstanding in exchange for 0.2375 of an
     Aspen  Share  and  0.11875  of an Aspen Purchase Warrant for each Endeavour
     Share;

(b)  all  Endeavour  Series I Special Warrants currently outstanding in exchange
     for  0.2375  of an Aspen Share and 0.11875 of an Aspen Purchase Warrant for
     each  Endeavour  Series  I  Special  Warrant;  and

(c)  all  Endeavour Series II Special Warrants currently outstanding in exchange
     for  0.2375  of  an  Aspen  Share, 0.11875 of an Aspen Purchase Warrant and
     0.2375  of  an  Aspen Class B Purchase Warrant for each Endeavour Series II
     Special  Warrant.

For  greater  certainty  if  a Securityholder holding Endeavour Special Warrants
exercises  such  securities prior to tendering them to the Offer and having them
taken up and paid for by Aspen, then upon tendering the underlying securities to
the  Offer:

(a)  a Securityholder who had previously held Endeavour Series I Special
     Warrants shall be entitled to receive 0.2375 of an Aspen Share and 0.11875
     of a Aspen Purchase Warrant for each Endeavour Share and nil consideration
     for each Series I Purchase Warrant underlying each Endeavour Series I
     Special Warrant; and

(b)  a  Securityholder  who  had  previously  held  Endeavour  Series II Special
     Warrants  shall be entitled to receive 0.2375 of an Aspen Share and 0.11875
     of  an  Aspen  Purchase  Warrant  for each Endeavour Share and 0.2375 of an
     Aspen  Class  B  Purchase  Warrant  for  each  Series  II  Purchase Warrant
     underlying  each  Endeavour  Series  II  Special  Warrant.

The  Ratio was determined by negotiation between Aspen and Endeavour.  The Ratio
will  be  adjusted,  if  necessary,  such  that, assuming all of the outstanding
Endeavour  Securities  are  tendered  to  the Offer (and no purchase warrants of
Aspen or Endeavour are exercised), 64.1% of the Aspen Shares will be held by the
current  shareholders of Aspen and 35.9% of the Aspen Shares will be held by the
former  shareholders of Endeavour after closing of the Offer (provided, however,
that  there  shall be no adjustments in the Ratio if any share purchase warrants
of  Endeavour  or  Aspen  are  exercised and shares issued by Endeavour or Aspen
therefor,  or  in  respect  of 1,000,000 Endeavour Shares to be issued to Thames
Capital  Corp.  pursuant  to  an  agreement  dated  July  4,  2001).

The  Offer  is  open  for  acceptance  until the Expiry Time unless withdrawn or
extended  by  Aspen.

The Offer is made only for Endeavour Securities and is not made for any options,
warrants  or  rights  to  purchase  Endeavour  Shares or other securities or any
securities convertible into Endeavour Shares or other securities (other than for
the  Endeavour  Special  Warrants  and  the  underlying  securities).  It  is  a
condition of the Offer that all other outstanding warrants or options to acquire
Endeavour  Securities  shall  have  been  exercised,  cancelled  or  otherwise
terminated.

The  obligation of Aspen to take up and pay for Endeavour Securities pursuant to
the  Offer  is  subject  to  certain  conditions.  See  Section  4 of the Offer,
"Conditions of the Offer".  The Offer is not being made to, nor will deposits be
accepted  from or on behalf of, Securityholders in any jurisdiction in which the
making  or  acceptance  thereof would not be in compliance with the laws of such
jurisdiction. However, Aspen may, in its sole discretion, take such action as it
may  deem  necessary  to  extend  the  Offer  to  Securityholders  in  any  such
jurisdiction.


<PAGE>
                                        5


THE BOARD OF DIRECTORS OF ENDEAVOUR HAS UNANIMOUSLY DETERMINED THAT THE OFFER IS
FAIR  TO THE HOLDERS OF THE ENDEAVOUR SECURITIES AND HAS UNANIMOUSLY RESOLVED TO
RECOMMEND  THAT  SECURITYHOLDERS  ACCEPT  THE  OFFER.

PURPOSE  OF  AND  REASONS  FOR  THE  OFFER

The  purpose of the Offer is to enable Aspen to acquire control of or to own all
of  the  outstanding  Endeavour  Securities.

Aspen  wishes  to  acquire  Endeavour  in  order  to  increase  its  oil and gas
production, and to acquire the growth potential of the oil and gas production in
Endeavour.  Aspen's  management  views  the  acquisition  of  Endeavour  as  an
opportunity to acquire competent and experienced management personnel in Canada,
along  with  access  to  the  Canadian  market  place  through  increased market
recognition  from  the  Canadian  oil and gas properties of Endeavour.  Finally,
Aspen  will  enjoy the higher rate of production in the Canadian assets owned by
Endeavour  which  will  in  turn  increase  the  cash  flow  of  Aspen.

ASPEN

Aspen is an independent energy company engaged in the acquisition, exploitation,
development  and  operation of oil and gas properties with a geographic focus in
major  oil and gas producing regions in the United States.  Aspen currently owns
interests  in  approximately  1,200  wells  located  in  eleven  states  with  a
predominant  focus  in  Oklahoma, Kansas and Texas.  The Aspen Shares are listed
for trading on the TSE under the trading symbol "ASR" and on the OTCBB under the
trading  symbol  "ASPG".  See  "Information  Concerning  Aspen" in the Circular.

ENDEAVOUR

Endeavour  is  an  independent  energy  company  engaged in the exploration for,
development and production of petroleum and natural gas in Canada and the United
States.  Endeavour  holds  interests  in approximately 90 wells, the majority of
which  are  located  in Alberta.  The Endeavour Shares are listed and posted for
trading  on  the  CDNX  under  the  symbol  "ERU".   See "Information Concerning
Endeavour"  in  the  Circular.

PRE-ACQUISITION  AGREEMENT

Aspen  and Endeavour have entered into the Pre-Acquisition Agreement relating to
the  Offer.  The  Pre-Acquisition  Agreement  contains,  among  other  things,
covenants  of  Aspen relating to the making of the Offer, covenants of Endeavour
relating  to  steps  to  be  taken  to support the Offer, covenants of Endeavour
relating to the conduct of Endeavour's business pending completion of the Offer,
representations and warranties of Endeavour and Aspen and provisions relating to
the  payment  of  fees  to  Aspen  and  Endeavour in certain circumstances.  See
"Background  to  and  Reasons  for the Offer - Pre-Acquisition Agreement" in the
Circular.

LOCK-UP  AND  BREAK-UP  FEE  AGREEMENT

Aspen,  Endeavour  and the Selling Securityholders have entered into the Lock-Up
and  Break-Up Fee Agreement relating to the Offer.  The Lock-Up and Break-Up Fee
Agreement contains, among other things, covenants of the Selling Securityholders
to  tender  their  Endeavour Securities to the Offer, covenants of Endeavour and
the  Selling Securityholders relating to steps to be taken to support the Offer,
covenants of Endeavour and the Selling Securityholders not to continue, solicit,
initiate,  authorize, encourage or engage in alternate transactions to the Offer
or  to  enter  into  any  agreement, discussions or negotiations with any person
other than Aspen with respect to an alternate transaction or to furnish or cause
to  be  furnished  any non-public information concerning Endeavour to any person
other  than  Aspen relating to an alternate transaction and a provision relating
to  a  break-up  fee  that  may  be paid to Aspen in certain circumstances.  See
"Background  to  and Reasons for the Offer - Lock-Up and Break-Up Fee Agreement"
in  the  Circular.


<PAGE>
                                        6


VOTING  AGREEMENT

Certain  of the Selling Securityholders, Jack E. Wheeler, Randall B. Kahn, Aspen
and Endeavour have entered into the Voting Agreement relating to the Offer.  The
Voting  Agreement  contains,  among  other  things,  covenants  by  such Selling
Securityholders,  Jack  E. Wheeler and Randall B. Kahn to vote the securities in
Aspen  owned  by  them  in  favour of Allan J. Kent for election to the board of
directors  of  Aspen and covenants from such Selling Securityholders not to vote
the  securities  in  Aspen owned by them against the election of Jack E. Wheeler
and  Randall  B.  Kahn  as  directors of Aspen.  Such covenants remain in effect
until  the  earliest  of the date that all parties agree to terminate the Voting
Agreement, December 31, 2006 or the failure of Aspen to acquire more than 50.01%
of the Issued and outstanding shares of Endeavour on or before December 31, 2001
(provided  that  if  at  any time after January 31, 2002 any of Jeffrey J. Chad,
Allan  J.  Kent,  Jack  E. Wheeler or Randall B. Kahn ceases to be an officer or
director of Aspen or one of its subsidiaries then such person, together with any
other  corporate  party  to  the  Voting  Trust  controlled  by such person, may
withdraw  from  the  Voting  Agreement.  See  "Background to and Reasons for the
Offer  -  Voting  Agreement"  in  the  Circular.

PLANS  FOR  ENDEAVOUR

If  the  Offer  is  successful,  Aspen  will  review  the operations, assets and
business  of  Endeavour.  It  is  expected  that  Endeavour  will  continue as a
Subsidiary  of  Aspen.  It is also expected that certain changes will be made to
the  composition  of  the  board  of directors of Endeavour to allow nominees of
Aspen  to  become  members  of  such  board.

If  Aspen  takes up and pays for Endeavour Securities validly deposited pursuant
to  the  Offer, it intends to acquire the remaining Endeavour Securities through
the  Compulsory  Acquisition  provisions  of  the  ABCA  or, if Aspen's right of
Compulsory  Acquisition  is  not  available  thereunder,  then  pursuant  to  a
Subsequent Acquisition Transaction. See Section 12 of the Offer and "Acquisition
of  Endeavour  Securities  Not  Deposited"  in  the  Circular.

If  permitted  by  applicable law, subsequent to the completion of the Offer and
any  Compulsory Acquisition or Subsequent Acquisition Transaction, Aspen intends
to delist the Endeavour Shares from the CDNX, and to cause Endeavour to cease to
be  a  reporting  issuer  under  the securities laws of each of the provinces of
Canada in which it currently holds such status. The effect of these actions will
be  that  Endeavour  will  no  longer be required to publicly file or provide to
security  holders  financial  information  or  timely  disclosure in Canada with
respect  to  its  affairs. See "Purpose of the Offer and Plans for Endeavour" in
the  Circular.

CONDITIONS  OF  THE  OFFER

Aspen  reserves  the right to withdraw the Offer and not take up and pay for any
Endeavour  Securities  deposited under the Offer unless the conditions described
in  Section  4  of the Offer, "Conditions of the Offer", are satisfied or waived
prior  to  the  Expiry Time by Aspen. The Offer is conditional upon, among other
things, there being validly deposited under the Offer and not withdrawn a number
of  Endeavour Securities which, when included with any Endeavour Securities then
held  by  Aspen  and  anyone  acting  in concert with Aspen, constitute at least
50.01%  of  the  Endeavour  Securities  at  the  Expiry  Time.  For  a  complete
description  of  the  conditions  of  the  Offer,  see  Section  4 of the Offer,
"Conditions  of  the  Offer".

TIME  FOR  ACCEPTANCE

The  Offer  is  open  for  acceptance  until the Expiry Time, unless extended or
withdrawn in accordance with the terms of the Offer. See Section 4 of the Offer,
"Conditions  of  the Offer" and Section 5 of the Offer, "Extension and Variation
of  the  Offer".

MANNER  OF  ACCEPTANCE

A  Securityholder  wishing  to  accept the Offer must, not later than the Expiry
Time, deposit the certificate(s) representing the Endeavour Securities, together
with a properly completed Letter of Transmittal or a manually executed facsimile
thereof  and  all  other documents required by the Letter of Transmittal, at the
office  of  the  Depositary specified in the Letter of Transmittal. Instructions
are  contained  in  the  Letter  of  Transmittal which accompanies the Offer and
Circular.  Securityholders whose Endeavour Securities are registered in the name


<PAGE>
                                        7


of  a  nominee  should contact their stockbroker, investment dealer, bank, trust
company  or  other  nominee  for  assistance  in  depositing  their  Endeavour
Securities.

If  the  certificate(s)  representing Endeavour Securities are not available for
deposit  prior  to  the  Expiry  Time,  Securityholders  may accept the Offer by
complying with the procedures for guaranteed delivery as set forth in the Notice
of  Guaranteed  Delivery which accompanies this Offer and Circular and Section 3
of  the  Offer,  "Manner  of  Acceptance".

If  a  Letter  of  Transmittal is executed by a person other than the registered
holder(s)  of the Endeavour Securities deposited therewith, and in certain other
circumstances as set forth in the Letter of Transmittal, then the certificate(s)
must  be  endorsed or be accompanied by an appropriate securities transfer power
of  attorney  duly  and properly completed by the registered holder(s), with the
signature(s) on the endorsement panel or securities transfer power guaranteed by
an  Eligible  Institution.

The deposit of Endeavour Securities pursuant to the procedures set forth in this
Offer  will constitute a binding agreement between the depositing Securityholder
and  Aspen  upon  the  terms  and  subject  to  the  conditions  of  the  Offer.

WITHDRAWAL  OF  DEPOSITED  ENDEAVOUR  SECURITIES

Endeavour  Securities  deposited  pursuant  to the Offer may be withdrawn at any
time  prior  to Aspen taking up and paying for deposited Endeavour Securities by
following  the  procedures set forth in Section 7 of the Offer. See Section 7 of
the  Offer,  "Withdrawal  of  Deposited  Endeavour  Securities".

PAYMENT  FOR  DEPOSITED  ENDEAVOUR  SECURITIES

If  all the conditions referred to in Section 4 of the Offer, "Conditions of the
Offer",  are  satisfied  or  waived,  Aspen will become obligated to take up all
Endeavour  Securities  validly deposited under the Offer and not withdrawn under
the  Offer  not  later  than  ten  days after the Expiry Date and to pay for the
Endeavour  Securities  taken  up as soon as possible, but in any event not later
than  three  Business  Days  after  taking  up  such  Endeavour  Securities. Any
Endeavour  Securities  deposited  under  the Offer after the first date on which
Endeavour  Securities  have been taken up and paid for by Aspen will be taken up
and  paid  for  within  ten  days  of  such deposit. See Section 6 of the Offer,
"Payment  for  Deposited  Endeavour  Securities".

ACQUISITION  OF  ENDEAVOUR  SECURITIES  NOT  DEPOSITED

If Aspen acquires at least 90% of the Endeavour Securities (other than Endeavour
Securities  held  at  the  date  of  the  Offer  by or on behalf of Aspen or its
Affiliates  or Associates), Aspen currently intends to avail itself of the right
to  acquire  the  remaining  Endeavour  Securities  pursuant  to  the Compulsory
Acquisition  provisions  of Part 16 of the ABCA. If Aspen acquires less than 90%
of  the  Endeavour  Securities,  Aspen presently intends to avail itself of such
other  corporate  actions  or  proceedings  as may be legally available to it to
acquire  the  remaining Endeavour Securities, including transactions that may be
effected  without  the  consent  of  the  holders  thereof.  See "Acquisition of
Endeavour  Securities  Not  Deposited"  in  the  Circular.

PRICE  RANGE  AND  TRADING  VOLUMES  OF  ASPEN  SHARES  AND  ENDEAVOUR  SHARES

The  Aspen  Shares are listed for trading on TSE and the OTCBB.  Application has
been made to list the Aspen Shares issuable pursuant to the Offer on the TSE and
the OTCBB.  The Endeavour Shares are listed for trading on the CDNX.  On October
23,  2001,  the last trading day prior to the public announcement the Offer, the
closing  trading  price  on  the CDNX of the Endeavour Shares was $0.14, and the
closing trading price on the TSE and the OTCBB of the Aspen Shares was $0.85 and
US$0.60,  respectively.  See  "Aspen  - Price Range and Trading Volumes of Aspen
Shares" and "Endeavour - Price Range and Trading Volumes of Endeavour Shares" in
the  Circular.


<PAGE>
                                        8


CANADIAN  FEDERAL  INCOME  TAX  CONSIDERATIONS

The exchange of Endeavour Securities for Aspen Shares will not be a tax-deferred
roll-over  transaction.  Canadian  resident Securityholders who accept the Offer
may  realize  a  gain or loss, or other income, as a result of such an exchange.
Non-Canadian resident Securityholders who accept the Offer will generally not be
subject to tax in Canada as a result of such an exchange.  See "Canadian Federal
Income  Tax  Considerations"  in  the  Circular.

DEPOSITARY

Computershare  Trust  Company of Canada is acting as Depositary under the Offer.
The  Depositary will receive deposits of certificates representing the Endeavour
Securities,  Letters  of  Transmittal, and Notices of Guaranteed Delivery at its
office  specified  in  the  Letter  of  Transmittal.  The  Depositary  will  be
responsible  for giving certain notices, if required, and for making payment for
all  Endeavour Securities purchased by Aspen under the Offer.  See "Depositary "
in  the  Circular.

No  fee  or commission will be payable by any holder of Endeavour Securities who
transmits  his,  her  or  its Endeavour Securities directly to the Depositary to
accept  the Offer.  Securityholders should contact the Depositary or a broker or
dealer  for  assistance  in  accepting the Offer and in depositing the Endeavour
Securities  with  the  Depositary.  See  "Depositary"  in  the  Circular.


<PAGE>
                                        9


                                      OFFER

                                                               November 23, 2001
TO:  THE  HOLDERS  OF  ENDEAVOUR  SECURITIES

1.   THE  OFFER

Aspen  hereby  offers, upon the terms and subject to the conditions set forth in
this  Offer,  to  purchase:

(a)  all  Endeavour  Shares  currently  outstanding in exchange for 0.2375 of an
     Aspen  Share  and  0.11875  of an Aspen Purchase Warrant for each Endeavour
     Share;

(b)  all  Endeavour  Series I Special Warrants currently outstanding in exchange
     for  0.2375  of an Aspen Share and 0.11875 of an Aspen Purchase Warrant for
     each  Endeavour  Series  I  Special  Warrant;  and

(c)  all  Endeavour Series II Special Warrants currently outstanding in exchange
     for  0.2375  of  an  Aspen  Share, 0.11875 of an Aspen Purchase Warrant and
     0.2375  of  an  Aspen Class B Purchase Warrant for each Endeavour Series II
     Special  Warrant.

For  greater  certainty  if  a Securityholder holding Endeavour Special Warrants
exercises  such  securities prior to tendering them to the Offer and having them
taken up and paid for by Aspen, then upon tendering the underlying securities to
the  Offer:

(a)  a  Securityholder  who  had  previously  held  Endeavour  Series  I Special
     Warrants  shall be entitled to receive 0.2375 of an Aspen Share and 0.11875
     of  a Aspen Purchase Warrant for each Endeavour Share and nil consideration
     for  each  Series  I  Purchase  Warrant  underlying each Endeavour Series I
     Special  Warrant;  and

(b)  a  Securityholder  who  had  previously  held  Endeavour  Series II Special
     Warrants  shall be entitled to receive 0.2375 of an Aspen Share and 0.11875
     of  an  Aspen  Purchase  Warrant  for each Endeavour Share and 0.2375 of an
     Aspen  Class  B  Purchase  Warrant  for  each  Series  II  Purchase Warrant
     underlying  each  Endeavour  Series  II  Special  Warrant.

The  Ratio was determined by negotiation between Aspen and Endeavour.  The Ratio
will  be  adjusted,  if  necessary,  such  that, assuming all of the outstanding
Endeavour  Securities  are  tendered  to  the Offer (and no purchase warrants of
Aspen or Endeavour are exercised), 64.1% of the Aspen Shares will be held by the
current  shareholders of Aspen and 35.9% of the Aspen Shares will be held by the
former  shareholders of Endeavour after closing of the Offer (provided, however,
that  there  shall be no adjustments in the Ratio if any share purchase warrants
of  Endeavour  or  Aspen  are  exercised and shares issued by Endeavour or Aspen
therefor,  or  in  respect  of 1,000,000 Endeavour Shares to be issued to Thames
Capital  Corp.  pursuant  to  an  agreement  dated  July  4,  2001).

The Offer is made only for Endeavour Securities and is not made for any options,
warrants  or  rights  to  purchase  Endeavour  Shares or other securities or any
securities convertible into Endeavour Shares or other securities (other than for
the  Endeavour  Special  Warrants  and  the  underlying  securities).  It  is  a
condition of the Offer that all other outstanding warrants or options to acquire
Endeavour  Securities  shall  have  been  exercised,  cancelled  or  otherwise
terminated.

The  accompanying  Circular,  Letter  of  Transmittal  and  Notice of Guaranteed
Delivery  are incorporated into and form part of the Offer and contain important
information which should be read carefully before making a decision with respect
to  the  Offer.

The  Offer is not being made to, nor will deposits be accepted from or on behalf
of,  Securityholders  in  any  jurisdiction  in  which  the making or acceptance
thereof would not be in compliance with the laws of such jurisdiction.  However,
Aspen  may, in its sole discretion, take such action as it may deem necessary to
extend  the  Offer  to  Securityholders  in  any  such  jurisdiction.


<PAGE>
                                        10


The  Offer  is  subject to certain conditions as detailed under Section 4 of the
Offer, "Conditions of the Offer". If such conditions are met, Aspen will (unless
Aspen  shall have withdrawn or terminated the Offer) become obligated to take up
and  pay  for the Endeavour Securities validly deposited under the Offer and not
withdrawn  in accordance with the terms hereof.  All of the terms and conditions
of  the  Offer  may  be  waived or modified (subject to applicable law) by Aspen
without  prejudice to any other right which Aspen may have, by notice in writing
delivered  to  the  Depositary  at  its  office  specified  in  the  Letter  of
Transmittal.

2.   TIME  FOR  ACCEPTANCE

The  Offer  is  open  for  acceptance  until  the Expiry Time unless extended at
Aspen's  sole discretion or withdrawn in accordance with the terms of the Offer.

3.   MANNER  OF  ACCEPTANCE

LETTER  OF  TRANSMITTAL

The Offer may be accepted by a Securityholder by delivering to the Depositary at
any  one of the offices of the Depositary listed in the Letter of Transmittal so
as  to  arrive  there  not  later  than  the  Expiry  Time:

(a)  the  certificate(s)  representing  the  Endeavour  Securities in respect of
     which  the  Offer  is  being  accepted;

(b)  Letter  of  Transmittal  in  the form accompanying the Offer, or a manually
     executed  facsimile  thereof,  properly  completed  and  duly  executed  as
     required  by  the  instructions  set out in such Letter of Transmittal; and

(c)  any  other  relevant documents required by the instructions set out in such
     Letter  of  Transmittal.

If  the  certificate(s)  representing Endeavour Securities are not available for
deposit  prior  to  the  Expiry  Time,  Securityholders  may accept the Offer by
complying  with  the  procedures  for  guaranteed  delivery  set  forth  below.

Except  as  otherwise provided in the instructions in the Letter of Transmittal,
all  signatures  on  a  Letter  of  Transmittal and on certificates representing
Endeavour  Securities  and,  if necessary, on the Notice of Guaranteed Delivery,
must  be  guaranteed  by an Eligible Institution.  If a Letter of Transmittal is
executed  by  a  person  other  than  the  registered holder(s) of the Endeavour
Securities  deposited therewith, and in certain other circumstances as set forth
in  the  Letter  of  Transmittal, then the certificate(s) must be endorsed or be
accompanied  by  an  appropriate  securities transfer power of attorney duly and
properly  completed  by  the  registered holder(s), with the signature(s) on the
endorsement  panel  or  securities  transfer  power  guaranteed  by  an Eligible
Institution.

PROCEDURE  FOR  GUARANTEED  DELIVERY

If a Securityholder wishes to deposit Endeavour Securities pursuant to the Offer
and  (i)  the  certificate(s)  representing  such  Endeavour  Securities are not
immediately  available,  or  (ii) such Securityholder is not able to deliver the
certificate(s)  representing  such  Endeavour  Securities and all other required
documents  to the Depositary prior to the Expiry Time, such Endeavour Securities
may  nevertheless  be  deposited  pursuant to the Offer provided that all of the
following  conditions  are  met:

(a)  such  deposit  is  made  by  or  through  an  Eligible  Institution;

(b)  a properly completed and duly executed Notice of Guaranteed Delivery in the
     form  accompanying  the Offer, or a manually executed facsimile thereof, is
     received  by  the  Depositary  at  its office as set forth in the Notice of
     Guaranteed  Delivery  prior  to  the  Expiry  Time;  and

(c)  the  certificate(s)  representing  deposited Endeavour Securities in proper
     form  for  transfer,  together  with a properly completed and duly executed
     Letter  of  Transmittal  in  the form accompanying the Offer, or a manually
     executed  facsimile thereof, covering the relevant Endeavour Securities and
     all other documents required by such Letter of Transmittal, are received by
     the  Depositary  at  its  office  as  set forth in the Notice of Guaranteed
     Delivery  on or before 5:00 p.m. (Toronto time) (3:00 p.m. Calgary time) on
     the  third  trading  day  on  the  CDNX  after  the  Expiry  Date.


<PAGE>
                                        11


In  each  Notice  of Guaranteed Delivery, an Eligible Institution must guarantee
delivery  of the certificate(s) representing the Endeavour Securities referenced
therein,  as  set  forth  in  paragraph  (c)  above.

The  Notice  of  Guaranteed  Delivery  may  be  delivered  by  hand  or  courier
transmitted  by facsimile transmission or delivered by mail to the Depositary so
as  to  be  received by the Depositary at the office specified therein not later
than  the  Expiry  Time.

GENERAL

In  all  cases,  payment  for the Endeavour Securities deposited and taken up by
Aspen  pursuant  to  the  Offer  will  be  made only after timely receipt by the
Depositary of certificates representing the Endeavour Securities together with a
properly  completed  and  duly  executed  Letter  of  Transmittal  in  the  form
accompanying  the  Offer,  or a manually executed facsimile thereof, relating to
such  Endeavour  Securities and any other required documents with the signatures
guaranteed,  if  required,  in  accordance  with the instructions set out in the
Letter  of  Transmittal.

The  method  of delivery of the Letter of Transmittal, certificates representing
the  Endeavour  Securities and all other required documents is at the option and
risk  of  the  person forwarding the same, and delivery will be deemed effective
only  when  such  documents  are  actually received.  Aspen recommends that such
documents be delivered by hand to the Depositary and a receipt obtained. If such
documents  are mailed, Aspen recommends that registered mail with return receipt
requested  be  used  and  that  appropriate  insurance  be  obtained.

Securityholders  whose  Endeavour  Securities  are  registered  in the name of a
nominee should contact their stockbroker, investment dealer, bank, trust company
or  other  nominee  for  assistance  in  depositing  the  Endeavour  Securities.

The  execution  of  a  Letter  of  Transmittal  by  a Securityholder irrevocably
appoints  Aspen,  the Depositary and any officer of Aspen, and each of them, and
any  other  person designated by Aspen in writing, as the true and lawful agent,
attorney  and  attorney-in-fact and proxy of such Securityholder with respect to
the  Endeavour  Securities deposited under Letter of Transmittal which are taken
up and paid for under the Offer (the "PURCHASED SECURITIES") and with respect to
any  and  all  dividends, distributions, payments, securities, rights, assets or
other  interests  declared, paid, issued, distributed, made or transferred on or
in  respect  of  the Purchased Securities on or after October 24, 2001, the date
upon  which  Aspen  announced its intention to make the Offer (collectively, the
"OTHER  SECURITIES"),  effective  on  and after the date that Aspen takes up and
pays  for  the  Purchased  Securities (the "EFFECTIVE DATE"), with full power of
substitution, in the name of and on behalf of such Securityholder (such power of
attorney  being deemed to be an irrevocable power coupled with an interest), (a)
to  register  or record, transfer and enter the transfer of Purchased Securities
and/or  Other  Securities  on  the appropriate register of holders maintained by
Endeavour,  and  (b)  to exercise any and all of the rights of the holder of the
Purchased  Securities and/or Other Securities, including, without limitation, to
vote,  execute  and  deliver any and all instruments of proxy, authorizations or
consents  in  respect  of  all  or  any of the Purchased Securities and/or Other
Securities, revoke any such instrument, authorization, or consent given prior to
or  after  the  Effective  Date,  designate in any such instruments of proxy any
person  or  persons  as  the  proxy  or  the  proxy  nominee or nominees of such
Securityholder  in  respect of such Purchased Securities and/or Other Securities
for  all  purposes including, without limitation, in connection with any meeting
(whether  annual,  special or otherwise and any adjournments thereof) of holders
of  securities  of Endeavour, and execute, endorse and negotiate, for and in the
name  of  and  on behalf of the registered holder of Purchased Securities and/or
Other  Securities,  any  and  all  cheques  or  other instruments respecting any
distribution  payable  to  or  to  the  order  of such holder in respect of such
Purchased Securities and/or Other Securities. Furthermore, a holder of Purchased
Securities  and/or Other Securities who executes a Letter of Transmittal agrees,
effective  on  and  after  the  Effective Date, not to vote any of the Purchased
Securities  and/or  Other  Securities at any meeting (whether annual, special or
otherwise  and  any  adjournments thereof) of holders of securities of Endeavour
and  not  to  exercise  any other rights or privileges attached to any Purchased
Securities  and/or  Other Securities, and agrees to execute and deliver to Aspen
any  and  all  instruments  of proxy, authorizations or consents, in form and on
terms satisfactory to Aspen, in respect of the Purchased Securities and/or Other
Securities  and  to  designate  in  any  such instruments of proxy the person or
persons  specified by Aspen as the proxy or the proxy nominee or nominees of the
holder  of  the  Purchased  Securities  and/or  Other  Securities.  Upon  such
appointment,  all prior proxies given by the holder of such Purchased Securities
and/or  Other Securities with respect thereto shall be revoked and no subsequent
proxies may be given by such person with respect thereto.  A holder of Purchased
Securities  and/or  Other  Securities  who  executes  a  Letter  of  Transmittal
covenants  to  execute,  upon  request,  any additional documents, transfers and


<PAGE>
                                        12


other  assurances  as  may  be  necessary  or  desirable  to  complete the sale,
assignment  and  transfer of the Purchased Securities and/or Other Securities to
Aspen  and  acknowledges  that  all  authority therein conferred or agreed to be
conferred shall survive the death or incapacity, bankruptcy or insolvency of the
holder  and  all  obligations  of  the  holder therein shall be binding upon the
heirs,  personal  representatives,  successors and assigns of the holder, as the
case  may  be.

The deposit of Endeavour Securities pursuant to the procedures set forth in this
Offer  will constitute a binding agreement between the depositing Securityholder
and  Aspen  upon the terms and subject to the conditions of the Offer, including
the depositing Securityholder's representation and warranty that (i) such person
has full power and authority to deposit, sell, assign and transfer the Endeavour
Securities (and any Other Securities) being deposited and has not sold, assigned
or  transferred  and  has  not  agreed  to  sell, assign or transfer any of such
Endeavour  Securities  and/or  Other  Securities  to any other person; (ii) such
person  owns  the  Endeavour  Securities and/or Other Securities being deposited
within  the  meaning  of  applicable  securities laws; (iii) the deposit of such
Endeavour Securities and/or Other Securities complies with applicable securities
laws;  and (iv) when such Endeavour Securities and/or Other Securities are taken
up  and  paid for by Aspen, Aspen will acquire good title thereto free and clear
of  all  liens,  restrictions,  charges,  encumbrances,  claims  and  equities
whatsoever.

All  questions  as to the validity, form, eligibility (including timely receipt)
and  acceptance of any Endeavour Securities and accompanying documents deposited
pursuant  to  the  Offer  will  be  determined  by Aspen in its sole discretion.
Depositing  Securityholders  agree  that  such  determination shall be final and
binding.  Aspen reserves the absolute right to reject any and all deposits which
Aspen  determines  not  to  be in proper form or which may be unlawful to accept
under  the  laws of any jurisdiction. Aspen reserves the absolute right to waive
any  defect  or  irregularity  in  the  deposit  of any Endeavour Securities and
accompanying  documents.  There  shall  be  no  duty or obligation on Aspen, the
Depositary,  or any other person to give notice of any defect or irregularity in
any  deposit  and  no  liability shall be incurred by any of them for failure to
give any such notice.  Aspen's interpretation of the terms and conditions of the
Offer  (including  the  Circular,  the  Letter  of Transmittal and the Notice of
Guaranteed  Delivery)  shall  be  final  and  binding.

Aspen  reserves  the  right to permit the Offer to be accepted in a manner other
than  that  set  out  above.

4.   CONDITIONS  OF  THE  OFFER

Notwithstanding  any  other  provision of the Offer, Aspen reserves the right to
withdraw  or  terminate  the Offer and not take up and pay for, or to extend the
period  of time during which the Offer is open and postpone taking up and paying
for,  any  Endeavour  Securities  deposited  under  the  Offer unless all of the
following  conditions  are  satisfied  or  waived  by  Aspen:

(a)  at  the  Expiry  Time,  and  at  the time Aspen first takes up and pays for
     Endeavour  Securities  under  the  Offer,  there  shall  have  been validly
     deposited  under  the  Offer  and  not  withdrawn  a  number  of  Endeavour
     Securities  which,  when  included  with  Endeavour Securities then held by
     Aspen  and  anyone acting in concert with Aspen, constitute at least 50.01%
     of  the  outstanding Endeavour Securities (such condition being referred to
     herein  as  the  "MINIMUM  CONDITION");

(b)  at  the  Expiry  Time,  and  at  the time Aspen first takes up and pays for
     Endeavour Securities under the Offer, there shall not exist any prohibition
     at  law  against  Aspen making the Offer or taking up and paying for all of
     the  Endeavour  Securities  registered  in  the  names  of  Securityholders
     resident  in  Canada  under  the  Offer;

(c)  the  Ontario  Securities  Commission  shall  not  have  taken  any steps to
     preclude  Aspen  from issuing securities to the Securityholders, namely the
     imposition  of  a  cease  trade  order  in  respect  of  the  Offer;  and

(d)  all  outstanding  warrants  or options to acquire Endeavour Shares or other
     securities  shall  have  expired  or been exercised, cancelled or otherwise
     terminated,  other  than the Endeavour Special Warrants (and the underlying
     securities).

The  foregoing  conditions  are  for  the exclusive benefit of Aspen.  Aspen may
assert  any  of  the foregoing conditions at any time, both before and after the
Expiry  Time,  regardless  of  the  circumstances  giving rise to such assertion
(including  the  action  or  inaction  of  Aspen).  Aspen  may  waive any of the
foregoing conditions in whole or in part at its sole option at any time and from


<PAGE>
                                        13


time  to  time,  both before and after the Expiry Time, without prejudice to any
other rights which Aspen may have.  The failure by Aspen at any time to exercise
or  assert  any of the foregoing rights shall not be deemed a waiver of any such
right  and  each  such  right  shall  be  deemed  an  ongoing right which may be
exercised  or  asserted at any time and from time to time.  Any determination by
Aspen  concerning  the  events  described  in  this  Section 4 will be final and
binding  upon  all  parties.

Any waiver of a condition or the withdrawal of the Offer shall be effective upon
written  notice  or  other  communication  confirmed in writing by Aspen to that
effect  to  the  Depositary  at  its  principal  office  in Calgary, Alberta. If
required  by  law,  Aspen  shall  forthwith  after giving any such notice make a
public  announcement  of  such  waiver  or  withdrawal,  shall  use  reasonable
commercial  efforts to cause the Depositary to notify the Securityholders in the
manner  set  forth  in  Section  11 of the Offer, "Notice and Delivery".  If the
Offer  is  withdrawn,  Aspen shall not be obligated to take up or pay for any of
the  Endeavour  Securities  deposited  under  the  Offer and the Depositary will
promptly  return all certificates for deposited Endeavour Securities, Letters of
Transmittal, Notices of Guaranteed Delivery and related documents to the parties
by  whom  they  were  deposited.

5.   EXTENSION  AND  VARIATION  OF  THE  OFFER

The  Offer is open for acceptance until the Expiry Time, subject to extension or
variation  in  Aspen's  sole  discretion.

Aspen  reserves  the right, in its sole discretion, at any time and from time to
time  during  the Offer Period (or otherwise as permitted by applicable law), to
extend  the Offer by fixing a new Expiry Date or to vary the terms of the Offer,
in  each  case  by  giving  written  notice  or other communication confirmed in
writing of such extension or variation to the Depositary at its principal office
in  Toronto,  Ontario.  Aspen  shall,  forthwith after giving any such notice or
communication,  make  a  public  announcement  of the extension or variation and
shall  cause  the Depositary as soon as practicable thereafter to provide notice
or  communication  of  such  extension  or  variation in the manner set forth in
Section  11  of  the  Offer,  "Notice and Delivery" to all Securityholders whose
Endeavour Securities have not been taken up prior to the extension or variation.
Any notice of extension or variation will be deemed to have been given and to be
effective  on  the day on which it is delivered or otherwise communicated to the
Depositary  at  its  principal  office  in  Calgary,  Alberta.

Notwithstanding  the foregoing, the Offer may not be extended by Aspen if all of
the  terms  and  conditions  of the Offer, excluding those waived by Aspen, have
been  fulfilled  or  complied  with unless Aspen first takes up and pays for all
Endeavour  Securities  validly  deposited  under  the  Offer  and not withdrawn.

Where  the terms of the Offer are varied, other than a variation in the terms of
the  Offer  consisting  solely of the waiver of a condition, the Offer shall not
expire  before  ten  days  after  the  notice  of  variation  in respect of such
variation  has  been  mailed,  delivered  or  otherwise  communicated  to
Securityholders  unless  otherwise  permitted  by  applicable law and subject to
abridgement  or  elimination  of  that  period pursuant to such orders as may be
granted  by  Canadian  courts  or  securities  regulatory  authorities.

During  any  such  extension  or  in  the  event of any variation, all Endeavour
Securities  previously  deposited  and  not  taken  up  or withdrawn will remain
subject  to  the  Offer  and may be accepted for purchase by Aspen in accordance
with  the  terms  hereof,  subject  to  Section  7  of the Offer, "Withdrawal of
Deposited  Endeavour  Securities".  An extension of the period of the Offer or a
variation of the Offer does not constitute a waiver by Aspen of its rights under
Section  4  of the Offer, "Conditions of the Offer".  If the consideration being
offered for the Endeavour Securities under the Offer is increased, the increased
consideration  will  be  paid  to all depositing Securityholders whose Endeavour
Securities  are  taken  up  under  the  Offer.

6.   PAYMENT  FOR  DEPOSITED  ENDEAVOUR  SECURITIES

If  all  the conditions referred to under Section 4 of the Offer, "Conditions of
the  Offer"  have  been  satisfied  or waived by Aspen, Aspen will (unless Aspen
shall  have  withdrawn  or terminated the Offer) become obligated to take up the
Endeavour  Securities  validly  deposited  under the Offer and not withdrawn not
later  than  ten  days after the Expiry Date and to pay for Endeavour Securities
taken  up  as  soon  as possible, but in any event not later than three Business
Days  after  taking  up  the Endeavour Securities. In accordance with applicable
law,  any  Endeavour Securities deposited under the Offer subsequent to the date
on  which  Aspen  first  takes up Endeavour Securities deposited under the Offer
will  be  taken  up and paid for by Aspen within ten days of the deposit of such
Endeavour  Securities.


<PAGE>
                                        14


In  addition, on and after December 31, 2001, if all of the terms and conditions
attached  to the Offer have been fulfilled or waived, Aspen shall be entitled to
take  up  and pay for the Endeavour Securities deposited under the Offer and not
withdrawn,  subject,  however,  to  the  withdrawal  rights  in  respect of such
Endeavour  Securities  described  in  Section  7  of  the  Offer, "Withdrawal of
Deposited  Endeavour  Securities".

Subject  to  applicable  law,  Aspen  expressly  reserves  the right in its sole
discretion  to  delay  taking  up  or  paying for any Endeavour Securities or to
terminate  the  Offer and not take up or pay for any Endeavour Securities if any
condition specified in Section 4 of the Offer, "Conditions of the Offer", is not
satisfied  or  waived  by  Aspen,  in whole or in part, by giving written notice
thereof  or  other  communication  confirmed in writing to the Depositary at its
principal  office  in Calgary, Alberta. Aspen also expressly reserves the right,
in  its sole discretion and notwithstanding any other condition of the Offer, to
delay taking up and paying for Endeavour Securities in order to comply, in whole
or in part, with any applicable law, including without limitation such period of
time  as  may  be  necessary to obtain any necessary regulatory approval.  Aspen
will  not, however, take up and pay for any Endeavour Securities deposited under
the  Offer  unless  it  simultaneously  takes  up  and  pays  for  all Endeavour
Securities then validly deposited under the Offer.  Aspen will be deemed to have
taken up and accepted for payment Endeavour Securities validly deposited and not
withdrawn  pursuant  to  the Offer if, as and when Aspen gives written notice or
other  communication  confirmed  in  writing  to the Depositary at its principal
office  in  Calgary,  Alberta  of  its  acceptance for payment of such Endeavour
Securities  pursuant  to  the  Offer.

Aspen  will  pay  for Endeavour Securities validly deposited under the Offer and
not  withdrawn  by issuing Aspen Shares and other securities and cheques for the
amount  to cover fractional Aspen Shares as described in the paragraph below, to
or  on behalf of the holders of deposited Endeavour Securities and providing the
Depositary with certificates representing such Aspen Shares and other securities
and  cheques  for  delivery  to  such  Securityholders.

No  fractional  Aspen  Shares  or  other  securities  will  be  issued.  Any
Securityholder  who  would  otherwise  be entitled to receive a fractional Aspen
Share  will receive a cheque for an amount obtained by multiplying such fraction
by  US$0.40,  provided  that in no event shall Aspen be obligated to deliver any
cheque for less than US$1.00. Any Securityholder who would otherwise be entitled
to  receive a fractional Aspen security (other than an Aspen Share) will receive
no  consideration  for  such  fractional  security.

If  a Securityholder deposits more than one certificate for Endeavour Securities
which  are  taken up and paid for by Aspen, the number of Aspen Shares and other
securities  issuable to such Securityholder will be computed on the basis of the
aggregate  number  of  Endeavour  Securities  of  the  Shareholder so deposited.

Under  no  circumstances  will  interest  accrue  or  be  paid  by  Aspen or the
Depositary  to  persons depositing Endeavour Securities on the purchase price of
Endeavour  Securities purchased by Aspen, regardless of any delay in making such
payment.  No  additional  amount  will  be  paid  by  Aspen or the Depositary in
respect  of  accrued  and  unpaid  dividends  on  the  Endeavour  Securities.

The  Depositary  will  act  as the agent of persons who have deposited Endeavour
Securities in acceptance of the Offer for the purposes of receiving Aspen Shares
and  other securities from Aspen and transmitting the same, as applicable, and a
cheque  for  the amount to cover any fractional Aspen Share, to such person, and
receipt  of Aspen Shares and other securities and cheques by the Depositary will
be deemed to constitute receipt of Aspen Shares and other securities and cheques
by  Securityholders  who  have  deposited  and  not  withdrawn  their  Endeavour
Securities  pursuant  to  the  Offer.

Settlement  will  be  made  by  the  Depositary  forwarding  the  certificates
representing  the  Aspen Shares and other securities and a cheque for the amount
to  cover  any  fractional  Aspen  Share, to which a person depositing Endeavour
Securities  is entitled, provided that the person is a resident of a province of
Canada  or  another  jurisdiction in which the Aspen Shares and other securities
and  cheque  may be lawfully delivered without further action by Aspen.  Subject
to the foregoing and unless otherwise directed by the Letter of Transmittal, the
certificates  representing  the Aspen Shares and other securities and the cheque
will  be issued in the name of the registered holder of the Endeavour Securities
so  deposited.  Unless  the person depositing the Endeavour Securities instructs
the  Depositary  to hold the certificates and cheque for pick-up by checking the
appropriate  box in the Letter of Transmittal, such certificates and cheque will
be  forwarded  by  first  class  insured  mail  to  such  persons at the address
specified  in  the  Letter  of  Transmittal.  If  no  address  is  specified,
certificates and a cheque will be forwarded to the address of the Securityholder
as  shown  on  the  registers  maintained  by  Endeavour.


<PAGE>
                                        15


If  any  deposited Endeavour Securities are not accepted for payment pursuant to
the  terms  and  conditions  of the Offer for any reason, or if certificates are
submitted  for  more  Endeavour  Securities  than  the  Securityholder wishes to
deposit,  a  certificate  for  the  Endeavour  Securities  not purchased will be
returned,  without  expense,  to  the  depositing  Securityholder  as  soon  as
practicable following the Expiry Time or withdrawal and early termination of the
Offer.

Depositing  Securityholders  will  not  be  obligated  to  pay brokerage fees or
commissions  if  they  accept the Offer by depositing their Endeavour Securities
directly  with  the  Depositary  to  accept  the  Offer. See "Depositary" in the
Circular.

7.   WITHDRAWAL  OF  DEPOSITED  ENDEAVOUR  SECURITIES

All  deposits  of  Endeavour  Securities  pursuant to the Offer are irrevocable,
provided  that any Endeavour Securities deposited in acceptance of the Offer may
be  withdrawn  by  or on behalf of the depositing holder of Endeavour Securities
(unless  otherwise  required  or  permitted  by  applicable  law):

(a)  at any time where Endeavour Securities have not been taken up by Aspen; and

(b)  at  any  time  after  3  Business  Days  from  the  date Aspen takes up the
     Endeavour  Securities,  if such Endeavour Securities have not been paid for
     by  Aspen.

In  addition,  if:

(a)  there  is  a  variation  of  the  terms of the Offer before the Expiry Time
     including any extension of the period during which Endeavour Securities may
     be  deposited  hereunder  or the modification of a term or condition of the
     Offer,  but  excluding,  unless otherwise required by applicable law, (i) a
     variation  consisting  solely  of  an increase in the consideration offered
     where the time for deposit is not extended for more than ten days after the
     notice  of  variation  has  been  delivered  or (ii) a variation consisting
     solely  of  the  waiver  of  a  condition  of  the  Offer;  or

(b)  at or before the Expiry Time or after the Expiry Time but before the expiry
     of all rights of withdrawal in respect of the Offer, a change occurs in the
     information contained in the Offer or the Circular, as amended from time to
     time,  that would reasonably be expected to affect the decision of a holder
     of  Endeavour  Securities to accept or reject the Offer, unless such change
     is not within the control of Aspen or of any Affiliate of Aspen (except, to
     the  extent  required by applicable law, where it is a change in a material
     fact  relating  to  the  Aspen  Shares);

any Endeavour Securities deposited under the Offer and not taken up and paid for
by  Aspen  at  such  time  may  be  withdrawn  by or on behalf of the depositing
Securityholder  at  the place of deposit at any time until the expiration of ten
days  after  the date upon which a notice of such variation or change is mailed,
delivered  or  otherwise  communicated,  subject  to  abridgement of that period
pursuant  to  such  order  or  orders  as  may  be granted by Canadian courts or
securities  regulatory  authorities.

In order for any withdrawal to be made, notice of the withdrawal must be made by
the  depositing  Securityholder or his or her agent in writing (which includes a
telegraphic  communication or notice by electronic means that produces a printed
copy) and must be actually received by the Depositary at the place of deposit of
the applicable Endeavour Securities (or Notice of Guaranteed Delivery in respect
thereof)  within  the  period  permitted  for  withdrawal.  Any  such  notice of
withdrawal  must be: (i) executed by or on behalf of the person who executed the
Letter  of Transmittal that accompanied the Endeavour Securities to be withdrawn
(or  Notice  of  Guaranteed  Delivery in respect thereof); and (ii) specify such
person's  name,  the number of Endeavour Securities to be withdrawn, the name of
the  registered  holder  and  the  certificate  number shown on each certificate
representing  the  Endeavour  Securities  to  be  withdrawn.  Any signature on a
notice  of  withdrawal must be guaranteed by an Eligible Institution in the same
manner as in the Letter of Transmittal (as described in the instructions set out
therein),  except  in the case of Endeavour Securities deposited for the account
of an Eligible Institution. The withdrawal shall take effect upon receipt of the
written  notice  by  the  Depositary.


<PAGE>
                                        16


All  questions as to the validity (including timely receipt) and form of notices
of  withdrawal  shall  be  determined  by  Aspen in its sole discretion and such
determination  shall be final and binding.  There shall be no duty or obligation
on  Aspen,  the  Depositary  or any other person to give notice of any defect or
irregularity  in  any notice of withdrawal and no liability shall be incurred by
any  of  them  for  failure  to  give  any  such  notice.

If  Aspen  extends  the  Offer,  is delayed in taking up or paying for Endeavour
Securities  or  is unable to take up or pay for Endeavour Shares for any reason,
then,  without prejudice to Aspen's other rights, no Endeavour Securities may be
withdrawn  except  to the extent that depositing holders thereof are entitled to
withdrawal  rights as set forth in this Section 7 or pursuant to applicable law.
Withdrawals  may not be rescinded and any Endeavour Securities withdrawn will be
deemed  not  validly  deposited  for  the  purposes  of  the  Offer,  but may be
redeposited  at any subsequent time prior to the Expiry Time by following any of
the  applicable  procedures  described  in  Section  3  of the Offer, "Manner of
Acceptance".

In  addition  to  the foregoing rights of withdrawal, Securityholders in certain
provinces  of  Canada  are entitled to statutory rights of rescission in certain
circumstances.  See  "Statutory  Rights"  in  the  Circular.

8.   RETURN  OF  DEPOSITED  ENDEAVOUR  SECURITIES

If  any  deposited  Endeavour  Securities are not taken up and paid for by Aspen
under the Offer for any reason whatsoever, or if certificates are submitted by a
Securityholder  for  more  Endeavour Securities than are deposited, certificates
for  Endeavour  Securities  not deposited will be returned at Aspen's expense by
either  sending  new  certificates  representing  securities  not  purchased  or
returning  the  deposited  certificates  and  other  relevant  documents.  The
certificates  and other relevant documents will be forwarded by first class mail
in  the name of and to the address specified by the depositing Securityholder in
the  Letter of Transmittal or, if such name or address is not so specified, then
in such name and to such address of the Securityholder as shown on the registers
maintained  by  Endeavour,  as  soon as practicable following the Expiry Time or
withdrawal  or  termination  of  the  Offer.

9.   CHANGES  IN  CAPITALIZATION,  DISTRIBUTIONS  AND  LIENS

If,  on  or  after  October 23, 2001, Endeavour should subdivide, consolidate or
otherwise change any of the Endeavour Securities or its capitalization, or shall
disclose that it has taken or intends to take any such action, Aspen may, in its
sole  discretion,  and  without  prejudice  to  its  rights  under  Section  4,
"Conditions  of the Offer", make such adjustments as it considers appropriate to
the  terms  of  the Offer (including, without limitation, the type of securities
offered  to  be  purchased  and  the  amounts  payable therefor) to reflect such
subdivision,  consolidation  or  other  change.

Endeavour  Securities acquired pursuant to the Offer shall be transferred by the
Securityholders and acquired by Aspen free and clear of all liens, restrictions,
charges,  encumbrances,  claims  and  equities  and together with all rights and
benefits  arising  therefrom  including  the  right  to  any  and all dividends,
distributions, payments, securities, rights, assets or other interests which may
be  declared, paid, issued, distributed, made or transferred on or in respect of
the  Endeavour  Securities  on  or  after October 23, 2001.  If Endeavour should
declare  or pay any cash dividend, stock dividend or make any other distribution
on  or issue any rights with respect to any of the Endeavour Securities which is
or  are  payable  or  distributable to the Securityholders of record on a record
date  which  is  prior  to  the  date  of transfer into the name of Aspen or its
nominees  or  transferees  on  the  registers  maintained  by  Endeavour of such
Endeavour  Securities  following acceptance thereof for purchase pursuant to the
Offer,  then  the  whole  of  any  such  dividend, distribution or right will be
received  and held by the depositing Securityholder for the account of Aspen and
shall  be  promptly remitted and transferred by the depositing Securityholder to
the  Depositary  for  the  account  of  Aspen,  accompanied  by  appropriate
documentation  of  transfer.  Pending such remittance, Aspen will be entitled to
all  rights  and  privileges  as the owner of any such dividend, distribution or
right,  and  may  withhold the entire consideration payable by Aspen pursuant to
the  Offer  or  deduct  from  the consideration payable by Aspen pursuant to the
Offer  the  amount  or  value  thereof,  as  determined  by  Aspen  in  its sole
discretion.


<PAGE>
                                        17


10.  MAIL  SERVICE  INTERRUPTION

Notwithstanding  the  provisions  of  the  Offer,  the  Circular,  the Letter of
Transmittal  or  the  Notice  of  Guaranteed Delivery, certificates representing
Aspen  Shares  issued  in payment for Endeavour Securities purchased pursuant to
the Offer and certificates representing Endeavour Securities to be returned will
not  be mailed if Aspen determines that delivery thereof by mail may be delayed.
Persons  entitled  to  such  certificates which are not mailed for the foregoing
reason  may  take  delivery thereof at the office of the Depositary at which the
deposited  certificates  representing  Endeavour  Securities in respect of which
such  certificates  are  being  issued  were  deposited  upon application to the
Depositary until such time as Aspen has determined that delivery by mail will no
longer  be delayed.  Aspen shall provide notice of any such determination not to
mail  made  under  this  Section  10 as soon as reasonably practicable after the
making  of  such  determination  and in accordance with Section 11 of the Offer,
"Notice  and  Delivery".  Notwithstanding  Section  6 of the Offer, "Payment for
Deposited  Endeavour Securities", the deposit of certificates representing Aspen
Shares  with  the  Depositary  for delivery to the depositing Securityholders in
such circumstances shall constitute delivery to the persons entitled thereto and
the  Endeavour Securities shall be deemed to have been paid for immediately upon
such  deposit.

11.  NOTICE  AND  DELIVERY

Without  limiting  any  other lawful means of giving notice, any notice Aspen or
the  Depositary  may give or cause to be given under the Offer will be deemed to
have  been  properly given if it is mailed by first class mail, postage prepaid,
to  the  registered Securityholders at their addresses as shown on the registers
maintained  by  Endeavour  and will be deemed to have been received on the first
day  following  the  date  of mailing which is a Business Day.  These provisions
apply  notwithstanding any accidental omission to give notice to any one or more
Securityholders and notwithstanding any interruption of postal service in Canada
or  elsewhere  following  mailing.  In  the  event of any interruption of postal
service  following  mailing,  Aspen  intends  to  make  reasonable  efforts  to
disseminate the notice by other means, such as publication.  Except as otherwise
required  or  permitted  by  law, if post offices in Canada or elsewhere are not
open  for the deposit of mail or there is reason to believe there is or could be
a disruption in all or part of the postal service, any notice which Aspen or the
Depositary  may  give  or cause to be given under the Offer, except as otherwise
provided  herein,  will  be  deemed to have been properly given and to have been
received  by  Securityholders,  if (i) it is given to the CDNX for dissemination
through its facilities; and (ii) it is published once in the national edition of
The  Globe  and Mail or The National Post, provided that if the national edition
of  The  Globe  and Mail or The National Post is not being generally circulated,
publication  thereof  shall  be  made  in  any  other daily newspaper of general
circulation  published  in  the  cities  of  Toronto  and  Calgary.

Wherever  the  Offer calls for documents to be delivered to the Depositary, such
documents  will  not  be  considered  delivered  unless and until they have been
physically  received  at  one  of the addresses listed for the Depositary in the
Letter of Transmittal or Notice of Guaranteed Delivery, as applicable.  Wherever
the  Offer  calls  for  documents  to be delivered to a particular office of the
Depositary such documents will not be considered delivered unless and until they
have been physically received at that particular office at the address listed in
the  Letter  of  Transmittal  or  Notice  of Guaranteed Delivery, as applicable.

12.  ACQUISITION  OF  ENDEAVOUR  SECURITIES  NOT  DEPOSITED

If  by the Expiry Time or within 120 days after the date of the Offer, whichever
period  is  shorter, the Offer has been accepted by the holders of not less than
90%  of  the  Endeavour  Securities (other than Endeavour Securities held at the
date  of  the  Offer  by or on behalf of Aspen or its Affiliates or Associates),
Aspen  currently  intends to acquire the remaining Endeavour Securities pursuant
to  the Compulsory Acquisition provisions of the ABCA on the same terms on which
Aspen  acquired  Endeavour  Securities pursuant to the Offer.  If Aspen takes up
and  pays  for  Endeavour  Securities validly deposited under the Offer and such
statutory  right  of  Compulsory Acquisition is not available or if Aspen elects
not to proceed by way of such statutory right, Aspen intends to seek to acquire,
directly  or indirectly, all of the Endeavour Securities not deposited under the
Offer  by  a Subsequent Acquisition Transaction.  Aspen will cause the Endeavour
Securities  acquired under the Offer to be voted in favour of such a transaction
and  to  be  counted as part of any minority or independent shareholder approval
that  may  be  required in connection with such a transaction. If Aspen takes up
and  pays  for at least 66.7% of the Endeavour Securities under the Offer, Aspen
will  own  sufficient  Endeavour  Securities  to effect such a transaction.  See
"Acquisition  of  Endeavour  Securities  Not  Deposited"  in  the  Circular.


<PAGE>
                                        18


13.  MARKET  PURCHASES  AND  SALES  OF  ENDEAVOUR  SECURITIES

Aspen  has  no  current intention of acquiring beneficial ownership of Endeavour
Securities  while  this  Offer  is  outstanding  other  than as described in the
Circular  and pursuant to this Offer.  However, Aspen reserves the right to, and
may,  acquire  (or  cause  an  Affiliate  to  acquire)  beneficial  ownership of
Endeavour Shares by making purchases through the facilities of the CDNX, subject
to  applicable  law, at any time and from time to time prior to the Expiry Time.
In  no  event will Aspen make any such purchases of Endeavour Shares through the
facilities  of  the CDNX until the third clear trading day following the date of
the Offer.  If Aspen should acquire Endeavour Shares by making purchases through
the  facilities  of  the  CDNX  during the Offer Period, the Endeavour Shares so
purchased  shall  be  counted in any determination whether the Minimum Condition
has  been fulfilled.  The aggregate number of Endeavour Shares acquired by Aspen
through  the  facilities of the CDNX during the Offer Period shall not exceed 5%
of  the  outstanding Endeavour Shares as of the date of the Offer and Aspen will
issue  and  file a press release in Canada containing the information prescribed
by  law  forthwith  after the close of business of the CDNX on each day on which
such  Endeavour  Shares  have  been  purchased.

If  Aspen  so  purchases Endeavour Securities during the Offer Period other than
pursuant  to  the  Offer  for  an amount that is greater than the amount offered
pursuant to the Offer, Aspen will pay the increased consideration to each person
whose  Endeavour  Securities  are  taken  up  pursuant  to  the  Offer  and will
immediately  notify  the  Securityholders  of  the increased consideration being
offered  for  the  Endeavour  Securities.  For  the purposes of this Section 13,
"Aspen"  includes any person or company acting jointly or in concert with Aspen.

Although  Aspen  has  no current intention to sell Endeavour Securities taken up
under  the  Offer,  it  reserves the right to make or enter into an arrangement,
commitment  or  understanding  during  the  Offer  Period  to  sell  any of such
Endeavour  Securities  after  the  Offer  Period  subject  to  applicable  laws.

14.  OTHER  TERMS  OF  THE  OFFER

The  Offer  and  all  contracts  resulting  from  the acceptance hereof shall be
governed by and construed in accordance with the laws of the Province of Ontario
and  the  laws  of  Canada  applicable  therein.  Each  party  to  any agreement
resulting  from  the  acceptance  of  the  Offer unconditionally and irrevocably
attorns  to  the  jurisdiction  of the courts of the Province of Ontario and the
courts  of  appeal  thereof.

No broker, dealer or other person has been authorized to give any information or
make  any representation on behalf of Aspen other than as contained herein or in
the  Circular and, if given or made, such information or representation must not
be  relied  upon  as  having been authorized.  No broker, dealer or other person
shall  be  deemed to be the agent of Aspen or the Depositary for the purposes of
the  Offer.

The  provisions  of  the  Circular,  the Letter of Transmittal and the Notice of
Guaranteed Delivery accompanying the Offer, including the instructions contained
therein,  as  applicable,  form  part  of the terms and conditions of the Offer.

Aspen  shall,  in  its  sole discretion, be entitled to make a final and binding
determination  of all questions relating to the interpretation of the Offer, the
Circular,  the  Letter of Transmittal and the Notice of Guaranteed Delivery, the
validity  of  any  acceptance  of  the  Offer  and  any withdrawals of Endeavour
Securities,  including, without limitation, the satisfaction or non-satisfaction
of  any  condition,  the  validity,  time and effect of any deposit of Endeavour
Securities  or  notice  of  withdrawal  of  Endeavour  Securities  and  the  due
completion  and  execution  of  Letters of Transmittal and Notices of Guaranteed
Delivery.  The Offeror reserves the right to waive any defect in acceptance with
respect  to  any particular Endeavour Security or any particular Securityholder.
There  shall  be  no obligation on Aspen or the Depositary to give notice of any
defects  or irregularities in acceptance and no liabilities shall be incurred by
any  of  them  for  failure  to  give  any  such  notification.


<PAGE>
                                        19


The  Offer is not being made to, nor will deposits be accepted from or on behalf
of,  Securityholders  in  any  jurisdiction  in  which  the making or acceptance
thereof would not be in compliance with the laws of such jurisdiction.  However,
Aspen  may, in its sole discretion, take such action as it may deem necessary to
extend  the  Offer  to holders of Endeavour Securities in any such jurisdiction.

Aspen  reserves  the  right  to  transfer to one or more Affiliates the right to
purchase  all  or  any portion of the Endeavour Securities deposited pursuant to
the Offer, but any such transfer will not relieve Aspen of its obligations under
the  Offer  and  will  in  no  way  prejudice  the  rights of persons depositing
Endeavour  Securities  to  receive  payment  for  Endeavour  Securities  validly
deposited  and  accepted  for  payment  pursuant  to  the  Offer.

The  Offer  and  the  accompanying  Circular and the other documents referred to
above  constitute  the take-over bid circular required under Canadian provincial
securities  legislation  with  respect  to  the  Offer.

DATED this 23rd day of November, 2001.

                                       ASPEN GROUP RESOURCES CORPORATION

                                       By:    "Jack  E.  Wheeler"
                                              ----------------------------------
                                              Jack E. Wheeler, Chairman and CEO


THE  ACCOMPANYING  CIRCULAR,  LETTER  OF  TRANSMITTAL  AND  NOTICE OF GUARANTEED
DELIVERY  ARE INCORPORATED INTO AND FORM PART OF THE OFFER AND CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE MAKING A DECISION WITH RESPECT
TO  THE  OFFER.


<PAGE>
                                        20


                                    CIRCULAR
INTRODUCTION

This  Circular  is supplied with respect to the accompanying Offer made by Aspen
to  purchase  all  of  the  issued  and  outstanding  Endeavour  Securities.

The terms, conditions and provisions of the Offer are incorporated into and form
part  of this Circular. Securityholders should refer to the Offer for details of
the  terms  and  conditions  of the Offer, including details as to the manner of
payment  and  withdrawal  rights.  Terms defined in the Offer but not defined in
this  Circular  have  the same meaning herein as in the Offer unless the context
otherwise  requires.

BACKGROUND  TO  AND  REASONS  FOR  THE  OFFER

BACKGROUND  TO  THE  OFFER

In  June,  2001  Aspen  and  Endeavour  entered into a confidentiality agreement
pursuant  to  which  each  party  agreed  to  keep confidential any confidential
information  provided to it by the other party in connection with the evaluation
of  a  transaction  involving  the two companies. Following the execution of the
confidentiality  agreement,  Aspen  and Endeavour started exchanging information
and  negotiations  continued.

REASONS  FOR  THE  OFFER

Aspen  wishes  to  acquire  Endeavour  in  order  to  increase  its  oil and gas
production, and to acquire the growth potential of the oil and gas production in
Endeavour.  Aspen's  management  views  the  acquisition  of  Endeavour  as  an
opportunity to acquire competent and experienced management personnel in Canada,
along  with  access  to  the  Canadian  market  place  through  increased market
recognition  from  the  Canadian  oil and gas properties of Endeavour.  Finally,
Aspen  will  enjoy the higher rate of production in the Canadian assets owned by
Endeavour  which  will  in  turn  increase  the  cash  flow  of  Aspen.

PRE-ACQUISITION  AGREEMENT

Pursuant  to  the  Pre-Acquisition Agreement, Aspen agreed to make the Offer and
Endeavour  represented  that  its board of directors, upon consultation with its
advisors,  has determined that: (i) the Offer is fair to the Securityholders and
is in the best interests of Endeavour and the Securityholders, (ii) the board of
directors will recommend that Securityholders accept the Offer unless a superior
competing  bid materializes; (iii) the Pre-Acquisition Agreement was in the best
interests  of Endeavour and the Securityholders; and (iv) the individual members
of the board of directors who beneficially hold Endeavour Securities have agreed
to  deposit  their Endeavour Securities under the Offer.  In addition, Endeavour
represented that its board of directors had received an opinion from Endeavour's
financial  advisors  to the effect that the Offer is fair from a financial point
of  view  to  the  Securityholders.

Pursuant  to  the  Pre-Acquisition  Agreement,  Aspen and Endeavour made certain
covenants,  representations  and  warranties  with  and  to  each  other.

Endeavour's  covenants,  representations  and  warranties included the following
matters:

(a)  Endeavour  agreed  to cooperate with Aspen to take all reasonable action to
     support the Offer and to use all reasonable efforts to make all filings and
     obtain all consents necessary or desirable in connection with the Offer and
     the  transactions  contemplated  by  the  Pre-Acquisition  Agreement.

(b)  Endeavour agreed and represented that its board of directors had determined
     to use its and their respective reasonable efforts to enable Aspen to elect
     or  appoint all of the directors of Endeavour in accordance with the Voting
     Agreement  as  soon  as possible after Aspen takes up and pays for at least
     50.01%  of  the  Endeavour  Securities  pursuant  to  the  Offer.


<PAGE>
                                        21


(c)  Endeavour  agreed  that during the term of the Pre-Acquisition Agreement it
     would  continue  in  the  ordinary  course  of  business and would not, for
     example,  declare or pay any dividend or otherwise make any distribution to
     its  shareholders, issue or enter into any agreement to issue any shares of
     other  securities  of Endeavour or its subsidiaries, merge or permit any of
     its subsidiaries to merge with any other entity or otherwise enter into any
     transaction  or negotiation which could reasonably be expected to interfere
     or  be  inconsistent with the consummation of the transactions contemplated
     by  the Offer, amend or permit any of its subsidiaries to amend it articles
     or  by-laws,  or  borrow  any  amounts great then $10,000 other than in the
     ordinary  course  of  business.

(d)  Endeavour  made  representations  and  warranties  as to its authorized and
     issued  share  capital,  its  convertible  securities and its subsidiaries.

Aspen's  covenants,  representations  and  warranties  included  the  following
matters:

(a)  Aspen  agreed  to  make  all  filings  and obtain all consents necessary or
     desirable in connection with the Offer and the transactions contemplated by
     the  Pre-Acquisition  Agreement.

(b)  Aspen  acknowledged  the  obligation  of  Endeavour and its subsidiaries to
     honour  and  comply  with  the  terms of existing employment and consulting
     agreements  of  Endeavour  and  its  subsidiaries.

(c)  Aspen agreed that during the term of the Pre-Acquisition Agreement it would
     continue  in  the  ordinary  course of business and would not, for example,
     declare  or  pay  any  dividend  or  otherwise make any distribution to its
     shareholders,  issue  or  enter  into  any agreement to issue any shares of
     other  securities  of Endeavour or its subsidiaries, merge or permit any of
     its subsidiaries to merge with any other entity or otherwise enter into any
     transaction  or negotiation which could reasonably be expected to interfere
     or  be  inconsistent with the consummation of the transactions contemplated
     by  the Offer, amend or permit any of its subsidiaries to amend it articles
     or  by-laws,  or  borrow  any  amounts great then $10,000 other than in the
     ordinary  course  of  business.

(d)  Aspen  made  representations and warranties as to its authorized and issued
     share capital, its convertible securities, the reservation of securities to
     effect payment pursuant to the Offer, and the absence of certain securities
     and  corporate  approvals  or  consents.

The  Pre-Acquisition  Agreement provides that Endeavour shall pay Aspen a fee of
US$500,000  if  the board of directors of Endeavour withdraws its recommendation
that  the  Securityholders accept the Offer or if, prior to Aspen acquiring more
than 50% of the Endeavour Securities, a third party acquires more than 50.01% of
the  Endeavour  Securities  pursuant to any transaction on or before January 31,
2002.

The  Pre-Acquisition  Agreement provides that Aspen shall pay Endeavour a fee of
US$500,000  if  Aspen fails to acquire more than 50% of the Endeavour Securities
prior  to January 31, 2002 (provided all conditions in favour of Aspen have been
met  and that the failure does not result from a material breach by Endeavour of
its  representations and warranties under the Pre-Acquisition Agreement) or if a
third  party  acquires  or offers to acquire more than 50.01% of the outstanding
shares  of  Aspen.

The  Pre-Acquisition  Agreement provides that it will terminate automatically on
January  31,  2002 or earlier in certain events such as if the Offer expires and
Aspen  has not purchased Endeavour Securities pursuant to the Offer or if either
of  the  fees  referenced  above  become  payable  by either Aspen or Endeavour.

LOCK-UP  AND  BREAK-UP  FEE  AGREEMENT

Pursuant  to  the  Lock-Up  and Break-Up Fee Agreement, Aspen agreed to make the
Offer  and  the  Selling Securityholders to tender their Endeavour Securities to
the  Offer.  The Selling Securityholders collectively hold a total of 19,419,873
Endeavour Shares, representing approximately 48.9% of the issued and outstanding
voting  securities  of  Endeavour.

Pursuant to the Lock-Up and Break-Up Fee Agreement, the Selling Securityholders,
Aspen  and Endeavour made certain covenants, representations and warranties with
and  to  each  other.


<PAGE>
                                        22


The  Selling  Securityholders represented and warranted that each of them is the
beneficial  owner  of  the  number  of Endeavour Securities which they agreed to
tender  to  the  Offer,  with  good  and  marketable title free and clear of any
encumbrances, and further agreed that they would not transfer such securities to
any person other than to Aspen.  The Selling Shareholders also agreed to support
and vote in favour of the Offer and not to take any steps which may, directly or
indirectly, diminish in any manner the likelihood of the completion of the Offer
and  to  use  their  best  efforts  to  cause  Endeavour  to obtain all required
approvals  with  respect  to  the  Offer.

For its part, Endeavour made representations and warranties as to its authorized
and  issued  share capital and its convertible securities.  It also  agreed that
until  the  closing  of  Offer  it would not issue any securities other than the
issuance  of  securities  pursuant  to  the  exercise  of  the Endeavour Special
Warrants  or  any  other  currently  outstanding  options  or  warrants.

The  Selling Securityholders, Endeavour and Endeavour's subsidiaries agreed that
neither  of  them  would,  directly  or indirectly, continue, solicit, initiate,
authorize, encourage or engage in any Alternate Transaction (which term includes
(i)  any  inquiries,  offers or proposals from, or negotiations with, any person
other  than  Aspen  relating  to  the  acquisition  or  disposition of assets or
securities of Endeavour; (ii) any amalgamation, merger or other form of business
combination  involving  Endeavour  with  any  person other than Aspen; (iii) any
sale,  lease,  exchange  or  transfer of all or substantially all of Endeavour's
assets  or  entering  into  of  any  long-term  contract  or the increase of any
employee  benefits; or (iv) any take-over bid, reorganization, recapitalization,
liquidation, winding-up of, or other business combination or similar transaction
involving,  Endeavour).  and  that  neither  would  any  of  them enter into any
agreement,  discussion  or  negotiations  with  any person other than Aspen with
respect  to  an  Alternate  Transaction  or  potential  Alternate Transaction of
furnish  or  cause  to  be  furnished  any  non-public  information  concerning
Endeavour's  condition  (financial  or  other),  business, properties, assets or
prospects  to  any person other than Aspen relating to an Alternate Transaction.
Such  parties  also  agreed  to  notify Aspen if any discussions or negotiations
relating  to a possible Alternate Transaction are sought or maintained or if any
proposal in respect of an Alternate Transaction is received, being considered or
indicated to be forthcoming from any person other than Aspen.  Furthermore, such
parties  agreed  to  use  their  best  efforts to cause the directors, officers,
employees,  representatives,  agents,  advisors,  accountants  and  attorneys of
Endeavour  not  directly  or  indirectly  to  take  any  of  the  above actions.

Aspen acknowledged that, pursuant to the terms of the Pre-Acquisition Agreement,
Endeavour  could  terminate  the  Pre-Acquisition  Agreement and the Lock-Up and
Break-Up Fee Agreement upon payment to Aspen of a break-up fee of US$500,000 and
that  in  certain  events,  Aspen  would  pay  to  Endeavour  a  break-up fee of
US$500,000.

Certain  of  the Selling Securityholders waived certain rights of themselves and
related entities under agreements with Endeavour which rights arise in the event
of  a  change  in  control  of  Endeavour.

VOTING  AGREEMENT

Jeffrey  J.  Chad,  Allan J. Kent, Robert D. Cudney, Jack E. Wheeler, Randall B.
Kahn,  567895  Alberta  Ltd.,  DI  Investments  Ltd.,  Pachanga  Corp.,  Riechad
Incorporated,  615433  Alberta  Ltd. and Northfield Capital Corporation, entered
into  the  Voting  Agreement  in  order  to  establish the basis upon which such
persons  would vote their shares in Aspen following the completion of the Offer.
Upon  completion  of  the  Offer,  assuming  that  all  Endeavour Securities are
tendered  to  the  Offer  and  taken up and paid for by Aspen, such persons will
hold,  directly  or  indirectly,  an  aggregate  of  5,912,177  Aspen  Shares
representing  18.4%  of  the  issued  and  outstanding  Aspen Shares.  Aspen and
Endeavour  are  also  parties  to  the  Voting  Agreement.

Pursuant  to  the  Voting Agreement, each of the parties to the Voting Agreement
(other  than  Aspen  and  Endeavour)  agreed  that:

(a)  at every meeting of shareholders of Aspen, at every adjournment thereof and
     on  every  action or approval for the election of the board of directors of
     Aspen,  such  persons  would  exercise  the  voting  rights attached to all
     securities  of  Aspen then owned by him, her or it or over which he, she or
     it exercises control as at the date and time of the exercise of such voting
     rights in favour of Allan J. Kent for election to the board of directors of
     Aspen,  and,  other  than  Jack  E.  Wheeler and Randall B. Kahn, all other
     parties  would  not vote against each of Jack E. Wheeler or Randall B. Kahn
     for  election  to  the  board  of  directors  of  Aspen;


<PAGE>
                                        23


(b)  at every meeting of shareholders of Aspen, at every adjournment thereof and
     on  every  action or approval for the election of the board of directors of
     Aspen,  such  persons  would  exercise  the  voting  rights attached to all
     securities  of  Aspen then owned by him, her or it or over which he, she or
     it exercises control as at the date and time of the exercise of such voting
     rights, to cause the board of directors, officers and employees of Aspen to
     exercise  the  voting  rights  attached to all securities of Endeavour then
     owned by Aspen in favour of each of Jeffrey J. Chad, Allan J. Kent and Jack
     E.  Wheeler  for  election  to  the  board  of  directors  of  Endeavour;

(c)  at every meeting of directors of Aspen, at every adjournment thereof and on
     every  action  or  approval  for  the election of the board of directors of
     Endeavour,  such persons would use their best efforts to cause the board of
     directors of Aspen to exercise the voting rights attached to all securities
     of  Endeavour  then  owned  by  Aspen in favour of each of Jeffrey J. Chad,
     Allan J. Kent and Jack E. Wheeler for election to the board of directors of
     Endeavour;  and

(d)  at every meeting of shareholders of Endeavour, at every adjournment thereof
     and  on every action or approval for the election of the board of directors
     of Endeavour, such persons would exercise the voting rights attached to all
     securities  of Endeavour then owned by him, her or it or over which he, she
     or  it  exercises  control  as at the date and time of the exercise of such
     voting  rights in favour of each of Jeffrey J. Chad, Allan J. Kent and Jack
     E.  Wheeler  for  election  to  the  board  of  directors  of  Endeavour.

Each  of  the  parties  to the Voting Agreement (other than Aspen and Endeavour)
also  agreed not to sell, transfer, dispose of or in any way alienate any of the
Aspen  Shares, without the express prior written consent of all of the others of
them  prior  to December 31, 2002 and thereafter, in amounts in excess of twenty
percent  (20%)  per  year of the original number of Aspen Shares held by them on
completion  of  the  Offer.

The  parties'  covenants pursuant to the Voting Agreement remain in effect until
the  earliest  of  the  date  that  all  parties  agree  to terminate the Voting
Agreement, December 31, 2006 or the failure of Aspen to acquire more than 50.01%
of the Issued and outstanding shares of Endeavour on or before December 31, 2001
(provided  that  if  at  any time after January 31, 2002 any of Jeffrey J. Chad,
Allan  J.  Kent,  Jack  E. Wheeler or Randall B. Kahn ceases to be an officer or
director of Aspen or one of its subsidiaries then such person, together with any
other  corporate  party  to  the  Voting  Trust  controlled  by such person, may
withdraw  from  the  Voting  Agreement.

PURPOSE  OF  THE  OFFER  AND  PLANS  FOR  ENDEAVOUR

PURPOSE  OF  THE  OFFER

The  purpose of the Offer is to enable Aspen to acquire control or to own all of
the  outstanding  Endeavour Securities. The acquisition will be realized through
the  exchange  of  Endeavour  Securities for Aspen Shares. If Aspen takes up and
pays  for  Endeavour  Securities  validly deposited pursuant to the Offer, Aspen
intends  to  acquire  the  remaining Endeavour Securities through the Compulsory
Acquisition  provisions  of  the  ABCA  or,  if  Aspen's  right  of  Compulsory
Acquisition  is  not  available  thereunder,  then  pursuant  to  a  Subsequent
Acquisition  Transaction. See Section 12 of the Offer, "Acquisition of Endeavour
Securities  Not  Deposited"  and  "Acquisition  of  Endeavour  Securities  Not
Deposited"  in  the  Circular.

PLANS  FOR  ENDEAVOUR

If  the  Offer  is  successful,  Aspen  will  review  the operations, assets and
business  of  Endeavour.  It is expected that Endeavour will continue to operate
as a Subsidiary of Aspen.  It is also expected that certain changes will be made
to  the  composition of the board of directors of Endeavour to allow nominees of
Aspen  to  become  members  of  such  board, all in a manner consistent with the
Voting  Agreement.


<PAGE>
                                        24


If permitted by applicable law, subsequent to the completion of the Offer or any
Compulsory  Acquisition  or Subsequent Acquisition Transaction, Aspen intends to
delist the Endeavour Shares from the CDNX, and to cause Endeavour to cease to be
a  reporting issuer under the securities laws of each of the provinces of Canada
in which it currently holds such status.  See "Effect of the Offer on Market and
Listings"  in  the Circular.  The effect of these actions will be that Endeavour
will  no  longer  be  required  to  publicly file or provide to security holders
financial  information  or  timely  disclosure  in  Canada  with  respect to its
affairs.

OWNERSHIP  OF  SECURITIES  OF  ENDEAVOUR

Other  than  pursuant  to  the Lock-Up and Break-Up Fee Agreement and the Voting
Agreement, neither Aspen nor any director of officer of Aspen beneficially owns,
directly  or  indirectly,  or  controls  or exercises direction over, or has the
right  to  acquire, any Endeavour Securities.  To the knowledge of the directors
and  senior  officers  of  Aspen,  after  reasonable  inquiry,  no securities of
Endeavour are owned by, directly or indirectly, nor is control or direction over
any  securities  of Endeavour exercised by, any Associate or Affiliate of Aspen,
by  any  Associate  of  any  director  or  officer of Aspen, or by any person or
company  who  beneficially  owns,  directly  or indirectly, more that 10% of any
class  of  equity  securities  of  Aspen.  There  is no person or company acting
jointly  or  in concert with Aspen in connection with the transactions described
in  the  Offer  and  this  Circular.

TRADING  IN  SECURITIES  OF  ENDEAVOUR

During  the  six-month  period preceding the date of the Offer, no securities of
Endeavour  have  been traded by Aspen or any director or officer of Aspen or, to
the  knowledge  of  the directors and senior officers of Aspen, after reasonable
inquiry,  by  any  Associate  or  Affiliate  of  Aspen,  by any Associate of any
director  or  officer  of Aspen, by any person or company who beneficially owns,
directly or indirectly, more than 10% of any class of equity securities of Aspen
or  by  any  person  or  company  acting  jointly  or  in  concert  with  Aspen.

COMMITMENTS  TO  ACQUIRE  SECURITIES  OF  ENDEAVOUR

Other  than  pursuant  to  the  Pre-Acquisition  Agreement  and  the Lock-up and
Break-Up  Fee  Agreement,  neither  Aspen  nor  any  of  its directors or senior
officers  has  any  commitment to acquire equity securities of Endeavour and, to
the knowledge of such directors and senior officers after reasonable inquiry, no
Associates  of the directors and senior officers of Aspen, any person or company
acting  jointly  or  in  concurrent  with  Aspen  or  any  person or company who
beneficially  owns, directly or indirectly, more than 10% of any class of equity
securities  of  Aspen.

ARRANGEMENTS,  AGREEMENTS  OR  UNDERSTANDINGS

Other  than  the  Pre-Acquisition  Agreement,  the  Lock-Up  and  Break-Up  Fee
Agreement,  the  Voting Agreement, and as set out below, there are no contracts,
arrangements  or  agreements  made  or  proposed to be made between Aspen or its
Affiliates  and  any  of  the  directors  or senior officers of Endeavour and no
payments  or  other  benefits  are  proposed  to  be  made  or  given  by way of
compensation  for  loss  of  office  or  as to such directors or senior officers
remaining in or retiring from office if the Offer is successful and there are no
contracts, arrangements or understandings, formal or informal, between Aspen and
any  security  holder  of  Endeavour  in  relation  to  the  Offer.

Pursuant  to the Pre-Acquisition Agreement, Aspen agreed that, after Aspen takes
up  and  pays  for  at  least 50.01% of the Endeavour Securities pursuant to the
Offer,  Endeavour  will  honour  and  comply  with  the  terms  of  the existing
consulting,  employment  and  severance  agreements  of  Endeavour  and  its
subsidiaries  as  more  particularly described in the Pre-Acquisition Agreement.

There  are no business relationships between Aspen, its Associates or Affiliates
and  Endeavour  that  are  material  to  any  of  them with the exception of the
Pre-Acquisition Agreement, the Lock-Up and Break-Up Fee Agreement and the Voting
Agreement.


<PAGE>
                                        25


MATERIAL  CHANGES  IN  THE  AFFAIRS  OF  ENDEAVOUR  AND  OTHER  INFORMATION

Except  as  disclosed  herein  or in the Directors' Circular of Endeavour, Aspen
does not have any information which indicates any material change in the affairs
of Endeavour since June 30, 2001, the date of the latest financial statements of
Endeavour, being the unaudited interim consolidated financial statements for the
six  months  then  ended.  Aspen does not have any knowledge of any other matter
that  has  not previously been generally disclosed but which would reasonably be
expected  to  affect  the  decision  of  Securityholders to accept or reject the
Offer.

ACCEPTANCE  OF  THE  OFFER

Other  than  as  a  result  of  the  Pre-Acquisition  Agreement, the Lock-Up and
Break-Up  Fee  Agreement  and as described in the Offer and this Circular, Aspen
has  no  knowledge  regarding  whether  Securityholders  will  accept the Offer.

Aspen  has  been  informed  by  Endeavour  that  all of the directors and senior
officers of Endeavour and, to the knowledge of the directors and senior officers
of  Endeavour,  after  reasonable  enquiry,  their respective Associates who own
Endeavour  Securities,  intend  to deposit to the Offer all Endeavour Securities
which are owned or over which control or direction is exercised by such persons.

EFFECT  OF  THE  OFFER  ON  MARKET  AND  LISTINGS

The  purchase of Endeavour Securities by Aspen pursuant to the Offer will reduce
the  number of Endeavour Securities that might otherwise trade publicly, as well
as  the  number  of  Securityholders,  and,  depending  on the number of holders
depositing  and  the  number  of Endeavour Securities purchased under the Offer,
could adversely affect the liquidity and market value of the remaining Endeavour
Securities  held  by the public.  After the purchase of the Endeavour Securities
under  the  Offer, Endeavour may cease to be subject to the public reporting and
proxy  solicitation  requirements of the ABCA and the securities laws of certain
provinces  of  Canada.

The  rules  and regulations of the CDNX establish certain criteria which, if not
met,  could  lead  to  the delisting of the Endeavour Shares from such exchange.
Among such criteria are the number of holders of Endeavour Shares, the number of
Endeavour  Shares  publicly held and the aggregate market value of the Endeavour
Shares  publicly  held.  Depending  on  the number of Endeavour Shares purchased
pursuant  to  the  Offer, it is possible that the Endeavour Shares would fail to
meet  the  criteria  for continued listing on the CDNX.  If this were to happen,
the Endeavour Shares could be delisted and this could, in turn, adversely affect
the  market  or  result  in  a  lack of an established market for such Endeavour
Shares.  It  is  the  intention of Aspen to apply to delist the Endeavour Shares
from  the  CDNX  as soon as practicable after the completion of the Offer or any
Compulsory  Acquisition  or  Subsequent  Acquisition  Transaction,  if required.

ACQUISITION  OF  ENDEAVOUR  SECURITIES  NOT  DEPOSITED

The  purpose  of  the Offer is to enable Aspen to acquire all of the outstanding
Endeavour Securities.  If Aspen takes up and pays for Endeavour Securities under
the Offer, Aspen intends to utilize the compulsory acquisition provisions of the
ABCA,  if  available,  to  acquire  the  remaining  Endeavour  Securities or, if
necessary,  to  acquire  such  remaining  Endeavour  Securities  pursuant  to  a
Subsequent  Acquisition  Transaction,  as  discussed  below.


<PAGE>
                                        26


COMPULSORY  ACQUISITION

Section  188  of  the  ABCA  provides  that  if  at least 90% of the outstanding
Endeavour  Securities  not  owned by or on behalf of Aspen or an Affiliate or an
Associate  of  Aspen  are validly tendered pursuant to the Offer (such purchased
Endeavour  Securities  being referred to herein as "ACCEPTED SECURITIES"), Aspen
may,  but  is  not obligated to, acquire the remaining Endeavour Securities.  In
such  event,  Aspen  could  send  by registered mail to each holder of remaining
Endeavour  Securities, on or before the earlier of 60 days after the Expiry Date
or  180  days  after  the  date  hereof,  notice of its intention to acquire the
remaining  Endeavour  Securities  on  the terms of the Offer and pursuant to the
provisions  of  Part  16 of the ABCA.  Any such holder will be required to elect
within 60 days after the date of sending of such notice by Aspen (i) to transfer
such  holder's  remaining  Endeavour  Securities  to Aspen on the terms on which
Aspen  acquired  the  Accepted Securities, or (ii) to demand payment of the fair
value  thereof  by  notifying  Aspen  and by applying to a court to fix the fair
value  of  the  holder's  remaining Endeavour Securities.  A holder of remaining
Endeavour  Securities  who fails to notify Aspen and apply to a court to fix the
fair value of the holder's remaining Endeavour Securities will be deemed to have
elected  to transfer the holder's remaining Endeavour Securities to Aspen on the
terms  set  forth in the Offer.  It is Aspen's current intention to exercise the
foregoing  compulsory purchase right in the event it acquires 90% of more of the
Endeavour  Securities under the Offer.  If Aspen does not exercise such right or
proceed  with  a Subsequent Acquisition Transaction, as described below, holders
of  Endeavour  Securities  who do not tender under the Offer may remain minority
shareholders  in  Endeavour.

THE  FOREGOING  IS  A SUMMARY OF THE RIGHT OF ACQUISITION AVAILABLE TO ASPEN AND
THE  RIGHT  OF  APPRAISAL  AVAILABLE  TO  SECURITYHOLDERS.  THE  SUMMARY  IS NOT
INTENDED  TO  BE  COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY THE PROVISIONS OF
PART  16  OF  THE ABCA.  SECURITYHOLDERS SHOULD REFER TO PART 16 OF THE ABCA FOR
THE  FULL  TEXT  OF  THE  RELEVANT STATUTORY PROVISIONS AND THOSE WHO WISH TO BE
BETTER  INFORMED ABOUT THOSE PROVISIONS SHOULD CONSULT THEIR OWN LEGAL ADVISORS.
THE  PROVISIONS  OF  PART  16  OF  THE  ABCA  ARE COMPLEX AND MAY REQUIRE STRICT
ADHERENCE TO NOTICE AND TIMING PROVISIONS, FAILING WHICH SUCH RIGHTS MAY BE LOST
OR  ALTERED.

SUBSEQUENT  ACQUISITION  TRANSACTION

If  Aspen takes up and pays for Endeavour Securities validly deposited under the
Offer  and  the  foregoing  statutory  right  of  Compulsory  Acquisition is not
available  or  Aspen elects not to pursue such right, Aspen currently intends to
pursue  other  means  of  acquiring,  directly  or indirectly, all the Endeavour
Securities  in  accordance with applicable law, including by way of a Subsequent
Acquisition  Transaction,  as  described below.  In order to effect a Subsequent
Acquisition  Transaction,  Aspen  may  seek  to  cause  a special meeting of the
holders  of  Endeavour  Securities  to  be  called  to consider an amalgamation,
statutory  arrangement,  capital  reorganization  or other transaction involving
Aspen,  or  an  Affiliate of Aspen, and Endeavour or the Securityholders for the
purposes  of  Endeavour  becoming,  directly  or  indirectly,  a  wholly-owned
Subsidiary  of  Aspen, of an Affiliate of Aspen, or effecting an amalgamation or
merger of Endeavour's business and assets with or into Aspen, or an Affiliate of
Aspen.  Aspen  would  cause  Endeavour Securities acquired under the Offer to be
voted  in  favour  of  any Subsequent Acquisition Transaction and, to the extent
permitted  by  law,  to  be  counted  as  part  of  any  minority or independent
shareholder approval that may be required in connection with such a transaction.

The  timing  and  details  of  any such transaction will necessarily depend on a
variety  of  factors,  including  the  number  of  Endeavour Securities acquired
pursuant  to  the  Offer.  In  the  event  of  any  such  Subsequent Acquisition
Transaction,  Securityholders,  other  than  Aspen and its Affiliates, could, in
accordance  with  Canadian  law,  receive cash, shares (which may be immediately
redeemable  for  cash),  debt  or  any  combination  thereof.  The consideration
offered  to Securityholders in a Subsequent Acquisition Transaction could have a
higher  or  lower  value  than  the  value  of the consideration offered for the
Endeavour  Securities  pursuant  to  the  Offer.

Any  such  Subsequent Acquisition Transaction may also result in Securityholders
having  the  right  to dissent in respect thereof and demand payment of the fair
value  of their Endeavour Securities.  The exercise of such right of dissent, if
certain  procedures  are  complied  with by the holder, could lead to a judicial
determination  of  fair  value  required  to  be  paid  to  such  dissenting
Securityholder  for  his  or  her  Endeavour  Securities.  The  fair  value  so
determined  could  be  more  or less than the amount paid per Endeavour Security
pursuant  to  such  transaction  or  pursuant  to  the  Offer.


<PAGE>
                                        27


The tax consequences to a Securityholder of a Subsequent Acquisition Transaction
may  differ  from  the  tax consequences to such Securityholder of accepting the
Offer.  See  "Canadian  Federal  Income  Tax  Considerations".

OSC Rule 61-501 may deem certain types of Subsequent Acquisition Transactions to
be  "going  private  transactions"  if  such Subsequent Acquisition Transactions
would  result in the interest of a holder of Endeavour Securities (the "affected
securities")  being terminated without the consent of the holder and without the
substitution  therefor  of  an  interest  of equivalent value in a participating
security  of Endeavour, a successor to the business of Endeavour or a person who
controls  Endeavour  or  a  person  who  controls a successor to the business of
Endeavour.  Such  methods  of  acquiring  the  remaining  outstanding  Endeavour
Securities  may  also be a "related party transaction" within the meaning of OSC
Rule  61-501.

OSC Rule 61-501 provides that, unless exempted, a corporation proposing to carry
out  a  going  private transaction or a related party transaction is required to
prepare  a  valuation of the affected securities (and any non-cash consideration
being  offered therefor) and provide to the holders of the affected securities a
summary  of  such  valuation.  If  Aspen  decides  to  effect  a  going  private
transaction  or  a  related  party  transaction,  Aspen  intends to seek waivers
pursuant  to  OSC Rule 61-501 exempting Endeavour or Aspen or its Affiliates, as
appropriate,  from the requirement to prepare a valuation in connection with any
such  transaction  proposed  by  Aspen.

OSC  Rule  61-501  would  also  generally require that, in addition to any other
required  securityholder  approval,  in  order  to  complete  a  going  private
transaction,  the  approval of a simple majority of the votes cash by "minority"
holders  of  each  class of affected securities be obtained.  In relation to the
Offer  and  any  Subsequent  Acquisition  Transaction  which constitutes a going
private  transaction  (or  a related party transaction within the meaning of OSC
Rule  61-501),  the "minority" holders will be, unless an exemption is available
or  discretionary  relief  is granted by the OSC, all Securityholders other than
Aspen,  and "interested party" or any person or company who is a "related party"
of  Aspen for the purposes of OSC Rule 61-501, including any directors, officers
or  other  insiders  of  Aspen,  or  any  person or company acting jointly or in
concert  with Aspen or any Affiliate of the foregoing.  However, OSC Rule 61-501
also provides that Aspen may treat Endeavour Securities acquired pursuant to the
Offer  as  "minority" shares and to vote them, or to consider having them voted,
in  favour  of  such  going  private  (or  related  party)  transaction  if  the
consideration  per  security in the going private (or related party) transaction
is  at  least equal in value to, and in the same form as, the consideration paid
under  the  Offer.  Aspen currently intends that the consideration offered under
any  Subsequent Acquisition Transaction proposed by it would be identical to the
consideration  offered  under  the  Offer  and  Aspen intends to cause Endeavour
Securities  acquired  under  the  Offer  to  be  voted  in  favour  of  any such
transaction  and  to  be  counted  as  part of any minority approval required in
connection  with  any  such  transaction.

In  addition,  under  OSC  Rule  61-501,  if, following the Offer, Aspen and its
Affiliates are the registered holders of 90% or more of the Endeavour Securities
at the time the Subsequent Acquisition Transaction is initiated, the requirement
for  minority  approval  would  not  apply  to the transaction if an enforceable
appraisal  right  or  substantial  equivalent  right  is  made  available to the
minority  shareholders.

Any  Subsequent  Acquisition  Transaction carried out by Aspen will likely be by
way  of  an amalgamation or a statutory arrangement pursuant to which Aspen or a
successor corporation would acquire all Endeavour Securities not tendered to the
Offer.

The details of any such Subsequent Acquisition Transaction, including the timing
of  its  implementation  and  the  consideration  to be received by the minority
Securityholders,  would  necessarily  be  subject to a number of considerations,
including  the  number  of  Endeavour Securities acquired pursuant to the Offer.
There  can  be  no  assurance  that any such transaction will be proposed or, if
proposed, effected.  Securityholders should consult their own legal advisors for
a  determination  of their legal rights with respect to a Subsequent Acquisition
Transaction  if  and  when  proposed.


<PAGE>
                                        28


OTHER  ALTERNATIVES

If  Aspen  proposes  a  Subsequent  Acquisition  Transaction but cannot promptly
obtain  any  required  approval,  or  otherwise  does  not complete a Subsequent
Acquisition  Transaction,  Aspen  will  evaluate  its  other alternatives.  Such
alternatives  could  include,  to  the  extent  permitted  by  applicable  law,
purchasing  additional  Endeavour  Securities  in  the open market, in privately
negotiated transactions, in another takeover bid or exchange offer or otherwise,
or  taking  no  further  action to acquire additional Endeavour Securities.  Any
additional  purchase  of  Endeavour Securities could be at a price greater than,
equal  or  less than the price to be paid for the Endeavour Securities under the
Offer  and  could  be  for  cash  and/or  Aspen  Shares  or other consideration.
Alternatively,  Aspen  may  sell  or  otherwise  dispose of any or all Endeavour
Securities  acquired  pursuant to the Offer or otherwise.  Such transactions may
be  effected  on  terms  and at a price then determined by Aspen, which may vary
from  the  price  paid  for  Endeavour  Securities  under  the  Offer.

JUDICIAL  DEVELOPMENTS

Certain  judicial  decisions  may  be  considered  relevant  to  any  Subsequent
Acquisition  Transaction  which  may  be  proposed or effected subsequent to the
expiry of the Offer.  Prior to the pronouncement of Rule 61-501, Canadian courts
have,  in  a  few  instances,  granted  preliminary  injunctions  to  prohibit
transactions  which  constituted "going private transactions" within the meaning
of  OSC  Rule  61-501.

In  two  decisions  in  1978,  the  Supreme Court of Ontario restrained proposed
amalgamations  which would have had the effect of eliminating the interest which
minority  shareholders held in one of the amalgamating corporations, without the
minority shareholders having been offered the opportunity to receive in exchange
participating  securities issued by the amalgamated corporation, an Affiliate or
a  successor  body  corporate,  with  the  result  that the existing controlling
shareholder  would  become  the  sole holder of common shares of the amalgamated
corporation.  See  Carlton  Realty Ltd. v. Maple Leaf Mills Ltd. (1978), 22 O.R.
(2d) 198 and Alexander v. Westeel-Rosco Ltd. (1978), 22 O.R. (2d) 211.  In light
of  the  specific regulatory framework governing "going private transactions" in
OSC  Rule  61-501  and  the  decision  of the Supreme Court of Ontario in Lornex
described  below,  the decisions in Maple Leaf Mills and Westeel-Rosco may be of
limited relevance to any Subsequent Acquisition Transaction that may be effected
by  Aspen  subsequent  to  the  Offer.

In  General  Accident  Assurance  Company of Canada v. Lornex Mining Corporation
Ltd.  (1988),  66  O.R. (2d) 783, the Supreme Court of Ontario declined to grant
injunctive  relief  to  a  minority  shareholder  of Lornex seeking to prevent a
proposed  amalgamation  squeeze-out  transaction which was to follow a take-over
bid  made  through the facilities of the Vancouver Stock Exchange.  The minority
shareholder  also  sought  an  order declaring that the minority shareholders of
Lornex  were  entitled  to  vote separately as a class in approving the proposed
amalgamation. Lornex was not an "offering corporation" as defined in the OBCA so
the  "going private transaction" provisions of Section 190 of the OBCA were held
to  be  not applicable to it.  The Court held that the proposed amalgamation did
not  contravene  the  relevant  provisions of the OBCA and that, in light of the
oppression  remedy  contained  in  the  OBCA,  the  OBCA  did not require that a
separate  class  vote  of the minority shareholders of Lornex be held to approve
the  amalgamation.  The  Court further held that the minority shareholder failed
to  establish  that  the  proposed  amalgamation  was  oppressive  or  unfairly
prejudicial  to  or unfairly disregarded the rights of the minority shareholders
of  Lornex.

Aspen  has  been  advised that the current trend, both in legislation and in the
United  States  jurisprudence  upon  which  the previous Canadian decisions were
based,  is  to  permit  "going  private  transactions"  to  proceed  subject  to
compliance  with  requirements  intended  to  ensure  procedural and substantive
fairness  to  the  minority  shareholders.

Securityholders should consult their legal advisors for a determination of their
legal  rights  with  respect  to  a  Subsequent  Acquisition  Transaction.


<PAGE>
                                        29


STOCK  EXCHANGE  LISTINGS

The  Aspen  Shares are listed for trading on the TSE and the OTCBB.  The TSE has
conditionally  approved the listing of the Aspen Shares issuable pursuant to the
Offer,  subject  to  the  fulfilment  of  its  requirements.

DEPOSITARY

Aspen  has  engaged the Depositary for the receipt of certificates in respect of
Endeavour  Securities  and  related  Letters  of  Transmittal  and  Notices  of
Guaranteed  Delivery  deposited  under  the  Offer  and  to make the payment for
Endeavour  Securities  purchased by Aspen pursuant to the Offer.  The Depositary
will receive reasonable and customary compensation from Aspen for their services
in  connection  with  the  Offer,  will  be reimbursed for certain out-of-pocket
expenses  and  will  be  indemnified  against  certain  liabilities,  including
liabilities  under securities laws and expenses in connection therewith.  No fee
or  commission  will  be  payable  by  any  holder  of  Endeavour Securities who
transmits  his,  her  or  its  Endeavour  Securities directly to the Depositary.

THAMES  CAPITAL  REPORT

Thames  Capital  Corporation was retained by both Aspen and Endeavour to provide
pro  forma  financial  information  and  an  analysis of the combined company to
assist  in  determining the terms of the Offer.  Mr. Grahame Notman provided the
report  to  the board of directors of both Aspen and Endeavour.  Under the terms
of  the  arrangement  with  Thames Capital Corporation, the fee payable is to be
split  between Aspen and Endeavour.  In addition, there is an agreement to issue
1,000,000  shares  of Endeavour to Thames Capital Corporation, which shares will
then  be  taken  up  by  Aspen  pursuant  to  the  Offer.

The  report  prepared  by  Thames  Capital Corporation for this purpose is not a
formal valuation under applicable securities laws, Thames Capital Corporation is
not  independent  in  that  it acted for both Aspen and Endeavour.  The board of
directors  of  each  of  Aspen  and Endeavour have utilized this report in their
support  of  the  Offer.

EXPENSES  OF  THE  OFFER

Aspen  estimates  that  the  fees  and  expenses  of  the  Offer  will amount to
approximately  US$150,000.  Such  fees  and expenses will be paid out of Aspen's
working  capital  balances.

INFORMATION  CONCERNING  ASPEN

CORPORATE  INFORMATION

Aspen  was  incorporated in the Province of Ontario, originally as Cotton Valley
Energy  Limited, on February 15, 1995.  On June 14, 1996, Aspen amalgamated with
Arjon Enterprises, Inc., and Aspen's name was changed to Cotton Valley Resources
Corporation.  Aspen  continued  from  Ontario to the Yukon Territory pursuant to
Articles  of  Continuance  dated February 9, 1998. Aspen changed its name to its
current  name "Aspen Group Resources Corporation" effective March 2, 2000. Aspen
consolidated  the Aspen Shares on a one for seven (1:7) basis by filing Articles
of  Amendment  effective  February  12, 2001.  All references to Aspen Shares in
this  Circular,  unless  otherwise  indicated,  give  effect  to  the  share
consolidation,  except  for  the  June  30,  2000 financial statements which are
presented  on  a  pre-consolidated  basis.

Aspen's  head  office  is  located  at 3300 Bank One Center, 100 North Broadway,
Oklahoma City, Oklahoma 73102.  The registered office of Aspen is located at 200
-  204  Lambert  Street,  Whitehorse,  YT,  Y1A  3T2.


<PAGE>
                                        30


BUSINESS  OF  ASPEN

Aspen is an independent energy company engaged in the acquisition, exploitation,
development  and  operation of oil and gas properties with a geographic focus in
major  oil  and gas producing regions in the United States. Aspen currently owns
interests  in  approximately  1,200  wells  located  in  eleven  states  with  a
predominant  focus  in  Oklahoma, Kansas and Texas.  The Aspen Shares are listed
for trading on the TSE under the trading symbol "ASR" and on the OTCBB under the
trading  symbol  "ASPG".

From  its  inception  through  September,  1999,  Aspen  was a development stage
company  engaged  principally  in organization and capitalization activities and
had  not  generated  material  net  revenues  from  operations.

During  the fiscal year 1999, Aspen experienced cash flow difficulty as a result
of  a  decline  in  oil  and  gas prices as well as the significant reduction in
demand  for  oilfield equipment and services.  Aspen was also unable to complete
the effectiveness of a registration statement under the United States Securities
Act  of  1933  for  the securities underlying certain convertible debentures and
remained,  for  much  of  the fiscal year of 1999, in default under the terms of
such  convertible debentures. In response to these conditions, Aspen, during the
first  fiscal  quarter,  curtailed  proposed capital projects and other business
operations  and  reduced its staff from over 40 employees to two field employees
on  payroll  plus  two  officers  who  worked  throughout  the year for deferred
salaries.


During  January  through  April  1999 Aspen entered into agreements with over 50
vendors  to  whom it owed more than US$750,000 to eliminate the debt through the
issuance  of  shares  of  common  stock.  As  of June 30, 1999, Aspen had issued
571,429  shares of common stock at US$1.75 per share reflecting the reduction of
approximately  US$1,300,000  of  liabilities.  During  calendar year 1999, Aspen
assigned  substantially all of its properties to its secured lenders in exchange
for  releases  from  the  secured  indebtedness.

Aspen  carries  on  business  activities  directly  and  indirectly  through its
subsidiaries.

                        ASPEN GROUP RESOURCES CORPORATION
                            (Yukon Territory, Canada)
       --------------------------------------------------------------
       |                      |                    |                |
       |                      |                    |                |

     100%                    75%                  100%            100%
-------------      --------------------      ------------      --------------
Cotton Valley      United Cementing and      Aspen Energy      Aspen Minerals
 Means, Inc.           Acid Co., Inc.         Group, Inc.       Group, Inc.
   (Texas)               (Kansas)              (Nevada)           (Nevada)
-------------      --------------------      ------------      --------------


<PAGE>
                                       31


Acquisitions

Since  September,  1999, Aspen has completed several acquisitions of oil and gas
properties  or  of  companies  primarily  engaged in oil and gas exploration and
development.  The  following  is  a  summary  of  the  most substantial of these
acquisitions.

On  September  16,  1999 (but effective July 1, 1999), Aspen acquired 50% of the
outstanding  common  stock  of East Wood Equity Venture, Inc. ("EAST WOOD") from
Jack E. Wheeler, the current Chairman, Chief Executive Officer and a Director of
Aspen  and others in exchange for 6,604,414 Aspen Shares.  On February 28, 2000,
Aspen  purchased the remaining 50% of the outstanding capital stock of East Wood
from  Farrell  Kahn  and  others in exchange for the issuance of 3,747,271 Aspen
Shares  and Aspen's promissory note for US$3,000,000.  East Wood was principally
engaged  in  the  business  of  the  acquisition,  development,  exploration and
operation  of producing oil and gas properties.  At the time of the acquisition,
the main concentration of East Wood's properties were in Oklahoma with 335 wells
and  Texas  with  30  wells.  Approximately  80%  of these wells were gas wells.

Effective  January  1,  2000,  Aspen  acquired  49  producing, operated wells in
Oklahoma  from  EDB Oil Properties for US$313,718 which was paid by the issuance
of  260,714  Aspen  Shares.

Effective  the  same  date,  Aspen  closed  smaller  projects  with  Fer-Scher
Exploration,  L.L.C.,  Red Terra Resources Company, Sebenius & Associates 1982-1
Joint Venture and SGH, Inc.  The total allocated cost of these four projects was
US$562,105  paid  by  a  combination  of  cash  and  Aspen  Shares.

Effective April 1, 2000, Aspen acquired certain oil and gas interests and all of
the  outstanding common stock of Mercer Oil and Gas Company from Ron Mercer, the
current  President  of  Aspen,  in  exchange  for cash and 142,857 Aspen Shares.

Effective  May  1,  2000,  Aspen  acquired  through  a  merger  with Briscoe Oil
Operating,  Inc.  a  55%  undivided  interest  in  171  properties located in 21
counties  in  Oklahoma,  Texas,  and  Kansas for US$3,000,000.  Effective May 1,
2000,  Aspen  also  acquired  17  producing  oil  and gas properties, equipment,
vehicles  and  a  10-year  equipment  facility yard lease from L.C.B. Resources,
Inc.,  which  was  paid  by  the  issuance of 571,429 Aspen Shares.  Briscoe Oil
Operating,  Inc.  and  L.C.B.  Resources,  Inc.  were  both controlled by Lenard
Briscoe,  a current director of Aspen. This acquisition added 245 Mbo of oil PDP
oil  reserves  and  7,536  Mmcf  of  net gas reserves for an acquisition cost of
US$3.10/  Net  Boe.

Effective  May  5, 2000, Aspen acquired an interest in approximately 3,775 gross
acres  and  several  producing  oil  and gas properties in the Tiger Hunton Unit
Development  Project  in  Seminole  County,  Oklahoma  from  Oak  Tree  Natural
Resources,  L.L.C. for US$55,940 and a commitment to future development costs of
approximately  US$500,000.

Aspen  acquired  a significant interest in the El Dorado field prior to June 30,
2000,  through acquisitions from The Flowers Estate and MOG Oil and Gas Company.
These  acquisitions increased Aspen's proven oil reserves by over 1,600,000 Bbls
for  an  acquisition  cost  of  US$2.60/Bbl,  including future development costs
expected  to  be  US$1.125  million.

Effective  August  1,  2000,  Aspen  purchased  interests  in  158  oil  and gas
properties  primarily  located  in  the  Arkoma and Anadarko Basins of Oklahoma,
increasing  its interest in 130 wells in inventory by an additional 5.88235% and
royalty  and  overriding  royalty  interests  in  28 wells from PGGB Oil and Gas
Partnership  for  US$131,164.

Effective August 1, 2000, Aspen purchased interests in approximately 400 oil and
gas  properties  located  in the Arkoma and Anadarko Basins of Oklahoma from Old
Dominion  Oil  Corporation  for  US$644,930.

Effective  August  1,  2000,  Aspen  purchased  interests in 41 producing wells,
leases,  property  and  equipment located in Butler County, Kansas from Crawford
Oil  Company  and  Leiker-Crawford  Oil  Company  for  a  cash purchase price of
US$1,743,604.


<PAGE>
                                       32


Effective  January  1,  2001,  Aspen  purchased  from Muras Energy, Inc. working
interests ranging up to 45% in 36 wells in 16 different counties in the Anadarko
Basin  of  Western Oklahoma and certain other assets for a cash consideration of
US$475,250  and  the  issuance  of  119,048  Aspen  Shares.

Effective January 1, 2001, Aspen acquired United Cementing and Acid Co., Inc., a
privately-held  oilfield  service company headquartered in El Dorado, Kansas for
US$1,040,000  in  cash  and  250,000  Aspen Shares.  United Cementing operates a
cementing  and  acidizing  business providing oil field services integral to oil
and gas operations.  Aspen has sold 25% of United Cementing to Lenard Briscoe, a
Director  of  Aspen,  for  US$312,500.

Effective April 1, 2001, Aspen purchased from C.B. Oil Company working interests
averaging  34%  in  43  wells  in 14 different counties in the Anadarko Basin of
Western  Oklahoma  and  certain  other  assets  for  US$2,299,907.

Effective April 1, 2001, Aspen purchased from Saco Oil Company working interests
in  44  producing wells and certain other assets for US$1,125,000.  The acquired
properties  comprise  39 leases and are primarily located in the El Dorado Field
in  Kansas.

Effective July 2, 2001, Aspen acquired 61,843 net acres of leasehold interest in
the  North  East  New  Mexico  Basin over an area of approximately 100,000 gross
acres  for  US$179,000.  This  results  in  Aspen  owning an average 62% working
interest with an estimated 53% net revenue interest.  The area is prospective of
coal-bed  methane,  shale  gas  and  Pennsylvanian  ages  gas  reservoirs.

Aspen is actively engaged in pursuing other acquisition opportunities to further
develop  its  business  opportunities.  Aspen  assesses  each of the acquisition
prospects  as  presented to management of Aspen, and continually makes decisions
as  to  whether to actively pursue such opportunities.  At any time Aspen may be
assessing  one  or  more  potential  acquisitions.

Credit  Facility

On  April  28,  2000,  Local Oklahoma Bank, N.A. loaned Aspen Energy Group, Inc.
amounts  up  to  US$25,000,000, as set forth in a credit agreement of that date.
The  loan is subject to, and limited by, a borrowing base based primarily on the
value  of  Aspen's  oil  and gas properties.  The commitment of the bank reduces
over  time  based upon a monthly commitment reduction.  As of November 16, 2001,
the  borrowing  base  was  US$14,774,000  and  the  amount  outstanding  was
approximately  US$14,389,000.  The  loan  accrues  interest at a rate based upon
Chase  Manhattan  Prime  plus one half of one percent per annum.  The purpose of
the  loan is to provide financing for the acquisition and development of oil and
gas  properties.

Employees

As  of  the  date  hereof, Aspen had 27 full-time corporate employees of which 6
were  management.  Aspen  has  experienced  no  work  stoppages  and  management
considers  its relations with employees to be good. Aspen uses contract services
in  its  field  operations  and  employs  independent consultants, as needed, to
evaluate  prospects,  reserves  and  other  oil  and  gas  assets  for potential
acquisitions.

Facilities

Aspen  occupies approximately 9,454 square feet of office space at 3300 Bank One
Center,  Oklahoma  City, Oklahoma 73102, under a five year lease that expires on
September  30,  2004.  Monthly  base  rent  is  US$8,745.

Aspen  leases  approximately  7,132  square  feet of office space at 6510 Abrams
Road,  Suite  300,  Dallas,  Texas 75231 under a five year lease that expires on
April  30,  2003.  Currently  three separate tenants are subletting a portion of
this  space.  The  net  cost  to  Aspen  is  US$5,875  per  month.

Aspen  obtained  a lease of a 20 acre equipment yard for 10 years as part of the
acquisition from L.C.B. Resources Inc.  The property includes three freestanding
pre-fab  buildings,  each  approximately  25,000 square feet in size.  The lease
expires  May,  2010,  and  the  lease  payments  have  been  prepaid.


<PAGE>
                                       33


Aspen  obtained  a  10-acre  yard  facility  including  an  1,800 sq. ft. office
building,  a  shop  building  and  warehouse  as  part  of  the United Cementing
acquisition.  There  are  no  rent  payments  associated  with  this  property.

Oil  and  Gas  Operations

Principal  Properties
---------------------

Means  (Queen  Sand)  Unit.  The  Aspen  Means  (Queen  Sand)  Unit  consists of
approximately  2,600 acres on six leases in north central Andrews County, Texas.
Production  began  in  1954  and secondary recovery was initiated in 1960. Aspen
purchased  the  leases  in  1996 for the purpose of instituting a 20-acre infill
redevelopment  program.  An  engineering  report, as of June 30, 2001, estimates
that  the  Means  (Queen  Sand) Unit contains net proved undeveloped reserves of
3,092,000  MMBbls.  Aspen estimates that it will require a capital investment of
approximately  US$11,260,000  to develop this property.  During fiscal year 2001
the  Company  purchased,  and delivered to the Means Unit, or the nearby city of
Odessa,  Texas,  approximately  US$500,000  of  equipment  to  be  used  in  the
waterflood  project.

Mid-Continent.  Aspen  owns  interest in approximately 1,200 wellbores, of which
97%  are  in  the  Mid  Continent area. The majority of the wellbores are in the
Anadarko  Basin  of  western  Oklahoma and The Texas Panhandle. Aspen's value is
mostly  from the production of these wellbores producing from the Atoka, Granite
Wash,  Morrow,  Red  Fork  and  other  formations.

There  are  several  geologic  provinces within the Mid-Continent area.  Most of
these  provinces have established hydrocarbon production, i.e., the Arkoma Basin
is  predominately  dry  gas while the Anadarko has both oil and gas.  The Nemaha
Ridge  area and the Golden Trend are predominately oil, while recent activity in
the  northeastern  part  of  the  state  has  been  in  shale  gas  development.

Geologically,  the  Anadarko  Basin began as a rift in the North American plate.
This  rift  valley  was  initially  filled  with volcanic material from vents on
either  side  of  the rift.  During the Late Cambrian when rifting subsided, the
sea  invaded  the rift valley from the southeast.  The earliest sediments (known
as  the Arbuckle Group) were sandstones, limestones and dolomites; all deposited
in  a  shallow sea environment.  It is estimated that approximately 2000 feet of
the Arbuckle Group sediments were deposited.  The true thickness of the Arbuckle
Group  in  the "Deep Anadarko" is unknown; a deep test drilled in Washita County
to  a  thickness  of  more  than  31,000  feet  penetrated  only 200 feet of the
Arbuckle.  The  Arbuckle  Group does produce throughout the State and production
is  usually  associated  with  a  structural  component.

An  additional  7,000  to  10,000  feet of limestones were deposited through the
Mississippian Period.  In many places the top of the Mississippian is an erosion
surface  with a "Chat" interval or with enhanced porosity due to exposure and/or
structural  movement.   The  open ocean was completely gone by the Triassic Age.
Production  from  the  Pennsylvanian  is  mainly  stratigraphic,  with  multiple
sandstones  within  each formation (the Morrow/Springer has multiple sandstones,
10  to  15  individual  sandstones  in  one  area  is  not  unusual).

The  Anadarko  Basin  has  been  divided into the "Deep" and "Shelf" areas.  The
"Deep  Anadarko"  includes the counties of Beckham, Blaine, Caddo, Custer, Roger
Mills,  and Washita (the Central Western Oklahoma Counties).  Drilling depths in
these  Counties  are  generally  deeper  than  10,000  feet;  17,000 feet is not
uncommon for the Morrow/Springer Formation.  In Beckham, Custer, Roger Mills and
Washita  Counties  the  "Granite  Wash"  is a prolific gas producer with several
intervals  (each  of  these  zones  can  be several hundreds of feet thick) from
Desmoisian  to  Atokan age.  These zones are limestone, dolomite, shale mixtures
that  were washed in from the mountain front, with deposition primarily from the
south.

The  earlier  Pennsylvanian  (Morrow/Springer)  sandstones  were  deposited  in
relatively  deep  water  as  long  shore  and near shore bars generally trending
northwest-southeast  (parallel  to  the  Basin).  The  eastern side of the "Deep
Anadarko"  includes  Blaine,  Canadian  and  Grady  Counties.   This  area  also
included  the  Blaine  County  Embayment,  an  area  known  for  overpressure
Morrow/Springer sandstones (these sands were deposited in an embayment and range
from  fluvial  to  delta  front  sands  instead  of  deep  water  sands  and the
depositional trend within the embayment is generally north-south).  This area of
the  Basin  is  primarily  productive  from  the  Pennsylvanian  sandstones.


<PAGE>
                                       34


Reserves can range from 1 to 30+ BCF per interval with many wells producing from
the  deepest  interval  first and then some years later will recomplete from the
shallow  zones.  Spacing  is typically based on 640 acres, but increased density
drilling  is  common.  For  example the "Granite Wash" is now being developed in
many areas to 160 acre spacing (from 1 well per Section to 4 wells per Section).

Most  of  Aspen's  operated wells are on the "Shelf Area" of the Anadarko Basin.
These  wells  are  generally  7000-9000  feet  deep  and  produce  with  the aid
artificial lift.  The wells are characteristically low volume gas wells but have
relative  long  lives.

The  "Shelf" area of the Anadarko encompasses the northwestern part of the state
as  well  as  part  of the Panhandles of Oklahoma and Texas.  This area produces
from  zones ranging from the Arbuckle to the Permian.  Most of the production is
from  multiple  stratigraphic  sandstones,  'reefal'  limestones  and  massive
limestone.  The  majority of the production is from the Pennsylvanian sandstones
and  limestones.  The  older  and  deeper  limestone  production  is  generally
dependent  of  porosity  development associated with structure.  The majority of
the  production,  however,  is  stratigraphically  controlled.  The  major
depositional  trends  for the sandstones are from north to south or northeast to
southwest,  depending  on  the  geographic  area.

Drilling  depths  are  generally less than 10,000 feet and don't usually require
intermediate  casing  or  special drilling programs.  Spacing can range from 640
acres  to 40 acres depending on the area, formation and well classification (oil
or  gas).  Increased  density drilling is as common on the "Shelf" area as it is
in the "Deep" Anadarko.  Reserves are from both oil and gas and can range from a
few  BCF's  gas  and  a  few  thousand  barrels  of  oil to 5+ BCF's and tens of
thousands  of  barrels  of  oil.

The  "Golden  Trend" is an area in south-central Oklahoma, bounded by the Nemaha
and  Pauls  Valley  uplifts  on  the  east and the southeastern embayment of the
Anadarko.  This  area  is  known  for prolific oil production from stratigraphic
traps.  The  Upper  Pennsylvanian  sands  are  the  best  producers, these sands
successively  lap on to the Pauls Valley uplift.  The overall Deese (the primary
sequence  of  sands)  interval  is  several  thousand  feet  thick.

It  is  also  known  for  the  prolific  oil production from the Simpson/Bromide
(Ordovician) sands.  Production from the Ordovician sands, however, is generally
found associated with structures.  (The formations typically need a structure to
trap  hydrocarbons  above water.)  Structure in this area is very complex and it
is  highly  faulted  with  its  major  structural  axis trending almost directly
east-west.  This  arch  contains many known structural features that produce oil
and  gas  (Fields  such  as  Cement, Lindsay and Maysville are along this arch).
This  area  has  had  established  production  since  the  late  1940's  and
exploration/exploitation  continues  today with advances in seismic and drilling
technology finding additional prospective formations and traps.  Drilling depths
can  vary  widely  depending of the area and target formation.  Oil is the major
production  -  some  formations  such  as  the  Bromide can flow up to 300 BOPD.

The  "Hugoton"  is  an  area  encompassing  far  northern Oklahoma, the Oklahoma
Panhandle  and  western  Kansas.  This  was  an  embayment  of the Anadarko with
sediments  being deposited predominately from the north and northwest.  The area
is  dominated  by  natural gas production from shallow Permian sands (most wells
are  less  than  3,000  feet).  The area is also known for its large deposits of
helium.  For  many  years  only the shallow Permian gas was exploited and deeper
formations  were  not  tested.  During  the past twenty years this area has been
slowly  being  developed  for  the  deeper  producing formations.  Pennsylvanian
sandstones  and  the Mississippian limestones are favorite targets.  These zones
are  generally  stratigraphically  controlled.

Drilling  depths  for  the Mississippian are usually less than 6,000 feet in the
Hugoton, making it an attractive area for drilling.  The biggest problem here is
getting  an acreage position due to the spacing of the Permian and Kansas' rules
for  additional  drilling.

The  Arkoma  Basin  lies  in  southeastern  Oklahoma  and  central  Arkansas.
Geologically  it  is  bounded by the Ozark Plateau to the north and the Quachita
Overthrust  Belt  to the south.  The Basin was separated from the Anadarko Basin
by a series of volcanic islands and uplifts associated with the tectonics of the
region.  The  Arkoma  produces  mainly  dry  gas  from  the  Pennsylvanian  age
sandstones.  Production  is  from  stratigraphic  traps,  structural  traps  and
combination of the two.  There are some areas where the production is controlled
by the faults (forming boundaries and stacking formations within blocks) and yet
there  are  areas  where  faulting  is  not  important at all to the production.


<PAGE>
                                       35


Depending  on  the  area  of  the  Basin,  drilling  depths can range from a few
thousand  feet  to  17,000+  feet  and prospect definition can range from simple
stratigraphic  correlations and geologic mapping to state of the art 3D seismic.
This  area  is currently enjoying increased activity as shale gas formations are
now being exploited and seismic prospects have opened up new discoveries such as
the  Potato  Hills  Field.

New Mexico Acreage Acquisition.  The Sierra Grande Uplift of NE New Mexico joins
the  Dalhart Basin of the Texas Panhandle in the north half of Union County, New
Mexico.  These  features  are  tectonic  of  Mid  Pennsylvanian  to  Wolfcampian
(Permian)  age.  These  strata  consist  of  arkosic sandstone, conglomerate and
shale.  The  arkosic  sediments  were  derived  from  the  granite core of these
elements  and  were  deposited  as  alluvial  fans  and  fan  deltas.

Structure  of  the Sierra Grande uplift appear to have been controlled primarily
by  high  angle  faulting  (normal  and reverse). In the southern parts of Union
County and Northeastern part of Harding County commercial CO2 is being produced.
The northern part of Union County has many hydrocarbon shows in past exploration
efforts  from  900  feet  deep  to  5000  feet  deep.

Aspen recently acquired 61,843 net acres of leasehold interest in this area over
an  area  of 61,843 gross acres. This results in Aspen owning an average of 100%
GWI  with  an  estimated  85%  average  NRI. The area is prospective of coal-bed
methane, shale gas, and Pennsylvanian aged gas reservoirs. Even though Aspen has
not  completed its Plan of Development, Aspen is encouraged by the potential and
the  large  position  it  now  holds.  According to one analysis by a geological
engineer,  the  potential could be as great as 100 BCF from the coal beds alone.

El  Dorado  Field.  The  El  Dorado Field of central southeast Kansas has a long
history of oil production and development.  Aspen has acquired interests in over
200  wells  within  the  past  two  years  in this Field.  Current company gross
production  is  approximately 450 BOPD from several different horizons including
the  Admire,  the  Mississippi,  the  Simpson  and  the  Viola.  Aspen  recently
completed  a  successful five well drilling program in the Field and third party
engineers  have identified several additional development opportunities on these
leases.

Title  of  Properties
---------------------

Aspen follows industry practice when acquiring undeveloped properties on minimal
title  investigation.  A title opinion is obtained before drilling begins on the
properties.  Title  opinions  cover  the majority of Aspen's properties. Aspen's
properties are subject to royalty interests and can be subject to liens incident
to  operating  agreements,  liens  for current taxes and other burdens (although
none  exist  at the present time and in the event they are filed) Aspen does not
believe they will materially interfere with their use or value.  Aspen may incur
additional  expenses  in  obtaining titles or doing remedial work on the titles,
but  in  the  opinion  of  management  these  expenses  would  not  be material.

Exploitation  and  Development
------------------------------

The  gas  dominated  Mid-Continent  Region of Oklahoma and Texas is the focus of
Aspen's  exploitation  and  development.

In  fiscal  year  2001  Aspen initiated an aggressive development program during
which  it  participated  in  the  drilling  of  6 wells in Texas and 27 wells in
Oklahoma  for  a  total  of 33 new wells with 31 economic completions.  This 94%
completion  success  rate  resulted in Aspen participating in 33 gross wells and
1.01  net  wells  for  a  total  drilling  cost of approximately US$773,000.  In
addition  to  the  exploitation drilling program, Aspen also participated in the
successful  recompletion  and/or  rework  of  15  wells during fiscal year 2001.

These  drilling  activities  during the year resulted in Aspen adding net proved
reserves  of  751,567  Mcf and 17.2 Mbo, or 142 Mboe for a finding cost of $4.15
per  Boe  which  is  significantly  below  the  industry  average.  The  present
discounted  value  added  to  Aspen's  present worth for these new wells is over
US$1,000,000.



<PAGE>
                                       36

Drilling Activity
-----------------

The  following  table summarizes, for the periods indicated, the number of wells
that  Aspen  drilled  or  participated  in  drilling.

                                      YEAR ENDED
                                       JUNE 30
                                       -------
                                   2001       2000
                                 GROSS/NET  GROSS/NET
                                 ---------  ---------
Oil Wells Capable of Production        0/0        0/0
-------------------------------  ---------  ---------
Gas Wells Capable of Production    31/1.01    34/2.47
-------------------------------  ---------  ---------
Dry Holes                            2/0.1        0/0
-------------------------------  ---------  ---------
Total                              33/1.11    34/2.47
-------------------------------  ---------  ---------

Oil  and  Gas  Wells
--------------------

Aspen  owns approximately 1,200 wells. Aspen's interests range from less than 1%
to  100%  with  an  average  working  interest  of  25.1%. Aspen's most valuable
properties  are  located  in  the  Anadarko  Basin in Oklahoma where its working
interests  averages  from  3%  to  5%.  The  majority  of Aspen's asset value is
derived  from  approximately  683  of  the  1,200  wells.

The  following  table  summarizes, as of June 30, 2001, the number of productive
oil  and  gas  wells  in  which  Aspen  has a working interest, all of which are
located  in  the  United  States.


           PRODUCTIVE           PRODUCTIVE
          GROSS  WELLS(1)      NET  WELLS(2)
          ---------------  ----------------------
LOCATION  OIL  GAS  TOTAL   OIL     GAS    TOTAL
--------  ---  ---  -----  ------  ------  ------
Kansas    126    3    129  117.13     .72  117.85
--------  ---  ---  -----  ------  ------  ------
Oklahoma  100  857    957   22.58  169.82  192.40
--------  ---  ---  -----  ------  ------  ------
Texas      34   43     77   32.07    3.42   35.49
--------  ---  ---  -----  ------  ------  ------
Others      0   37     37       0    2.08    2.08
--------  ---  ---  -----  ------  ------  ------
Total     260  940   1200  171.78  176.04  347.82
--------  ---  ---  -----  ------  ------  ------

Notes:

(1)  The  number  of gross wells is the total number of wells in which a working
     interest  is  owned.
(2)  The number of net wells is the sum of fractional working interests owned in
     gross  wells  expressed  as  whole  numbers  and  fractions  thereof.

Oil  and  Gas  Acreage
----------------------

The  following  table  summarizes,  as  of June 30, 2001, the number of acres of
developed  and  undeveloped  acreage  leased  by  Aspen.

                 DEVELOPED        UNDEVELOPED
            ------------------  -----------------
LOCATION    GROSS(1)   NET(2)   GROSS(1)  NET(2)
----------  --------  --------  --------  -------
Kansas        12,055     7,418         0        0
----------  --------  --------  --------  -------
Oklahoma     677,402   148,512       434      434
----------  --------  --------  --------  -------
Texas         29,900    12,906     2,900    2,900
----------  --------  --------  --------  -------
New Mexico         0         0    61,843   61,843
----------  --------  --------  --------  -------
Total        719,357   168,836    65,177   65,177
----------  --------  --------  --------  -------

Notes:

(1)  The  number  of gross acres is the total number of acres in which a working
     interest  is  owned.
(2)  The number of net acres is the sum of fractional working interests owned in
     gross  acres  expressed  as  whole  numbers  and  fractions  thereof.


<PAGE>
                                       37


Oil  and  Gas  Reserves
-----------------------

Aspen's  reserves  consist  primarily of proved and probable reserves located in
Oklahoma,  Kansas  and  Texas.

The following table summarizes Aspen's estimated net proved oil and gas reserves
and  future revenue attributable to Aspen as evaluated in the report of American
Energy  Advisors (the "AEA REPORT") as of June 30, 2001.  The ownership, pricing
and  other  factual  data used in the estimates were supplied by Aspen.  Reserve
estimates  were made using industry-accepted methodology including extrapolation
of performance trends, volumetrics, material balance and statistical analysis of
analogs.  The  evaluator's  professional  judgment  and  experience were used to
select  the  most  appropriate method and to determine the reasonableness of the
results.

The following table summarizes Aspen's estimated net proved oil and gas reserves
and  future  revenue  attributable to Aspen as evaluated in the AEA Report as of
June  30,  2001.

<TABLE>
<CAPTION>
                       TOTAL RESERVES                               ESTIMATED NET REVENUES
             ---------------------------------  ------------------------------------------------------------
                                                    NOT                        DISCOUNTED AT:
RESERVE         OIL         GAS                  DISCOUNTED      5%         10%           15%       20%
CATEGORY       (BBLS)      (MCF)       MBOE        (US$)                           (US$)
-----------  ---------  ----------  ----------  -----------  -----------------------------------------------
<S>          <C>        <C>         <C>         <C>          <C>          <C>         <C>         <C>
Proved
Developed
Producing
Reserves     1,344,552  14,666,212   3,788,920   45,173,063   30,284,382  22,924,709  18,633,920  15,834,673
-----------  ---------  ----------  ----------  -----------  -----------  ----------  ----------  ----------
Proved
Developed
Non-
Producing
Reserves        14,983   1,874,153     327,341    5,870,262    3,272,391   2,091,178   1,470,634   1,107,487
-----------  ---------  ----------  ----------  -----------  -----------  ----------  ----------  ----------
Proved
Undeveloped
Reserves     4,111,338  15,947,434   6,769,243  115,545,711   78,351,329  56,649,765  42,781,306  33,323,896
-----------  ---------  ----------  ----------  -----------  -----------  ----------  ----------  ----------
TOTAL
PROVED
RESERVES     5,470,873  32,487,799  10,885,504  166,589,036  111,908,102  81,665,652  62,885,860  50,266.056
-----------  ---------  ----------  ----------  -----------  -----------  ----------  ----------  ----------
</TABLE>

Notes:

(1)  The  reserve  data  and  future  estimates  set  forth above are for Proved
     Reserves. These estimates do not include any value for probable or possible
     reserves which might exist for Aspen's properties, or any value which might
     be attributable to interests in undeveloped acreage beyond those tracts for
     which  reserves  have  been assigned. "PROVED RESERVES" means the estimated
     quantities  of  crude  oil, condensate, natural gas and natural gas liquids
     which geological and engineering data demonstrate with reasonable certainty
     to  be  recoverable  in  future  years from known reservoirs under existing
     economic  and  operating  conditions (i.e., prices and costs as of the date
     the  estimate  is  made).  The  Proved  Reserves  are  subdivided  into the
     following  classifications  depending  on  their  state  of  development:

     (a)  "PROVED  DEVELOPED  PRODUCING  RESERVES"  are Proved Reserves that are
          expected to be recovered from completion intervals open for production
          in  existing  wells;
     (b)  "PROVED DEVELOPED NON-PRODUCING RESERVES" are Proved Reserves that are
          currently  not  being  produced due to lack of facilities, markets, or
          ability  to  currently  complete  a  producable  formation;
     (c)  "PROVED UNDEVELOPED RESERVES" are Proved Reserves that are expected to
          be  recovered  from  new  wells  on undrilled acreage or from existing
          wells where a relatively major expenditure is required for completion.
          Reserves  on  undrilled  acreage  are  limited to those drilling units
          offsetting  productive wells that are reasonably certain of production
          when  drilled.

(2)  FUTURE  NET  REVENUE ESTIMATES INCLUDE DEDUCTIONS FOR APPROPRIATE STATE AND
     LOCAL  PRODUCTION  TAXES,  BUT  DO  NOT  INCLUDE ANY CREDITS OR LIABILITIES
     ASSOCIATED  WITH  APPROPRIATE  FEDERAL  OR  STATE  INCOME  TAXES.

(3)  DISCOUNTED  FUTURE  NET  REVENUE  ESTIMATES  ARE SHOWN ONLY TO INDICATE THE
     EFFECT  OF  TIME ON THE VALUE OF MONEY AND SHOULD NOT BE CONSTRUED AS BEING
     THE  FAIR  MARKET  VALUE  OF  THE  PROPERTIES.

(4)  Future net revenue estimates are based on the actual price received on June
     30, 2001, being US$26.98 per Bbl of oil and US$2.66 per MBtu of gas. Prices
     for  oil  and  gas  were  kept  constant  for  the  life  of  the reserves.


<PAGE>
                                       38


The  reserve  data  set forth above is only an estimate.  Numerous uncertainties
are inherent in estimating oil and gas reserves and their values, including many
factors  beyond the control of the producer. Reserve engineering is a subjective
process  of  estimating  underground accumulations of oil and gas that cannot be
measured  in an exact manner. The accuracy of any reserve estimate is a function
of  the  quality  of  available  data  and  of  engineering  and  geological
interpretation  and  judgment.  As  a  result,  estimates of different engineers
often  vary.  In  addition, estimates of reserves are subject to revision by the
results  of  later  drilling,  testing  and  production.  Accordingly,  reserve
estimates  often differ from the quantities of oil and gas ultimately recovered.
The  meaningfulness  of  estimates  is highly dependent upon the accuracy of the
assumptions  upon  which  they  are  based.

In general, oil and gas production declines as reserves are depleted.  Except to
the  extent  that  Aspen  acquires  proven reserves or succeeds in exploring and
developing  its  own  reserves, or both, Aspen's proven reserves will decline as
they  are produced.  Aspen's future oil and gas production is, therefore, highly
dependent  upon  its  ability  to  acquire  or  develop  additional  reserves.

Production
----------

The following table summarizes, for the periods indicated, Aspen's average daily
production  volume  before  deduction  of  royalties.


                     OIL     GAS
QUARTER ENDED       (BBLS)  (MCF)
------------------  ------  -----
March 31, 2000         103   3079
------------------  ------  -----
June 30, 2000          212   4831
------------------  ------  -----
September 30, 2000     340   4923
------------------  ------  -----
December 31, 2000      333   5448
------------------  ------  -----
March 31, 2001         316   4467
------------------  ------  -----
June 30, 2001          386   4974
------------------  ------  -----
September 30, 2001     397   5479
------------------  ------  -----


The  following  table  summarizes,  for the periods indicated, certain operating
information  regarding  Aspen's  oil  production.

                                         OIL(1)
                    -----------------------------------------------
                    AVERAGE NET
                      PRODUCT
                       PRICE      ROYALTIES   OPERATING    NETBACK
                      RECEIVED      (20%)      EXPENSES   RECEIVED
QUARTER ENDED        (US$/BBL)    (US$/BBL)   (US$/BBL)   (US$/BBL)
------------------  ------------  ----------  ----------  ---------
December 31, 1999          22.19        4.43        2.21      15.55
------------------  ------------  ----------  ----------  ---------
March 31, 2000             27.02        5.40        3.78      17.84
------------------  ------------  ----------  ----------  ---------
June 30, 2000              27.98        5.59        8.76      13.63
------------------  ------------  ----------  ----------  ---------
September 30, 2000         27.93        5.58        7.07      15.28
------------------  ------------  ----------  ----------  ---------
December 31, 2000          34.98        6.99        8.85      19.14
------------------  ------------  ----------  ----------  ---------
March 31, 2001             28.61        5.72        7.47      15.42
------------------  ------------  ----------  ----------  ---------
June 30, 2001              26.12        5.22        8.73      12.17
------------------  ------------  ----------  ----------  ---------
September 30, 2001         25.36        5.07        7.40      13.89
------------------  ------------  ----------  ----------  ---------

Note:

(1)     Aspen  only  produces  light  and  medium  conventional  crude  oil.


<PAGE>
                                       39


The  following  table  summarizes,  for the periods indicated, certain operating
information  regarding  Aspen's  gas  production.

                                          GAS
                    -----------------------------------------------
                    AVERAGE NET
                      PRODUCT
                       PRICE      ROYALTIES   OPERATING    NETBACK
                      RECEIVED      (20%)      EXPENSES   RECEIVED
QUARTER ENDED        (US$/MCF)    (US$/MCF)   (US$/MCF)   (US$/MCF)
------------------  ------------  ----------  ----------  ---------
December 31, 1999           2.50        0.50        0.37       1.63
------------------  ------------  ----------  ----------  ---------
March 31, 2000              2.34        0.47        0.63       1.24
------------------  ------------  ----------  ----------  ---------
June 30, 2000               2.84        0.57        1.47       0.80
------------------  ------------  ----------  ----------  ---------
September 30, 2000          4.15        0.83        1.19       2.13
------------------  ------------  ----------  ----------  ---------
December 31, 2000           5.62        1.12        1.47       3.03
------------------  ------------  ----------  ----------  ---------
March 31, 2001              6.91        1.38        1.24       4.29
------------------  ------------  ----------  ----------  ---------
June 30, 2001               4.91        0.98        1.94       1.99
------------------  ------------  ----------  ----------  ---------
September 30, 2001          3.17        0.63        1.53       1.01
------------------  ------------  ----------  ----------  ---------

The following table summarizes, for the periods indicated, the expenditures made
by  Aspen  on  property  acquisition  and  development.

                      PROPERTY
                    ACQUISITION   DEVELOPMENT
QUARTER ENDED          (US$)         (US$)
------------------  ------------  ------------
December 31, 1999       109,381              0
------------------  ------------  ------------
March 31, 2000       14,801,853              0
------------------  ------------  ------------
June 30, 2000          (813,691)       646,614
------------------  ------------  ------------
September 30, 2000    1,892,506        522,409
------------------  ------------  ------------
December 31, 2000       245,477        609,103
------------------  ------------  ------------
March 31, 2001          518,341        936,890
------------------  ------------  ------------
June 30, 2001                 0        280,000
------------------  ------------  ------------
September 30, 2001      900,000        115,000
------------------  ------------  ------------

Future  Commitments
-------------------

As  of  the  date  of this Circular, Aspen has no future material commitments to
buy,  sell,  exchange  or  transport  oil  and  gas.

SELECTED  CONSOLIDATED  FINANCIAL  INFORMATION

The  following tables summarize, for the periods indicated, certain consolidated
selected historical consolidated financial information of Aspen and is qualified
in  its  entirety  by  the  detailed  provisions  of  the consolidated financial
statements  and  the  notes  thereto  contained  in  this  Circular.

<TABLE>
<CAPTION>
                                           QUARTER ENDED SEPTEMBER 30         YEAR ENDED JUNE 30
                                                  (UNAUDITED)                     (AUDITED)
                                                     (US$)                          (US$)
                                            -----------------------  ------------------------------------
                                               2001         2000        2001        2000         1999
                                            -----------  ----------  ----------  ----------  ------------
<S>                                         <C>          <C>         <C>         <C>         <C>
Total Revenue                                2,332,077    2,187,562  10,549,274   3,481,718      980,966
------------------------------------------  -----------  ----------  ----------  ----------  ------------
Earnings (loss) from operations                181,850      707,397   3,151,553     771,745  (1,497, 195)
------------------------------------------  -----------  ----------  ----------  ----------  ------------
Earnings (loss) from per share operations         0.01         0.04        0.17        0.06        (0.52)
------------------------------------------  -----------  ----------  ----------  ----------  ------------
Net earnings (loss)                            (76,218)     434,090   2,100,524      94,116  (11,479,086)
------------------------------------------  -----------  ----------  ----------  ----------  ------------
Net earnings (loss) per share                     0.00         0.02        0.11        0.01        (4.01)
------------------------------------------  -----------  ----------  ----------  ----------  ------------
Total Assets                                55,850,315   45,320,696  54,852,919  42,774,666   11,341,651
------------------------------------------  -----------  ----------  ----------  ----------  ------------
Total Long Term Liabilities                 15,799,266    9,589,302  15,164,533   7,870,560            -
------------------------------------------  -----------  ----------  ----------  ----------  ------------
</TABLE>


<PAGE>
                                       40

<TABLE>
<CAPTION>
                                             QUARTER ENDED (UNAUDITED)
                                                        (US$)
                 ----------------------------------------------------------------------------------------
                 SEPTEMBER    JUNE 30,   MARCH 31,  DECEMBER   SEPTEMBER   JUNE 30,   MARCH 31,  DECEMBER
                  30, 2001      2001       2001     31, 2000   31, 2000      2000       2000     31, 1999
                 ----------  ----------  ---------  ---------  ---------  ----------  ---------  --------
<S>              <C>         <C>         <C>        <C>        <C>        <C>         <C>        <C>
Total Revenue    2,332,077   2,857,623   2,468,596  3,035,493  2,187,562  1,140,528   1,011,276   652,417
---------------  ----------  ----------  ---------  ---------  ---------  ----------  ---------  --------
Earnings
(loss) from
operations         181,850     195,629     964,060  1,284,467    707,397   (416,910)    569,143   258,609
---------------  ----------  ----------  ---------  ---------  ---------  ----------  ---------  --------
Earnings
(loss) from
operations per
share                 0.01        0.01        0.05       0.07       0.04      (0.09)       0.05      0.03
---------------  ----------  ----------  ---------  ---------  ---------  ----------  ---------  --------
Net earnings
(loss)             (76,218)    (36,871)    702,201  1,001,104    434,090   (471,194)    444,140    54,406
---------------  ----------  ----------  ---------  ---------  ---------  ----------  ---------  --------
Net earnings
(loss) per
share                 0.00        0.00        0.04       0.05       0.02      (0.05)       0.04      0.01
---------------  ----------  ----------  ---------  ---------  ---------  ----------  ---------  --------
</TABLE>

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS

The  following  is  a summary of the variations in Aspen's operating results for
the  periods  indicated:

Quarter Ended September 30, 2001 as Compared to Quarter Ended September 30, 2000

During  the  three months ended September 30, 2001, Aspen experienced a net loss
of  US$76,218,  which  compares  to  net earnings of US$434,090 during the first
three  months  of  fiscal  2001.  The  decrease in earnings is a result of lower
prices  for  oil  &  gas  products  as well as additional cost of operations and
overhead  incurred in the transition of a new business segment, United Cementing
&  Acid  Company,  into  the  organization.  Earnings  before  interest,  taxes,
depreciation  and  amortization  was  US$824,369  for  the  three  months  ended
September 30, 2001 compared to US$1,177,203 for the three months ended September
30,2000.

Oil  and  gas  sales  decreased  to  US$1,978,957  during the three months ended
September  30,  2001,  a  decrease of US$208,605 or 9.5%, compared to last year.
This  decrease  reflects the results of a gas price decline of 31% when compared
to  the  same  period,  coupled  with  an  8.5%  decline  in  oil prices.  Aspen
experienced  a  growth of 10% in oil and gas volumes sold for this period, which
is  reflective  of  the  additional oil and gas properties acquired and drilling
activity.  Total  revenues  increased  by  6.6% when compared to the same period
last  year  due  to  income from the acquisition and drilling activities and the
service  related  business,  United  Cementing  &  Acid  Company,  acquired.

Oil  and  gas  production  expenses  increased by 22% when compared to the first
three  months  of last year due to a program of increased maintenance during the
warmer  months  as  well  as  increased  cost  experienced as a direct result of
property  acquisitions.

Operating  expenses  are  the  cost  of  sales  and  operations  incurred in the
operation of the Product and Service Business acquired during the previous year.

General  and  administrative  expenses increased approximately 14% to US$480,656
during  the  three  months  ended September 30, 2001.  The increase reflects the
expansion of staff related to the operation of the additionally acquired service
business,  as  well  as  operations  of  the  additional  oil and gas properties
acquired.

Depreciation  and  depletion  cost  have  increased  by  37%  due the additional
equipment  and  property  assets  acquired  since  September  2000.

Interest  and  financing  expenses have decreased due to the decline in interest
rates.


<PAGE>
                                       41


Fiscal  Year  2001  as  Compared  to  Fiscal  Year  2000

During  the  fiscal  year  ended  June  30,  2001,  Aspen  had  net  earnings of
US$2,100,524  on  revenues  of  US$10,549,274  as  compared with net earnings of
US$94,116  on  revenues of US$3,481,718 for the fiscal year ended June 30, 2000.

Revenue  for the 2001 fiscal year was US$10,549,274 compared to US$3,481,718 for
2000,  an  increase  of  US$7,067,556  or  203%.  This  increase  is  primarily
attributable to an 190% increase in oil and gas sales during the 2001 year.  The
increase  in  oil  and  gas  sales is a result of the acquisition of oil and gas
properties  and  higher  energy  prices.

Expenses  for  the  2001  fiscal  year  amounted  to  US$7,397,721  compared  to
US$2,709,973  for  2000,  an  increase of US$4,687,748 or 173%.  The increase is
attributable  to:

     an  increase  in  oil  and  gas  production  expenses  associated  with the
     increased  number  of  wells  in  which  the  company  has  participation.
     an  increase  in general and administrative expenses of US$1,385,634 mostly
     related  to  additional  staff.
     an  increase  of  US$1,833,559  in  oil and gas production costs related to
     increased  oil  and gas sales and an increase of $1,125,097 in depreciation
     and  depletion  directly  related  to  increased  oil  and  gas  sales.

Operating  income  was  US$3,151,553  in 2001 compared to an operating income of
US$771,745  in  2000  as  a  result  of  increased  sales.

Interest  and  financing  expense  for  the  2001  fiscal  year was US$1,085,286
compared to US$665,362 in 2000, an increase of US$419,924 or 63%.  This increase
is  attributable  to  bank  debt incurred and a note payable given in connection
with  the  acquisition  and  development  of  oil  and  gas  properties.

Fiscal  Year  June  30,  2000  as  Compared  to  Fiscal  Year  June  30,  1999

During  the  fiscal  year  ended  June 30, 2000, the Company had net earnings of
US$94,116  on  revenues  of  US$3,481,718  as  compared  with  a  net  loss  of
US$11,479,086 on revenues of US$980,966 for the fiscal year ended June 30, 1999.
During  1999,  Aspen  recorded  a loss on disposal of assets of US$9,807,576 and
provided  for further loss of US$1,262,000 in respect of impairment in the value
of  oil  and  gas  properties.  These two items comprise 96.4% of the 1999 loss.

Revenue  for  the  2000  fiscal year was US$3,481,718 compared to US$980,966 for
1999, an increase of US$2,500,752 or 254.9%.  This increase is attributable to a
1,200.3%  increase  in  oil  and  gas sales offset by decreased equipment sales.
During  the  2000  year, the Company ceased its equipment sales operations.  The
increase  in  oil  and  gas  sales is a result of the acquisition of oil and gas
properties  and  higher  energy  prices.

Expenses  for  the  2000  fiscal  year  amounted  to  US$2,709,973  compared  to
US$2,478,161  for  1999,  an  increase  of  US$231,812 or 9.4%.  The increase is
attributable  to:

     a decrease in equipment sales related expenses of US$592,475 resulting from
     the  cessation  of  this  business  activity,
     a  decrease  in  general  and  administrative expenses of US$869,219 mostly
     related  to  the  elimination  of  penalties  associated  with a failure to
     register  certain  convertible  debentures  in 1999, more than offset by an
     increase of US$737,757 in oil and gas production costs related to increased
     oil  and  gas  sales,
     an increase of US$956,720 in depreciation and depletion directly related to
     increased  oil  and  gas  sales.

Operating  income  was  US$771,745  in  2000  compared  to  an operating loss of
US$1,497,195  in  1999  as  a  result  of  increased  sales.

Interest  and financing expense for the 2000 fiscal year was US$665,362 compared
to  US$399,289  in  1999,  an increase of US$266,073 or 66.6%.  This increase is
attributable  to  bank debt incurred and a note payable given in connection with
the  acquisition  and  development  of  oil  and  gas  properties.


<PAGE>
                                       42


Liquidity  and  Capital  Resources

As  of  September  30, 2001, Aspen had a working capital deficit of US$1,938,192
calculated  by  subtracting  current  liabilities  of  US$5,036,527 from current
assets  of  US$3,098,335.  Aspen  intends  to finance its development activities
with  cash  flow, as well as with the proceeds from private placements, exercise
of  warrants  and  traditional  bank debt.  No assurance can be given that Aspen
will  be  successful  in  these  efforts.

AUTHORIZED AND ISSUED SHARE CAPITAL

The  authorized  share capital of Aspen consists of an unlimited number of Aspen
Shares,  20,204,157  of  which  are  issued  and  outstanding  as fully paid and
non-assessable  shares,  and  an  unlimited  number of preferred shares, none of
which  are  issued  and  outstanding.

Aspen  Shares

The  holders of the Aspen Shares are entitled to receive notice of and to attend
and  vote  at  all  meetings  of the shareholders of Aspen and each common share
shall  confer the right to one vote in person or by proxy at all meetings of the
shareholders  of  Aspen.  The  holders of the Aspen Shares, subject to the prior
rights,  if  any, of any other class of shares of Aspen, are entitled to receive
such  dividends  in any financial year as the board of directors of Aspen may by
resolution  determine.  In  the  event  of  the  liquidation,  dissolution  or
winding-up  of Aspen, whether voluntary or involuntary, the holders of the Aspen
Shares  are  entitled  to  receive,  subject to the prior rights, if any, of the
holders of any other class of shares of Aspen, the remaining property and assets
of  Aspen.  Aspen  may at any time or times purchase or otherwise acquire all or
any  part  of  the  Aspen  Shares.

Preferred  Shares

Aspen's preferred shares are issuable in series, each series of which shall have
the  designations,  rights, privileges, restrictions and conditions fixed by the
directors.  The preference shares of each series shall rank on a parity with the
preference  shares  of every other series with respect to priority in payment of
dividends  and return of capital in the event of the liquidation, dissolution or
winding-up  of  Aspen  and have a preference over the Aspen Shares and any other
shares  of  Aspen.

Purchase  Warrants

Each whole Aspen Purchase Warrant will entitle the holder thereof to purchase an
Aspen  Share  at  an  exercise  price  of  US$1.25  until September 30, 2002 and
thereafter  at  an  exercise  price  of  US$1.75  until  June  30,  2003.

Each  whole  Aspen  Class  B Purchase Warrant will entitle the holder thereof to
purchase  an  Aspen  Share  at  an exercise price of the US dollar equivalent of
$2.11  until  June  28,  2002.

CAPITALIZATION  OF  ASPEN

The  following  table  summarizes the consolidated capitalization of Aspen as at
June  30,  2001:

                                 OUTSTANDING AS AT
                                   JUNE 30, 2001
DESCRIPTION        AUTHORIZED        (AUDITED)
----------------  -------------  ------------------
Aspen Shares        Unlimited    19,075,157 shares
                                   (US$45,935,125)
----------------  -------------  ------------------
Preferred Shares    Unlimited                     -
----------------  -------------  ------------------
Special Warrants    1,230,000             1,230,000
----------------  -------------  ------------------
Secured Loan      US$25,000,000       US$13,816,060
----------------  -------------  ------------------


<PAGE>
                                       43


There have been no material changes in the share and loan capital of Aspen since
June  30,  2001  except  for  the  following:

1.   Aspen's  borrowing  base  under its credit facility as of November 16, 2001
     was US$14,774,000 of which approximately US$14,389,000 has been drawn down.

2.   In  August,  2001  Aspen issued a total of 371,428 options to acquire Aspen
     Shares to certain of its employees pursuant to its stock compensation plan.

3.   In August, 2001 Aspen issued 250,000 Aspen Shares at an attributed price of
     US$1.00  per  share  as  partial  consideration  for the purchase of United
     Cementing  and  Acid  Co.,  Inc.

4.   In  October,  2001  Aspen  issued 808,500 Aspen Shares and 404,250 warrants
     exercisable at US$1.80 pursuant to the exercise of 735,000 special warrants
     of  Aspen.

5.   In  November,  2001  Aspen  issued  70,000  Aspen Shares as compensation to
     CEOcast.com  for  its  fee  for  consulting  services.

STOCK COMPENSATION PLAN

Aspen  has in place a stock compensation plan for directors, officers, employees
and  consultants  (the "PLAN").  The Plan, as amended, provides that the maximum
aggregate number of shares reserved for issuance and which may be purchased upon
the  exercise  of  all options granted under the Plan shall not exceed 1,857,143
Aspen  Shares.  The  Plan  also  provides  that  the  approval  of disinterested
shareholders  is  required  if  (a)  the  number of shares reserved for issuance
pursuant  to  stock  options  granted to insiders exceeds 10% of the outstanding
issue,  (b)  the  issuance to insiders, within a one-year period, of a number of
shares  exceeds  10%  of  the  outstanding issue, or (c) the issuance to any one
insider  and such insider's Associates, within a one-year period, of a number of
shares  exceeds  5%  of  the  outstanding  issue.

Outstanding Options Under the Plan

The  following table summarizes the outstanding options of Aspen issued pursuant
to  the  Plan  as  of  the  date  hereof.

<TABLE>
<CAPTION>
                                                                    EXERCISE    MARKET VALUE OF    MARKET VALUE OF
                                                                   PRICE PER   THE ASPEN SHARES       THE ASPEN
                                                                     ASPEN      AS OF THE GRANT   SHARES AS OF THE
                                                                     SHARE           DATE            DATE HEREOF
GROUP              NO. OF OPTIONS    GRANT DATE     EXPIRY DATE      (US$)           (US$)              (US$)
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
<S>                <C>             <C>             <C>             <C>         <C>                <C>
Officers                  464,286  Dec. 20, 2000   Dec. 20, 2003         1.33               1.30               0.40
(4 persons)
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
                          785,716  Feb. 22, 2000   Feb. 22, 2003        1.645               1.60               0.40
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
Directors not             285,716  Feb. 22, 2000   Feb. 22, 2003        1.645               1.60               0.40
Officers
(5 persons)
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
                          214,285  Dec. 20, 2000   Dec. 20, 2003         1.33               1.30               0.40
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
                            7,144  Dec. 23, 1998   Dec. 23, 2001         1.75               1.75               0.40
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
Employees                 371,428  Aug. 4, 2001    Aug. 7, 2004          1.00               0.94               0.40
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
                           42,858  Oct. 25, 2000   Oct. 25, 2003         1.33               1.30               0.40
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
                           28,572  Sept. 27, 2000  Sept. 27, 2003        1.96               1.96               0.40
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
Total Options
Granted Pursuant        2,200,005
to the Plan
-----------------  --------------  --------------  --------------  ----------  -----------------  -----------------
</TABLE>


<PAGE>
                                       44


Outstanding  Options  Not  Under  the  Plan

The  following  table  summarizes  the outstanding options of the Company issued
outside  of  the  Plan  as  of  the  date  hereof.

<TABLE>
<CAPTION>
                                                     EXERCISE    MARKET VALUE OF    MARKET VALUE OF
                                                    PRICE PER   THE ASPEN SHARES       THE ASPEN
                                                      ASPEN      AS OF THE GRANT   SHARES AS OF THE
             NO. OF                                   SHARE           DATE            DATE HEREOF
GROUP        OPTIONS   GRANT DATE     EXPIRY DATE     (US$)           (US$)              (US$)
-----------  -------  -------------  -------------  ----------  -----------------  -----------------
<S>          <C>      <C>            <C>            <C>         <C>                <C>
Consultants   14,286  Feb. 1, 2000   Feb. 1, 2005         0.98               0.95               0.40
-----------  -------  -------------  -------------  ----------  -----------------  -----------------
Consultants   85,714  July 25, 2001  July 25, 2004        1.00               0.93               0.40
-----------  -------  -------------  -------------  ----------  -----------------  -----------------
</TABLE>

PRICE  RANGE  AND  TRADING  VOLUME  OF  ASPEN  SHARES

The  Aspen  Shares began trading through the Canadian Dealing Network ("CDN") on
June  24, 1996, under the symbol "CVZC" and ceased trading on the CDN on October
2,  2000,  when  the  shares commenced trading on the CDNX.  The following table
sets  forth  the high and low bid and volume information for the Aspen Shares in
United  States  dollars  as  reported on the CDN or CDNX, as applicable, for the
periods  indicated  reflecting  the  consolidation  on a 1 for 7 basis effective
February  12,  2001.  The information in the table reflects inter-dealer prices,
without  retail  mark-up,  mark-down  or  commission,  and  may  not necessarily
represent  actual  transactions.  From December 31, 1997 to June 30, 1999, there
were  no  significant  trades  on  the  CDN.

                                      CDN-CDNX (U.S. DOLLARS)
                                      -----------------------

                                       HIGH    LOW   VOLUME
                                      ------  -----  -------
       July 1 - September 30, 1999    $ 2.59  $0.70   14,295
       October 1 - December 31, 1999  $ 1.54  $0.98  152,287
       January 1 - March 31, 2000     $ 0.98  $0.84  261,143
       April 1 - June 30, 2000        $ 2.66  $1.96  182,000
       July 1 - September 30, 2000    $1.925  $1.40   28,572
       October 1 - December 31, 2000  $ 2.58  $0.56  108,424
       January 1 - February 26, 2001  $ 2.25  $0.98  770,740

The Aspen Shares began trading on the TSE on February 26, 2001, under the symbol
"ASR".  The  following table sets forth the high and low sales prices and volume
information for the Aspen Shares for the periods indicated, in Canadian dollars.

                                         TSE (CANADIAN DOLLARS)
                                         ----------------------

                                         HIGH    LOW   VOLUME
                                         -----  -----  -------
       February 26 - March 31, 2001      $2.55  $1.77  661,250
       April 1 - June 30, 2001           $2.40  $1.25  809,508
       July 1 - July 31, 2001            $1.50  $1.15    2,216
       August 1 - August 31, 2001        $1.50  $1.35   23,248
       September 1 - September 30, 2001  $1.20  $1.20    1,500
       October 1 - October 31, 2001      $1.00  $0.85   14,248
       November 1 - November 22, 2001    $0.86  $0.58   17,530


<PAGE>
                                       45


The  Aspen  Shares began trading through the OTCBB on January 14, 1997 under the
symbol  "CTVYF".  On  July  1,  1997, Aspen's symbol was changed to "CTVY".  The
Aspen Shares were not traded through the OTCBB after October 17, 1997 until June
2,  1999 when the Aspen Shares returned to trading on the OTCBB under the symbol
"KTNV".  At  present,  the  Aspen  Shares  trade  on  the OTCBB under the symbol
"ASPG".  The  following table sets forth the high and low transaction and volume
information  for  the Aspen Shares in U.S. currency as reported on the OTCBB for
the  periods  indicated.

                                         OTCBB (U.S. DOLLARS)
                                         -----------------------

                                         HIGH    LOW    VOLUME
                                         -----  -----  ---------
       July 1 - September 30, 1999       $3.85  $0.70  1,266,929
       October 1 - December 31, 1999     $2.03  $0.77    824,414
       January 1 - March 31, 2000        $3.92  $0.77  9,105,630
       April 1 - June 30, 2000           $4.13  $1.60  6,318,129
       July 1 - September 30, 2000       $2.73  $1.22  6,002,429
       October 1 - December 31, 2000     $2.24  $0.87  4,466,872
       January 1 - March 31, 2001        $1.69  $0.63  2,037,615
       April 1 - June 30, 2001           $1.52  $0.81  1,856,000
       July 1 - July 31, 2001            $1.10  $0.76    558,900
       August 1 - August 31, 2001        $1.01  $0.78    361,000
       September 1 - September 30, 2001  $0.83  $0.60    484,200
       October 1 - October 31, 2001      $0.76  $0.50    655,900
       November 1 - November 21, 2001    $0.56  $0.38    464,000

The  closing price of the Aspen Shares on the TSE on November 22, 2001 was $0.70
and  on  the  OTCBB  on  November  21,  2001  was  US$0.40.

DIVIDENDS

Aspen  has  not  previously  paid any dividends on the Aspen Shares and does not
anticipate  or  contemplate  paying  dividends  on  the  Aspen  Shares  in  the
foreseeable  future.

PRIOR  SALES

During  the 12 month period prior to the date hereof, the following issuances of
securities  in  the  capital  of  Aspen  were  made:

1.   In  November, 2000 Aspen issued 3,571 Aspen Shares pursuant to the exercise
     of  previously  issued purchase warrants which were exercised at a price of
     US$1.26  per  Aspen  Share.

2.   In  January,  2001 Aspen issued 119,048 Aspen Shares at an attributed price
     of  US$1.68  per share as partial consideration for the purchase of oil and
     gas  properties  from  Muras  Energy,  Inc.

3.   In  April,  2001  Aspen  issued  21,813  Aspen  Shares at attributed prices
     ranging  from  US$0.98  to  US$2.52 in consideration for services rendered.

4.   In  April,  2001  Aspen  issued  1,230,000  special warrants, each of which
     entitles  the  holder thereof to receive, upon exercise and without payment
     of  any  additional  consideration,  1.1  units, each unit consisting of an
     Aspen Share and one-half of a warrant, each whole warrant being exercisable
     for  an  Aspen Share at US$1.80. The special warrants were sold for US$1.50
     per  special  warrant  and  proceeds  to  Aspen  of the issuance of special
     warrants  was  US$1,196,557  net  of selling commissions and other costs of
     sale.  735,000  of  these special warrants were exercised in October, 2001.

5.   In August, 2001 Aspen issued 250,000 Aspen Shares at an attributed price of
     US$1.00  per  share  as  partial  consideration  for the purchase of United
     Cementing  and  Acid  Co.,  Inc.

6.   In  November,  2001 Aspen issued 70,000 Aspen Shares at an attributed price
     of  US$1.00  per  share  as consideration for consulting services rendered.


<PAGE>
                                       46


PRINCIPAL  SHAREHOLDERS

To  the  knowledge of the directors and officers of Aspen, as of the date hereof
no  person beneficially owns or exercises control or direction over Aspen Shares
carrying  more  than  10%  of  the votes attached to Aspen Shares except for the
following:

<TABLE>
<CAPTION>
                    NUMBER OF ASPEN SHARES BENEFICIALLY
NAME                   OWNED DIRECTLY OR INDIRECTLY      PERCENTAGE OF ASPEN SHARES HELD(1)
------------------  -----------------------------------  ----------------------------------
<S>                 <C>                                  <C>
Jack E. Wheeler(2)               2,857,143                            13.8%
------------------  -----------------------------------  ----------------------------------
<FN>
Notes:

(1)  After giving effect to the issuance of 544,500 Aspen Shares on the exercise
     of the special warrants of Aspen that remain outstanding (but not including
     the  exercise  of  any  purchase  warrants).
(2)  2,857,143  Aspen  Shares  are held by Aspen Energy Group, Inc. on behalf of
     Mr.  Wheeler.
</TABLE>

DIRECTORS  AND  OFFICERS

The  following  table  provides the names, municipalities of residence, position
and  principal  occupations of each of Aspen's directors and executive officers.

<TABLE>
<CAPTION>
NAME AND MUNICIPALITY OF
RESIDENCE AND POSITION WITH ASPEN         POSITION WITH ASPEN         PRINCIPAL OCCUPATION
----------------------------------  -------------------------------  -----------------------
<S>                                 <C>                              <C>
Jack E. Wheeler (1)                 Chairman of the Board, Chief     Petroleum Executive
Edmond, Oklahoma                    Executive Officer and Director
                                    (since September, 1999)
----------------------------------  -------------------------------  -----------------------
James E. Hogue (1)(2)               Director                         Petroleum Executive
Dallas, Texas                       (since July, 1996)
----------------------------------  -------------------------------  -----------------------
Wayne T. Egan (1)(2)                Director                         Lawyer
Toronto, Ontario                    (since June, 1996)
----------------------------------  -------------------------------  -----------------------
Anne Holland (2)                    Director                         Petroleum Executive
Fort Worth, Texas                   (since February, 1999)
----------------------------------  -------------------------------  -----------------------
Randall B. Kahn (1)                 Director                         Businessman
St. Louis, Missouri                 (since February, 2000)
----------------------------------  -------------------------------  -----------------------
Lenard Briscoe                      Director                         Businessman
Kingfisher, Oklahoma                (since December 20, 2000)
----------------------------------  -------------------------------  -----------------------
Ron Mercer                          President and Chief Operating    Petroleum Executive
Norman, Oklahoma                    Officer
----------------------------------  -------------------------------  -----------------------
Peter Lucas                         Senior Vice President and        Accountant and Business
Blaine, Washington                  Chief Financial Officer          Executive
----------------------------------  -------------------------------  -----------------------
Sam Hammons                         Vice President                   Businessman
Edmond, Oklahoma
----------------------------------  -------------------------------  -----------------------
<FN>
Notes:

(1)     Denotes a member of the Audit Committee of Aspen.
(2)     Denotes a member of the Compensation Committee of Aspen.

</TABLE>


<PAGE>
                                       47


JACK  E.  WHEELER  has  served  as  a  director, Chairman of the Board and Chief
Executive  Officer of Aspen since September 16, 1999.  Prior to that he has been
the  managing  partner  of  Crown Partners LLC Minerals Division (currently East
Wood  Equity Venture, Inc.) for the past 5 years.  Mr. Wheeler received his A.A.
from Lon Morris University in 1969, a B.A. from Texas A&M University in 1970, an
M.A.  in  1973 from the University of Colorado, and his J.D. from the University
of  Houston in 1975.  Mr. Wheeler has more than 25 years experience managing oil
and  gas  property  acquisition, exploration and development, having started his
career  with  Texaco Inc.  He is a highly decorated Vietnam combat veteran where
he  was  twice  nominated for the Congressional Medal of Honor.  Mr. Wheeler was
awarded  the  Silver Star, Purple Heart, Vietnamese Cross of Gallantry, Soldiers
Medal,  Bronze  Star for Valor, Army Commendation Medal for Valor, the Air Medal
and  the  Combat  Infantryman's  Badge.

RON  MERCER  was  appointed  President  on  December  1,  2000  and is the Chief
Operating  Office  of  Aspen.  Prior  thereto,  Mr.  Mercer  was  Executive
Vice-President  and  Chief  Operating Officer of Aspen since September 16, 1999.
Prior  thereto,  Mr.  Mercer  has  acted  as President responsible for the daily
operations of Mercer Oil and Gas Company and Armer LLC for the past 5 years.  He
is  a  Professional  Engineer with over 30 years experience in oil and gas asset
management.  He is a Registered Professional Engineer in Texas and Oklahoma, and
a  Member  of  the  Society  of  Professional Engineers and Society of Petroleum
Engineers.  Mr.  Mercer  received  his B.Sc. in Petroleum Engineering from Texas
Tech  University.

SAM  HAMMONS  was  appointed  effective  September 16, 1999 as Vice-President of
Aspen.  He is an attorney with over 25 years experience, and is former President
of  the law firm of Hammons & Vaught.  Mr. Hammons was formerly an Assistant for
Energy  Natural  Resources  to  Governor  David  Boren  in  Oklahoma,  and  an
administrative  assistant to Governor George Nigh in Oklahoma.  Mr. Hammons is a
graduate  of  Oklahoma  Baptist  University  and  received  a J.D. from Oklahoma
University  and  a  Masters in International Relations from Oklahoma University.

PETER LUCAS was appointed Chief Financial Officer effective March 13, 2000.  Mr.
Lucas served as Chief Financial Officer of WesTower Corporation until September,
1999.  He  is  also  a  director of Ubiquitel, a public company.  Mr. Lucas is a
Chartered  Accountant,  and  received  his  C.A. from the Institute of Chartered
Accountants  of  British  Columbia  in 1980.  He also has a Bachelor of Commerce
degree  form  the  University  of  Alberta.

JAMES  E.  HOGUE  was President, Chief Operating Officer and a Director of Aspen
from  July  1996  to  September  1999,  and President of its primary subsidiary,
Cotton  Valley  Energy  Corporation,  from February 1995 through July 1996.  Mr.
Hogue  also  has been a director, president and major shareholder of Third Coast
Capital,  Inc.,  a  venture  company  since  1988.

ANNE  HOLLAND has been the President of Mayco Petroleum Co., a crude oil trading
company,  since  1982.   Ms.  Holland  devotes her principal working time to her
position  as  President  of Mayco Petroleum Co. and acts as a director of Aspen.

WAYNE  T.  EGAN is a partner of the law firm of WeirFoulds LLP, and practices in
the  securities  law  section.  He  received an LL.B from Queen's University Law
School in 1988, and a Bachelor of Commerce degree from the University of Toronto
in 1985.  He is a member of the Canadian Bar Association.  WeirFoulds LLP serves
as  Aspen's  corporate  counsel  in  Ontario,  Canada.

RANDALL  B. KAHN currently is President of Triangle Industries, and was formerly
President  of  Dharma  Capital,  a venture capital company located in St. Louis,
Missouri.  From  1994  to  1999  Mr.  Kahn  served as Chief Executive Officer of
Tiffany  Industries,  an  office  furniture manufacturer in St. Louis, Missouri.
Prior  thereto, Mr. Kahn was a litigation attorney from 1993 to 1994 with Paule,
Camazine  and Blumenthal, a law firm in St. Louis, Missouri, and prior thereto a
litigation  attorney  with  Susman, Chermer, Rimmel & Shifrin, a law firm in St.
Louis, Missouri from 1989 to 1993.  Mr. Kahn received a BA in English literature
from Colorado College in 1982, and received a JD, Environmental Law honours from
Northwestern  School  of  Law,  Portland,  Oregon.

LENARD  BRISCOE  is  a  director  elected  at the December 20, 2000 shareholders
meeting.  Mr.  Briscoe  was formerly President of Briscoe Oil Operating Company,
Inc.  from  1980  to 2000.  Mr. Briscoe is a private investor involved with real
estate,  banking  and  farming.


<PAGE>
                                       48


As  of  the  date  hereof,  directors  and  officers  of Aspen as a group own or
exercise  direct or indirect control or direction over an aggregate of 4,114,495
Aspen  Shares,  representing 19.8% of the outstanding Aspen Shares (after giving
effect  to  the  issuance of 544,500 Aspen Shares on the exercise of the special
warrants  of Aspen that remain outstanding but not including the exercise of any
purchase  warrants).

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Compensation of Executive Officers

The  following  table discloses compensation paid to or awarded to Aspen's Chief
Executive  Officer  and each of the other most highly paid executive officers of
Aspen  whose  total  salary  and  bonus exceeded Cdn.$100,000 (collectively, the
"NAMED EXECUTIVE OFFICERS") for the last three most recently completed financial
years  of  Aspen.  Specific  aspects  of the compensation of the Named Executive
Officers  are  dealt  with  in  further  detail  in  subsequent  tables.

<TABLE>
<CAPTION>
                                                                   SECURITIES
                                                                      UNDER
                                                                     OPTIONS
                                                SALARY   BONUS(1)    GRANTED
NAME AND PRINCIPAL POSITION              YEAR   (US$)     (US$)        (#)
---------------------------------------  ----  --------  --------  -----------
<S>                                      <C>   <C>       <C>       <C>
Jack E. Wheeler                          2001   188,002         -      357,143
Chairman of the Board,  Chief Executive  2000   112,500         -      428,572
Officer and Director                     1999         -         -            -
---------------------------------------  ----  --------  --------  -----------
Ron Mercer                               2001   128,667   100,000      107,143
President and Chief Operating Officer    2000    48,000         -      214,286
                                         1999         -         -            -
---------------------------------------  ----  --------  --------  -----------
</TABLE>

Note:

(1)  Certain of Aspen's executive officers receive personal benefits in addition
     to  salary.  The aggregate amount of these benefits, however, do not exceed
     the  lesser of US$50,000 or 10% of the total annual salary reported for the
     executives.

Long-Term  Incentive  Plan  Awards  During the Most Recently Completed Financial
Year

Aspen  currently  has  no  long-term  incentive  plans, other than stock options
granted  from  time  to  time  by the Board of Directors under the provisions of
Aspen's  stock  option  plan  and  non-employee  directors  stock  option  plan.

Option  Grants  During  the  Most  Recently  Completed  Financial  Year

The  following  table summarizes option grants to Named Executive Officers under
Aspen's  stock  option  plan  in  the  fiscal  year  ended  June  30,  2001:

<TABLE>
<CAPTION>
                                                                  MARKET VALUE OF
                                 % OF TOTAL                      SHARES UNDERLYING
                  NUMBER OF   OPTIONS GRANTED                      OPTIONS ON THE
                 OPTIONS (1)  TO EMPLOYEES IN   EXERCISE PRICE   DATE OF THE GRANT
NAME                 (#)       FINANCIAL YEAR        (US$)             (US$)            EXPIRY DATE
---------------  -----------  ----------------  ---------------  ------------------  -----------------
<S>              <C>          <C>               <C>              <C>                 <C>
Jack E. Wheeler      357,143             46.7%             1.33                1.33  December 20, 2003
---------------  -----------  ----------------  ---------------  ------------------  -----------------
Ron Mercer           107,144             14.0%             1.33                1.33  December 20, 2003
---------------  -----------  ----------------  ---------------  ------------------  -----------------
</TABLE>


<PAGE>
                                       49


Option Exercises During the Most Recently Completed Financial Year and Financial
Year-End  Option  Values

The  following  table  summarizes information regarding the value of unexercised
options  held  by  Named  Executive  Officers  as  of  June  30,  2001.

<TABLE>
<CAPTION>
                                                                 VALUE OF UNEXERCISED
                                           UNEXERCISED OPTIONS   IN-THE-MONEY OPTIONS
                  SECURITIES   AGGREGATE        AT FY-END              AT FY-END
                 ACQUIRED ON     VALUE             (#)                   (US$)
                   EXERCISE     REALIZED       EXERCISABLE/          EXERCISABLE/
NAME                 (#)         (US$)        UNEXERCISABLE          UNEXERCISABLE
---------------  ------------  ----------  --------------------  ---------------------
<S>              <C>           <C>         <C>                   <C>
Jack E. Wheeler             -           -           785,715 / 0                      -
---------------  ------------  ----------  --------------------  ---------------------
Ron Mercer                  -           -           321,429 / 0                      -
---------------  ------------  ----------  --------------------  ---------------------
</TABLE>
Compensation  of  Directors

Each  director who is not an employee of Aspen is paid US$500 per meeting of the
board of directors and US$500 per committee meeting not held on the same date as
a  board  meeting.  Directors  are  permitted  to accept shares in lieu of cash.
Directors  who  are  employees  of Aspen are not paid any extra compensation for
service  on  the board or on committees.  No directors were compensated by Aspen
during  the  last  financial  year for services as consultants or experts, other
than approximately US$92,292 paid in legal fees to WeirFoulds LLP, Toronto.  Mr.
Wayne  T.  Egan,  a  current  director  of  Aspen,  is  a  partner in said firm.

Employment  Agreements

Aspen  does  not  have  employment contracts with any of its executive officers,
other  than  with Jack Wheeler, its Chief Executive Officer and Chairman and Ron
Mercer,  its  President.  The  agreement  with  Mr.  Wheeler  is effective until
September  17,  2006, and he is paid a base salary of US$200,000 per year, to be
reviewed  annually  by  the board of directors of Aspen.  The agreement with Mr.
Mercer  is  effective  until  January  1,  2005, and he is paid a base salary of
US$120,000 per year, to be reviewed annually by the board of directors of Aspen.
Under  the  terms  of  both  employment  agreements, in the event of termination
without  cause  or  change  of  control, each is to receive 60 months salary and
bonus.  There  is  no  severance  compensation  otherwise  payable.

Indebtedness  of  Directors  and  Officers

None  of  the  directors  or officers of Aspen or their respective Associates or
Affiliates  is  indebted  to  Aspen.

INTERESTS  OF  MANAGEMENT  AND  OTHERS  IN  MATERIAL  TRANSACTIONS

Pursuant  to  a purchase agreement made on September 16, 1999, with an effective
date  from July 1, 1999, Aspen acquired 50% of the issued and outstanding shares
of  East Wood from 4 vendor shareholders of East Wood in exchange for issuing to
the  vendor  shareholders  3,571,429 Aspen Shares and 3,032,985 special warrants
each  of  which  was  exercisable  for no consideration for one Aspen Share. The
vendor shareholders included Jack Wheeler, the Chairman, Chief Executive Officer
and  a  director  of  Aspen, who received 2,857,143 Aspen Shares.  The estimated
value  of  the  East  Wood  shares  acquired  was  $5,895,840.

Pursuant to a purchase agreement made as of February 28, 2000 Aspen acquired the
remaining  50%  of  the issued and outstanding shares of East Wood from 6 vendor
shareholders  of  East  Wood  in exchange for issuing to the vendor shareholders
3,747,271 Aspen Shares and a promissory note in the amount of US$3,000,000.  The
vendor  shareholders  included  Farrell  Kahn  and  his  son, Randall B. Kahn, a
director  of  Aspen,  who  received  99,066  Aspen  Shares.

Pursuant  to  a  purchase  agreement  made  effective as of April 1, 2000, Aspen
acquired  certain  oil and gas interests and all of the outstanding common stock
of  Mercer  Oil  and  Gas  Company  from  Ron Mercer, the President of Aspen, in
exchange  for cash and 142,857 Aspen Shares.  The value of the acquired property
was estimated at the time of acquisition as US$343,800.  Prior to the closing of
the  acquisition  of  Mercer Oil, Aspen purchased certain oil and gas properties
from  Mercer  Oil  for  US$300,000  in  cash.


<PAGE>
                                       50

Effective  May  1,  2000,  Aspen  acquired  through  a  merger  with Briscoe Oil
Operating,  Inc.  a  55%  undivided  interest  in  171  properties located in 21
counties in Oklahoma, Texas, and Kansas for US$3,000,000.  Also effective May 1,
2000,  Aspen  also  acquired  17  producing  oil  and gas properties, equipment,
vehicles  and  a  10-year  equipment  facility yard lease from L.C.B. Resources,
Inc.,  which  was  paid  by  the  issuance of 571,429 Aspen Shares.  Briscoe Oil
Operating,  Inc.  and  L.C.B.  Resources,  Inc.  were  both controlled by Lenard
Briscoe,  a  director  of  Aspen.

Effective  January  1,  2001, Aspen acquired United Cementing and Acid Co., Inc.
for  US$1,040,000  in cash and 250,000 Aspen Shares.  Contemporaneously with the
acquisition  Aspen sold 25% of United Cementing to Lenard Briscoe for a purchase
price  (composed  of  cash  and  debt  cancellation) of US$312,500.  Mr. Briscoe
presently  is  indebted  to  United  Cementing  in  the  amount of approximately
US$125,000  under  a  non-interest  bearing  promissory  note.

Aspen  paid aggregate legal fees of US$92,292 in fiscal year 2001 to WeirFoulds,
LLP  a  Toronto law firm in which Wayne Egan, a director of Aspen, is a partner.

The  transactions  described  in  this  Section  were  ratified by a majority of
Aspen's  independent  directors who did not have an interest in the transactions
and who had access, at Aspen's expense, to available material information and to
Aspen's  independent  counsel.

Any  future  transactions between Aspen and its affiliates will be approved by a
majority  of  disinterested directors and will be on terms no less favourable to
Aspen  than  those  which  could  be  obtained from unrelated third parties. Any
forgiveness  of  loans  must  be  approved  by a majority of Aspen's independent
directors  who  do not have an interest in the transactions and who have access,
at  Aspen's  expense,  to either Aspen's or their own independent legal counsel.

MATERIAL  CONTRACTS

Except  for  contracts  entered  into  in  the  ordinary course of business, the
following  sets  forth  the agreements entered into in the last two years before
the  date  hereof,  which  may  be  considered  presently  material  to  Aspen:

1.   The Pre-Acquisition Agreement. See "Background to and Reasons for the Offer
     -  Pre-Acquisition  Agreement";

2.   The  Lock-Up and Break-Up Fee Agreement. See "Background to and Reasons for
     the  Offer  -  Lock-Up  and  Break-Up  Fee  Agreement";

3.   The  Voting  Agreement  -  See  "Background  to and Reasons for the Offer -
     Voting  Agreement";

4.   The  purchase agreements for the acquisition of East Wood. See "Business of
     Aspen  -  Acquisitions";  and

5.   The  purchase  agreements  for  the  recent  acquisitions  of  Aspen.  See
     "Information  Concerning  Aspen  -  Business  of  Aspen  -  Acquisitions".

The  material  contracts  set  forth  above  may  be inspected at the offices of
WeirFoulds  LLP,  The Exchange Tower, Suite 1600, 130 King Street West, Toronto,
Ontario  M5X  1J5  during  normal business hours during the period of the Offer.

LEGAL  PROCEEDINGS

Aspen  is  not a party to any material legal proceedings, nor is it aware of any
material  pending  or contemplated legal proceedings to which it may be a party.

AUDITORS,  TRANSFER  AGENT  AND  REGISTRAR

The auditors of Aspen are Lane Gorman Trubitt LLP, Certified Public Accountants,
with  offices  at  2626  Howell,  the  Seventh  Floor,  Dallas,  Texas  75204.

Equity  Transfer  Services  Inc. is the registrar and transfer agent of Aspen in
Canada  at  its  office in Toronto, Ontario.  Continental Stock Transfer & Trust
Company  is  the  registrar and transfer agent for Aspen in the United States of
America  at  its  office  in  New  York,  New  York.


<PAGE>
INFORMATION  CONCERNING  ENDEAVOUR

RELIANCE  ON  ENDEAVOUR

The  information  concerning  Endeavour contained in the Offer and this Circular
has been taken from or is based upon publicly available documents and records of
Endeavour  on  file  with  Canadian  securities regulatory authorities and other
public  sources  and  the  securityholder  lists provided by Endeavour to Aspen.
Endeavour  management  has  granted  Aspen  limited access to certain additional
information  concerning  the  business  and  affairs  of Endeavour which are not
generally  available.  Although  Aspen has no knowledge that would indicate that
any  statements  relating  to  Endeavour contained herein taken from or based on
information  contained  in  such  documents  and  records  are  inaccurate  or
incomplete, none of Aspen or its directors or officers assume any responsibility
for  the  accuracy  or  completeness  of such information nor for any failure by
Endeavour  to disclose events or facts which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to Aspen.

CORPORATE  INFORMATION

Endeavour  was  incorporated  in  the  Province  of  Alberta  under the Business
Corporations  Act  (Alberta), originally as Fairmont Resources Inc., on February
12,  1987.  On  October  24,  1995,  Fairmont  changed  its  name  to "Endeavour
Resources  Inc."

Endeavour's  head  office  is  located at Suite #200, 630 - 4 Avenue SW, Calgary
Alberta,  T2P  0J9.

BUSINESS  OF  ENDEAVOUR

Endeavour  is  an  independent  energy  company  engaged in the exploration for,
development and production of petroleum and natural gas in Canada and the United
States.  The  Endeavour  Shares  are  listed  and posted for trading on the CDNX
under  the  symbol  "ERU".

Endeavour  carries  on  business  activities directly and indirectly through its
wholly-owned  subsidiaries  Lyse  Petroleum Ltd., 615434 Alberta Ltd., Endeavour
Resources  Limited and its partnership interest in ERU Oil & Gas Management LLC.
Endeavour  also  holds  26,185,982  common shares in Cubacan Exploration Inc., a
CDNX  listed  company  under  the  symbol  "CCX", which represents approximately
33.4%.

Employees

Endeavour  has  no  direct  employees, however, the services of 17 employees are
provided  to  Endeavour  by  management companies under contract with Endeavour.
Oil  and  Gas  Operations

Endeavour  has  been,  and  is  currently,  engaged  in  oil  and  natural  gas
exploration, development and production primarily in Western Canada and the Gulf
Coast  region  of  the  United  States.

Endeavour  holds an interest in 191 wells (53.3 net wells), 189 (53.1 net wells)
of  which are located in Canada.  Endeavour also operates 2 gas plants at Namaka
and  Brooks,  and  an  oil  battery  at  Sturgeon Lake; all these facilities are
located  in  Alberta.

Principal  Properties
---------------------

The  following  is  a  description  of  Endeavour's  principal  properties  and
activities.

Atlee,  Alberta.  The original Atlee area lands were acquired in the purchase of
Lyse  Petroleum  Ltd.  and  are  located  approximately  210  kilometres east of
Calgary.  Endeavour  operates and holds a 90% working interest in the Atlee area
lands.  Endeavour  purchased  an  additional  979 net acres at the March 7, 2001
Crown  Land  Sale increasing its current land holdings in the area to 25,536 net
acres.


<PAGE>
Beaumont,  Alberta.  The Beaumont area in central Alberta is located primarily 3
kilometres west of the town of Beaumont, Alberta. Endeavour holds a 100% working
interest  in  1,792  net  acres of land in this area, which was purchased at the
March  21,  2001  Crown Land Sale. Endeavour has acquired geophysics through the
region  and  has  completed  an  exploration  work-up.

Butte,  Alberta.  The Butte oil property is situated approximately 55 kilometres
west  of  the  city  of  Swift  Current,  Saskatchewan.  Endeavour acquired this
property  in  the  purchase  of Lyse Petroleum Ltd. and now holds an average 25%
working  interest in this property.  Regent Resources Ltd. operates the property
and  drilled  and  compled  8  wells  on  the  property in 2000. These wells are
currently  tied-in  and  on production, increasing the total producing oil wells
Endeavour  holds  interests  in  to  11  wells.

Hercules,  Alberta.  The  Hercules  area  in  central  Alberta  is located three
kilometres  west of the town of Sherwood Park, Alberta.  Endeavour operates this
area  currently  holding  640  acres in Section 16-51-23 W4M with a 100% working
interest in the rights from surface to base of the Belly River and a 50% working
interest  in  the  Viking  and  Mannville  horizons.

Namaka,  Alberta.  The  Namaka  area  in  southeastern  Alberta  is  located
approximately 35 kilometres east of Calgary. Endeavour holds between 50% and 56%
operated  working interests in the Namaka lands. Endeavour has an interest in 24
producing  gas  wells  in  this  area.  Endeavour has negotiated a joint venture
agreement  with  the  Siksika  Indian  Nation for the joint development of lands
within  the  Namaka  area.

Sturgeon  Lake,  Alberta.  The  Sturgeon  Lake  area is located approximately 80
kilometres  east  of Grande Prairie in north-central Alberta. Endeavour holds an
average  32.58%  working  interest on these lands.  Additional interests in this
area  were  acquired by Endeavour in the purchase of Lyse Petroleum Ltd. as well
as  the  acquisition of a third party's working interest in the area.  Endeavour
operates  the property and has both oil and sour gas handling facilities as well
as  an  interest  in  6  wells.  An extensive shallow, natural gas re-completion
program  in the existing wells in the field has resulted in additional gas wells
being  placed  on  production  in  the  third  quarter  of  2001.

Taber/Grassy,  Alberta.  Endeavour holds working interests between 19% and 37.5%
in  this Husky-operated oil property located approximately 80 kilometres west of
Medicine  Hat  in  southern  Alberta.

Pandura,  Texas.  Endeavour  holds  a  10.84%  working interest in this property
located  approximately  30  kilometres  south-south  west  of Laredo in southern
Texas.  Operated  by  Teal  Energy USA, Inc., the Kathleen Marie #1  and Hein #1
wells produce at gross rates of 1.0 million cubic feet per day plus 9 barrels of
oil  per  day,  providing  Endeavour  with a net production of 17 barrels of oil
equivalent  per  day.

Sabine  County,  Texas.  Endeavour  holds a net 10.625% working interest in this
1,594.5  acre  property operated by CG Operating, Inc. located approximately 175
kilometres  southeast  of  Tyler in East Texas.  The initial McGraw B#1 well was
drilled  and  tested  for  natural gas from the James Lime formation in the last
quarter  of  2000.

Other  Areas.  Endeavour  also  owns  minor  working interests in the Beaverhill
Lake,  Brooks,  Entice, Matziwin and Wintering Hills areas of Alberta as well as
the  Union  Jack  and  Gainsborough areas of Saskatchewan. During 2000, no wells
were  drilled  by  Endeavour  in  these  areas.

Exploitation  and  Development
------------------------------

Endeavour is active with over five exploration projects in various stages within
Western  Canada.

Drilling  Activity
------------------

In  the  third  quarter  of  2001,  Endeavour  drilled 4 wells, one of which was
abandoned.  As  well,  Endeavour  re-entered  7  wells for workovers to increase
production.


<PAGE>
                                       53


SELECTED  CONSOLIDATED  FINANCIAL  INFORMATION

The  following table summarizes, for the periods indicated, certain consolidated
selected  historical  consolidated  financial  information  of  Endeavour and is
qualified  in  its  entirety  by  the  detailed  provisions  of the consolidated
financial  statements and the notes thereto that have been publicly disclosed by
Endeavour.

<TABLE>
<CAPTION>
                                       Nine Months Ended                   Year Ended
                                         September 30                      December 31
                                          (unaudited)                       (audited)
                                             (Cdn$)                          (Cdn$)
                                      ----------------------  -----------------------------------
                                         2001        2000         2000         1999       1998
                                      ----------  ----------  -----------  ----------  ----------
<S>                                   <C>         <C>         <C>          <C>         <C>
Total Revenue                          5,473,497   4,046,281   6,232,970    3,324,537  2,140,606
------------------------------------  ----------  ----------  -----------  ----------  ----------
Earnings (loss) from operations          225,703     574,043     506,475        2,303   (338,304)
------------------------------------  ----------  ----------  -----------  ----------  ----------
Cash flow from operations per share         0.05        0.04        0.07         0.03       0.02
------------------------------------  ----------  ----------  -----------  ----------  ----------
Net earnings (loss)                      383,259     362,945    (601,125)       2,303   (164,110)
------------------------------------  ----------  ----------  -----------  ----------  ----------
Net earnings (loss) per share               0.01        0.01       (0.02)        0.00      (0.01)
------------------------------------  ----------  ----------  -----------  ----------  ----------
Total Assets                          16,791,353  13,213,975  17,974,434   10,548,904  9,506,827
------------------------------------  ----------  ----------  -----------  ----------  ----------
Total liabilities                      7,291,613   5,510,214   8,857,953    3,374,228  3,441,221
------------------------------------  ----------  ----------  -----------  ----------  ----------
Shareholders' Equity                   9,499,740   7,703,761   9,116,481    7,174,676  6,065,606
------------------------------------  ----------  ----------  -----------  ----------  ----------
</TABLE>

As  at September 30, 2001, Endeavour had working capital of $309,498.  Currently
there  are outstanding warrants and options to purchase an additional 11,715,895
Endeavour Shares which if exercised would provide $5,061,358 worth of additional
funding.   These  are  outlined  as  follows:

There  are 2,965,895 Lyse Purchase Warrants, which are exercisable at $0.40 each
and  expire  on  November  30,  2001,  which would provide additional funding of
$1,186,358.

There  are  the Series I Purchase Warrants which underlie the Endeavour Series I
Special  Warrants,  which  would  provide  additional  funding  of  $2,000,000.
There are the Series II Purchase Warrants which underlie the Endeavour Series II
Special  Warrants,  which  would  provide  additional  funding  of  $1,875,000.

AUTHORIZED  AND  ISSUED  SHARE  CAPITAL

The  authorized  share  capital  of Endeavour consists of an unlimited number of
Endeavour  Shares,  39,718,942 of which are issued and outstanding as fully paid
and  non-assessable  shares.

Endeavour  Shares

The  holders  of  the  Endeavour Shares are entitled to receive notice of and to
attend  and  vote  at  all  meetings  of  the shareholders of Endeavour and each
Endeavour  Share shall confer the right to one vote in person or by proxy at all
meetings  of the shareholders of Endeavour. The holders of the Endeavour Shares,
subject  to the prior rights, if any, of any other class of shares of Endeavour,
are  entitled  to  receive  such dividends in any financial year as the board of
directors  of  Endeavour  may  by  resolution  determine.  In  the  event of the
liquidation,  dissolution  or  winding-up  of  Endeavour,  whether  voluntary or
involuntary,  the  holders  of  the  Endeavour  Shares  are entitled to receive,
subject to the prior rights, if any, of the holders of any other class of shares
of  Endeavour,  the remaining property and assets of Endeavour. Endeavour may at
any time or times purchase or otherwise acquire all or any part of the Endeavour
Shares.


<PAGE>
                                       54


Endeavour  Special  Warrants

Each  Endeavour  Series I Special Warrant entitles the holder, upon the exercise
(or  deemed  exercise), to acquire, without payment of additional consideration,
one Endeavour Share and one Series I Purchase Warrant.  Each Endeavour Series II
Special  Warrant entitles the holder, upon the exercise (or deemed exercise), to
acquire,  without  payment  of additional consideration, one Endeavour Share and
one  Series  II  Purchase  Warrant.

The  Endeavour  Special Warrants are exercisable any time on or before 5:00 p.m.
(Calgary  time)  on the date which is the earlier of: (i) the fifth business day
after a receipt has been issued by certain securities regulatory authorities for
a  (final)  prospectus  qualifying  the distribution of that number of Endeavour
Shares and Purchase Warrants issuable upon the exercise of the Endeavour Special
Warrants;  and  (ii)  the  expiry  date.  For  the  Endeavour  Series  I Special
Warrants,  the  expiry date is November 30, 2001 and for the Endeavour Series II
Special  Warrants  the  expiry  date  is  June 28, 2002.   Any Endeavour Special
Warrants  that  remain unexercised at 5:00 p.m. (Calgary time) on the applicable
expiry  date  shall  be  deemed to have been exercised immediately prior to such
time  without  any  further  action  on  the part of the holder.  The holding of
Endeavour  Special Warrants does not constitute the holder thereof a shareholder
of  Endeavour  or entitle the holder to any right or interest in respect thereof
except  as  expressly  provided  in  the  Special  Warrant  Agreements.

Series  I  Purchase  Warrants  and  Series  II  Purchase  Warrants

The Series I Purchase Warrants and Series II Purchase Warrants issuable upon the
exercise  (or  deemed  exercise)  of  the  Endeavour  Special  Warrants  will be
evidenced  by  Series  I  Purchase  Warrant  Certificates and Series II Purchase
Warrant Certificates. The holders of Series I Purchase Warrants will be entitled
to  subscribe  for  and  purchase,  for  each  whole  Series  I Purchase Warrant
exercised, one Endeavour Share at a price of $0.40 at any time on or before 5:00
p.m.  (Alberta  time)  on  November  30, 2001. The holders of Series II Purchase
Warrants  will  be entitled to subscribe for and purchase, for each whole Series
II  Purchase  Warrant  exercised, one Endeavour Share at a price of $0.50 at any
time  on  or  before  5:00  p.m.  (Alberta  time)  on  June  28,  2002.

CAPITALIZATION  OF  ENDEAVOUR

The  following  table sets forth the capitalization of Endeavour as at September
30,  2001  and  as  at  December  31,  2000.

<TABLE>
<CAPTION>
                                                        SEPTEMBER 30, 2001      DECEMBER 31, 2000
                                             AMOUNT         (UNAUDITED)             (AUDITED)
                                           AUTHORIZED          CDN$                   CDN$
-----------------------------------------  ----------  ---------------------  ---------------------
<S>                                        <C>         <C>                    <C>
LONG-TERM INDEBTEDNESS:
-----------------------------------------  ----------  ---------------------  ---------------------
    Long-term debt (1)                                 $           3,100,000  $           3,150,000
-----------------------------------------  ----------  ---------------------  ---------------------
SHAREHOLDERS' EQUITY:
-----------------------------------------  ----------  ---------------------  ---------------------
                                                       $           7,336,203  $           7,336,203
    Common Shares (2) (3)                  Unlimited     (39,718,942 shares)    (39,718,942 shares)
-----------------------------------------  ----------  ---------------------  ---------------------
                                                       $             662,500  $             662,500
    Endeavour Series I Special Warrants     5,000,000   (5,000,000 warrants)   (5,000,000 warrants)
-----------------------------------------  ----------  ---------------------  ---------------------
                                                       $             587,250  $             587,250
    Endeavour Series II Special Warrants    3,750,000   (3,750,000 warrants)   (3,750,000 warrants)
-----------------------------------------  ----------  ---------------------  ---------------------
    Retained Earnings                                  $             913,787  $             530,528
-----------------------------------------  ----------  ---------------------  ---------------------
TOTAL SHAREHOLDERS' EQUITY                             $           9,499,740  $           9,116,481
-----------------------------------------  ----------  ---------------------  ---------------------
TOTAL CAPITALIZATION                                   $          12,139,740  $          12,266,481
-----------------------------------------  ----------  ---------------------  ---------------------
</TABLE>

(1)  The  long-term debt consists of a demand, revolving and reducing production
     loan, bearing interest at prime plus three quarters of one percent, secured
     by  a  $5,000,000  fixed  and  floating  charge  debenture covering various
     petroleum  and  natural  gas  leases  of  Endeavour.
(2)  Does  not include Endeavour Shares issuable pursuant to the exercise of the
     purchase  warrants  underlying the Endeavour Special Warrants.
(3)  Does  not  include  Endeavour  Shares  issuable  upon  the  exercise of the
     2,965,895  Lyse  Purchase  Warrants  exercisable  at $0.40, which expire on
     November  30,  2001.


<PAGE>
                                       55


PRICE  RANGE  AND  TRADING  VOLUME  OF  ENDEAVOUR  SHARES

The  Endeavour Shares began trading on the Alberta Stock Exchange (the "ASE") on
September  18,  1987 and ceased trading on the ASE on November 29, 1999 at which
time  the  Endeavour  Shares commenced trading on the CDNX under the symbol ERU.
The  following  table  sets  forth  the  high  and  low  sales prices and volume
information for the Aspen Shares for the periods indicated, in Canadian dollars,
as  reported  on  the  ASE  or  CDNX,  as applicable, for the periods indicated.

                                         ASE-CDNX (CDN. DOLLARS)
                                         -----------------------

                                         HIGH    LOW    VOLUME
                                         -----  -----  ---------
       July 1 - September 30, 1999       $0.35  $0.09  2,395,400
       October 1 - December 31, 1999     $0.29  $0.12  2,555,560
       January 1 - March 31, 2000        $0.28  $0.11  1,727,850
       April 1 - June 30, 2000           $0.18  $0.10    721,850
       July 1 - September 30, 2000       $0.31  $0.14  2,168,900
       October 1 - December 31, 2000     $0.25  $0.16  1,085,890
       January 1 - March 31, 2001        $0.25  $0.15    751,000
       April 1 - June 30, 2001           $0.26  $0.16    872,855
       July 1 - July 31, 2001            $0.21  $0.18    352,600
       August 1 - August 31, 2001        $0.19  $0.15    339,000
       September 1 - September 30, 2001  $0.17  $0.13    230,000
       October 1 - October 31, 2001      $0.22  $0.11    745,097
       November 1 - November 22, 2001    $0.17  $0.11    332,571

On  October  23,  2001 the closing price of the Endeavour Shares on the CDNX was
Cdn.  $0.14.  On  November 22, 2001 the closing price of the Endeavour Shares on
the  CDNX  was  Cdn.  $0.13.

DIVIDENDS

Based  on  publicly  available information, Endeavour has never declared or paid
any  dividends  on  the  Endeavour  Shares.

PRINCIPAL  SHAREHOLDERS

To  the  knowledge of the directors and officers of Endeavour, as of the date of
this circular no person beneficially owns or exercises control or direction over
Endeavour  Shares  carrying  more  than  10%  of the votes attached to Endeavour
Shares  except  for  the  following:

<TABLE>
<CAPTION>
                           NUMBER OF ENDEAVOUR SHARES BENEFICIALLY  PERCENTAGE OF ENDEAVOUR
NAME                            OWNED DIRECTLY OR INDIRECTLY              SHARES HELD
-------------------------  ---------------------------------------  ------------------------
<S>                        <C>                                      <C>
114161 Resources Ltd. (1)                4,866,666                           12.3%
-------------------------  ---------------------------------------  ------------------------
567895 Alberta Ltd. (2)                  4,492,297                           11.3%
-------------------------  ---------------------------------------  ------------------------
</TABLE>

(1)  114161 Resources Ltd. holds 600,000 Endeavour Series I Special Warrants and
     808,334  Endeavour  Series  II  Special Warrants. Once all of the Endeavour
     Special  Warrants  are  exercised,  114161  Alberta  Ltd.  would  then hold
     6,275,000  Endeavour  Shares  which  would  represent  a  holding of 12.9%.
(2)  567895  Alberta Ltd. does not hold any Endeavour Special Warrants. Once all
     Endeavour  Special Warrants are exercised, its holding would then represent
     9.2%.


<PAGE>
                                       56


DIRECTORS  AND  OFFICERS

The  following table sets forth the names and municipalities of residence of the
current  directors and executive officers of Endeavour, the offices held by them
and  their  principal  occupations.

<TABLE>
<CAPTION>
Name and                                                                                       Number of
Municipality of                                 Principal Occupation for Previous Five     Endeavour Shares
Residence             Position with Endeavour                   Years                          Held (4)
--------------------  -----------------------  ----------------------------------------  ---------------------
<S>                   <C>                      <C>                                       <C>

Jeffrey J. Chad       President, CEO and       President, CEO and director of            6,481,627 (2) (3) (6)
Dallas, Texas         Director                 Endeavour and President of the Riechad
                                               Group of Companies.

Allan J. Kent (1)     CFO and Director         CFO and director of Endeavour,            6,096,297 (2) (3) (5)
Calgary, Alberta                               President and director of Cubacan
                                               Exploration Inc. and President and
                                               Director of Prospect Oil and Gas
                                               Management Ltd.

Dennis P. Besler      Vice President of        Director and VP of Operations of                     1,358,580
Calgary, Alberta      Operations and Director  Endeavour and founder of Lyse
                                               Petroleum Ltd.

Robert D. Cudney (1)  Director                 Director of Endeavour and President               3,429,500 (7)
Toronto, Ontario                               and Chief Executive Officer of
                                               Northfield Capital Corporation

Brent Peters (1)      Director                 Director of Endeavour and Vice                         140,000
Toronto, Ontario                               President of Finance & Treasurer of
                                               Northfield Capital Corporation and
                                               director of Cubacan Exploration Inc. and
                                               director of Dotcom 2000 Inc.
<FN>
(1)  Member  of  Audit  Committee.
(2)  Includes  shares  held  directly  or  indirectly.
(3)  Includes  4,492,297  shares  held  by  567895  Alberta Ltd., which is owned
     equally  by  Jeffrey  J.  Chad  and  Allan  J.  Kent
(4)  Before  giving  effect  to  the  exercise  of  Endeavour  Special  Warrants
(5)  Allan  J.  Kent  holds  200,000  Endeavour  Series  I  Special  Warrants
(6)  Jeffrey  J.  Chad  holds  808,333  Endeavour  Series  II  Special  Warrants
(7)  Robert  Cudney  holds  600,000  Endeavour  Series  I  Special  Warrants
</TABLE>

Jeffrey  J.  Chad,  LL.B.,  P. Eng., of Dallas, Texas is the President and Chief
Executive  Officer  of Endeavour. Mr. Chad is also President of Riechad Group of
Companies,  a  group  of  investments  companies  with  interests in oil and gas
development  and  exploration  within  Alberta and the United States. From early
1983  to  1989,  Mr.  Chad  was  Vice  President  of Signalta Resources Limited,
engineer  and  manager  of  an  oil and gas corporation with annual cash flow in
excess of $20 million and a capital budget of $15 million. Mr. Chad received his
LL.B.  from  Dalhousie  Law School, Halifax, Nova Scotia. Mr. Chad also received
his  B.Sc.  Engineering  Physics  (Honours)  in  1980  from  Queen's University,
Kingston,  Ontario.

Allan  J.  Kent,  B.Math,  of  Calgary, Alberta is a founder and Chief Financial
Officer  of  Endeavour.  Mr.  Kent  is  also  President  and director of Cubacan
Exploration  Inc.,  a  CDNX  listed junior oil and gas company.  Mr. Kent is the
President,  a  director  and  co-owner  of Prospect Oil & Gas Management Ltd., a
private  Alberta  junior oil and gas corporation. From 1973 through to 1979, Mr.
Kent  was employed by a national accounting firm in Toronto, Ontario auditing in
various industries, including oil and gas, mining, automotive, manufacturing and
real  estate.  Mr. Kent received his Bachelor of Mathematics degree in 1977 from
the  University  of  Waterloo,  Waterloo,  Ontario.


<PAGE>
                                       57


Dennis  P. Besler, P. Eng., of Calgary, Alberta is a director and Vice-President
of  Operations of Endeavour.  Mr. Besler was a founder and was President of Lyse
Petroleum  Ltd.,  a private oil and gas corporation. Prior thereto, from 1994 to
1995,  Mr.  Besler  was  President  of  Ridgestarr Petroleum Management Ltd., an
engineering  and  oil  and gas management corporation. Mr. Besler was Operations
Manager  of ResoQuest Resources Ltd., a public oil and gas corporation. Prior to
ResoQuest,  Mr.  Besler  was  employed with Ladd Exploration and Amoco Canada in
various  engineering  operations  capacities.  Mr.  Besler  received  his  B.Sc.
Mechanical  Engineering  in 1977 from the University of Saskatchewan, Saskatoon,
Saskatchewan.

Robert  D. Cudney, of Toronto, Ontario is a director of Endeavour. Mr. Cudney is
the President and Chief Executive Officer of Northfield Capital Corporation. Mr.
Cudney  founded  Northfield  Capital  Corporation in 1981 and has been its Chief
Executive  Officer  since its inception. Mr. Cudney has served as a board member
for  a  number  of  corporations  in  the  manufacturing,  mining and technology
industries.

Brent  J.  Peters,  of  Toronto, Ontario, has been Vice President of Finance and
Treasurer  of  Northfield  Capital  Corporation,  a  publicly  traded investment
company  acquiring  shares  in public and private corporations since 1997 and is
also a director of Cubacan Exploration Inc. as well as a director of Dotcom 2000
IncMr. Peters has a Bachelor of Business Administration degree, specializing in
accounting.

INTERESTS  OF  MANAGEMENT  AND  OTHERS  IN  MATERIAL  TRANSACTIONS

There are no material interests, direct or indirect, of the current directors or
senior  officers of Endeavour, any known shareholders who beneficially owns more
than  10%  of the Endeavour Shares, or any known associate or affiliate of these
persons  in  any  transaction  within  the  past three years and in any proposed
transaction  which has materially affected or would materially affect Endeavour,
except  as  follows:

1.     Endeavour  contracts  services from Prospect Oil & Gas Management Ltd., a
company  related by common management and controlled by a director of Endeavour,
for general and administrative, land, development and exploration services for a
monthly  fee  of $40,000.  The total contract fees charged during the year ended
December  31,  2000  total $480,000.  Other fees and reimbursable costs totalled
$31,554.  These transactions are in the normal course of operations and measured
at  the  exchange  amount  which  is the amount of consideration established and
agreed  to  by  the  related  parties.  Certain of the petroleum and natural gas
activities  are  conducted  jointly  with  Prospect at normal industry terms and
conditions.  At December 31, 2000, Prospect owed Endeavour  $714,543 for oil and
gas  revenues in the normal course, which bears no interest and has no set terms
of  repayment

2.     Endeavour  is  related  to Cubacan Exploration Inc. ("CUBACAN") by way of
common management.  Endeavour is a shareholder of Cubacan and as at December 31,
2000  owned  7,870,676  common  shares,  representing  14.7%  of the outstanding
capital.  At December 31, 2000, Cubacan owed Endeavour $1,774,244 as a result of
cash  advances  and  reimbursable  costs  which bear no interest and have no set
terms  of  repayment.  These transactions are in the normal course of operations
and  are  measured  at  the exchange amount which is the amount of consideration
established  and  agreed  to  by  the  related  parties.  On  November  2, 2001,
Endeavour  converted  $1,831,531 of its advances to Cubacan to 18,315,306 common
shares of Cubacan.  This increased Endeavour's holdings in Cubacan to 26,185,982
common  shares  or  33.4%

3.     Endeavour  contracts  services  from Riechad Inc. and APT Inc., companies
controlled  by a director of Endeavour, for engineering and management services.
The  total  contract fees charged and accrued during the year ended December 31,
2000 total $140,550.  Other fees and reimbursable costs totalled $34,871.  These
transactions  are  in  the  normal  course of operations and are measured at the
exchange  amount  which is the amount of consideration established and agreed to
by  the  related  parties.  At  December  31,  2000, Endeavour owed Riechad Inc.
$125,104,  which  amount  bears  no  interest and has no set terms of repayment.

LEGAL  PROCEEDINGS

To  Aspen's  knowledge,  there  are no legal proceedings, pending or known to be
contemplated, involving Endeavour or its subsidiaries or which affects assets or
its  property  as  of  the date of this prospectus which management of Endeavour
believes  to  be  material  to  Endeavour,  except  as  follows:


<PAGE>
Endeavour  filed a statement of claim against a private company claiming certain
misrepresentations, breaches and wrongful interference with regard to a purchase
option  and  farmout  agreement  as well as damages in the amount of $3 million.
The  private  company  has  subsequently  filed  a  statement  of  defence  and
counterclaim  claiming  damages  in  the  amount  of  $6.8  million.  Endeavour
management  is  of  the  opinion that the counterclaim is without merit and will
ultimately  be  dismissed  by the courts.  The outcome of the litigation at this
time  is  indeterminable.

RISK  FACTORS

Prospective  holders  of  the  Aspen Shares and other securities should consider
carefully  the  following  factors:

Limited  Operating  History;  Capital  Intensive  Business;  Need for Additional
Funds.  From  its  inception  in  February 1995 through June 30, 1999, Aspen was
engaged  principally  in  organization and capitalization activities and was not
able  to  generate  material  net revenues from operations until the merger with
East  Wood  and  the  change  of  management. Aspen's business is highly capital
intensive  requiring  continuous  development  and  acquisition  of  oil and gas
reserves.  In  addition,  capital  is required to operate and expand Aspen's oil
field  operations and purchase equipment.  At June 30, 2001, Aspen had a working
capital  deficit  of  approximately  US$928,974. Aspen anticipates, based on its
currently  proposed  plans and assumptions relating to its operations, including
borrowings  from its line of credit, together with cash expected to be generated
from operations, that it will be able to meet its cash requirements for at least
the next 12 months.  However, if such plans or assumptions change or prove to be
inaccurate,  Aspen  could  be  required to seek additional financing sooner than
currently anticipated. Aspen has no commitments to obtain any additional debt or
equity  financing  and  there  can be no assurance that additional funds will be
available,  when  required, on terms favorable to Aspen. Any future issuances of
equity  securities  would  likely  result  in  dilution to Aspen's then existing
shareholders  while  the  incurring  of  additional indebtedness would result in
increased  interest  expense  and  debt  service  changes.  See  "Information
Concerning  Aspen  -  Management's  Discussion  and  Analysis".

History  of Losses.  Although Aspen's operations were profitable in fiscal years
2000  and 2001 following the merger with East Wood and the change of management,
Aspen  had  historically  incurred  losses,  including  a loss before income tax
benefits  of  US$13,324,086  in 1999. Aspen's accumulated deficit as of June 30,
2001  was  US$12,884,201.  Aspen  has  historically funded its operating losses,
acquisitions  and  expansion  costs  primarily  through a combination of private
offerings  of  debt  and  equity  securities  and  proceeds from the exercise of
options  and  warrants.

Significant Capital Expenditures Necessary for Undeveloped Properties. Aspen has
substantial  oil  and  gas  reserves  which are classified as Proved Undeveloped
Reserves,  meaning  very little production currently exists. Recovery of Aspen's
Proved  Undeveloped  Reserves  will  require  significant  capital expenditures.
Management  estimates  that  aggregate  capital  expenditures  of  approximately
US$18,700,000  will  be  required  to  fully  develop  these  reserves, of which
US$2,400,000 is expected to be incurred during the next 12 months.  No assurance
can be given that Aspen's estimates of capital expenditures will prove accurate,
that  its  financing  sources  will  be  sufficient  to  fund  fully its planned
development  activities or that development activities will be either successful
or  in accordance with Aspen's schedule.  Additionally, any significant decrease
in  oil  and  gas  prices or any significant increase in the cost of development
could  result  in  a significant reduction in the number of wells drilled and/or
reworked.  No  assurance  can be given that any wells will produce oil or gas in
commercially  profitable  quantities.

Exploration  and  Development  Risks;  Waterflood  Projects.  Aspen  intends  to
increase  its  development  activities  and  development drilling of oil and gas
reserves.  Even  though  development drilling carries less risk than exploration
drilling,  there  is  risk  that  production  will  not  be obtained and/or that
production  will  be insufficient to recover drilling and completion costs.  The
cost  of  drilling,  completing  and operating wells is often uncertain. Aspen's
drilling  operations  may  be  curtailed,  delayed  or  canceled  as a result of
numerous  factors, including title problems, weather conditions, compliance with
governmental  requirements and shortages or delays in the delivery of equipment.
Furthermore,  completion of a well does not assure a profit on the investment or
a recovery of drilling, completion and operating costs.  There are certain risks
associated  with  secondary  recovery  operations,  especially  the  use  of
waterflooding  techniques  and  drilling activities in general.  Part of Aspen's
inventory  of  development  prospects  consists  of  waterflood  projects.
Waterflooding  involves  significant  capital expenditures and uncertainty as to
the  total  amount  of  secondary reserves that can be recovered.  In waterflood
operations, there is generally a delay between the initiation of water injection
into a formation containing hydrocarbons and any increase in production that may
result.  The  operating  cost  per  unit of production of waterflood projects is
generally  higher during the initial phases of such projects due to the purchase


<PAGE>
                                       59


of  injection water and related costs, as well as during the later stages of the
life  of  the project as production declines.  The degree of success, if any, of
any  secondary  recovery program depends on a large number of factors, including
the  porosity  of the formation, the technique used and the location of injector
wells.

Volatility  of  Oil  and  Gas  Prices.  Aspen's  revenues, profitability and the
carrying  value  of  its oil and gas properties are substantially dependent upon
prevailing  prices  of,  and demand for, oil and gas and the costs of acquiring,
finding,  developing  and  producing  reserves.  Aspen's  ability to maintain or
increase its borrowing capacity, to repay current or future indebtedness, and to
obtain  additional  capital  on  favorable terms is also substantially dependent
upon  oil  and  gas  prices. Historically, the markets for oil and gas have been
volatile  and  are  likely to continue to be volatile in the future.  Prices for
oil  and  gas  are  subject  to wide fluctuations in response to: (i) relatively
minor  changes  in  the  supply  of,  and  demand  for, oil and gas; (ii) market
uncertainty;  and  (iii)  a  variety  of  additional  factors such as the recent
terrorists  attacks  on New York and Washington, all of which are beyond Aspen's
control.  These  factors  include domestic and foreign political conditions, the
price  and  availability  of  domestic  and  imported  oil and gas, the level of
consumer  and  industrial  demand,  weather,  domestic  and  foreign  government
relations,  the price and availability of alternative fuels and overall economic
conditions.  Furthermore,  the  marketability  of  Aspen's production depends in
part  upon  the  availability,  proximity  and  capacity  of  gathering systems,
pipelines  and  processing  facilities.  Volatility  in oil and gas prices could
affect  Aspen's ability to market its production through such systems, pipelines
or  facilities. Substantially all of Aspen's gas production is currently sold to
gas  marketing  firms or end users either on the spot market on a month-to-month
basis  at  prevailing  spot  market prices or under long-term contracts based on
current  spot  market  prices. Aspen normally sells its oil under month-to-month
contracts  with a variety of purchasers. Accordingly, Aspen 's oil and gas sales
expose  it  to  the  commodities risks associated with changes in market prices.
During  the  past  year, Aspen entered into several six month and one year fixed
price  contracts  (all  of  which  have now terminated) in order to mitigate the
effect  of  such  price  declines  on  Aspen.

Uncertainty  of  Estimates  of Reserves and Future Net Cash Flows. This Circular
contains estimates of Aspen's oil and gas reserves and the future net cash flows
from  those reserves, which have been prepared or audited by certain independent
petroleum  consultants.  There are numerous uncertainties inherent in estimating
quantities  of  reserves  of  oil  and  gas  and  in  projecting future rates of
production  and  the  timing of development expenditures, including many factors
beyond  Aspen's  control.  The  reserve  estimates in this Circular are based on
various  assumptions,  including,  for  example,  constant  oil  and gas prices,
operating  expenses,  capital  expenditures  and  the availability of funds and,
therefore,  are  inherently  imprecise  indications  of  future  net cash flows.
Actual  future  production,  cash  flows, taxes, operating expenses, development
expenditures  and  quantities  of  recoverable  oil  and  gas  reserves may vary
substantially  from those assumed in the estimates.  Any significant variance in
these  assumptions  could  materially affect the estimated quantity and value of
reserves set forth in this Annual Report.  Additionally, Aspen's reserves may be
subject to downward or upward revision based upon actual production performance,
results of future development and exploration, prevailing oil and gas prices and
other  factors,  many of which are beyond Aspen's control.  The present value of
future  net reserves discounted at 10% (the "PV-10") of Proved Reserves referred
to  in  this Circular should not be construed as the current market value of the
estimated Proved Reserves of oil and gas attributable to Aspen's properties.  In
accordance with applicable requirements of regulatory authorities, the estimated
discounted  future  net  cash  flows from Proved Reserves are generally based on
prices  and  costs  as of the date of the estimate, whereas actual future prices
and  costs may be materially higher or lower.  Actual future net cash flows also
will  be  affected  by:  (i) the timing of both production and related expenses;
(ii)  changes  in  consumption  levels;  and  (iii)  governmental regulations or
taxation.  In  addition,  the calculation of the present value of the future net
cash  flows  using  a  10% discount as required by regulatory authorities is not
necessarily  the  most  appropriate  discount  factor based on interest rates in
effect  from  time to time and risks associated with Aspen's reserves or the oil
and  gas  industry  in  general. Furthermore, Aspen's reserves may be subject to
downward  or  upward  revision  based  upon actual production, results of future
development,  supply  and  demand for oil and gas, prevailing oil and gas prices
and  other factors.  See "Information Concerning Aspen - Business of Aspen - Oil
and  Gas  Operations - Oil and Gas Reserves."  Under full cost accounting, Aspen
would  be  required  to  take  a  non-cash charge against earnings to the extent
capitalized  costs of acquisition, exploration and development (net of depletion
and  depreciation),  less  deferred income taxes, exceed the PV-10 of its Proved
Reserves and the lower of cost or fair value of unproved properties after income
tax  effects.  See  "Information  Concerning Aspen - Management's Discussion and
Analysis".


<PAGE>
                                       60


Operating  Hazards and Uninsured Risks; Production Curtailments. Aspen's oil and
gas  business  involves a variety of operating risks, including, but not limited
to,  unexpected formations or pressures, uncontrollable flows of oil, gas, brine
or  well  fluids  into  the  environment  (including groundwater contamination),
blowouts,  fires,  explosions,  pollution  and  other  risks, any of which could
result  in personal injuries, loss of life, damage to properties and substantial
losses.  Although  Aspen  carries  insurance  at  levels, which it believes, are
reasonable,  it  is  not  fully  insured against all risks. Aspen does not carry
business  interruption insurance.  Losses and liabilities arising from uninsured
or  under-insured  events  could have a material adverse effect on the financial
condition and operations of Aspen.  From time to time, due primarily to contract
terms,  pipeline  interruptions  or  weather  conditions, the producing wells in
which  Aspen  owns an interest have been subject to production curtailments. The
curtailments  range  from  production  being partially restricted to wells being
completely  shut-in.  The  duration  of  curtailments  varies from a few days to
several  months.  In most cases Aspen is provided only limited notice as to when
production will be curtailed and the duration of such curtailments. Aspen is not
currently  experiencing  any  material  curtailment  of  its  production.

Laws  and  Regulations.  Aspen's operations are affected by extensive regulation
pursuant  to  various  federal, state and local laws and regulations relating to
the  exploration for and development, production, gathering and marketing of oil
and  gas.  Matters  subject to regulation include discharge permits for drilling
operations,  drilling  and  abandonment  bonds or other financial responsibility
requirements,  reports  concerning operations, the spacing of wells, unitization
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  Risks.  Operations  of  Aspen  are  also  subject  to  numerous
environmental  laws, including but not limited to, those governing management of
waste,  protection  of  water,  air quality, the discharge of materials into the
environment  and  preservation  of  natural  resources.  Noncompliance  with
environmental  laws  and  the discharge of oil, gas, or other materials into the
air,  soil  or  water  may  give rise to liabilities to the government and third
parties,  including civil and criminal penalties, and may require Aspen to incur
costs  to remedy the discharge.  Laws and regulations protecting the environment
have  become  more  stringent  in recent years, and may in certain circumstances
impose  retroactive,  strict, and joint and several liability rendering entities
liable for environmental damage without regard to negligence or fault. From time
to  time Aspen has agreed to indemnify sellers of producing properties from whom
Aspen has acquired reserves against certain liabilities for environmental claims
associated  with  such  properties.  There  can be no assurance that new laws or
regulations,  or  modifications  of  or new interpretations of existing laws and
regulations, will not increase substantially the cost of compliance or otherwise
adversely  affect Aspen's oil and gas operations and financial condition or that
material  indemnity  claims  will  not  arise  against  Aspen  with  respect  to
properties acquired by or from Aspen.  While Aspen does not anticipate incurring
material  costs  in connection with environmental compliance and remediation, it
cannot  guarantee  that  material  costs  will  not  be  incurred.

Dependence  on Key Personnel. Aspen depends to a large extent on the services of
Jack  E.  Wheeler, Aspen's Chairman of the Board and Chief Executive Officer and
Ronald  L.  Mercer,  President  and  Chief  Operating  Officer.  The loss of the
services  of either of these individuals could have a material adverse effect on
Aspen's  operations.  Aspen has entered into five year employment contracts with
both of these executive officers, and has obtained key personnel life insurance.
Aspen  believes that its success is also dependent on its ability to continue to
employ  and  retain  skilled  technical  personnel.

Concentration  of  Voting Power. Aspen's Executive Officers, Directors and their
Affiliates  beneficially  own  approximately  19.8%  of  the Aspen Shares.  As a
result,  Officers, Directors and their Affiliates will have the ability to exert
significant  influence over the business affairs of Aspen, including the ability
to  influence  the  election  of  directors and results of voting on all matters
requiring  shareholder  approval.

Conflicts  of  Interests.  Certain  Officers, Directors and related parties have
engaged  in  business transactions with Aspen which were not the result of arm's
length  negotiations  between  independent parties. Management believes that the
terms  of these transactions were as favorable to Aspen as those that could have
been obtained from unaffiliated parties under similar circumstances.  All future
transactions between Aspen and its Affiliates will be on terms no less favorable
than could be obtained from unaffiliated third parties and will be approved by a
majority  of  the  disinterested  members  of  the  Board of Directors of Aspen.


<PAGE>
                                       61


Public  Market  and  Possible  Volatility  of  Securities.  The Aspen Shares are
traded on the TSE and the OTCBB.  The trading price of the Aspen Shares could be
subject  to  wide  fluctuations  in response to quarter-to-quarter variations in
operating  results,  announcements of drilling results by Aspen and other events
or  factors.  In  addition,  the  U.S.  stock  market  has  from  time  to  time
experienced  extreme  price  and  volume  fluctuations  which  have particularly
affected the market price for many companies and which often have been unrelated
to  the  operating  performance  of  these  companies.  These  broad  market
fluctuations  may  adversely  affect  the  market  price  of Aspen's securities.

No  Dividends. Aspen's Board of Directors presently intends to retain all of its
earnings  for the expansion of its business. Aspen therefore does not anticipate
the  distribution  of  cash  dividends  in  the  foreseeable future.  Any future
decision  of Aspen's Board of Directors to pay cash dividends will depend, among
other  factors, upon Aspen's earnings, financial position and cash requirements.

Exchange  Rate Fluctuations. Aspen is exposed to foreign exchange risks since it
has  granted  stock  options and warrants denominated in Canadian currency while
the  majority  of  its  expenditures  will  be  in  United  States dollars.  Any
significant reduction in the value of the Canadian dollar may decrease the value
of  funds  in United States dollars Aspen receives upon exercise of warrants and
options.

Competition.  Competition  in  the  oil  and  gas industry is intense generally.
Aspen  believes  that  price  is  the  determinative  factor  in competition for
drilling  prospects,  equipment  and  labor.  Major  and independent oil and gas
companies  and  syndicates actively bid for desirable oil and gas properties and
equipment  and  labor  required  to  operate  and develop them.  Many of Aspen's
competitors  have  substantially greater financial resources and exploration and
development  budgets than those of Aspen.  Therefore, competitors may be able to
pay  more  for  desirable leases and to evaluate, bid for and purchase a greater
number  of  properties or prospects than the financial or personnel resources of
Aspen  will  permit.

Markets.  Oil  and  gas  operating revenues are highly dependent upon prices and
demand  for oil and gas.  Numerous factors beyond Aspen's control can impact the
prices  of  its  oil  and  gas.  Decreases  in  oil and gas prices would have an
adverse  effect  on  Aspen's  proved  reserves, revenues, profitability and cash
flow.  Aspen  has  not  engaged  in  any  crude oil and gas price swaps or other
hedging  transactions  to  reduce its exposure to price fluctuations. Aspen may,
however,  engage  in  other similar transactions from time to time as management
deems  advisable.  During fiscal year 2001, Aspen sold its gas to many different
purchasers,  one  of  which,  Duke  Energy  Field  Services,  accounted  for
approximately  19%  of total gas revenues.  Aspen sells its oil production under
short-term  and  long-term  arrangements  at prices no less than the purchaser's
posted  prices  for  the  respective areas less standard deductions.  Management
believes that numerous buyers are available for Aspen's oil.  During fiscal year
2001,  Aspen  sold  its  oil  to many different purchasers, one of which, Plains
Marketing  L.P.  accounted  for  more  than  63%  of Aspen's total oil revenues.

Regulation.  Oil  and  gas  exploration,  production  and related operations are
heavily  regulated  by  federal  and  state authorities.  Failure to comply with
applicable  law  can  result  in  substantial penalties.  The cost of regulatory
compliance  will  increase  Aspen's  cost  of  doing  business  and  affect  its
profitability.  Regulation  of  oil  and  gas activities has changed many times.
Consequently,  Aspen is unable to predict the future cost or impact of complying
with such laws.  Texas requires drilling permits and bonds and operating reports
and  imposes  other  burdens relating to oil and gas exploration and production.
Texas  also  requires  conservation  measures,  including pooling of oil and gas
properties,  establishing  maximum  production rates from oil and gas wells, and
spacing,  plugging and abandoning wells.  These laws limit the rate at which oil
and gas can be produced from Aspen's properties.  The transportation and sale of
gas  in  interstate  commerce  is regulated by United States law and the Federal
Energy  Regulatory  Commission.

Operating  Hazards  and  Uninsured  Risks.  The  acquisition,  development,
exploration  for,  and production, transportation and storage of, crude oil, gas
liquids  and  gas  involves  a  high degree of risk, which even a combination of
experience,  knowledge  and  careful  evaluation  may  not  be able to overcome.
Aspen's operations are subject to all of the risks normally incident to drilling
gas  and  oil  wells,  operating  and  developing  gas  and  oil  properties,
transporting,  processing,  and  storing  gas, including encountering unexpected
formations  or  pressures,  premature  reservoir  declines, blow-outs, equipment
failures  and  other  accidents,  craterings,  sour gas releases, uncontrollable
flows  of  oil, gas or well fluids, adverse weather conditions, pollution, other
environmental  risks,  fires  and spills. Oil production requires high levels of
investment  and  has  particular economic risks, such as retaining wall failure,
fires,  explosions,  gaseous  leaks, spills and migration of harmful substances,


<PAGE>
                                       62


any  of  which  can cause personal injury, damage to property, equipment and the
environment,  and  result  in  the  interruption  of  operations.  Aspen is also
subject to deliverability uncertainties related to the proximity of its reserves
to  pipeline  and  processing  facilities  and  the inability to secure space on
pipelines  that  deliver  oil  and  gas  to  commercial markets.  Although Aspen
maintains  insurance  in  accordance with customary industry practice, it is not
fully  insured  against  all  of  these risks, nor are all such risks insurable.
Losses  resulting  from  the  occurrence  of  these  risks could have a material
adverse  impact  on  Aspen.

Regulatory  Matters.  On April 4, 2001, Aspen issued 1,230,000 special warrants,
each  of which entitled the holder thereof to receive, upon exercise and without
payment  of  any additional consideration, 1.1 units, each unit consisting of an
Aspen  Share  and  one-half  of a common share purchase warrant exercisable at a
price of US$1.80 per Aspen Share until April 4, 2003.  Pursuant to its agreement
with  the  agent  for such offering, Aspen was obligated to file a prospectus in
Ontario  to  qualify  the  securities issuable upon the exercise of such special
warrants.  In its review of the prospectus and the relevant financial statements
of  the  Aspen, the OSC raised an issue concerning the accounting method used by
Aspen  for  the  acquisition  of  East Wood in its audited financial statements.
Aspen  has made submissions to the OSC with respect to this issue and is waiting
confirmation from the OSC that the issue has been resolved.  If the issue is not
resolved  to  the  OSC's  satisfaction, the OSC could take action against Aspen,
including  the imposition of cease trade order against the Aspen Shares.  If the
cease  trade  order  is  imposed,  Aspen  would be prevented from completing the
acquisition  of  the  Endeavour  Securities  pursuant  to  the  Offer.

CANADIAN  FEDERAL  INCOME  TAX  CONSIDERATIONS

In  the opinion of WeirFoulds LLP, counsel to Aspen, the following is, as of the
date  hereof,  a  fair  and  adequate  summary of the principal Canadian federal
income  tax  considerations  under  the  Tax  Act  generally  applicable  to
Securityholders  who  dispose  of  Endeavour Securities pursuant to the Offer or
otherwise  dispose  of  Endeavour  Securities  pursuant  to certain transactions
described  in  the  Circular  under  "Acquisition  of  Endeavour  Securities Not
Deposited."  This  summary is intended to apply only to Securityholders who, for
the purposes of the Tax Act, hold their Endeavour Securities as capital property
and  deal at arm's length with Aspen.  Such securities will generally constitute
capital  property to a holder unless the holder is a trader or dealer in respect
of  the securities, holds the securities in the course of carrying on a business
or has acquired the securities in a transaction or transactions considered to be
an  adventure in the nature of trade.  Certain Securityholders who are residents
of Canada, for the purposes of the Tax Act, and whose Endeavour Securities might
not constitute capital property may be entitled to make an irrevocable election,
pursuant  to  subsection  39(4)  of  the Tax Act, to have such shares treated as
capital  property,  for  the  purposes  of  the  Tax  Act.  This  summary is not
applicable  to  Securityholders who are financial institutions, for the purposes
of  mark-to  market  provisions  of  the  Tax  Act,  who are specified financial
institutions,  for  the  purposes  of  the Tax Act, or who carry on an insurance
business  in  Canada,  or  elsewhere, and any such Securityholders should obtain
independent advice as to the Canadian federal income tax consequences to them of
disposing  of their Endeavour Securities pursuant to the Offer.  This summary is
based  on  the current provisions of the Tax Act, the regulations thereunder and
counsel's  understanding  of  the  current administrative policies and assessing
practices  of  the Canada Customs and Revenue Agency (the "CCRA").  In addition,
this  summary  takes  into  account  all specific proposals to amend the Tax Act
which  have  been publicly announced by the Department of Finance (Canada) prior
to  the date hereof.  However, there is no assurance that such proposals will be
enacted  in their current form, or at all.  This summary does not otherwise take
into account or anticipate any changes in law, whether by judicial, governmental
or legislative decision or action, and it does not take into account provincial,
territorial  or  foreign  income  tax  legislation  or considerations, which may
differ  significantly  from  those  discussed  herein.

This  summary  is  of  a  general nature only, is not exhaustive of all Canadian
federal  income  tax consequences, and is not intended to be, and should not be,
construed  to  be  legal or tax advice to any person, and no representation with
respect  to  Canadian  federal  income  tax  consequences  to any person is made
herein.  Accordingly, Securityholders should consult their own tax advisors with
respect  to  their  particular  circumstances.


<PAGE>
                                       63


RESIDENTS  OF  CANADA

The  following  portion  of  this  summary  is  specifically  applicable  to
Securityholders  who, at all relevant times, are or are deemed to be resident in
Canada,  for  the  purposes  of  the  Tax  Act.

Exchange  of  Endeavour Securities for Aspen Shares, Aspen Purchase Warrants and
Aspen  Class  B  Purchase  Warrants  (as  applicable).

A  Securityholder  who  exchanges  Endeavour  Securities for Aspen Shares, Aspen
Purchase  Warrants  and Aspen Class B Purchase Warrants (as applicable) pursuant
to  the  Offer  will be considered to have disposed of the Endeavour Securities,
for  the  purposes  of  the  Tax  Act,  in  exchange for the Aspen Shares, Aspen
Purchase  Warrants  and  Aspen  Class B Purchase Warrants (as applicable).  Such
Securityholders  will  realize  a  capital gain (or a capital loss) equal to the
amount  by  which  the  fair  market  value  of the Aspen Shares, Aspen Purchase
Warrants  and  Aspen  Class B Purchase Warrants (as applicable), received on the
exchange,  net  of  any reasonable costs of disposition, exceeds (or is exceeded
by)  the  adjusted cost base of such Endeavour Securities immediately before the
time  of  the  disposition.

One-half  of the amount of any such capital gain (a "TAXABLE CAPITAL GAIN") must
be  included  in  computing  income in the taxation year of the disposition, and
one-half  of  the  amount of any such capital loss (an "ALLOWABLE CAPITAL LOSS")
may  be  deducted  from  taxable  capital  gains  realized by the holder in that
taxation  year.  Allowable capital losses in excess of taxable capital gains may
be  carried  back  and  deducted in any of the three preceding taxation years or
carried forward and deducted in any subsequent taxation year against net taxable
capital  gains realized in such years, to the extent and under the circumstances
described  in  the  Tax  Act.  A capital gain realized by an individual may give
rise  to  a  liability  for  alternative  minimum  tax.

The  cost  of  Aspen  Shares, Aspen Purchase Warrants and Aspen Class B Purchase
Warrants  (as  applicable)  acquired  by  a  Securityholder  on  an  exchange of
Endeavour  Securities  pursuant  to  the  Offer will be equal to the fair market
value  of  such Aspen Shares, Aspen Purchase Warrants and Aspen Class B Purchase
Warrants  (as applicable) and such cost will be required to be averaged with the
adjusted  cost base of all other Aspen Shares, Aspen Purchase Warrants and Aspen
Class  B Purchase Warrants (as applicable) which are held by such Securityholder
as  capital  property.

Aspen  has  agreed  that  it  will  jointly  elect,  where  applicable, with any
Securityholder  pursuant  to  the  terms of Subsection 85(1) of The Act so as to
permit  such Securityholder to elect to realize a portion or none of any accrued
capital  gain  of  any  Endeavour Securities upon the exchange for Aspen Shares,
Aspen  Purchase  Warrants  and  Aspen Class B Purchase Warrants (as applicable).

Compulsory  Acquisition

As  described  under  "Acquisition of Endeavour Securities Not Deposited" in the
Circular,  Aspen  may acquire Endeavour Securities not deposited under the Offer
pursuant  to  a  Compulsory  Acquisition.  A  Securityholder  whose  Endeavour
Securities  are  acquired pursuant to a Compulsory Acquisition will generally be
subject  to the same tax consequences as those described above in relation to an
exchange  of  Endeavour Securities for Aspen Shares, Aspen Purchase Warrants and
Aspen  Class  B  Purchase  Warrants  (as  applicable).

Subsequent  Acquisition  Transaction

As  further  described under "Acquisition of Endeavour Securities Not Deposited"
in the Circular, it is the current intention of Aspen to consider other means of
acquiring, directly or indirectly, all of the Endeavour Securities not deposited
under  the  Offer  pursuant to a Subsequent Acquisition Transaction.  The income
tax consequences to a Securityholder of a Subsequent Acquisition Transaction may
be  different  from  the  income  tax consequences of a Securityholder tendering
Endeavour  Securities  to  the  Offer  and  will  depend  upon the nature of the
transaction, and could include a deemed dividend, a capital gain or loss or both
a  deemed  dividend  and  a  capital  gain or loss. Securityholders are urged to
consult  their  own tax advisors to determine he income tax consequences to them
of  a  Subsequent  Acquisition  Transaction.


<PAGE>
                                       64


NON-RESIDENTS  OF  CANADA

The  following  portion  of  this  summary  is  specifically  applicable  to
Securityholders ("NON-RESIDENT SECURITYHOLDERS") who, at all relevant times, are
not and are not deemed to be resident in Canada, or the purposes of the Tax Act,
and  do  not  use  or  hold,  and are not deemed to use or hold, their Endeavour
Securities in the course of carrying on a business in Canada.  Special rules may
apply  to  Non-Resident  Securityholders  who  are  insurers  that  carry  on an
insurance  business  in  Canada,  or  elsewhere.  Any  such  Non-Resident
Securityholders  are  urged  to  consult  their  own  tax  advisors.

Exchange  of  Endeavour  Securities  for  Aspen  Shares

A  Non-Resident  Securityholder  who  exchanges  Endeavour  Securities for Aspen
Shares,  Aspen  Purchase  Warrants  and  Aspen  Class  B  Purchase  Warrants (as
applicable)  pursuant  to  the  Offer will be considered to have disposed of the
Endeavour  Securities for the purposes of the Tax Act, and will be considered to
have  received  proceeds  of  disposition  equal to the fair market value of the
Aspen  Shares,  Aspen  Purchase Warrants and Aspen Class B Purchase Warrants (as
applicable),  received  on  the  exchange.

A  Non-Resident  Securityholder  will not be subject to tax under the Tax Act in
respect  of any capital gain realized by such Non-Resident Securityholder on the
disposition  of Endeavour Securities unless such Endeavour Securities constitute
taxable  Canadian property to such Non-Resident Securityholder, for the purposes
of  the  Tax Act, and such Non-Resident Securityholder is not otherwise entitled
to  relief  under  an applicable tax treaty or convention.  As long as Endeavour
Securities remain listed on a prescribed stock exchange, for the purposes of the
Tax  Act,  (which includes TSE), such Endeavour Securities will not generally be
taxable  Canadian  property of a Non-Resident Securityholder unless, at any time
during  the  fiveyear  period  immediately  preceding  the  disposition  of such
Endeavour  Securities,  such  Non-Resident Securityholder, together with persons
with  whom such Non-Resident Securityholder does not deal at arm's length, owned
or  is  considered to own (or had an option to acquire) not less than 25% of the
issued  shares  of  any  class  or  series  of  shares  of  the capital stock of
Endeavour.

Compulsory  Acquisition

As  described  under  "Acquisition of Endeavour Securities Not Deposited" in the
Circular,  Aspen  may acquire Endeavour Securities not deposited under the Offer
pursuant  to  a  Compulsory  Acquisition.  A  Non-Resident  Securityholder whose
Endeavour  Securities  are  acquired  pursuant  to a Compulsory Acquisition will
generally  be  subject  to the same tax consequences as those described above in
relation to an exchange of Endeavour Securities for Aspen Shares, Aspen Purchase
Warrants  and  Aspen  Class  B  Purchase  Warrants.

Subsequent  Acquisition  Transaction

As  further  described under "Acquisition of Endeavour Securities Not Deposited"
in the Circular, it is the current intention of Aspen to consider other means of
acquiring, directly or indirectly, all of the Endeavour Securities not deposited
under  the  Offer  pursuant to a Subsequent Acquisition Transaction.  The income
tax  consequences  to  a Non-Resident Securityholder of a Subsequent Acquisition
Transaction  will depend upon the nature of the transaction, and could include a
deemed  dividend, a capital gain or loss or both a deemed dividend and a capital
gain  or  loss.  Non-Resident Securityholders are urged to consult their own tax
advisors  to  determine  the  income  tax  consequences  to them of a Subsequent
Acquisition  Transaction.

Any  interest  or  deemed  dividends received by Non-Resident Securityholders as
part  of  a  Subsequent  Acquisition Transaction will be subject to non-resident
withholding tax at a rate of 25% or such lower rate as may be provided for under
the  terms  of  an  applicable  income  tax  treaty  or  convention.

STATUTORY  RIGHTS

Securities  legislation  in  certain  of the provinces and territories of Canada
provides the shareholders with, in addition to any other rights they may have at
law,  rights  of  rescission  or  to  damages,  or  both,  if  there  is  a
misrepresentation  in a circular or a notice that is required to be delivered to
the  shareholders. However, such rights must be exercised within prescribed time
limits.  Securityholders  should  refer  to  the  applicable  provisions  of the
securities  legislation  of their province or territory for particulars of those
rights  or  consult  with  a  lawyer.


<PAGE>
                                      A-1



                        ASPEN GROUP RESOURCES CORPORATION
                   PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS


                               SEPTEMBER 30, 2001
                                       AND
                                  JUNE 30, 2001


<PAGE>
                                      A-2


<TABLE>
<CAPTION>
PRO-FORMA  CONSOLIDATED  BALANCE  SHEET
AS AT SEPTEMBER 30, 2001      (EXPRESSED IN U.S. DOLLARS)

                                                         ASPEN GROUP    ENDEAVOUR                             PRO-FORMA
                                                          RESOURCES     RESOURCES                           CONSOLIDATED
                                                         CORPORATION       INC.       ADJUSTMENTS   NOTE    AT SEPT 30,01
                                                         (UNAUDITED)   (UNAUDITED)                           (UNAUDITED)
                                                        ==================================================================
<S>                                                     <C>            <C>           <C>            <C>    <C>
ASSETS
 CURRENT ASSETS
 Cash                                                   $    254,620   $     61,067  $          -          $      315,687
 Accounts Receivable
   Trade                                                   2,144,034        875,219             -               3,019,253
   Other                                                       3,461         22,166             -                  25,627
 Materials and supplies inventory                            451,740              -             -                 451,740
 Prepaid expenses                                            244,480         72,021             -                 316,501
 Due from related company                                          -        560,365             -                 560,365
                                                        -------------  ------------  -------------         ---------------
   Total current assets                                    3,098,335      1,590,838             -               4,689,173

 PROVED OIL & GAS PROPERTIES (FULL COST METHOD)           49,365,939      8,726,952       382,714   (2.1)      58,497,794
 net of accumulated depletion of $4,294,603                                                22,189   (2.2)

 PROPERTY & EQUIPMENT                                      2,547,226         43,496             -               2,590,722
 net of accumulated depreciation of $2,112,323

 OTHER ASSETS
 Investment and advances                                           -      1,086,042             -               1,086,042
 Notes receivable                                            203,000              -             -                 203,000
 Note receivable - related party                             125,000              -             -                 125,000
 Nonmarketable security                                      236,119              -             -                 236,119
 Prepaid expenses                                            165,816              -             -                 165,816
 Deposits and other assets                                   108,880         57,703             -                 166,583
                                                        -------------  ------------  -------------         ---------------
          TOTAL ASSETS                                  $ 55,850,315   $ 11,505,031  $    404,903          $   67,760,249
                                                        =============  ============  =============         ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES
 Accounts payable
   Trade                                                $  1,994,590   $  1,022,195  $    100,000   (2.1)  $    3,116,785
   Revenue distribution                                      482,568              -             -                 482,568
 Due to related companies                                          -         23,690             -                  23,690
 Accrued expenses                                            117,533              -             -                 117,533
 Accrued interest                                            150,593              -             -                 150,593
                                                        -------------  ------------  -------------         ---------------
                                                           2,745,284      1,045,885       100,000               3,891,169
 Current maturities of long-term debt                      2,291,243        348,948             -               2,640,191
                                                        -------------  ------------  -------------         ---------------
   Total current liabilities                               5,036,527      1,394,833       100,000               6,531,360

 LONG-TERM DEBT, LESS CURRENT MATURITIES                  15,799,266      1,981,662             -              17,780,928
 PROVISION FOR SITE RESTORATION                                    -        213,185             -                 213,185
 FUTURE INCOME TAXES                                               -      1,148,741       158,850   (2.4)       1,307,591
 MINORITY INTERESTS                                                -              -             -                       -
                                                        -------------  ------------  -------------         ---------------
                                                          20,835,793      4,738,421       258,850              25,833,064
                                                        -------------  ------------  -------------         ---------------
 STOCKHOLDERS' EQUITY
 Preferred stock, no par value, authorized-unlimited,
 issued-none Common stock, no par value ,
 authorized -unlimited, issued - 19,075,657               46,169,125      5,233,945    (5,233,945)  (2.2)      53,218,449
                                                                                        7,049,324   (2.1)
 Less subscriptions for 122,535 shares                      (214,436)             -             -                (214,436)
 Warrants and beneficial conversion feature                2,020,252        840,832      (840,832)  (2.2)       2,020,252
 Accumulated (deficit) earnings                          (12,960,419)       691,833      (691,833)  (2.2)     (12,960,419)
 Net effect of adjustments on earnings                             -              -        13,485   (2.3)          13,485
 Tax effect of the purchase price adjustment                       -              -      (150,146)  (2.4)        (150,146)
                                                        -------------  ------------  -------------         ---------------
   Total stockholders' equity                             35,014,522      6,766,610       146,053              41,927,185
                                                        -------------  ------------  -------------         ---------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $ 55,850,315   $ 11,505,031  $    404,903          $   67,760,249
                                                        =============  ============  =============         ===============
</TABLE>

See accompanying notes to these financial statements


<PAGE>
                                      A-3


<TABLE>
<CAPTION>
PRO-FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001     (EXPRESSED IN U.S. DOLLARS)


                                                              ASPEN GROUP    ENDEAVOUR                             PRO-FORMA
                                                               RESOURCES     RESOURCES                           CONSOLIDATED
                                                              CORPORATION       INC.       ADJUSTMENTS   NOTE    AT SEPT 30/01
                                                              (UNAUDITED)   (UNAUDITED)                           (UNAUDITED)
                                                             =================================================================
<S>                                                          <C>            <C>           <C>            <C>    <C>
REVENUE
 Oil & gas sales                                             $  1,978,957   $   577,510   $          -          $    2,556,467
 Product and service revenues                                     353,120             -              -                 353,120
                                                             -------------  ------------  -------------         ---------------
   Total revenues                                               2,332,077       577,510              -               2,909,587
                                                             -------------  ------------  -------------         ---------------

EXPENSES
 Oil and gas production                                           719,133       337,707              -               1,056,840
 Operating expenses                                               307,919             -              -                 307,919
 General and Administrative                                       480,656       126,776                                607,432
 Depreciation and depletion                                       642,519       357,212        (22,189)  (2.3)         977,542
                                                             -------------  ------------  -------------         ---------------
   Total expenses                                               2,150,227       821,695        (22,189)              2,949,733
                                                             -------------  ------------  -------------         ---------------

EARNINGS (LOSS) FROM OPERATIONS                                   181,850      (244,185)        22,189                 (40,146)
                                                             -------------  ------------  -------------         ---------------

OTHER INCOME (EXPENSE)
 Interest and financing expense                                  (258,290)      (35,494)             -                (293,784)
                                                             -------------  ------------  -------------         ---------------
   Total other                                                   (258,290)      (35,494)             -                (293,784)
                                                             -------------  ------------  -------------         ---------------

EARNINGS (LOSS) BEFORE INCOME TAXES AND MINORITY INTERESTS        (76,440)     (279,679)        22,189                (333,930)

INCOME TAX BENEFIT                                                      -        92,915         (8,704)                 84,211
                                                             -------------  ------------  -------------         ---------------

NET EARNINGS (LOSS) BEFORE MINORITY INTERESTS                     (76,440)     (186,764)        13,485                (249,719)

MINORITY INTERESTS                                                    222             -              -                     222
                                                             -------------  ------------  -------------         ---------------

NET EARNINGS (LOSS)                                          $    (76,218)  $  (186,764)  $     13,485          $     (249,497)
                                                             =============  ============  =============         ===============

NET EARNINGS (LOSS) PER SHARE                                      ($0.00)       ($0.00)                                ($0.01)
                                                             =============  ============                        ===============

NET EARNINGS (LOSS) PER SHARE - ASSUMING DILUTION                  ($0.00)       ($0.00)                                ($0.01)
                                                             =============  ============                        ===============

WEIGHTED AVERAGE SHARES                                        19,293,553    40,963,088                             29,022,286
                                                             =============  ============                        ===============

WEIGHTED AVERAGE SHARES - ASSUMING DILUTION                    20,678,657    49,468,942                             32,427,531
                                                             =============  ============                        ===============
</TABLE>

See accompanying notes to these financial statements


<PAGE>
                                      A-4


<TABLE>
<CAPTION>
PRO-FORMA CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2001     (EXPRESSED IN U.S. DOLLARS)


                                                         ASPEN GROUP    ENDEAVOUR                             PRO-FORMA
                                                          RESOURCES     RESOURCES                           CONSOLIDATED
                                                         CORPORATION       INC.       ADJUSTMENTS   NOTE    AT JUNE 30/01
                                                          (AUDITED)    (UNAUDITED)                           (UNAUDITED)
                                                        =================================================================
<S>                                                     <C>            <C>           <C>            <C>    <C>
ASSETS
 CURRENT ASSETS
 Cash                                                   $    907,794   $     14,962  $          -          $      922,756
 Accounts Receivable
   Trade                                                   2,209,026        843,736             -               3,052,762
   Other                                                       5,730         23,062             -                  28,792
 Materials and supplies inventory                            438,845              -             -                 438,845
 Prepaid expenses                                            341,055        134,433             -                 475,488
 Due from related company                                          -        150,295             -                 150,295
                                                        -------------  ------------  -------------         ---------------
   Total current assets                                    3,902,450      1,166,488             -               5,068,938

 PROVED OIL & GAS PROPERTIES (FULL COST METHOD)           47,646,027      8,515,653       195,950   (2.1)      56,187,795
 net of accumulated depletion of $3,737,393                                              (169,835)  (2.2)

PROPERTY &  EQUIPMENT
 net of accumulated depreciation of $2,027,013             2,515,943         39,127             -               2,555,070

OTHER ASSETS
 Investment and advances                                           -      1,057,036             -               1,057,036
 Notes receivable                                            203,000              -             -                 203,000
 Note receivable - related party                             125,000              -             -                 125,000
 Nonmarketable security                                      236,119              -             -                 236,119
 Prepaid expenses                                            115,500              -             -                 115,500
 Deposits and other assets                                   108,880         63,776             -                 172,656
                                                        -------------  ------------  -------------         ---------------
         TOTAL ASSETS                                   $ 54,852,919   $ 10,842,080  $     26,115          $   65,721,114
                                                        =============  ============  =============         ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES
 Accounts payable
   Trade                                                $  1,599,349   $    933,587  $    100,000   (2.1)  $    2,632,936
   Revenue distribution                                      632,284              -             -                 632,284
 Due to related companies                                          -         86,515             -                  86,515
 Accrued expenses                                            127,955              -             -                 127,955
 Accrued interest                                            150,593              -             -                 150,593
                                                        -------------  ------------  -------------         ---------------
                                                           2,510,181      1,020,102       100,000               3,630,283
 Current maturities of long-term debt                      2,321,243          7,248             -               2,328,491
                                                        -------------  ------------  -------------         ---------------
   Total current liabilities                               4,831,424      1,027,350       100,000               5,958,774

 LONG-TERM DEBT, LESS CURRENT MATURITIES                  15,164,533      1,417,235             -              16,581,768
 PROVISION FOR SITE RESTORATION                                    -        202,465             -                 202,465
 FUTURE INCOME TAXES                                               -      1,241,656        10,285   (2.4)       1,251,941
 MINORITY INTERESTS                                              222              -             -                     222
                                                        -------------  ------------  -------------         ---------------
                                                        $ 19,996,179   $  3,888,706  $    110,285          $   23,995,170
                                                        -------------  ------------  -------------         ---------------
 STOCKHOLDERS' EQUITY
 Preferred stock, no par value, authorized-unlimited,
 issued-none Common stock, no par value,
 authorized -unlimited, issued - 19,075,657               45,935,125      5,233,945    (5,233,945)  (2.2)      52,984,449
                                                                                        7,049,324   (2.1)
 Less subscriptions for 122,535 shares                      (214,436)             -             -                (214,436)
 Warrants and beneficial conversion feature                2,020,252        840,832      (840,832)  (2.2)       2,020,252
 Accumulated (deficit) earnings                          (12,884,201)       878,597      (878,597)  (2.2)     (12,884,201)
 Net effect of adjustments on earnings                             -              -      (102,954)  (2.3)        (102,954)
 Tax effect of purchase price discrepancy                          -              -       (77,166)  (2.4)         (77,166)
                                                        -------------  ------------  -------------         ---------------
   Total stockholders' equity                             34,856,740      6,953,374       (84,170)             41,725,944
                                                        -------------  ------------  -------------         ---------------

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $ 54,852,919   $ 10,842,080  $     26,115          $   65,721,114
                                                        =============  ============  =============         ===============
</TABLE>

See accompanying notes to these financial statements


<PAGE>
                                      A-5


<TABLE>
<CAPTION>
PRO-FORMA  CONSOLIDATED  STATEMENT  OF  EARNINGS
FOR  THE  YEAR  ENDED  JUNE  30,  2001          (EXPRESSED  IN  U.S.  DOLLARS)


                                                              ASPEN GROUP    ENDEAVOUR                             PRO-FORMA
                                                               RESOURCES     RESOURCES                           CONSOLIDATED
                                                              CORPORATION       INC.       ADJUSTMENTS   NOTE    AT JUNE 30/01
                                                               (AUDITED)    (UNAUDITED)                           (UNAUDITED)
                                                             =================================================================
<S>                                                          <C>            <C>           <C>            <C>    <C>
REVENUE
 Oil & gas sales                                             $ 10,055,440   $ 3,836,275   $          -          $   13,891,715
 Product and service revenues                                     493,834             -              -                 493,834
                                                             -------------  ------------  -------------         ---------------
   Total revenues                                              10,549,274     3,836,275              -              14,385,549
                                                             -------------  ------------  -------------         ---------------

EXPENSES
 Oil and gas production                                         2,787,550     1,167,340              -               3,954,890
 Operating expenses                                               353,815             -              -                 353,815
 General and Administrative                                     2,015,210       537,425              -               2,552,635
 Depreciation and depletion                                     2,241,146     1,371,669        169,835   (2.3)       3,782,650
                                                             -------------  ------------  -------------         ---------------
   Total expenses                                               7,397,721     3,076,434        169,835              10,643,990
                                                             -------------  ------------  -------------         ---------------

EARNINGS FROM OPERATIONS                                        3,151,553       759,841       (169,835)              3,741,559
                                                             -------------  ------------  -------------         ---------------

OTHER INCOME (EXPENSE)
 Interest and financing expense                                (1,085,286)     (148,219)             -              (1,233,505)
 Other income                                                      34,479             -              -                  34,479
                                                             -------------  ------------  -------------         ---------------
   Total other                                                 (1,050,807)     (148,219)             -              (1,199,026)
                                                             -------------  ------------  -------------         ---------------

EARNINGS BEFORE INCOME TAXES, OTHER AND MINORITY INTERESTS      2,100,746       611,622       (169,835)              2,542,533

INCOME TAX BENEFIT                                                      -        52,380         66,881   (2.4)         119,261

PROVISION FOR WRITEDOWN OF INVESTMENT AND ADVANCES                      -      (727,692)             -                (727,692)
net of income tax benefit                                    -------------  ------------  -------------         ---------------

NET EARNINGS (LOSS) BEFORE MINORITY INTERESTS                   2,100,746       (63,690)      (102,954)              1,934,102

MINORITY INTERESTS                                                   (222)            -              -                    (222)
                                                             -------------  ------------  -------------         ---------------

NET EARNINGS (LOSS)                                          $  2,100,524   $   (63,690)  $   (102,954)         $    1,933,880
                                                             =============  ============  =============         ===============

NET EARNINGS (LOSS) PER SHARE                                $       0.11   $      0.00                         $         0.07
                                                             =============  ============                        ===============

NET EARNINGS (LOSS) PER SHARE - ASSUMING DILUTION            $       0.10   $      0.00                         $         0.06
                                                             =============  ============                        ===============

WEIGHTED AVERAGE SHARES                                        18,825,709    40,718,942                             28,496,457
                                                             =============  ============                        ===============

WEIGHTED AVERAGE SHARES - ASSUMING DILUTION                    20,678,657    49,468,942                             32,427,531
                                                             =============  ============                        ===============
</TABLE>

See accompanying notes to these financial statements


<PAGE>
                                      A-6

ASPEN  GROUP  RESOURCES  CORPORATION
NOTES  TO  THE  PRO-FORMA  CONSOLIDATED  FINANCIAL  STATEMENTS
(UNAUDITED)

1.   BASIS  OF  PRESENTATION

     On  October  24,  2001,  Aspen  Group  Resources  Corporation ("Aspen") and
     Endeavour  Resources Inc. ("Endeavour") jointly announced that the Board of
     Directors  of  Endeavour  had accepted a proposal from Aspen, whereby Aspen
     will  acquire  all  of  the  issued  and outstanding common shares, special
     warrants  and  3,750,000  unexercised purchase warrants exercisable at Cdn.
     $.50  until  June  28,  2002  of  Endeavour. Aspen will issue 0.2375 common
     shares  plus  0.11875  share  purchase  warrants (each whole share purchase
     warrant  entitling the holder to purchase one common share of Aspen at U.S.
     $1.25  until  September  30,  2002 or U.S $ $1.75 thereafter until June 30,
     2003)  for each common share or special warrant of Endeavour (provided that
     for  each  of  the 3,7500,000 special warrants issued by Endeavour for Cdn.
     $0.30,  Aspen  shall  offer 0.2375 common shares, 0.11875 purchase warrants
     and  0.2375 Class B purchase warrants) and 0.2375 Class B purchase warrants
     of Aspen exercisable at the United States dollar equivalent (as at the date
     of  closing) of Cdn. $2.11 until June 28, 2002 for each purchase warrant of
     Endeavour  with  expiry  date  of  June  28,  2002,  all by way of a formal
     take-over bid for all of the issued and outstanding securities of Endeavour
     held  by residents of Canada, pursuant to a Pre-Acquisition Agreement to be
     tendered  by  Endeavour's  shareholders.

     The  accompanying  unaudited  pro-forma  consolidated  financial statements
     ("pro-forma  statements")  have  been  prepared  based  on  the  unaudited
     consolidated  interim  financial  statements as at and for the three months
     ended  September  30,  2001  of  Aspen  and  Endeavour,  and  the  audited
     consolidated  financial  statements  as  at and for the year ended June 30,
     2001 for Aspen and the unaudited 12 month period ended financial statements
     for  Endeavour.  In  the  opinion of management, these pro-forma statements
     include  all adjustments necessary for fair presentation in accordance with
     generally  accepted  accounting  principles  in  Canada,  presented in U.S.
     dollars.

     The  pro-forma  consolidated balance sheets give effect to the transactions
     described  in Note 2 as if it had occurred on the balance sheet dates while
     the  pro-forma  consolidated  statements  of  earnings give effect to those
     transactions  as  if  they  had occurred at the beginning of the respective
     periods.

     The  pro-forma  statements may not be indicative either of the results that
     actually would have occurred if the events reflected herein had taken place
     on  the  dates indicated or of results which may be obtained in the future,
     including operational and administrative efficiencies that would occur from
     the  combination  of  the  two  companies.

     The  pro-forma  statements  should  be read in conjunction with the audited
     consolidated  financial  statements  and  notes  thereto  of both Aspen and
     Endeavour.

2    PRO-FORMA  ASSUMPTIONS  AND  ADJUSTMENTS

     The pro-forma consolidated balance sheets and statements of operations give
     effect  to  the  following  transactions,  assumptions  and  adjustments:

     Accounting policies used in the preparation of the pro-forma statements are
     in  acccordance  with  those  used  in  the preparation of the consolidated
     statements  of  Aspen  for  the  year  ended June 30, 2001. These pro-forma
     financial  statements  assume  that  all  of  Endeavour's common shares and
     special  warrants  will  be  tendered  to  this  offer, which is more fully
     disclosed  in  the  Circular,  and would result in the issuance by Aspen of
     11,748,874  common  shares, 5,874,437 purchase warrants and 445,312 Class B
     purchase  warrants.


<PAGE>
                                      A-7


ASPEN  GROUP  RESOURCES  CORPORATION
NOTES TO THE PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)

CONSOLIDATED  BALANCE  SHEETS

2.1  The  transaction  will  be  accounted  for  using  the purchase method. The
     following  table  shows the assumptions made with respect to the allocation
     of  the  aggregate  purchase  price  to  Endeavour's  net  assets  and  the
     adjustments  necessary  to their historical cost carrying value at June 30,
     2001  and  the  most  recent  interim reporting period for the three months
     ended  September  30,  2001.

<TABLE>
<CAPTION>
                                                                           JUNE 30, 2001   SEPTEMBER 30, 2001
                                                                                   (US$)                (US$)
                                                                          --------------  -------------------
<S>                                                                       <C>             <C>
Fair Value of Aspen shares issued                                              7,049,324            7,049,324
Related fees and expenses                                                        100,000              100,000
                                                                          --------------  -------------------
Cost of Acquisition                                                            7,149,324            7,149,324
Book Value of net assets acquired                                              6,953,374            6,766,610
                                                                          --------------  -------------------
Purchase price discrepancy                                                       195,950              382,714
Allocation of purchase price discrepancy - Proved Oil and Gas Properties         195,950              382,714
                                                                          --------------  -------------------
                                                                                       -                    -
                                                                          ==============  ===================
</TABLE>

   Note:  Issue  of  capital  stock is  calculated  using 40,718,942 outstanding
          common  shares  and  8,750,000 special warrants outstanding as at June
          30,  2001  and  September 30, 2001 at an exchange ratio of .2375 Aspen
          shares  equals one Endeavour common share and a special warrant at the
          fair  value  of  each  Aspen  share.


2.2  Elimination  of  equity  of  Endeavour  in connection with the transaction.

CONSOLIDATED  STATEMENTS  OF  EARNINGS

2.3  Depreciation  and  depletion
     An  adjustment to depreciation and depletion to reflect the pro-forma value
     of  capital  assets  at  the  assumed  acquisition  date.

2.4  Income  tax  benefit  (future)
     An  adjustment  has  been made for income taxes for the impact of the items
     noted  above  that  affect  the  current  year  income

2.5  Earnings  per  share
     Earnings  per  share  calculations  give  effect  to  the  issuance  of the
     additional  common  shares  of Aspen for the acquisition of Endeavour as if
     the  shares  had  been  issued  at the beginning of the respective periods.

2.6  Cash  flow  per  share
     Cash  flow  per share calculations below give effect to the issuance of the
     additional  common  shares  of Aspen for the acquisition of Endeavour as if
     the  shares  had  been  issued  at the beginning of the respective periods.

<TABLE>
<CAPTION>
CASH FLOW FROM OPERATIONS                                                   TWELVE MONTHS ENDED   THREE MONTHS ENDED
                                                                                  JUNE 30, 2001   SEPTEMBER 30, 2001
                                                                                          (US$)                (US$)
<S>                                                                         <C>                   <C>
Net earnings (loss) for the period                                                     1,933,880            (249,497)

Adjustments to reconcile net earnings (loss) to cash flow from operations
    Depreciation and depletion                                                         3,782,650             977,542
    Minority interests                                                                       222                (222)
    Provision for write down of investment (net of income taxes)                         727,692                   -
    Future income taxes                                                                  119,261              84,211
                                                                            --------------------  -------------------

CASH FLOW FROM OPERATIONS                                                              6,563,705             812,034
                                                                            ====================  ===================

CASH FLOW FROM OPERATIONS PER SHARE                                                         0.23                0.03
                                                                            ====================  ===================

CASH FLOW FROM OPERATIONS PER SHARE - ASSUMING DILUTION                                     0.20                0.03
                                                                            ====================  ===================
</TABLE>


<PAGE>
                                      B-1




                        ASPEN GROUP RESOURCES CORPORATION
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                        AND INDEPENDENT AUDITOR'S REPORT

                                  JUNE 30, 2001


<PAGE>
                                      B-2


          INDEPENDENT  AUDITOR'S  REPORT



          Board  of  Directors
          Aspen  Group  Resources  Corporation


          We  have  audited the accompanying consolidated balance sheet of Aspen
          Group  Resources  Corporation and subsidiaries as of June 30, 2001 and
          the  related  consolidated  statements  of  earnings,  changes  in
          stockholders'  equity  and cash flows for each of the two years in the
          period  ended  June  30,  2001.  These  financial  statements  are the
          responsibility  of  the Company's management. Our responsibility is to
          express  an opinion on these financial statements based on our audits.

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

          In  our  opinion,  the  consolidated  financial statements referred to
          above present fairly, in all material respects, the financial position
          of  Aspen  Group Resources Corporation and subsidiaries as of June 30,
          2001,  and  the  results  of their operations and their cash flows for
          each of the two years in the period ended June 30, 2001, in conformity
          with  accounting principles generally accepted in the United States of
          America.


          Lane  Gorman  Trubitt  L.L.P.

          "Signed"

          Dallas,  Texas
          August  10,  2001


<PAGE>
                                      B-3


<TABLE>
<CAPTION>
                            CONSOLIDATED BALANCE SHEET
                            (EXPRESSED IN U.S. DOLLARS)
                                   JUNE 30, 2001

                                     ASSETS
                                     ------

CURRENT ASSETS
<S>                                                                  <C>
  Cash                                                               $    907,794
  Accounts receivable
    Trade                                                               2,209,026
    Other                                                                   5,730
  Materials and supplies inventory                                        438,845
  Prepaid expenses                                                        341,055
                                                                     -------------
    Total current assets                                                3,902,450
                                                                     -------------

PROVED OIL & GAS PROPERTIES (FULL COST METHOD)                         47,646,027
  net of accumulated depletion of $3,737,393


PROPERTY AND EQUIPMENT
  net of accumulated depreciation of $2,027,013                         2,515,943

OTHER ASSETS
  Notes receivable                                                        203,000
  Note receivable - related party                                         125,000
  Nonmarketable security                                                  236,119
  Prepaid expenses                                                        115,500
  Deposits and other assets                                               108,880
                                                                     -------------

      TOTAL ASSETS                                                   $ 54,852,919
                                                                     =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES
  Accounts payable
    Trade                                                            $  1,599,349
    Revenue distribution                                                  632,284
  Accrued expenses                                                        127,955
  Accrued interest                                                        150,593
                                                                     -------------
                                                                        2,510,181
  Current maturities of long-term debt                                  2,321,243
                                                                     -------------
    Total current liabilities                                           4,831,424
                                                                     -------------

LONG-TERM DEBT, LESS CURRENT MATURITIES                                15,164,533

MINORITY INTERESTS                                                            222

STOCKHOLDERS' EQUITY
  Preferred stock, no par value, authorized-unlimited, issued-none
     issued-none                                                                -
  Common stock, no par value, authorized-unlimited,
    issued - 19,075,657 shares                                         45,935,125
  Less subscriptions for 122,535 shares                                  (214,436)
  Warrants and beneficial conversion feature                            2,020,252
  Accumulated deficit                                                 (12,884,201)
                                                                     -------------
    Total stockholders' equity                                         34,856,740
                                                                     -------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $ 54,852,919
                                                                     =============
"Jack Wheeler"                            "James Hogue"
Jack Wheeler, director                    James Hogue, director
</TABLE>

See accompanying notes to these financial statements.


<PAGE>
                                      B-4


<TABLE>
<CAPTION>
                       CONSOLIDATED STATEMENTS OF EARNINGS
                           (EXPRESSED IN U.S. DOLLARS)
                       YEARS ENDED JUNE 30, 2001 AND 2000


                                                  2001          2000
                                              ------------  ------------
<S>                                           <C>           <C>
REVENUE
  Oil and gas sales                           $10,055,440   $ 3,461,803
  Equipment sales                                       -        19,915
  Product and service revenues                    493,834             -
                                              ------------  ------------
    Total revenues                             10,549,274     3,481,718
                                              ------------  ------------

EXPENSES
  Oil and gas production                        2,787,550       953,991
  Cost of equipment sold                                -        10,357
  Operating expenses                              353,815             -
  General and administrative                    2,015,210       629,576
  Depreciation and depletion                    2,241,146     1,116,049
                                              ------------  ------------
    Total expenses                              7,397,721     2,709,973
                                              ------------  ------------

EARNINGS FROM OPERATIONS                        3,151,553       771,745

OTHER INCOME (EXPENSE)
  Interest and financing expense               (1,085,286)     (665,362)
  Other income                                     34,479       236,992
                                              ------------  ------------
    Total other                                (1,050,807)     (428,370)
                                              ------------  ------------

EARNINGS BEFORE INCOME
   TAXES AND MINORITY INTERESTS                 2,100,746       343,375

INCOME TAX BENEFIT                                      -             -
                                              ------------  ------------

NET EARNINGS BEFORE
   MINORITY INTERESTS                           2,100,746       343,375


MINORITY INTERESTS                                    222       249,259
                                              ------------  ------------

NET EARNINGS                                  $ 2,100,524   $    94,116
                                              ============  ============

NET EARNINGS PER SHARE                        $       .11   $       .01

NET EARNINGS PER SHARE - ASSUMING DILUTION    $       .10   $       .01

WEIGHTED AVERAGE SHARES                        18,825,709    11,953,798


WEIGHTED AVERAGE SHARES - ASSUMING DILUTION    20,084,953    12,080,212
</TABLE>

See  accompanying  notes  to  these  financial  statements.


<PAGE>
<TABLE>
<CAPTION>
                                      B-5


                                   CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                YEARS ENDED JUNE 30, 2001 AND 2000 (EXPRESSED IN U.S. DOLLARS)

                                                                                                            Warrants
                                                                           Common Stock                       And
                                                  Common  Stock             Subscribed      Special Shares  Beneficial
                                               -----------------------  -------------------  ------------  Conversion  Accumulated
                                                Shares      Amount      Shares     Amount    Shares Amount  Feature      DEFICIT
                                               ---------  ------------  -------  ----------  -----  -----  --------  -------------
<S>                                            <C>        <C>           <C>      <C>         <C>    <C>    <C>       <C>
BALANCES, June 30, 1999                        3,881,903  $23,548,537   122,535  $(214,436)      -    $ -  $823,695  $(15,078,841)

Issuance of shares in August 1999
  to related parties for settlement of
  debt  ($1.12 per share)                        446,429      500,000         -          -       -      -         -             -
Issuance of shares in August 1999
  for services related to the acquisition
  of oil and gas properties ($1.12 per share)     85,714       96,000         -          -       -      -         -             -
Exercise of warrants in September 1999
  for services related to the acquisition
  of oil and gas properties ($1.12 per share)     79,048       88,533         -          -       -      -         -             -
Issuance of shares in September 1999
  for services related to the acquisition
  of oil and gas properties ($1.53 per share)    142,857      218,750         -          -       -      -         -             -
Issuance of shares in September 1999 for
  services related to the acquisition
  of oil and gas properties ($1.12 per share)     42,857       48,000         -          -       -      -         -             -
Issuance of shares and warrants in private
  offering which closed in September 1999
  ($1.75 per share)                              171,429      300,000         -          -       -      -         -             -
Issuance of shares and special warrants
  in September 1999 for the acquisition
  of East Wood ($.89 per share)                6,604,414    5,895,840         -          -       -      -         -             -
Issuance of shares in September 1999 for
  services related to the acquisition
  of oil and gas properties ($1.12 per share)    114,285      128,000         -          -       -      -         -             -
Costs related to sales of stock                        -      (39,448)        -          -       -      -         -             -
Exercise of warrants in December 1999 for
  services related to the acquisition
  of oil and gas properties ($1.12 per share)     77,619       86,933         -          -       -      -         -             -
Issuance of shares and warrants in
  private offering which closed in
  December 1999  ($1.23 per share)               160,408      196,500         -          -       -      -         -             -
Costs related to sales of stock                        -      (95,470)        -          -       -      -         -             -
Issuance of shares in January 2000 for
  services related to the acquisition
  of oil and gas properties ($.88 per share)     142,857      125,000         -          -       -      -         -             -
Issuance of shares and warrants in private
  offering which closed in
  February 2000 ($1.05 per share)                571,429      600,000         -          -       -      -         -             -
Issuance of shares in February 2000
  for the Acquisition of East
  Wood  ($2.41 per share)                      3,747,271    9,033,170         -          -       -      -         -             -


                                                   Total
                                               -----------
<S>                                            <C>
BALANCES, June 30, 1999                        $9,078,955

Issuance of shares in August 1999
  to related parties for settlement of
  debt  ($1.12 per share)                         500,000
Issuance of shares in August 1999
  for services related to the acquisition
  of oil and gas properties ($1.12 per share)      96,000
Exercise of warrants in September 1999
  for services related to the acquisition
  of oil and gas properties ($1.12 per share)      88,533
Issuance of shares in September 1999
  for services related to the acquisition
  of oil and gas properties ($1.53 per share)     218,750
Issuance of shares in September 1999 for
  services related to the acquisition
  of oil and gas properties ($1.12 per share)      48,000
Issuance of shares and warrants in private
  offering which closed in September 1999
  ($1.75 per share)                               300,000
Issuance of shares and special warrants
  in September 1999 for the acquisition
  of East Wood ($.89 per share)                 5,895,840
Issuance of shares in September 1999 for
  services related to the acquisition
  of oil and gas properties ($1.12 per share)     128,000
Costs related to sales of stock                   (39,448)
Exercise of warrants in December 1999 for
  services related to the acquisition
  of oil and gas properties ($1.12 per share)      86,933
Issuance of shares and warrants in
  private offering which closed in
  December 1999  ($1.23 per share)                196,500
Costs related to sales of stock                   (95,470)
Issuance of shares in January 2000 for
  services related to the acquisition
  of oil and gas properties ($.88 per share)      125,000
Issuance of shares and warrants in private
  offering which closed in
  February 2000 ($1.05 per share)                 600,000
Issuance of shares in February 2000
  for the Acquisition of East
  Wood  ($2.41 per share)                       9,033,170
</TABLE>

See  accompanying  notes  to  these  financial  statements.


<PAGE>
                                      B-6


<TABLE>
<CAPTION>
                                   CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                 YEARS ENDED JUNE 30, 2001 AND 2000 (EXPRESSED IN U.S. DOLLARS)


                                                                                                                       Warrants
                                                                                      Common Stock                       And
                                                                 Common Stock           Subscribed     Special Shares Beneficial
                                                           -----------------------  ------------------  --------------Conversion
                                                             Shares      Amount     Shares    Amount    Shares  Amount  Feature
                                                           ----------  -----------  -------  ---------  ------  ------  -------
<S>                                                        <C>         <C>          <C>      <C>        <C>     <C>     <C>
Exercise of warrant in February 2000 for services
   related to the acquisition  of oil and gas properties
   ($2.41 per share)                                           84,762     203,988         -         -        -       -        -
Exercise of warrants in March 2000
   ($1.05 per share)                                           57,143      60,000         -         -        -       -        -
Exercise of warrants in March 2000
   ($1.26 per share)                                           57,143      72,000         -         -        -       -        -
Exercise of warrants in March 2000
   ($2.10 per share)                                           85,714     180,000         -         -        -       -        -
Exercise of warrants in March 2000
   ($1.26 per share)                                          209,218     263,614         -         -        -       -        -
Exercise of options in March 2000
   ($1.75 per share)                                           17,143      30,000         -         -        -       -        -
Costs related to sales of stock                                     -     (97,520)        -         -        -       -        -
Issuance of shares in April  2000 for
    services ($1.05 - $1.82 per share)                         45,788      55,800         -         -        -       -        -
Issuance of shares in April  2000 for
    services ($.98 per share)                                  85,714      84,360         -         -        -       -        -
Issuance of shares in April  2000 for
    services ($.88 per share)                                 285,714     250,000         -         -        -       -        -
Issuance of shares in April 2000 for the
   Acquisition  of oil and gas properties  ($1.20 per
   share)                                                     260,714     313,718         -         -        -       -        -
Issuance of shares in April 2000 to related parties
    for settlement of debt  ($1.40 per share)                 183,016     256,223         -         -        -       -        -
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($2.63 per
   share)                                                      92,857     243,750         -         -        -       -        -
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($2.41 per
   share)                                                     134,286     323,172         -         -        -       -        -
Exercise of warrants in June 2000
   ($2.41 per share)                                           44,286      96,875         -         -        -       -        -
Issuance of shares in June 2000 for the
   Acquisition  of oil and gas properties  ($2.41 per
   share)                                                     142,857     343,800         -         -        -       -        -

Net earnings                                                        -           -         -         -        -       -        -
                                                           ----------  -----------  -------  ---------  ------  ------  -------

BALANCES, June 30, 2000                                    18,054,875  43,410,125   122,535  (214,436)       -       -  823,695
                                                           ----------  -----------  -------  ---------  ------  ------  -------


                                                           Accumulated
                                                             Deficit        Total
                                                                         -----------
<S>                                                        <C>           <C>
Exercise of warrant in February 2000 for services
   related to the acquisition  of oil and gas properties
   ($2.41 per share)                                                 -      203,988
Exercise of warrants in March 2000
   ($1.05 per share)                                                 -       60,000
Exercise of warrants in March 2000
   ($1.26 per share)                                                 -       72,000
Exercise of warrants in March 2000
   ($2.10 per share)                                                 -      180,000
Exercise of warrants in March 2000
   ($1.26 per share)                                                 -      263,614
Exercise of options in March 2000
   ($1.75 per share)                                                 -       30,000
Costs related to sales of stock                                      -      (97,520)
Issuance of shares in April  2000 for
    services ($1.05 - $1.82 per share)                               -       55,800
Issuance of shares in April  2000 for
    services ($.98 per share)                                        -       84,360
Issuance of shares in April  2000 for
    services ($.88 per share)                                        -      250,000
Issuance of shares in April 2000 for the
   Acquisition  of oil and gas properties  ($1.20 per
   share)                                                            -      313,718
Issuance of shares in April 2000 to related parties
    for settlement of debt  ($1.40 per share)                        -      256,223
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($2.63 per
   share)                                                            -      243,750
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($2.41 per
   share)                                                            -      323,172
Exercise of warrants in June 2000
   ($2.41 per share)                                                 -       96,875
Issuance of shares in June 2000 for the
   Acquisition  of oil and gas properties  ($2.41 per
   share)                                                            -      343,800

Net earnings                                                    94,116       94,116
                                                           ------------  -----------
BALANCES, June 30, 2000                                    (14,984,725)  29,034,659
                                                           ------------  -----------
</TABLE>

See  accompanying  notes  to  these  financial  statements.


<PAGE>
                                      B-7


<TABLE>
<CAPTION>
                                CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             YEARS ENDED JUNE 30, 2001 AND 2000 (EXPRESSED IN U.S. DOLLARS)


                                                                                      Common  Stock
                                                               Common Stock            Subscribed        Special Shares
                                                           -----------------------  -------------------  ---------------
                                                             Shares      Amount     SHARES     AMOUNT    Shares  Amount
                                                           ----------  -----------  -------  ----------  ------  -------
<S>                                                        <C>         <C>          <C>      <C>         <C>     <C>
Exercise of warrants in July 2000
   ($1.26 per share)                                           60,714       76,500        -          -        -        -
Exercise of warrants in September 2000
   ($1.26 per share)                                          125,000      157,500        -          -        -        -
Issuance of shares in October  2000 for
    services ($1.05 - $1.97 per share)                         23,969       30,500        -          -        -        -
Issuance of shares in October 2000 for services
   related to the acquisition  of oil and gas properties
   and equipment ($1.97 per share)                            214,286      420,000        -          -        -        -
Issuance of shares in October 2000 for the
   Acquisition  of oil and gas properties, inventory
   and equipment ($3.15 per share)                            571,429    1,800,000        -          -        -        -
Exercise of warrants in November 2000
   ($1.26 per share)                                            3,571        4,500        -          -        -        -
Issuance of special  warrants in private
    offering which closed in April 2001
    ($10.50 per share)                                              -            -        -          -        -        -
Costs related to issuance of special warrants                       -            -        -          -        -        -
Issuance of shares in April 2001 for
    services ($.98 - 2.52 per share)                           21,813       36,000        -          -        -        -


Net earnings                                                        -            -        -          -        -        -
                                                           ----------  -----------  -------  ----------  ------  -------

BALANCES, June 30, 2001                                    19,075,657  $45,935,125  122,535  $(214,436)       -  $     -
                                                           ==========  ===========  =======  ==========  ======  =======


                                                             Warrants
                                                               and
                                                            Beneficial
                                                            Conversion   Accumulated
                                                             Feature       Deficit        Total
                                                           -----------  -------------  ------------
<S>                                                        <C>          <C>            <C>
Exercise of warrants in July 2000
   ($1.26 per share)                                                -              -        76,500
Exercise of warrants in September 2000
   ($1.26 per share)                                                -              -       157,500
Issuance of shares in October  2000 for
    services ($1.05 - $1.97 per share)                              -              -        30,500
Issuance of shares in October 2000 for services
   related to the acquisition  of oil and gas properties
   and equipment ($1.97 per share)                                  -              -       420,000
Issuance of shares in October 2000 for the
   Acquisition  of oil and gas properties, inventory
   and equipment ($3.15 per share)                                  -              -     1,800,000
Exercise of warrants in November 2000
   ($1.26 per share)                                                -              -         4,500
Issuance of special  warrants in private
    offering which closed in April 2001
    ($10.50 per share)                                      1,845,000              -     1,845,000
Costs related to issuance of special warrants                (648,443)             -      (648,443)
Issuance of shares in April 2001 for
    services ($.98 - 2.52 per share)                                -              -        36,000


Net earnings                                                        -      2,100,524     2,100,524
                                                           -----------  -------------  ------------

BALANCES, June 30, 2001                                    $2,020,252   $(12,884,201)  $34,856,740
                                                           ===========  =============  ============
</TABLE>

See  accompanying  notes  to  these  financial  statements.


<PAGE>
                                      B-8


<TABLE>
<CAPTION>
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (EXPRESSED IN U.S. DOLLARS)
                                              YEARS ENDED JUNE 30, 2001 AND 2000


                                                                                                      2001           2000

<S>                                                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net earnings                                                                                    $  2,100,524   $    94,116
  Adjustments to reconcile net earnings to net cash
      Provided by (used by) operating activities:
    Depreciation and depletion                                                                       2,241,146     1,116,049
    Amortization                                                                                       227,664       112,954
    Common stock and warrants issued for services
        and other expenses                                                                              66,500        28,800
    Minority interest                                                                                      222             -
    Change in assets and liabilities net of effects from purchase of
      East Wood Equity Venture, Inc.
        Accounts receivable                                                                           (755,433)   (1,031,451)
        Prepaid expenses                                                                               (43,030)     (140,283)
        Accounts payable and accrued liabilities                                                     1,560,734      (397,696)
        Materials and supplies inventory                                                                13,521        20,345
      Net cash provided by (used by) operating activities                                            5,411,848      (197,166)

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from sale of oil and gas properties                                                         168,272       241,989
  Oil and gas properties purchased                                                                  (6,058,006)   (5,201,091)
  Other                                                                                                      -          (950)
  Exploration and development costs capitalized                                                     (2,953,347)     (646,614)
  Issuance of notes receivable                                                                        (303,000)            -
  Issuance of note receivable - related party                                                         (125,000)            -
  Purchase of United Cementing & Acid Co., Inc.                                                     (1,250,000)            -
  Acquisition of property and equipment                                                               (396,373)     (170,032)
      Net cash used by investing activities                                                        (10,917,454)   (5,776,698)

CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of common stock and exercise of warrants                                                      2,083,500     1,702,114
  Cash acquired in acquisition                                                                               -        66,816
  Costs related to sale of stock and issuance of notes payable                                        (648,443)     (232,438)
  Issuance of notes payable and long-term debt                                                       4,918,742    10,081,425
  Issuance of related party note payable                                                               200,000             -
  Repayment of notes payable and long-term debt                                                       (459,645)   (5,333,890)
      Net cash provided by financing activities                                                      6,094,154     6,284,027

NET INCREASE IN CASH                                                                                   588,548       310,163

CASH - BEGINNING OF PERIOD                                                                             319,246         9,083

CASH - END OF PERIOD                                                                              $    907,794   $   319,246
                                                                                                  -------------  ------------

SUPPLEMENTAL INFORMATION
  Cash paid for interest                                                                          $  1,079,286   $   584,285
  Conversion of debt and other liabilities to common stock                                                   -       756,223
  Oil and gas property acquired with note payable                                                            -     3,000,000
  Oil and gas properties acquired with common stock                                                          -    16,497,200
  Issuance of common stock for acquisition consulting fees                                             420,000       748,329
  Prepaid expenses acquired with common stock                                                                -       361,360
  Equipment and other assets acquired with common stock Extinguishment of convertible debentures     1,800,000             -
  Purchase of nonmarketable security with note payable                                                 236,119             -
  Proceeds from sale of 25% of United Cementing & Acid Co., Inc.                                       312,500             -
  Noncash collections on notes receivable                                                              100,000             -

  Purchase of East Wood Equity Venture, Inc.
     Current assets, net of cash acquired                                                         $          -   $   374,850
     Oil and gas properties, net                                                                             -     5,804,002
     Office furniture and equipment, net                                                                     -        15,748
     Liabilities assumed                                                                                     -    (4,965,234)
                                                                                                  $          -   $ 1,229,366
                                                                                                  -------------  ------------
</TABLE>


<PAGE>
                                      B-9


1.   NATURE OF OPERATIONS
     --------------------

     The  Company  is  an independent energy company engaged in the acquisition,
     exploitation,  development,  and operation of oil and gas properties with a
     geographical  focus  in  major  oil  &  gas producing regions in the United
     States  of  America.  The Company was in the development stage through June
     30,  1999.  The  year ended June 30, 2000 is the first year during which it
     was  considered  an  operating  company.

     The  Company  was  incorporated under the laws of Ontario, Canada as Cotton
     Valley  Energy  Limited on February 15, 1995. On June 14, 1996, the Company
     merged  with  Arjon Enterprises, Inc., an Ontario corporation and reporting
     issuer  in  Ontario.  As  a  result  of  that merger the Company's name was
     changed  to Cotton Valley Resources Corporation. The Company continued from
     Ontario  to  the  Yukon Territory pursuant to Articles of Continuance dated
     February  9,  1998.  On February 28, 2000 the Company's name was changed to
     Aspen  Group  Resources  Corporation.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     ------------------------------------------

     Oil  and  Gas  Properties
     -------------------------
     The  Company  follows  the  full-cost  method of accounting for oil and gas
     properties. Accordingly, all costs associated with acquisition, exploration
     and  development  of  oil  and  gas  reserves,  including  directly related
     overhead  costs,  are  capitalized into a "full-cost pool". A separate full
     cost  pool  is  established  for  U.S.  and  non-U.S.  properties.

     All  capitalized  costs  of oil and gas properties, including the estimated
     future  costs  to  develop  proved  reserves,  are  amortized  on  the
     unit-of-production  method  using  estimates  of  proved  reserves.  Costs
     directly  associated  with  the  acquisition  and  evaluation  of  unproved
     properties  are  excluded  from  the  amortization  base  until the related
     properties  are  evaluated.  Such  unproved  properties  are  assessed
     periodically  and  a  provision  for  impairment  is  made to the full-cost
     amortization  base  when  appropriate.

     Sales  of  oil and gas properties are credited to the full-cost pool unless
     the  sale  would  have  a  significant  effect  on  the  amortization rate.
     Abandonments  of properties are accounted for as adjustments to capitalized
     costs  with no loss recognized. Oil and gas drilling and workover equipment
     used  primarily  on  the Company's properties are included in the full cost
     pool.

     The net capitalized costs are subject to a "ceiling test" which limits such
     costs  to  the  aggregate  of  the  estimated  present  value of future net
     revenues  from  proved  reserves discounted at ten percent based on current
     economic  and  operating  conditions.

     The  various  properties  are  located  in eleven states with a predominate
     focus  in  Oklahoma,  Kansas  and  Texas.

     The  recoverability  of  amounts  capitalized for oil and gas properties is
     dependent  upon  the  identification  of economically recoverable reserves,
     together  with  obtaining  the necessary financing to exploit such reserves
     and  the  achievement  of  profitable  operations.

     Revenue Recognition
     -------------------
     Revenue  is accrued and recognized in the month the oil and gas is produced
     and  sold.

     Inventories
     -----------
     Inventories,  which  consist primarily of oilfield equipment, acidizing and
     cementing  products,  and supplies held for resale, are stated at the lower
     of  cost  or  market  using  the  first-in,  first-out  (FIFO)  method.

     Debenture  Financing  Costs
     -------------------------
     Debenture  financing costs are being amortized ratably over the life of the
     related  debenture.

     Property and Equipment
     ----------------------
     Property  and  equipment  is  recorded  at  cost  and  depreciated  on  a
     straight-line  basis  over  the  estimated  useful  lives  of  the  assets.


See  accompanying  notes  to  these  financial  statements.


<PAGE>
                                      B-10


     Nonmarketable  Security
     ----------------------
     The  nonmarketable security, representing a 5% common stock investment in a
     closely held corporation acquired in March 2001, is accounted for using the
     cost  method  of  accounting.  A  readily  determinable  fair  value is not
     available.

     Basis of Presentation
     ---------------------
     The accompanying financial statements have been prepared in accordance with
     accounting  principles  generally  accepted  in  the  United  States.  The
     Company's  assets and principal activities are in the United States and its
     functional  currency  is  the  U.S.  dollar;  accordingly, the accompanying
     financial statements are presented in U.S. dollars. The effects of exchange
     rate  changes  on  transactions  denominated  in  Canadian dollars or other
     currencies are charged to operations. Foreign exchange gains or losses were
     insignificant  for  all  periods  presented.

     Reconciliation  with  Canadian  Generally  Accepted  Accounting  Principles
     ---------------------------------------------------------------------------
     These  consolidated  financial  statements have been prepared in accordance
     with  accounting  principals  generally  accepted  in the United States (US
     GAAP)  which  in  most respects, conform to accounting principals generally
     accepted  in  Canada  (Canadian  GAAP).  The primary difference is with the
     application  of the ceiling test under full cost accounting. Under US GAAP,
     a  ceiling test is applied to ensure that the capitalized costs accumulated
     in  each  cost  centre are limited to an amount equal to the present value,
     discounted  at  10%,  of  the  unescalated  estimated  future net operating
     revenues  from  proved reserves, net of restoration costs and income taxes.
     Under  Canadian  GAAP, a ceiling test is applied to ensure that capitalized
     costs  do  not exceed the sum of estimated undiscounted, unescalated future
     net  revenues from proved reserves less the cost incurred or administrative
     costs,  and  an  estimate  for restoration costs and applicable taxes. As a
     result  of applying the tests under both US and Canadian GAAP there were no
     material differences found. Therefore the Company's accounting policies are
     consistently  applied  in all material respects in accordance with Canadian
     generally  accepted  accounting  principles.

     Income Taxes
     ------------
     Income  taxes  are provided for the tax effects of transactions reported in
     the  financial  statements and consist of taxes currently due, if any, plus
     net  deferred  taxes  related primarily to differences between the bases of
     assets and liabilities for financial and income tax reporting. Deferred tax
     assets  and  liabilities  represent  the  future tax return consequences of
     those  differences,  which  will  either  be taxable or deductible when the
     assets  and  liabilities  are  recovered  or  settled.  Deferred tax assets
     include recognition of operating losses that are available to offset future
     taxable  income  and tax credits that are available to offset future income
     taxes. Valuation allowances are recognized to limit recognition of deferred
     tax  assets  where  appropriate.  Such  allowances  may  be  reversed  when
     circumstances  provide  evidence  that  the  deferred  tax assets will more
     likely  than  not  be  realized.

     Net Earnings Per Share
     ----------------------
     Per  share  information  is  based on the weighted average number of common
     stock  and  common  stock equivalent shares outstanding. As required by the
     Securities and Exchange Commission rules, all warrants, options, and shares
     issued  within  a  year  prior  to  the  initial  filing  of a registration
     statement  are  assumed  to  be  outstanding  for  each  year presented for
     purposes  of  the  earnings  per  share  calculation.

     Cash  Flow  Statement
     ---------------------
     For  purposes  of  the  statements of cash flows, the Company considers all
     highly liquid debt instruments purchased with an original maturity of three
     months  or  less  to  be  cash  equivalents.

     Advertising  Costs
     ------------------
     The  Company's  policy is to expense all advertising costs in the period in
     which they are incurred. Advertising and promotion expense was $276,651 and
     $155,175  for  the  years  ended  June  30,  2001  and  2000  respectively.


<PAGE>
                                      B-11


     Stock-Based  Compensation
     -------------------------
     Statement  of  Financial  Accounting  Standards  No.  123  - Accounting for
     Stock-Based  Compensation  (SFAS  123), which was effective for the Company
     beginning  with  its 1997 fiscal year, requires recognition of compensation
     expense  for  grants  of stock, stock options, and other equity instruments
     based on fair value. If the grants are to employees, companies may elect to
     disclose  only  the  pro  forma  effect  of  such  grants on net income and
     earnings  per  share  in  the notes to financial statements and continue to
     account for the grants pursuant to APB Opinion No. 25, Accounting for Stock
     Issued  to  Employees.  The  Company  has  elected the pro forma disclosure
     alternative  for  employee  grants.

     Use  of  Estimates
     ------------------
     The  preparation  of  the  Company's  consolidated  financial statements in
     conformity  with  generally  accepted  accounting  principles  requires the
     Company  to make estimates and assumptions that affect the amounts reported
     in  these financial statements and accompanying notes. Actual results could
     differ  from  those  estimates. Significant assumptions are required in the
     valuation  of  proved  oil  and  gas reserves, which as described above may
     affect  the  amount  at which oil and gas properties are recorded. It is at
     least reasonably possible those estimates could be revised in the near term
     and  those  revisions  could  be  material.

     Principles  of  Consolidation
     -----------------------------
     The  consolidated  financial statements include the accounts of the Company
     and its majority-owned subsidiaries. All material intercompany accounts and
     transactions  of  consolidated  subsidiaries  have  been  eliminated  in
     consolidation.

     Accounting  Pronouncements
     --------------------------
     In  June  1998,  the  Financial  Accounting  Standards  Board (FASB) issued
     Statement  of Financial Accounting Standards (SFAS) No. 133, Accounting for
     Derivative  Instruments and Hedging Activities which establishes accounting
     and  reporting  standards  for  derivative  instruments,  including certain
     derivative  instruments  embedded in other contracts (collectively referred
     to  as  derivatives), and for hedging activities. SFAS No. 133 is effective
     for  all fiscal quarters of all fiscal years beginning after June 15, 2001.
     The Company does not anticipate a material impact on its financial position
     or  results  of  operations.

     In  June  2000,  the  FASB  issued  SFAS  No.  138,  Accounting for Certain
     Derivative  Instruments  and  Certain  Hedging  Activities.  This statement
     amends  the  accounting and reporting standards of SFAS No. 133 for certain
     instruments  and  certain hedging activities. SFAS No. 138 also amends SFAS
     No.  133  for  decisions  made  by  the  Board  relating  to the Derivative
     Implementation  Group (DIG) process. Certain decisions arising from the DIG
     process  that required specific amendments to SFAS No. 133 are incorporated
     in  this  Statement.  The statement is effective concurrently with SFAS No.
     133  according  to  the  provisions  of  paragraph  48 of SFAS No. 133. The
     Company  does not anticipate a material impact on its financial position or
     results  of  operations.

     In  December  1999,  the  Securities  and  Exchange Commission issued Staff
     Accounting  Bulletin  (SAB) No. 101 which summarizes certain of the staff's
     views  in  applying  generally  accepted  accounting  principles to revenue
     recognition  in  financial  statements. SAB No. 101 did not have a material
     impact  on  the  Company's  financial  position  or  results of operations.

     In June 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS
     No.  142,  Goodwill  and  Other  Intangible  Assets,  collectively,  the
     Statements. These Statements drastically change the accounting for business
     combinations,  goodwill  and intangible assets. SFAS No. 141 eliminates the
     pooling-of-interests  method of accounting for business combinations except
     for  qualifying  business combinations that were initiated prior to July 1,
     2001. SFAS No. 141 also changes the criteria to recognize intangible assets
     apart  from  goodwill.  Under  SFAS  No. 142, goodwill and indefinite lived
     intangible  assets  are  no  longer amortized but are reviewed annually for
     impairment,  or  more  frequently if impairment indicators arise. Separable
     intangible assets that have finite lives will continue to be amortized over
     their  useful  lives.  The amortization provisions of SFAS No. 142 apply to
     goodwill  and  intangible assets acquired after June 30, 2001. With respect
     to  goodwill  and  intangible  assets  acquired  prior to July 1, 2001, the
     amortization provisions of SFAS No. 142 are affective upon adoption of SFAS
     No. 142. Pre-existing goodwill and intangibles will be amortized during the
     transition  period until adoption. Companies are required to adopt SFAS No.


<PAGE>
                                      B-12


     142  in their fiscal year beginning after December 15, 2001. Early adoption
     is  permitted  for  companies  with  fiscal years beginning after March 15,
     2001.  The  Company  does not anticipate a material impact on its financial
     position  or  results  of  operations.

     Reclassifications
     -----------------
     Certain  reclassifications  have  been  made  to  the prior years financial
     statements  to  conform  to  the  current  year  presentation.

3.   ACQUISITIONS
     ------------

     East  Wood  Equity  Venture,  Inc.
     ----------------------------------
     During  August  1999 the Company organized a Texas corporation Aspen Energy
     Group,  Inc  (AEG)  as a wholly-owned subsidiary. On September 16, 1999 AEG
     entered  into  an  agreement, effective July 1, 1999, to acquire 50% of the
     outstanding equity shares of East Wood Equity Venture, Inc. (East Wood), an
     oil  and  gas company, in exchange for the Company issuing 3,571,429 shares
     of  common  stock, and 3,032,985 special warrants (each exercisable for one
     share). On February 28, 2000, the Company acquired the remaining 50% of the
     outstanding equity shares of East Wood for 3,747,271 shares of common stock
     and  issuance  of a note payable in the amount of $3,000,000. For financial
     statement  purposes  the  acquisition  was accounted for as a purchase and,
     accordingly  East Wood's results are included in the consolidated financial
     statements  since the date of acquisition. The aggregate purchase price was
     approximately  $17.9 million, which exceeded the net assets of East Wood by
     approximately  $16.6  million.  The  excess  was  allocated  to oil and gas
     properties  and  is  being  amortized.

     The  following unaudited pro forma data summarize the results of operations
     for  the  years ended June 30, 2001 and 2000 as if the acquisition had been
     completed  on  July  1,  1999.

<TABLE>
<CAPTION>
     Pro Forma Information                              2001         2000
                                                     -----------  ----------
<S>                                                  <C>          <C>
     Net sales                                       $10,549,274  $3,481,718
     Net earnings                                    $ 2,100,524  $  343,375
     Net earnings per share                          $       .11  $      .03
</TABLE>

     These pro forma amounts do not purport to be indicative of the results that
     would  have  actually been obtained if the acquisition had occurred on July
     1,  1998  or  that  may  be  obtained  in  the  future.

     Mercer  Oil  and  Gas  Co.
     --------------------------
     Effective  April  1,  2000,  the  Company  entered  into  a  share purchase
     agreement  to  acquire  100% of Mercer Oil and Gas Company (Mercer), an oil
     and gas company, for 142,857 shares. Mercer is a company affiliated with an
     officer  of  the  Company.  Prior  to  the  closing  of  the share purchase
     agreement,  the Company purchased certain oil and gas property interests of
     Mercer  for  $300,000  in  cash.  For  financial  statement  purposes  the
     acquisition  was  accounted for as a purchase. The aggregate purchase price
     was  $343,800.  The  pro  forma effects of the acquisition has no effect on
     revenues,  earnings  or  per  share  amounts  as  Mercer  had no results of
     operations  prior  to  the  date  of  acquisition.

     United Cementing & Acid Co., Inc.
     ---------------------------------
     Effective  January  1,  2001,  the  Company  entered  into a share purchase
     agreement  to acquire 100% of United Cementing & Acid Co., Inc. (United), a
     privately  held  oilfield service company. For financial statement purposes
     the  acquisition  was  accounted  for as a purchase. The aggregate purchase
     price  was  $1,250,000. On April 13, 2001, the Company entered into a share
     purchase  agreement to sell 25% of United to a director of the Company. The
     aggregate  sale  price  was  $312,500. For financial statement purposes the
     acquisition  was  accounted  for  as  a  purchase and, accordingly United's
     results  are  included  in  the consolidated financial statements since the
     date  of  acquisition.  The  net  purchase price exceeded the net assets of
     United  by approximately $691,000. The excess was allocated to property and
     equipment  and  is  being  depreciated.


<PAGE>
                                      B-13


     The  following unaudited pro forma data summarize the results of operations
     for  the  years ended June 30, 2001 and 2000 as if the acquisition had been
     completed  on  July  1,  1999,  the  beginning  of  the  2000  fiscal year.

<TABLE>
<CAPTION>
     Pro Forma Information                                 2001         2000
                                                        -----------  ----------
<S>                                                     <C>          <C>
     Net sales                                          $11,114,856  $4,424,571
     Net earnings                                       $ 2,282,062  $  295,211
     Net earnings (loss) per share                      $       .12  $      .03
</TABLE>

     These pro forma amounts do not purport to be indicative of the results that
     would  have  actually been obtained if the acquisition had occurred on July
     1,  1999  or  that  may  be  obtained  in  the  future.

4.   PROPERTY  AND  EQUIPMENT
     ------------------------

<TABLE>
<CAPTION>
     Property and equipment consist of the following:

                                                        Estimated
                                                      Useful Lives
                                                      -------------
<S>                                    <C>            <C>

       Office furniture and equipment  $     553,364   5 -10 years
       Equipment                           1,073,088   5 -10 years
       Vehicles                            2,168,298       5 years
       Buildings and improvements            508,658      25 years
       Land                                  239,548
                                       -------------
                                       $   4,542,956
                                       =============
</TABLE>

     Depreciation  charged  to  expense amounted to $298,901 and $48,734 in 2001
     and  2000,  respectively.

5.   NOTES RECEIVABLE
     ----------------

<TABLE>
<CAPTION>
   Notes receivable consist of the following:


<S>                                                               <C>
     Note receivable from a director, nonintererest bearing,

     75,000 due on or before June 29, 2004 and the remainder
     on or before June 29, 2005                                   $125,000

     Note receivable from a corporation, nonintererest bearing,
     due on demand                                                 100,000

     Note receivable from a corporation, nonintererest bearing,
     due on demand                                                 103,000
                                                                  --------

                                                                  $328,000
                                                                  ========
</TABLE>


6.   NOTES PAYABLE AND LONG-TERM DEBT
     --------------------------------

     On  April 28, 2000, the Company entered into a credit agreement with a bank
     under  which  it may borrow up to $25,000,000 limited to the borrowing base
     as  determined by the lender. The commitment amount was $14,640,000 at June
     30, 2001. At June 30, 2001, there was $13,816,060 of outstanding borrowings
     under  this agreement. Interest on outstanding borrowings currently accrues
     at  the bank's base rate of interest plus one-quarter percent (base rate is
     7.00%  at  June 30, 2001). The agreement also provides for a commitment fee
     of  one-half  percent  per  annum  on  the  average  unused  portion of the
     commitment. A facility fee of one-half percent is assessed for increases in
     the  commitment  amount.

     The  facility is secured by the Company's oil and gas properties. Under the
     terms  of the credit agreement, the Company is required to maintain certain
     financial  ratios  and  other  financial  conditions. At June 30, 2001, the
     Company  was  in  compliance  with  those  loan  covenants.


<PAGE>
                                      B-14

     Interest  is  payable  monthly  and  the  credit agreement requires monthly
     commitment  reductions  as  determined  by  lender.  The monthly commitment
     reduction  amount  as  of  June 30, 2001 was $180,000. The credit agreement
     matures  on  April  10,  2004.

     The  Company  has an unsecured note payable to a bank, dated June 26, 2001,
     in  the  original  amount  of  $300,000; payable in monthly installments of
     $3,650, including interest at 7.50%, with all unpaid interest and principal
     due  on  June  26,  2004.  At  June  30,  2001  the outstanding balance was
     $300,000.

     The  Company  has  a  note  payable  to a bank, dated June 26, 2001, in the
     original  amount  of  $200,000;  payable in monthly installments of $4,848,
     including  interest at the base rate plus one-half percent, with all unpaid
     interest and principal due on June 26, 2005. The note payable is secured by
     substantially all of the Company's assets. At June 30, 2001 the outstanding
     balance  was  $200,000.

     In connection with the acquisition of a nonmarketable security, the Company
     issued  a $250,000 noninterest bearing note payable. The note is payable in
     monthly  installments of $10,000, including imputed interest at 7.50%, with
     all  unpaid interest and principal due on January 1, 2003. The note payable
     is  secured by the nonmarketable security. At June 30, 2001 the outstanding
     balance  was $169,715, which is net of the unamortized discount of $10,285.

     In  connection  with the acquisition of certain oil and gas properties, the
     Company,  on  February  28,  2000,  issued a $3,000,000 convertible 9% note
     payable.  During  fiscal  2001,  the  note  payable  was  modified  to  be
     noninterest  bearing. All unpaid principal and interest is due on or before
     December  31,  2002;  provided that at any time the Company proposes to pay
     this  note payable, the Company has the right, at their sole option, to pay
     all  or any portion of the amount outstanding by the issuance to the payees
     of  2,857,143  shares  of  common  stock  of  the  Company.

     Aggregate  maturities  of  notes  payable  and long-term debt for the years
     subsequent  to  June  30,  2001  are  as  follows:  2002, $2,321,243; 2003,
     $5,299,177;  2004,  $9,809,491;  and  2005,  $55,865.

7.   STOCKHOLDERS' EQUITY
     --------------------

     During  the  year  ended  June  30,  2001,  the Company initiated a private
     placement of 1,230,000 Special Warrants at $1.50 each for gross proceeds of
     $1,845,000.  Each  Special Warrant is exchangeable for one unit (one common
     share  and one-half common share purchase warrant) on or before the earlier
     of  (i)  the  fifth business day after the date of issuance of a Prospectus
     Receipt  by  the securities regulatory authority in Ontario, Canada or (ii)
     April  4,  2002,  without additional payment. Each Special Warrant that has
     been  not  exercised  prior  to  the  expiration  date will be deemed to be
     exercised immediately prior thereto. Because the Prospectus Receipt had not
     been  issued by August 2, 2001, each of the Special Warrants exercised will
     entitle  the  holder,  without additional payment, to receive 1.1 units for
     each  Special  Warrant so exercised, or deemed exercised. Each whole common
     share  purchase  warrant  is exercisable for one common share at a price of
     $1.80,  subject  to  adjustment in certain events, until April 4, 2003. The
     common  stock  purchase warrants may be redeemed at a price of $.01 subject
     to  certain  events. The Special Warrants were issued pursuant to an agency
     agreement,  and  the  Company  will  be  filing a prospectus to qualify the
     common shares and common share purchase warrants issuable upon the exercise
     of  the  Special  Warrants.

     In  fiscal  year  2001, additional options and warrants were granted as set
     forth  below.

     -    Options to acquire 678,571 shares for $1.33 per share through December
          21,  2003  were  granted to certain officers, employees and directors.

     -    Options  to  acquire 42,857 shares for $1.33 per share through October
          25,  2003  were  granted to certain officers, employees and directors.

     -    Options to acquire 28,572 shares for $1.96 per share through September
          27,  2003  were  granted to certain officers, employees and directors.

     -    Options  to acquire 71,429 shares for $1.65 per share through February
          22,  2003  were  granted to certain officers, employees and directors.


<PAGE>
                                      B-15


     -    Options  to  acquire 2,304 shares for $2.17 per share through June 14,
          2001  were  granted  in  connection  with  services  rendered.

     During  the  year  ended June 30, 2000, the Company initiated three private
     placement  of  its common stock, with warrants attached as set forth below.

     -    The  Company  sold 171,429 shares and 171,429 warrants exercisable for
          $2.10  per  share  until  September 30, 2002 for proceeds of $300,000.

     -    The  Company  sold 160,408 shares and 160,408 warrants exercisable for
          $1.26  per  share  until  June  15,  2001  for  proceeds  of $196,500.

     -    The  Company  sold 571,429 shares and 571,429 warrants exercisable for
          $1.26  per  share  until  June  15,  2001  for  proceeds  of $600,000.

     In  fiscal  year  2000, additional options and warrants were granted as set
     forth  below.

     -    Options to acquire 17,143 units (one common share and one common share
          purchase  warrant) for $1.75 per share through September 30, 2001 were
          granted  in  connection  with  a  private  placement.  This option was
          exercised  in  fiscal 2000 and the common share purchase warrants were
          issued  and  are exercisable for $2.10 per share through September 30,
          2002.

     -    Options to acquire 16,041 units (one common share and one common share
          purchase  warrant)  for  $1.26  per  share  through June 15, 2001 were
          granted  in  connection  with  a  private  placement.

     -    Options to acquire 57,143 units (one common share and one common share
          purchase  warrant)  for  $1.26  per  share  through June 15, 2001 were
          granted  in  connection  with  a  private  placement.  This option was
          exercised  in  fiscal 2000 and the common share purchase warrants were
          issued  and are exercisable for $1.26 per share through June 15, 2001.

     -    Options  to acquire 285,714 shares for $1.12 - $2.17 per share through
          August  27,  2000  were  granted  in  connection  with an acquisition.

     -    Options  to  acquire 14,286 shares for $.98 per share through February
          1,  2006  were  granted  in  connection  with  services  rendered.

     -    Options  to  acquire  1,142,857  shares  for  $1.68  per share through
          February  22,  2003  were  granted  to certain officers, employees and
          directors.

     At  June  30,  2001,  exercise prices of options range from $.98 to $14.56.

     The  following  tables  summarizes  the option and warrant activity for the
     years  ended  June  30,  2001  and  2000:

<TABLE>
<CAPTION>
                                          June 30, 2001         June 30, 2000
                                      ---------------------  ---------------------
                                                  Weighted               Weighted
                                                   Average               Average
                                        Number    Exercise     Number    Exercise
                                      Of Shares     Price    of Shares     Price
                                      ----------  ---------  ----------  ---------
<S>                                   <C>         <C>        <C>         <C>
  Outstanding, beginning of year      2,057,827   $    3.01    794,829   $    7.70
    Granted to:
       Employees, officers and
       directors                        821,429        1.38  1,142,857        1.68
       Others                             2,304        2.17  1,367,878        1.40
       Expired/canceled                (387,067)       7.23   (535,661)       5.18
       Exercised                       (189,285)       1.26   (712,076)       1.54
                                      ----------             ----------
    Outstanding, end of year          2,305,208        2.51  2,057,827        3.01
                                      ==========             ==========
</TABLE>


<PAGE>
                                      B-16


     All  outstanding  warrants  and  options,  except  for  3,571 options, were
     exercisable  at  June  30,  2001. If not previously exercised, warrants and
     options  outstanding  at  June  30,  2001  will  expire  as  follows:

<TABLE>
<CAPTION>
                           Number       Weighted Average
Year Ending June 30,     Of Shares      Exercise Price
--------------------  ----------------  ----------------
<S>                   <C>               <C>
      2002                     323,780  $          7.08
      2003                   1,174,286             1.68
      2004                     792,857             1.91
      2005                       3,571              .98
      2006                      10,714              .98
                      ----------------
     Total                   2,305,208
                      ================
</TABLE>

     Presented below is a comparison of the weighted average exercise prices and
     market  price of the Company's common stock on the measurement date for all
     warrants  and  stock  options  granted  during  fiscal years 2001 and 2000:

<TABLE>
<CAPTION>
                                  2001                             2000
                                ---------                        ---------
                      Number    Exercise    Market     Number    Exercise   Market
                    Of Shares     Price     Price    Of Shares     Price     Price
                    ----------  ---------  --------  ----------  ---------  -------
<S>                 <C>         <C>        <C>       <C>         <C>        <C>
Fair value equal
to exercise price       28,571  $    1.96  $   1.96   1,971,905  $    1.54  $  1.54
Fair value greater
than exercise
price                        -  $       -  $      -           -  $       -  $     -
Exercise price
greater than fair
value                  795,161  $    1.36  $    1.34    538,830  $    1.54  $  1.26
</TABLE>

     Pro  Forma  Stock-Based  Compensation Disclosures - The Company applies APB
     -------------------------------------------------
     Opinion  25 and related interpretations in accounting for its stock options
     and warrants which are granted to employees. Accordingly, compensation cost
     has not been recognized for grants of options and warrants to employees and
     directors  unless  the exercise prices were less than the fair value of the
     Company's  common  stock  on  the  grant  dates. Had compensation cost been
     determined  based  on  the  fair  value at the grant dates for awards under
     those  plans  consistent  with  the  method  of FASB 123, the Company's net
     earnings  and  earnings  per share would have been changed to the pro forma
     amounts  indicated  below.  The  fair values generated by the Black-Scholes
     model  may  not  be  indicative  of the future benefit, if any, that may be
     received  by  the  option  or  warrant  holder.

<TABLE>
<CAPTION>
                                                  Year Ended June 30,
                                                 ------------------------
                                                    2001         2000
                                                 ----------  ------------
<S>                                              <C>         <C>
Net earnings applicable to common stockholders:
    As reported                                  $2,100,524  $    94,116
    Pro forma                                    $1,456,795  $(1,544,760)
Net earnings  per common share:
    As reported                                  $      .11  $       .01
    Pro forma                                    $      .08  $      (.13)
</TABLE>


<PAGE>
                                      B-17


     The  fair  value of each option granted in 2001 and each option and warrant
     granted  in 2000 was estimated on the date of grant using the Black-Scholes
     option-pricing  model  with  the  following  assumptions:

<TABLE>
<CAPTION>
                                 Year Ended June 30,
                                 -------------------
                                     2001   2000
                                    -----  -----
<S>                                 <C>    <C>

Expected volatility                   83%   128%
Risk-free interest rate              5.5%   5.5%
Expected dividends                     -      -
Expected terms (in years)            3.0    5.0
</TABLE>

STOCK  BASED  COMPENSATION

     The  Company  has  two  stock-based  compensation  plans. At June 30, 2001,
     1,857,143  shares  were  reserved for issuance under these plans. Under the
     Non-Employee  Directors  Stock  Option Plan, options are granted to certain
     non-employee  directors at prices greater than or equal to the market price
     of the Company's stock on the date of grant. The maximum term of the option
     is 10 years, and they vest according to the terms of the individual options
     granted.  All  options must be granted prior to February 26, 2011, the date
     the  Plan  will  terminate. Options may be granted at any time prior to its
     termination.  Any  option  outstanding  under  the  plan at the time of its
     termination,  remains  in  effect until the option is exercised or expires.
     Under  the  2001  Stock  Compensation  Plan, options and stock appreciation
     rights  are  granted to certain officers, directors, employees and advisors
     at  prices greater than or equal to the market price of the Company's stock
     on  the date of grant. The maximum term of the option is 10 years, and they
     vest  according to the terms of the individual options granted. All options
     must  be  granted  prior  to  February  26,  2011,  the  date the Plan will
     terminate. Options may be granted at any time prior to its termination. Any
     option  outstanding  under the plan at the time of its termination, remains
     in  effect  until  the  option  is exercised or expires. Stock appreciation
     rights may be issued with stock options or separately, at the discretion of
     the  Compensation Committee. At June 30, 2001, no stock appreciation rights
     had  been  granted.

     Stock Consolidation
     -------------------
     On  December  21,  2000,  the stockholders approved a 1-for-7 reverse stock
     split of the Company's common stock. All references to the number of common
     shares  and  per share amounts in the consolidated financial statements and
     related  footnotes  have been restated as appropriate to reflect the effect
     of  the  split  for  all  periods  presented.

8.   RELATED PARTY TRANSACTIONS
     --------------------------

     The Company issued a note payable to a director, dated December 5, 2000, in
     the  amount  of  $200,000;  with  all unpaid interest and principal paid on
     April  13,  2001.  Interest  expense  on  this  note  payable  was $15,277.

     During  fiscal 2001, the Company acquired ownership interests in 17 oil and
     gas  producing  properties,  inventory,  and  equipment  from  a  company
     affiliated  with  an  officer  of  the Company for 571,429 shares of common
     stock.  The  stock  was  recorded  at  $1,800,000.

     Effective April 1, 2000, the Company acquired ownership interests in 35 oil
     and  gas  producing  properties  and  239  net mineral acres from a company
     affiliated  with  an  officer  of  the Company for 134,286 shares of common
     stock.  The  stock  was  recorded  at  $323,172.

     During  fiscal  2000,  the Company issued 446,429 shares of common stock in
     settlement  of  $500,000  of  accrued  salaries  and  advances from related
     parties,  and  183,016  shares  of common stock in settlement of a $256,223
     note  payable  to  a  related  party.

     Legal  expenses of approximately $142,000 and $14,000 were paid to firms of
     which  an officer or director of the Company are stockholders during fiscal
     2001  and  2000,  respectively.


<PAGE>
                                      B-18


9.   INCOME TAXES
     ------------

     The  Company's  deferred tax assets (liabilities) consist of the following:

<TABLE>
<CAPTION>
                                                              June 30,
                                                     --------------------------
                                                         2001          2000
                                                     ------------  ------------
<S>                                                  <C>           <C>
Deferred tax liabilities:
   Accumulated depreciation                          $  ( 47,000)  $         -
   Costs capitalized for books and deducted for tax   (1,364,000)     (797,000)
                                                     ------------  ------------
        Total deferred tax liabilities                (1,411,000)     (797,000)
Deferred tax assets:
   Net operating loss carryforwards                    7,169,000     6,232,000
Less valuation allowance                              (5,758,000)   (5,435,000)
                                                     ------------  ------------
           Net deferred tax liability                $         -   $         -
                                                     ============  ============
</TABLE>

     The  difference  from  the  expected income tax expense for the years ended
     June  30,  2001  and  2000 at the statutory federal tax rate of 34% and the
     actual  income  tax  expense  is primarily the result of net operating loss
     carryforwards.

     At  June  30,  2001,  the  Company  has  available  net  operating  loss
     carryforwards of approximately $21,086,000 to reduce future taxable income.
     These  carryforwards  expire  from  2002  to  2019.

10.  CONCENTRATION OF CREDIT RISK AND  FAIR VALUE OF FINANCIAL INSTRUMENTS
     ---------------------------------------------------------------------

     Financial  instruments  that  potentially  subject  the  Company  to
     concentrations  of  credit  risk  consist  principally of cash and accounts
     receivable. The Company maintains its cash with banks primarily in Oklahoma
     City, Oklahoma. The terms of these deposits are on demand to minimize risk.
     The  Company  has not experienced any losses related to these cash deposits
     and  believes  it  is  not  exposed  to  any  significant  credit  risk.

     Accounts  receivable  consist of uncollateralized receivables from domestic
     and  international  customers  primarily  in  the  oil and gas industry. To
     minimize  risk  associated  with  international transactions, all sales are
     denominated  in U.S. currency. The Company routinely assesses the financial
     strength  of  it customers. The Company considers accounts receivable to be
     fully  collectible;  accordingly,  no  allowance  for  doubtful accounts is
     required.  If  amounts  become  uncollectible,  they  will  be  charged  to
     operations when that determination is made. The Company had three customers
     that accounted for approximately 54% of gas sales revenue and two customers
     that  accounted  for  approximately  92% of oil sales revenues for the year
     ended  June  30,  2001.  The  Company  had  one customer that accounted for
     approximately  18% of gas sales revenue and one customer that accounted for
     approximately  11%  of oil sales revenues for the year ended June 30, 2000.

     Fair  value  of  financial  instruments  are  estimated  to approximate the
     related book value, unless otherwise indicated, based on market information
     available  to  the  Company.

11.  EMPLOYEE BENEFIT PLAN
     ---------------------

     The  Company has established a salary deferral plan under Section 401(k) of
     the  Internal  Revenue  Code. The plan allows eligible employees to defer a
     portion  of their compensation. Such deferrals accumulate on a tax-deferred
     basis  until  the  employee  withdraws  the  funds.  The  plan provides for
     contributions  by the Company in such amounts as the Board of Directors may
     determine annually. There were no Company contributions to the plan for the
     years  ended  June  30,  2001  and  2000.

12.  COMMITMENTS AND CONTINGENCIES
     -----------------------------

     Letters of Credit
     -----------------
     At  June  30,  2001,  the  Company  had  $151,000 of outstanding letters of
     credit.


<PAGE>
                                      B-19


     Leases
     ------
     The  Company  conducts  its  operations  utilizing  leased facilities under
     long-term  lease  agreements,  classified  as operating leases. The Company
     also  leases certain equipment and vehicles under operating leases. Certain
     leases  provide  that  the  Company  pay  taxes, maintenance, insurance and
     certain  other  operating  expenses  and  contain  purchase  options.

     Future  minimum  lease payments in the aggregate required by noncancellable
     operating  leases with initial or remaining terms in excess of one year are
     as  follows:

<TABLE>
<CAPTION>
Year Ending
  June 30,    Related Party    Total
------------  --------------  -----------
<S>           <C>             <C>
2002          $       14,000  $   353,606
2003                  14,000      343,053
2004                  14,000      224,782
2005                  14,000       58,049
2006                  14,000       14,636
Thereafter            59,500       59,500
              --------------  -----------

                     129,500  $ 1,053,626
              ==============  ===========
</TABLE>

     Total  rent  expense, all of which was minimum rentals, for fiscal 2001 and
     2000  was  approximately  $318,200 and $111,200, respectively and is net of
     sublease  rentals  of  $42,000  and $44,600 in 2001 and 2000, respectively.

     Environmental Matters
     ---------------------
     The  Company  is  engaged in oil and gas exploration and production and may
     become  subject  to  certain  liabilities  as  they relate to environmental
     cleanup of well sites or other environmental restoration procedures as they
     relate  to  the  drilling  of  oil and gas wells and the operation thereof.
     Although  environmental  assessments  are  conducted  on  all  purchased
     properties,  in the Company's acquisition of existing or previously drilled
     well  bores,  the Company may not be aware of what environmental safeguards
     were  taken  at  the  time  such wells were drilled or during such time the
     wells  were  operated. Should it be determined that a liability exists with
     respect to any environmental clean up or restoration, the liability to cure
     such  a  violation could fall upon the Company. No claim has been made, nor
     is  the Company aware of any liability, which it may have, as it relates to
     any  environmental  clean  up, restoration or the violation of any rules or
     regulations  relating  thereto.

     Litigation
     ----------
     The  Company,  in  the normal course of business, is a party to a number of
     lawsuits  and  other  proceedings. The Company's management does not expect
     that  the  results  in  these lawsuits and proceedings will have a material
     adverse  effect  on  the financial position or results of operations of the
     Company.

     Guarantee of Debt
     -----------------
     The  Company  is  the  guarantor  of  certain  obligations  of  Hat  Creek
     Exploration  in  the  aggregate amount of $4,000,000 in connection with the
     purchase  of  certain oil and gas properties. The note payable is dated May
     4,  2000, bears interest at 8%, and is payable in monthly installments over
     nine  years. The debt is expected to be paid with proceeds from the revenue
     interest  in  the oil and gas properties. In the opinion of management, the
     ultimate  disposition  of  this  guarantee will not have a material adverse
     effect  on  the  Company's  consolidated  financial  condition,  results of
     operations  or  future  cash  flows.

     Employment Contracts
     --------------------
     The  Company  maintains employment contracts with two officers through 2006
     that  provide for a minimum annual salary, benefits and incentives based on
     the  Company's  earnings.  The  contracts  provide  for  lump sum severance
     payments,  certain  benefits  and  accelerated  vesting  of  options  upon
     termination  of  employment  under  certain  circumstances  or  a change of
     control,  as  defined.  At  June  30, 2001, the total commitment, excluding
     incentives,  was  $1,470,000.


<PAGE>
                                      B-20


13.  SUPPLEMENTAL INFORMATION (UNAUDITED)
     ------------------------------------

     Costs  incurred  by  the  Company with respect to its oil and gas producing
     activities  are  set  forth  below.

<TABLE>
<CAPTION>
                                    Years Ended June 30,
                                     2001         2000
                                  -----------  -----------
<S>                               <C>          <C>
Exploration activities            $         -  $         -
Proved property acquisition cost    6,478,006   29,954,437
                                  -----------  -----------
Development costs                   2,953,347      646,614

       Total                      $ 9,431,353  $30,601,051
                                  ===========  ===========
</TABLE>

14.  OIL AND GAS RESERVE INFORMATION (UNAUDITED)
     -------------------------------------------

     Proved  oil  and  gas  reserves  are the estimated quantities of crude oil,
     condensate  and  natural  gas  which  geological  and  engineering  data
     demonstrate  with  reasonable  certainty  to be recoverable in future years
     from  known  reservoirs  under  existing economic and operating conditions.
     Proved  developed oil and gas reserves are reserves that can be expected to
     be  recovered  through existing wells with existing equipment and operating
     methods. The following estimated net interests in proved reserves are based
     upon  subjective  engineering  judgments  and  may  be  affected  by  the
     limitations inherent in such estimation. The process of estimating reserves
     is  subject  to  continual  revision  as  additional  information  becomes
     available  as  a  result  of  drilling,  testing,  reservoir  studies  and
     production  history. There can be no assurance that such estimates will not
     be  materially  revised  in  subsequent  periods.

     The  Company  emphasizes  that  reserve  estimates  of  new  discoveries or
     undeveloped  properties  are more imprecise than those of producing oil and
     gas  properties.  The Company's reserves are substantially from undeveloped
     properties.  Accordingly, these estimates are expected to change materially
     as  future  information  becomes  available.  The  Company's  reserves were
     estimated by independent petroleum engineers. All of the Company's reserves
     are located onshore in the continental United States. The recoverability of
     the  proved  undeveloped  reserves is dependent upon obtaining financing to
     exploit  the  reserves.

     The  following  table  sets  forth  proved oil and gas reserves at June 30,
     2001,  2000  and  1999  together  with  changes  therein:

<TABLE>
<CAPTION>
                                               Oil and      Natural
                                             Condensate       GAS
                                               (BBLS)        (MCF)
                                             -----------  -----------
<S>                                          <C>          <C>
Balance at June 30, 1999                      3,128,000            -
        Purchase of minerals in place         2,278,000   34,449,000
        Production                              (34,000)    (966,000)
        Sales/disposal of minerals in place           -            -
        Revision of prior estimates                   -            -
                                             -----------  -----------
Balance at June 30, 2000                      5,372,000    33,483,000

        Purchase of minerals in place           199,000      457,000
        Production                             (100,000)  (1,452,000)
        Sales/disposal of minerals in place           -            -
        Revision of prior estimates                   -            -
                                             -----------  -----------
Balance at June 30, 2001                      5,471,000   32,488,000
                                             ===========  ===========

Proved developed reserves at June 30:
        2000                                  1,293,000   16,376,000
                                             ===========  ===========
        2001                                  1,345,000   14,666,000
                                             ===========  ===========
</TABLE>


<PAGE>
                                      B-21


     The  standardized  measure  of discounted future net cash flows at June 30,
     2001  and  2000 relating to proved oil and gas reserves is set forth below.
     The  assumptions  used  to  compute  the  standardized  measure  are  those
     prescribed  by the Financial Accounting Standards Board and as such, do not
     necessarily  reflect  the  Company's  expectations of actual revenues to be
     derived  from  those  reserves  nor  their  present  worth. The limitations
     inherent  in  the  reserve  quantity estimation process described above are
     equally  applicable  to  the  standardized measure computations since these
     estimates  are  the  basis  for  the  valuation  process.

     Standardized measure of discounted future net cash flows relating to proved
     reserves:

<TABLE>
<CAPTION>
                                                  At June 30,
                                           ----------------------------
                                               2001           2000
                                           -------------  -------------
<S>                                        <C>            <C>
Future cash inflows                        $251,668,000   $324,553,000
Future production costs                     (66,338,000)   (76,939,000)
Future development costs                    (18,741,000)   (17,650,000)
                                           -------------  -------------
Future net cash flows, before income tax    166,589,000    229,964,000
Future income tax expenses                  (44,482,000)   (72,642,000)
                                           -------------  -------------
Future net cash flows                       122,107,000    157,322,000
10% discount to reflect timing of net
      cash flows                            (62,247,000)   (82,801,000)
                                           -------------  -------------
Standardized measure of discounted future
      net cash flows                       $ 59,860,000   $ 74,521,000
                                            =============  =============
</TABLE>

     Changes  in  standardized  measure  of  discounted  future  net  cash flows
     relating  to  proved  reserves:

<TABLE>
<CAPTION>
                                                       Year Ended June 30,
                                                 ----------------------------
                                                     2001           2000
                                                 -------------  -------------
<S>                                              <C>            <C>
Standardized measure, beginning of period        $ 74,521,000   $ 11,322,000
Net change in prices and production costs         (62,315,000)    43,006,000
Accretion of discount                              20,554,000    (77,140,000)
Sales of oil and gas, net of production costs      (7,268,000)    (2,508,000)
Sales and disposition of reserves in place                  -              -
Purchase of reserves, net of future development
    costs                                           3,255,000    152,455,000
Development costs which reduced future
    development costs                               2,953,000        647,000
Revisions of quantity estimates                             -     12,103,000
Change in timing of production and other                    -              -
Net changes in income taxes                        28,160,000    (65,364,000)
                                                 -------------  -------------
Standardized measure, end of period              $ 59,860,000   $ 74,521,000
                                                 =============  =============
</TABLE>

15.  EARNINGS PER SHARE
     ------------------

     The  following  data  show the amounts used in computing earnings per share
     and  the  effect  on  income  and  the weighted average number of shares of
     dilutive  potential  common  stock.


<PAGE>
                                      B-22

<TABLE>
<CAPTION>
                                                  Year Ended June 30,
                                               ------------------------
                                                  2001         2000
                                               -----------  -----------
<S>                                            <C>          <C>

Net earnings                                   $ 2,100,524  $    94,116
Effect of dilutive securities                            -            -
                                               -----------  -----------

Net earnings after effect of
   dilutive securities                         $ 2,100,524  $    94,116
                                               ===========  ===========

Weighted average number of common shares used
    in basic earnings per share                 18,783,941   11,953,798
   Special warrants                              1,230,000            -
   Stock options and warrants                       71,012      126,414
                                               -----------  -----------
Weighted average number of common shares and
    dilutive potential common stock used in
    diluted earnings per share                  20,084,953   12,080,212
                                               ===========  ===========
</TABLE>

     Options  and  warrants  to  purchase  approximately 1,553,000 shares of the
     Company's  common  stock,  with  exercise  prices  of ranging from $1.53 to
     $14.56,  were  excluded  from  the June 30, 2001 diluted earnings per share
     calculation  because  their effects were antidilutive. Options and warrants
     to  purchase  approximately 1,324,000 shares of the Company's common stock,
     with  exercise  prices  of ranging from $1.75 to $24.50, were excluded from
     the  June  30,  2000  diluted  earnings per share calculation because their
     effects  were  antidilutive.


<PAGE>
                                      B-23



                        ASPEN GROUP RESOURCES CORPORATION
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                        AND INDEPENDENT AUDITOR'S REPORT

                                  JUNE 30, 2000


<PAGE>
                                      B-24


          INDEPENDENT AUDITOR'S REPORT


          Board of Directors
          Aspen Group Resources Corporation



          We  have  audited the accompanying consolidated balance sheet of Aspen
          Group  Resources  Corporation and subsidiaries as of June 30, 2000 and
          the  related  consolidated  statements  of  operations,  changes  in
          stockholders'  equity  and cash flows for each of the two years in the
          period  ended  June  30,  2000.  These  financial  statements  are the
          responsibility  of  the Company's management. Our responsibility is to
          express  an opinion on these financial statements based on our audits.

          We conducted our audits in accordance with generally accepted auditing
          standards.  Those standards require that we plan and perform the audit
          to  obtain reasonable assurance about whether the financial statements
          are  free  of material misstatement. An audit includes examining, on a
          test  basis,  evidence  supporting  the amounts and disclosures in the
          financial  statements. An audit also includes assessing the accounting
          principles  used and significant estimates made by management, as well
          as evaluating the overall financial statement presentation. We believe
          that  our  audits  provide  a  reasonable  basis  for  our  opinion.

          In  our  opinion,  the  consolidated  financial statements referred to
          above present fairly, in all material respects, the financial position
          of  Aspen  Group Resources Corporation and subsidiaries as of June 30,
          2000,  and  the  results  of their operations and their cash flows for
          each of the two years in the period ended June 30, 2000, in conformity
          with  generally  accepted  accounting  principles.

          Lane Gorman Trubitt L.L.P.

          "Signed"

          Dallas, Texas
          August 21, 2000


<PAGE>
                                      B-25


<TABLE>
<CAPTION>
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2000

                                     ASSETS
                                     ------

<S>                                                                  <C>
CURRENT ASSETS
  Cash                                                               $    319,246
  Accounts receivable
    Trade                                                               1,297,730
    Other                                                                 161,593
  Materials and supplies inventory                                         77,305
  Prepaid expenses                                                        326,189
                                                                     -------------
    Total current assets                                                2,182,063
                                                                     -------------

PROVED OIL & GAS PROPERTIES (FULL COST METHOD)                         40,266,932
  net of accumulated depletion of $1,795,148

OFFICE FURNITURE AND EQUIPMENT
  net of accumulated depreciation of $87,722                              254,291

OTHER ASSETS                                                               71,380
                                                                     -------------

      TOTAL ASSETS                                                   $ 42,774,666
                                                                     =============


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES
  Accounts payable
    Trade                                                            $    423,198
    Revenue distribution                                                  277,049
  Accrued expenses                                                         99,831
  Accrued interest                                                        144,593
  Accrued  salaries                                                         4,776
                                                                     -------------
                                                                          949,447
  Current maturities of long-term debt                                  1,920,000
  Note payable                                                          3,000,000
                                                                     -------------
    Total current liabilities                                           5,869,447
                                                                     -------------

LONG-TERM DEBT, LESS CURRENT MATURITIES                                 7,870,560

STOCKHOLDERS' EQUITY
  Preferred stock, no par value, authorized-unlimited, issued-none
     issued-none                                                                -
  Common stock, no par value, authorized-unlimited,
    Issued - 126,384,006 shares                                        43,410,125
  Less subscriptions for 857,744 shares                                  (214,436)
  Warrants and beneficial conversion feature                              823,695
  Accumulated deficit                                                 (14,984,725)
                                                                     -------------
    Total stockholders' equity                                         29,034,659
                                                                     -------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $ 42,774,666
                                                                     =============
</TABLE>


<PAGE>
                                      B-26

<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       YEARS ENDED JUNE 30, 2000 AND 1999

                                              2000          1999
                                          ------------  -------------
<S>                                       <C>           <C>
REVENUE
  Oil and gas sales                       $ 3,461,803   $    266,232
  Equipment sales                              19,915        683,708
  Other income                                      -         31,026
                                          ------------  -------------
    Total revenues                          3,481,718        980,966
                                          ------------  -------------

EXPENSES
  Oil and gas production                      953,991        216,234
  Cost of equipment sold                       10,357        281,850
  Operating expenses                                -        320,982
  General and administrative                  629,576      1,498,795
  Depreciation and depletion                1,116,049        159,329
  Other expenses                                    -            971
                                          ------------  -------------
    Total expenses                          2,709,973      2,478,161
                                          ------------  -------------

EARNINGS (LOSS) FROM OPERATIONS               771,745     (1,497,195)

OTHER INCOME (EXPENSE)
  Interest and financing expense             (665,362)      (399,289)
  Gain (loss) on disposal of assets                 -     (9,807,576)
  Provision for inventory losses                    -       (359,664)
  Provision for oil & gas property loss             -     (1,262,000)
  Interest income                                   -            159
  Other income                                236,992          1,479
                                          ------------  -------------
    Total other                              (428,370)   (11,826,891)
                                          ------------  -------------

EARNINGS (LOSS) BEFORE INCOME
   TAXES AND MINORITY INTERESTS               343,375    (13,324,086)

INCOME TAX BENEFIT                                  -      1,845,000
                                          ------------  -------------

NET EARNINGS (LOSS) BEFORE
   MINORITY INTERESTS                         343,375    (11,479,086)


MINORITY INTERESTS                            249,259              -
                                          ------------  -------------

NET EARNINGS (LOSS)                       $    94,116   $(11,479,086)
                                          ============  =============

NET EARNINGS (LOSS) PER SHARE             $         -   $       (.57)

WEIGHTED AVERAGE SHARES                    83,676,588     20,036,818
</TABLE>


<PAGE>
                                      B-27

<TABLE>
<CAPTION>
                                CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                            YEARS ENDED JUNE 30, 2000 AND 1999

                                                                             Common Stock                        Warrants
                                                        Common Stock          Subscribed       Special Shares      and
                                                  -----------------------  -------------------  --------------- Beneficial
                                                     Shares      Amount    Shares    Amount    Shares   Amount  Conversion
                                                  ----------  -----------  -------  ----------  ------  -------   Feature
                                                                                                                 ---------
<S>                                               <C>         <C>          <C>      <C>         <C>     <C>      <C>
BALANCES, June 30, 1998                           17,273,278  $21,119,482        -  $       -        -  $     -  $823,695

Issuance of shares in September and
    November 1998 for services  ($.50 per share)     132,889       66,445        -          -        -        -         -
Issuance of shares in September 1998
    For services ($.25 per share)                     30,000        7,500        -          -        -        -         -
Conversion of debenture in September 1998
    ($.2334 per share)                               428,366      100,000        -          -        -        -         -
Issuance of shares in October 1998 to
    Debenture holders in payment of interest,
    Penalty and waiver fees ($.25 per share)       1,994,840      494,555        -          -        -        -         -
Issuance of shares in November 1998 for
    Services ($.25 per share)                        130,000       32,500        -          -        -        -         -
Issuance of shares in November 1998
    For services ($.25 per share)                    140,000       35,000        -          -        -        -         -
Issuance of shares in December 1998 for
    Compensation ($.25 per share)                    205,000       51,250        -          -        -        -         -
Issuance of shares in January 1999 for
    Services ($.15/$.25 per share)                   650,000      112,500        -          -        -        -         -
Issuance of shares in March 1998 for
    Services ($.75/$.25 per share)                   120,000       80,000        -          -        -        -         -
Issuance of shares and warrants in private
    Offering which closed in March 1999
    ($.22 per share)                               1,628,825      356,305        -          -        -        -         -
Issuance of shares in June 1999 in connection
    With sale of Sears Ranch Property ($.25 per
    share)                                           100,000       25,000        -          -        -        -         -
Issuance of shares in June 1999 for services
    ($.20 per share)                                 340,000       68,000        -          -        -        -         -
Issuance of shares in June 1999 for notes and
    Accounts payable ($.25 per share)              4,000,000    1,000,000        -          -        -        -         -
Common stock subscriptions receivable
    ($.25 per share)                                       -            -  857,744   (214,436)       -        -         -

Net loss                                                   -            -        -          -        -        -         -
                                                  ----------  -----------  -------  ----------  ------  -------  --------

BALANCES, June 30, 1999                           27,173,198   23,548,537  857,744   (214,436)       -        -   823,695
                                                  ----------  -----------  -------  ----------  ------  -------  --------

                                                  Accumulated
                                                    Deficit          Total
                                                  -------------  ------------
<S>                                               <C>            <C>
BALANCES, June 30, 1998                           $ (3,599,755)  $ 18,343,422

Issuance of shares in September and
    November 1998 for services  ($.50 per share)             -         66,445
Issuance of shares in September 1998
    For services ($.25 per share)                            -          7,500
Conversion of debenture in September 1998
    ($.2334 per share)                                       -        100,000
Issuance of shares in October 1998 to
    Debenture holders in payment of interest,
    Penalty and waiver fees ($.25 per share)                 -        494,555
Issuance of shares in November 1998 for
    Services ($.25 per share)                                -         32,500
Issuance of shares in November 1998
    For services ($.25 per share)                            -         35,000
Issuance of shares in December 1998 for
    Compensation ($.25 per share)                            -         51,250
Issuance of shares in January 1999 for
    Services ($.15/$.25 per share)                           -        112,500
Issuance of shares in March 1998 for
    Services ($.75/$.25 per share)                           -         80,000
Issuance of shares and warrants in private
    Offering which closed in March 1999
    ($.22 per share)                                         -        356,305
Issuance of shares in June 1999 in connection
    With sale of Sears Ranch Property ($.25 per
    share)                                                   -         25,000
Issuance of shares in June 1999 for services
    ($.20 per share)                                         -         68,000
Issuance of shares in June 1999 for notes and
    Accounts payable ($.25 per share)                        -      1,000,000
Common stock subscriptions receivable
    ($.25 per share)                                         -       (214,436)

Net loss                                           (11,479,086)   (11,479,086)
                                                  -------------  -------------

BALANCES, June 30, 1999                            (15,078,841)     9,078,955
                                                  -------------  -------------
</TABLE>

See accompanying notes to the financial statements.


<PAGE>
                                      B-28

<TABLE>
<CAPTION>
                                    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                                YEARS ENDED JUNE 30, 2000 AND 1999

                                                                                     Common Stock                      Warrants
                                                                Common Stock          Subscribed     Special  Shares      and
                                                           -----------------------  ---------------  ---------------   Beneficial
                                                             Shares      Amount     Shares  Amount  Shares   Amount    Conversion
                                                           ----------  -----------  ------  -------  ------  -------    Feature
                                                                                                                      -----------
<S>                                                        <C>         <C>          <C>     <C>      <C>     <C>      <C>
Issuance of shares in August 1999 to related parties
    For settlement of debt  ($.16 per share)                3,125,000  $  500,000        -  $     -       -  $     -  $         -
Issuance of shares in August 1999 for
    Services related to the acquisition  of oil and gas
    properties ($.16 per share)                               600,000      96,000        -        -       -        -            -
Exercise of warrants in September 1999 for
   Services related to the acquisition  of oil and gas
    properties ($.16 per share)                               553,333      88,533        -        -       -        -            -
Issuance of shares in September 1999 for services
   Related to the acquisition  of oil and gas properties
   ($.22 per share)                                         1,000,000     218,750        -        -       -        -            -
Issuance of shares in September 1999 for services
   Related to the acquisition  of oil and gas properties
   ($.16 per share)                                           300,000      48,000        -        -       -        -            -
Issuance of shares and warrants in private
    Offering which closed in September 1999
    ($.25 per share)                                        1,200,000     300,000        -        -       -        -            -
Issuance of shares and special warrants in
   September 1999 for the acquisition  of East Wood
   ($.13 per share)                                        46,230,897   5,895,840        -        -       -        -            -
Issuance of shares in September 1999 for services
   Related to the acquisition  of oil and gas properties
   ($.16 per share)                                           800,000     128,000        -        -       -        -            -
Costs related to sales of stock                                     -     (39,448)       -        -       -        -            -
Exercise of warrants in December 1999 for
   Services related to the acquisition  of oil and gas
   properties ($.16 per share)                                543,333      86,933        -        -       -        -            -
Issuance of shares and warrants in private
    Offering which closed in December 1999
    ($.18 per share)                                        1,122,857     196,500        -        -       -        -            -
Costs related to sales of stock                                     -     (95,470)       -        -       -        -            -
Issuance of shares in January 2000 for services
   Related to the acquisition  of oil and gas properties
   ($.13 per share)                                         1,000,000     125,000        -        -       -        -            -
Issuance of shares and warrants in private
    Offering which closed in  February 2000
    ($.15 per share)                                        4,000,000     600,000        -        -       -        -            -
Issuance of shares in February 2000 for the
   Acquisition  of East Wood  ($.34 per
   share)                                                  26,230,897   9,033,170        -        -       -        -            -
Exercise of warrant in February 2000 for services
   Related to the acquisition  of oil and gas properties
   ($.34 per share)                                           593,333     203,988        -        -       -        -            -

                                                           Accumulated
                                                             Deficit        Total
                                                           ------------  ----------
<S>                                                        <C>           <C>
Issuance of shares in August 1999 to related parties
    For settlement of debt  ($.16 per share)               $          -  $  500,000
Issuance of shares in August 1999 for
    Services related to the acquisition  of oil and gas
    properties ($.16 per share)                                       -      96,000
Exercise of warrants in September 1999 for
   Services related to the acquisition  of oil and gas
    properties ($.16 per share)                                       -      88,533
Issuance of shares in September 1999 for services
   Related to the acquisition  of oil and gas properties
   ($.22 per share)                                                   -     218,750
Issuance of shares in September 1999 for services
   Related to the acquisition  of oil and gas properties
   ($.16 per share)                                                   -      48,000
Issuance of shares and warrants in private
    Offering which closed in September 1999
    ($.25 per share)                                                  -     300,000
Issuance of shares and special warrants in
   September 1999 for the acquisition  of East Wood
   ($.13 per share)                                                   -   5,895,840
Issuance of shares in September 1999 for services
   Related to the acquisition  of oil and gas properties
   ($.16 per share)                                                   -     128,000
Costs related to sales of stock                                       -     (39,448)
Exercise of warrants in December 1999 for
   Services related to the acquisition  of oil and gas
   properties ($.16 per share)                                        -      86,933
Issuance of shares and warrants in private
    Offering which closed in December 1999
    ($.18 per share)                                                  -     196,500
Costs related to sales of stock                                       -     (95,470)
Issuance of shares in January 2000 for services
   Related to the acquisition  of oil and gas properties
   ($.13 per share)                                                   -     125,000
Issuance of shares and warrants in private
    Offering which closed in  February 2000
    ($.15 per share)                                                  -     600,000
Issuance of shares in February 2000 for the
   Acquisition  of East Wood  ($.34 per
   share)                                                             -   9,033,170
Exercise of warrant in February 2000 for services
   Related to the acquisition  of oil and gas properties
   ($.34 per share)                                                   -     203,988
</TABLE>

See accompanying notes to the financial statements.


<PAGE>
                                      B-29

<TABLE>
<CAPTION>
                                     CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                                YEARS ENDED JUNE 30, 2000 AND 1999

                                                                                     Common Stock                         Warrants
                                                              Common Stock            Subscribed         Special Shares     and
                                                       -------------------------  --------------------  ---------------- Beneficial
                                                         Shares       Amount       Shares    Amount     Shares   Amount  Conversion
                                                       -----------  ------------  --------  ----------  -------  -------   Feature
                                                                                                                          ---------
<S>                                                    <C>          <C>           <C>       <C>         <C>      <C>      <C>
Exercise of warrants in March 2000
   ($.15 per share)                                        400,000  $    60,000          -  $       -         -  $     -  $      -
Exercise of warrants in March 2000
   ($.18 per share)                                        400,000       72,000          -          -         -        -         -
Exercise of warrants in March 2000
   ($.30 per share)                                        600,000      180,000          -          -         -        -         -
Exercise of warrants in March 2000
   ($.18 per share)                                      1,464,524      263,614          -          -         -        -         -
Exercise of options in March 2000
   ($.25 per share)                                        120,000       30,000          -          -         -        -         -
Costs related to sales of stock                                  -      (97,520)         -          -         -        -         -
Issuance of shares in April  2000 for
    Services ($.15 - $26 per share)                        320,518       55,800          -          -         -        -         -
Issuance of shares in April  2000 for
    Services ($.14 per share)                              600,000       84,360          -          -         -        -         -
Issuance of shares in April  2000 for
    Services ($.13 per share)                            2,000,000      250,000          -          -         -        -         -
Issuance of shares in April 2000 for the
   Acquisition  of oil and gas properties  ($.17 per
   share)                                                1,825,000      313,718          -          -         -        -         -
Issuance of shares in April 2000 to related parties
    For settlement of debt  ($.20 per share)             1,281,115      256,223          -          -         -        -         -
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($.38 per
   share)                                                  650,000      243,750          -          -         -        -         -
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($.35 per
   share)                                                  940,000      323,172          -          -         -        -         -
Exercise of warrants in June 2000
   ($.31 per share)                                        310,001       96,875          -          -         -        -         -
Issuance of shares in June 2000 for the
   Acquisition  of oil and gas properties  ($.34 per
   share)                                                1,000,000      343,800          -          -         -        -         -

Net earnings                                                     -            -          -          -         -        -         -
                                                       -----------  ------------  --------  ----------  -------  -------  --------

BALANCES, June 30, 2000                                126,384,006  $43,410,125    857,744  $(214,436)        -  $     -  $823,695
                                                       ===========  ============  ========  ==========  =======  =======  ========

                                                         Accumulated
                                                           Deficit        Total
                                                       -------------  ------------
<S>                                                    <C>            <C>
Exercise of warrants in March 2000
   ($.15 per share)                                    $          -   $    60,000
Exercise of warrants in March 2000
   ($.18 per share)                                               -        72,000
Exercise of warrants in March 2000
   ($.30 per share)                                               -       180,000
Exercise of warrants in March 2000
   ($.18 per share)                                               -       263,614
Exercise of options in March 2000
   ($.25 per share)                                               -        30,000
Costs related to sales of stock                                   -       (97,520)
Issuance of shares in April  2000 for
    Services ($.15 - $26 per share)                               -        55,800
Issuance of shares in April  2000 for
    Services ($.14 per share)                                     -        84,360
Issuance of shares in April  2000 for
    Services ($.13 per share)                                     -       250,000
Issuance of shares in April 2000 for the
   Acquisition  of oil and gas properties  ($.17 per
   share)                                                         -       313,718
Issuance of shares in April 2000 to related parties
    For settlement of debt  ($.20 per share)                      -       256,223
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($.38 per
   share)                                                         -       243,750
Issuance of shares in May 2000 for the
   Acquisition  of oil and gas properties  ($.35 per
   share)                                                         -       323,172
Exercise of warrants in June 2000
   ($.31 per share)                                               -        96,875
Issuance of shares in June 2000 for the
   Acquisition  of oil and gas properties  ($.34 per
   share)                                                         -       343,800

Net earnings                                                 94,116        94,116
                                                       -------------  ------------

BALANCES, June 30, 2000                                $(14,984,725)  $29,034,659
                                                       =============  ============
</TABLE>

See accompanying notes to the financial statements.


<PAGE>
                                      B-30

<TABLE>
<CAPTION>
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                Years ended June 30, 2000 and 1999

                                                                           2000          1999
                                                                       ------------  -------------
<S>                                                                    <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net earnings (loss)                                                  $    94,116   $(11,479,086)
  Adjustments to reconcile net earnings (loss) to net cash
      Provided by (used by) operating activities:
    Deferred income tax benefit                                                  -     (1,845,000)
    Depreciation and depletion                                           1,116,049        159,329
    Amortization                                                           112,954        143,041
    Common stock and warrants issued for services
        and other expenses                                                  28,800        947,750
    Loss on disposal of assets                                                   -      9,807,576
    Provision for inventory losses                                               -        359,664
    Provision for oil & gas property loss                                        -      1,262,000
    Change in assets and liabilities net of effects from purchase of
      East Wood Equity Venture, Inc.
        Accounts receivable                                             (1,031,451)       343,368
        Prepaid expenses                                                  (140,283)       219,119
        Accounts payable and accrued liabilities                          (397,696)       136,335
        Materials and supplies inventory                                    20,345        434,045
        Other                                                                    -        (55,785)
                                                                       ------------  -------------
      Net cash provided by (used by) operating activities                 (197,166)       432,356
                                                                       ------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from sale of oil and gas properties                             241,989         12,500
  Oil and gas properties purchased                                      (5,201,091)       (81,874)
  Other                                                                       (950)             -
  Exploration and development costs capitalized                           (646,614)    (1,070,510)
  Acquisition of office furniture and equipment                           (170,032)       (31,883)
                                                                       ------------  -------------
      Net cash used by investing activities                             (5,776,698)    (1,171,767)
                                                                       ------------  -------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of common stock and exercise of warrants                          1,702,114        381,305
  Cash acquired in acquisition                                              66,816              -
  Costs related to sale of stock and issuance of notes payable            (232,438)      (247,102)
  Issuance of notes payable and long-term debt                          10,081,425        451,518
  Repayment of notes payable and long-term debt                         (5,333,890)             -
  Advances from (repayments to) related parties                                  -         77,011
                                                                       ------------  -------------
      Net cash provided by financing activities                          6,284,027        662,732
                                                                       ------------  -------------

NET INCREASE (DECREASE) IN CASH                                            310,163        (76,679)

CASH - Beginning of period                                                   9,083         85,762
                                                                       ------------  -------------

CASH - End of period                                                   $   319,246   $      9,083
                                                                       ============  =============

SUPPLEMENTAL INFORMATION
  Cash paid for interest                                               $   584,285   $    315,215
  Conversion of debt and other liabilities to common stock                 756,223        100,000
  Oil and gas property acquired with note payable                        3,000,000              -
  Oil and gas properties acquired with common stock                     16,497,200              -
  Issuance of common stock for acquisition consulting fees                 748,329              -
  Prepaid expenses acquired with common stock                              361,360              -
  Extinguishment of convertible debentures                                       -      4,220,000
  Issuance of common stock for notes and accounts payable
     net of subscriptions receivable of $214,436                                 -        785,564
  Purchase of East Wood Equity Venture, Inc.
     Current assets, net of cash acquired                              $   374,850   $          -
     Oil and gas properties, net                                         5,804,002              -
     Office furniture and equipment, net                                    15,748              -
     Liabilities assumed                                                (4,965,234)             -
                                                                       ------------  -------------
                                                                       $ 1,229,366   $          -
                                                                       ============  =============
</TABLE>

See accompanying notes to the financial statements.


<PAGE>
                                      B-31


1.   NATURE  OF  OPERATIONS
     ----------------------

     The  Company  was  incorporated  under the laws of Ontario as Cotton Valley
     Energy  Limited  (CVEL) on February 15, 1995. It acquired all of the shares
     of  Cotton  Valley Energy Corporation (CVEC), a Nevada corporation, on June
     30,  1995  in  a  one-for-one  share  and  warrant  exchange. CVEC was also
     incorporated  in  February  1995.  CVEL had no substantive activity, so the
     acquisition  of  CVEC  was accounted for as a recapitalization of CVEL with
     the  net  assets of CVEC. These consolidated financial statements have been
     prepared  as  if  the Company had acquired CVEC at the Company's inception.

     On  June 14, 1996, the Company merged with Arjon Enterprises, Inc. (Arjon),
     an Ontario corporation and reporting issuer in Ontario. As a result of that
     merger  the  Company's  name  was  changed  to  Cotton  Valley  Resources
     Corporation  and  a  new capital structure was established. Transactions in
     the  accompanying  financial  statements  are reflected as if the resulting
     capital  structure  was in existence since inception. Arjon had no business
     activities  and  its  only asset consisted of convertible debentures of the
     Company  in the principal amount of $146,300. The Company accounted for the
     transaction  as  an  issuance of stock for the net monetary assets of Arjon
     accompanied  by  a  recapitalization.  Former  Arjon  shareholders received
     686,551  common  shares  (representing  approximately  7.5%  of  the  then
     outstanding  common  shares)  of  the  Company.

     On April 30, 1996, the Company organized Cotton Valley Operating Company, a
     Texas  corporation  (CV  Operating)  to  operate  the Company's oil and gas
     properties.  The  Company  on  February  25,  1997, organized Cotton Valley
     Energy,  Inc.,  an  Oklahoma  corporation (CVEI) to acquire and operate the
     N.E.  Alden  Field  properties  in  Caddo  County, Oklahoma. CVEI commenced
     operations on March 3, 1997. Aspen Energy Corporation, a Nevada corporation
     (Aspen),  was an inactive subsidiary of the Company, formed on May 1, 1996,
     which was used to accommodate the merger of Aspen Energy Corporation, a New
     Mexico  corporation  (Old Aspen) into Aspen on July 31, 1997. The principal
     asset  of  Old  Aspen was its interest in the Means Unit in Andrews County,
     Texas  (Means  Unit). On May 27, 1998, Aspen organized Cotton Valley Means,
     Inc.  as a Texas corporation (CV Means) and transferred all of its interest
     in  the  Means  Unit  to  CV  Means  to  facilitate a $10 million financing
     relating  to  the  development  of  this  property.

     In  addition  to  CV  Energy,  CV  Operating, CVEI, Aspen and CV Means, the
     Company  organized  Mustang  Well  Servicing  Company, a Nevada corporation
     (Mustang  Well  Servicing),  Mustang  Oilfield  Equipment Company, a Nevada
     corporation  (Mustang  Equipment), and Mustang Horizontal Services, Inc., a
     Nevada  corporation  (Mustang  Horizontal)  (collectively,  Mustang Service
     Companies).  All  of  the  Company's  subsidiaries  are wholly owned by the
     Company,  except for CV Means, which is a wholly-owned subsidiary of Aspen.
     On  February  28,  2000  the  Company's  name  was  changed  to Aspen Group
     Resources  Corporation.

     The  Company  was  in the development stage through June 30, 1999. The year
     ended  June  30,  2000  is the first year during which it was considered an
     operating company. The Company's principal business activity is to acquire,
     explore,  and  develop  oil  and  gas  properties.

     The  recoverability  of  amounts  capitalized for oil and gas properties is
     dependent  upon  the  identification  of economically recoverable reserves,
     together  with  obtaining  the necessary financing to exploit such reserves
     and  the  achievement  of  profitable  operations.


2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
     ----------------------------------------------

     Oil  and  Gas  Properties
     -------------------------
     The  Company  follows  the  full-cost  method of accounting for oil and gas
     properties. Accordingly, all costs associated with acquisition, exploration
     and  development  of  oil  and  gas  reserves,  including  directly related
     overhead  costs,  are  capitalized into a "full-cost pool". A separate full
     cost  pool  is  established  for  U.S.  and  non-U.S.  properties.

     All  capitalized  costs  of oil and gas properties, including the estimated
     future  costs  to  develop  proved  reserves,  are  amortized  on  the
     unit-of-production  method  using  estimates  of  proved  reserves.  Costs
     directly  associated  with  the  acquisition  and  evaluation  of  unproved
     properties  are  excluded  from  the  amortization  base  until the related
     properties  are  evaluated.  Such  unproved  properties  are  assessed
     periodically  and  a  provision  for  impairment  is  made to the full-cost
     amortization  base  when  appropriate.

See accompanying notes to the financial statements.


<PAGE>
                                      B-32


     Sales  of  oil and gas properties are credited to the full-cost pool unless
     the  sale  would  have  a  significant  effect  on  the  amortization rate.
     Abandonments  of properties are accounted for as adjustments to capitalized
     costs  with no loss recognized. Oil and gas drilling and workover equipment
     used  primarily  on  the Company's properties are included in the full cost
     pool.

     The net capitalized costs are subject to a "ceiling test" which limits such
     costs  to  the  aggregate  of  the  estimated  present  value of future net
     revenues  from  proved  reserves discounted at ten percent based on current
     economic  and operating conditions. A provision for an oil and gas property
     loss  of  $1,262,000  was  recognized  in  fiscal  1999.

     Revenue  Recognition
     --------------------
     Revenue  is accrued and recognized in the month the oil and gas is produced
     and  sold.

     Inventories
     -----------
     Inventories,  which  consist  primarily  of oilfield equipment and supplies
     held  for  resale,  are  stated  at  the  lower of cost or market using the
     first-in,  first-out  (FIFO)  method.

     Office  Furniture  and  Equipment
     ---------------------------------
     Office  equipment  is  recorded  at cost and depreciated on a straight-line
     basis over the estimated useful lives of the assets, which range from three
     to  ten  years.

     Debenture  Financing  Costs
     ---------------------------
     Debenture  financing costs are being amortized ratably over the life of the
     related  debenture.

     Basis  of  Presentation
     -----------------------
     The accompanying financial statements have been prepared in accordance with
     accounting  principles  generally  accepted  in  the  United  States.  The
     differences  between accounting principles generally accepted in the United
     States  and  Canada  would  not  have a material impact on the accompanying
     financial  statements. The Company's assets and principal activities are in
     the  United  States  and  its  functional  currency is the U.S. dollar. The
     effects  of  exchange  rate changes on transactions denominated in Canadian
     dollars  or  other  currencies  are charged to operations. Foreign exchange
     gains  or  losses  were  insignificant  for  all  periods  presented.

     Reconciliation  with  Canadian  Generally  Accepted  Accounting  Principles
     ---------------------------------------------------------------------------
     These  consolidated  financial  statements have been prepared in accordance
     with  accounting  principals  generally  accepted  in the United States (US
     GAAP)  which  in  most respects, conform to accounting principals generally
     accepted  in  Canada  (Canadian  GAAP).  The primary difference is with the
     application  of the ceiling test under full cost accounting. Under US GAAP,
     a  ceiling test is applied to ensure that the capitalized costs accumulated
     in  each  cost  centre are limited to an amount equal to the present value,
     discounted  at  10%,  of  the  unescalated  estimated  future net operating
     revenues  from  proved reserves, net of restoration costs and income taxes.
     Under  Canadian  GAAP, a ceiling test is applied to ensure that capitalized
     costs  do  not exceed the sum of estimated undiscounted, unescalated future
     net  revenues from proved reserves less the cost incurred or administrative
     costs,  and  an  estimate  for restoration costs and applicable taxes. As a
     result  of applying the tests under both US and Canadian GAAP there were no
     material differences found. Therefore the Company's accounting policies are
     consistently  applied  in all material respects in accordance with Canadian
     generally  accepted  accounting  principles.

     Income  Taxes
     -------------
     Income  taxes  are provided for the tax effects of transactions reported in
     the  financial  statements and consist of taxes currently due, if any, plus
     net  deferred  taxes  related primarily to differences between the bases of
     assets and liabilities for financial and income tax reporting. Deferred tax
     assets  and  liabilities  represent  the  future tax return consequences of
     those  differences,  which  will  either  be taxable or deductible when the
     assets  and  liabilities  are  recovered  or  settled.  Deferred tax assets
     include recognition of operating losses that are available to offset future
     taxable  income  and tax credits that are available to offset future income
     taxes. Valuation allowances are recognized to limit recognition of deferred
     tax  assets  where  appropriate.  Such  allowances  may  be  reversed  when
     circumstances  provide  evidence  that  the  deferred  tax assets will more
     likely  than  not  be  realized.

See accompanying notes to the financial statements.


<PAGE>
                                      B-33


     Net  Earnings  (Loss)  Per  Share
     ---------------------------------
     Per  share  information  is  based on the weighted average number of common
     stock  and  common  stock equivalent shares outstanding. As required by the
     Securities and Exchange Commission rules, all warrants, options, and shares
     issued  within  a  year  prior  to  the  initial  filing  of a registration
     statement  are  assumed  to  be  outstanding  for  each  year presented for
     purposes  of  the  earnings (loss) per share calculation. Dilutive earnings
     per  share for the years ended June 30, 2000 and 1999 are the same as basic
     earnings  per share because the exercise of potentially dilutive securities
     does  not  have  a  significant  effect  on  dilutive  earnings  per share.

     Cash  Flow  Statement
     ---------------------
     For  purposes  of  the  statements of cash flows, the Company considers all
     highly liquid debt instruments purchased with an original maturity of three
     months  or  less  to  be  cash  equivalents.

     Stock-Based  Compensation
     -------------------------
     Statement  of  Financial  Accounting  Standards  No.  123  - Accounting for
     Stock-Based  Compensation  (SFAS  123), which was effective for the Company
     beginning  with  its 1997 fiscal year, requires recognition of compensation
     expense  for  grants  of stock, stock options, and other equity instruments
     based on fair value. If the grants are to employees, companies may elect to
     disclose  only  the  pro  forma  effect  of  such  grants on net income and
     earnings  per  share  in  the notes to financial statements and continue to
     account for the grants pursuant to APB Opinion No. 25, Accounting for Stock
     Issued  to  Employees.  The  Company  has  elected the pro forma disclosure
     alternative  for  employee  grants.

     Use  of  Estimates
     ------------------
     The  preparation  of  the  Company's  consolidated  financial statements in
     conformity  with  generally  accepted  accounting  principles  requires the
     Company  to make estimates and assumptions that affect the amounts reported
     in  these financial statements and accompanying notes. Actual results could
     differ  from  those  estimates. Significant assumptions are required in the
     valuation  of  proved  oil  and  gas reserves, which as described above may
     affect  the  amount  at which oil and gas properties are recorded. It is at
     least reasonably possible those estimates could be revised in the near term
     and  those  revisions  could  be  material.

     Principles  of  Consolidation
     -----------------------------
     The  consolidated  financial statements include the accounts of the Company
     and  its  wholly-owned subsidiaries. All material intercompany accounts and
     transactions  of  consolidated  subsidiaries  have  been  eliminated  in
     consolidation.

     Reclassifications
     -----------------
     Certain  reclassifications  have  been  made  to  the prior years financial
     statements  to  conform  to  the  current  year  presentation.

     Accounting  Pronouncements
     --------------------------
     In  June  1998,  the  Financial  Accounting  Standards  Board (FASB) issued
     Statement  of Financial Accounting Standards (SFAS) No. 133, Accounting for
     Derivative  Instruments and Hedging Activities which establishes accounting
     and  reporting  standards  for  derivative  instruments,  including certain
     derivative  instruments  embedded in other contracts (collectively referred
     to  as  derivatives), and for hedging activities. SFAS No. 133 is effective
     for  all fiscal quarters of all fiscal years beginning after June 15, 2000,
     with  earlier  application  encouraged.  The  Company does not anticipate a
     material  impact  on  its  financial  position  or  results  of operations.

     In  June  2000,  the  FASB  issued  SFAS  No.  138,  Accounting for Certain
     Derivative  Instruments  and  Certain  Hedging  Activities.  This statement
     amends  the  accounting and reporting standards of SFAS No. 133 for certain
     instruments  and  certain hedging activities. SFAS No. 138 also amends SFAS
     No.  133  for  decisions  made  by  the  Board  relating  to the Derivative
     Implementation  Group (DIG) process. Certain decisions arising from the DIG
     process  that required specific amendments to SFAS No. 133 are incorporated
     in  this  Statement.  The statement is effective concurrently with SFAS No.
     133  according  to  the  provisions  of  paragraph  48 of SFAS No. 133. The
     Company  does not anticipate a material impact on its financial position or
     results  of  operations.

     In  December  1999,  the  Securities  and  Exchange Commission issued Staff
     Accounting  Bulletin  No. 101 which summarizes certain of the staff's views
     in applying generally accepted accounting principles to revenue recognition

See accompanying notes to the financial statements.


<PAGE>
                                      B-34


     in  financial statements. The Company does not anticipate a material impact
     on  its  financial  position  or  results  of  operations.

     In  April  2000,  the FASB issued Financial Interpretation Number (FIN) 44,
     Accounting  for  Certain  Transactions  Involving  Stock  Compensation--an
     Interpretation  of Accounting Principles Board No. 25. FIN 44 clarifies the
     application  of  Opinion  No.  25.  This  Interpretation  was  effective
     immediately and all issues are to be handled prospectively. The adoption of
     FIN  44  did not have a material impact on the Company's financial position
     or  results  of  operations.

3.   OIL  AND  GAS  PROPERTIES
     -------------------------

     East  Wood  Equity  Venture,  Inc.
     ----------------------------------
     During  August 1999 the Company organized a Texas corporation, Aspen Energy
     Group,  Inc  (AEG)  as a wholly-owned subsidiary. On September 16, 1999 AEG
     entered  into  an  agreement, effective July 1, 1999, to acquire 50% of the
     outstanding equity shares of East Wood Equity Venture, Inc. (East Wood), an
     oil  and gas company, in exchange for the Company issuing 25,000,000 shares
     of  common stock, and 21,230,897 special warrants (each exercisable for one
     share). On February 28, 2000, the Company acquired the remaining 50% of the
     outstanding  equity  shares  of  East  Wood for 26,230,897 shares of common
     stock  and  issuance  of  a  note  payable in the amount of $3,000,000. For
     financial  statement  purposes  the  acquisition  was  accounted  for  as a
     purchase  and,  accordingly  East  Wood's  results  are  included  in  the
     consolidated  financial  statements  since  the  date  of  acquisition. The
     aggregate  purchase  price  was approximately $17.9 million, which exceeded
     the  net assets of East Wood by approximately $16.6 million. The excess was
     allocated  to  oil  and  gas  properties  and  will  be  amortized.

     The  following unaudited pro forma data summarize the results of operations
     for  the  years ended June 30, 2000 and 1999 as if the acquisition had been
     completed  on  July  1,  1998,  the  beginning  of  the  1999  fiscal year.

<TABLE>
<CAPTION>
     Pro Forma Information              2000         1999
                                     ----------  -------------
<S>                                  <C>         <C>
     Net sales                       $3,481,718  $  1,936,131
     Net earnings (loss)             $  343,375  $(11,362,024)
     Net earnings (loss) per share   $        -  $       (.57)
</TABLE>

     These pro forma amounts do not purport to be indicative of the results that
     would  have  actually been obtained if the acquisition had occurred on July
     1,  1998  or  that  may  be  obtained  in  the  future.

     Mercer  Oil  and  Gas  Co.
     --------------------------
     Effective  April  1,  2000,  the  Company  entered  into  a  share purchase
     agreement  to  acquire  100% of Mercer Oil and Gas Company (Mercer), an oil
     and  gas company, for 1,000,000 shares. Mercer is a company affiliated with
     an  officer  of  the  Company.  Prior  to the closing of the share purchase
     agreement,  the Company purchased certain oil and gas property interests of
     Mercer  for  $300,000  in  cash.  For  financial  statement  purposes  the
     acquisition  was  accounted for as a purchase. The aggregate purchase price
     was  $343,800.  The  pro  forma effects of the acquisition has no effect on
     revenues,  earnings  or  per  share  amounts  as  Mercer  had no results of
     operations  prior  to  the  date  of  acquisition.

4.   NOTES  PAYABLE  AND  LONG-TERM  DEBT
     ------------------------------------

     On  April 28, 2000, the Company entered into a credit agreement with a bank
     under  which  it may borrow up to $25,000,000 limited to the borrowing base
     as  determined by the lender. The commitment amount was $12,160,000 at June
     30,  2000. At June 30, 2000, there was $9,790,560 of outstanding borrowings
     under  this agreement. Interest on outstanding borrowings currently accrues
     at  the  bank's  base  rate of interest plus one-half percent (base rate is
     9.5% at June 30, 2000). The agreement also provides for a commitment fee of
     one-half percent per annum on the average unused portion of the commitment.
     A  facility  fee  of  one-half  percent  is  assessed  for increases in the
     commitment  amount.  The  facility  is secured by the Company's oil and gas
     properties.  Under  the  terms  of  the  credit  agreement,  the Company is
     required  to  maintain  certain  financial  ratios  and  other  financial
     conditions. At June 30, 2000, the Company was in compliance with those loan
     covenants.

See accompanying notes to the financial statements.


<PAGE>
                                      B-35


     Interest  is  payable  monthly  and  the  credit agreement requires monthly
     commitment  reductions  as  determined  by  lender.  The monthly commitment
     reduction  amount  as  of  June 30, 2000 was $160,000. The credit agreement
     matures  on  April  10,  2004. Annual required commitment reductions of the
     credit  agreement  for  the four years subsequent to June 30, 2000 based on
     the current monthly commitment reduction amount are $1,920,000, $1,920,000,
     $1,920,000 and $4,030,560 for fiscal years ending June 30, 2001, 2002, 2003
     and  2004,  respectively.

     In  connection  with the acquisition of certain oil and gas properties, the
     Company,  on  February  28,  2000,  issued a $3,000,000 convertible 9% note
     payable. All unpaid principal and interest is due on or before December 31,
     2000;  provided  that  at  any  time  the Company proposes to pay this note
     payable, the payees have the right, at their sole option, to receive all or
     any  portion  of  the  amount  outstanding by the issuance to the payees of
     20,000,000  common  stock  of  the  Company.

     Sale  of  Convertible  Debentures
     ---------------------------------
     On  December  30,  1997,  the  Company  completed  the private placement of
     $4,320,000  Convertible  Debentures  to  a  group  of  nine  institutional
     investment firms. The Convertible Debentures were due December 31, 2001 and
     were  secured  by  equipment  and other assets of the Company. Interest was
     payable  annually  at  7%. The Convertible Debentures were convertible into
     shares  of  the  Company's  Common Stock and Debenture Warrants, subject to
     adjustment  upon  certain events. During October 1998, the Company and each
     Convertible Debentureholder agreed to certain amendments to the Convertible
     Debentures  and  related  documents,  including  a  waiver  of the event of
     default.  As  consideration  for  the waiver, the Company issued a total of
     400,000  shares  on  a  pro rata basis to each Convertible Debentureholder.
     Additionally,  the  Company  issued  and  delivered  to  the  Convertible
     Debentureholders  approximately  1.6 million shares of common stock in lieu
     of  accrued  interest  and  penalties  of  approximately  $400,000  on  the
     Convertible  Debentures  for  December  30, 1997 through December 31, 1998.

     A beneficial conversion feature was recognized and measured by allocating a
     portion  of  the  proceeds  equal to the intrinsic value of that feature to
     stockholders'  equity.  The  estimated  fair  value  of  $479,162  has been
     recorded as a discount to the note and was amortized from the issue date to
     the  date  the debenture  was  scheduled  to  become  convertible.

     On March 26, 1999 the Company assigned to the holders (Holders) of its then
     outstanding  $4.22  million  of Convertible Debentures, assets (Transferred
     Assets)  having a book value of approximately $13 million in exchange for a
     release  from all obligations, including repayment and/or conversion, under
     the  Convertible  Debentures.  The  obligations  under  the  Convertible
     Debentures  were  assumed  by Mustang Well Servicing Company (MWSC) and the
     Company's  ownership interest in MWSC was transferred to an unrelated third
     party.  Pursuant  to  an  agreement  for conveyances in lieu of foreclosure
     between  the  Company,  its subsidiaries and the holders of the Convertible
     Debentures,  the  Company  is  entitled  to  the  return  of  all remaining
     Transferred  Assets  (well  servicing  equipment,  horizontal  drilling
     equipment,  certain  oil and gas leases plus the remaining working interest
     in  the Company's Cheneyboro leases in Navarro County, Texas) and remaining
     cash  from  the  sale  of Transferred Assets once the Holders have received
     $4.22  million  (plus interest and certain expenses, less revenues and less
     50%  of the proceeds from sales of certain shares of common stock) from the
     sale  of  the  Transferred  Assets.  In connection with the transaction the
     Company  has  recorded  a  pre-tax  loss  on  disposition  of  assets  of
     approximately  $9,808,000.

     Means  Credit  FacilitY
     -----------------------
     On  June  12,  1998, CV Means entered into a credit agreement with Triassic
     Energy  Partners,  L.P.  (Triassic),  an  affiliate  of  Cambrian  Capital
     Corporation  whereby  CV  Means  could  borrow  up  to  $10,000,000  on  a
     multiple-advance,  non-revolving  basis  (Means  Credit  Facility).

     As  of  June  30,  1999,  the  Company  had drawn down $451,518 for working
     capital  and  $388,600  for Means Unit property development purposes. A $10
     million  promissory  note dated June 12, 1998 with interest payable monthly
     at  the  prime rate of Citibank N.A., New York, New York plus 2% was issued
     to  Triassic  by  CV Means in accordance with the terms of the Means Credit
     Facility.  As  security  for  the Means Credit Facility, CV Means granted a
     security  interest  in  substantially all the assets of CV Means, including
     the  Means  Unit  and all income generated thereby. As further security for
     the Means Credit Facility, Aspen, the sole shareholder of CV Means, pledged
     all  the  outstanding  shares  of  CV  Means  to  Triassic.

See accompanying notes to the financial statements.


<PAGE>
                                      B-36


     At  June  30,  1999,  the  entire amount of the note payable, $840,118, was
     included  in  current  liabilities  as the Company was in default under the
     terms  of  the Means Credit Facility. On May 23, 2000, the accrued interest
     and  outstanding  principal balance of the note totaling $994,723 was paid.

5.   STOCKHOLDERS'  EQUITY
     ---------------------

     During  the  year  ended June 30, 2000, the Company initiated three private
     placement  of  its common stock, with warrants attached as set forth below.

     -    The  Company  sold 1,200,000 shares and 1,200,000 warrants exercisable
          for  $.30 per share until September 30, 2002 for proceeds of $300,000.

     -    The  Company  sold 1,122,857 shares and 1,122,857 warrants exercisable
          for  $.18  per  share  until  June  15, 2001 for proceeds of $196,500.

     -    The  Company  sold 4,000,000 shares and 4,000,000 warrants exercisable
          for  $.18  per  share  until  June  15, 2001 for proceeds of $600,000.

     In  fiscal  year  2000, additional options and warrants were granted as set
     forth  below.

     -    Option to acquire 120,000 units (one common share and one common share
          purchase  warrant)  for $.25 per share through September 30, 2001 were
          granted  in  connection  with  a  private  placement.  This option was
          exercised  in  fiscal 2000 and the common share purchase warrants were
          issued  and  are  exercisable for $.30 per share through September 30,
          2002.

     -    Option to acquire 112,286 units (one common share and one common share
          purchase  warrant)  for  $.18  per  share  through  June 15, 2001 were
          granted  in  connection  with  a  private  placement.

     -    Option to acquire 400,000 units (one common share and one common share
          purchase  warrant)  for  $.18  per  share  through  June 15, 2001 were
          granted  in  connection  with  a  private  placement.  This option was
          exercised  in  fiscal 2000 and the common share purchase warrants were
          issued  and  are exercisable for $.18 per share through June 15, 2001.

     -    Options  to acquire 2,000,000 shares for $.16 - $.31 per share through
          August  27,  2000  were  granted  in  connection  with an acquisition.

     -    Option  to  acquire 100,000 shares for $.14 per share through February
          1,  2006  were  granted  in  connection  with  services  rendered.

     -    Option to acquire 8,000,000 shares for $.24 per share through February
          22,  2003  were  granted to certain officers, employees and directors.

     During  the  year  ended  June  30,  1999,  the Company initiated a private
     placement  of  its  common  stock, with warrants attached. The Company sold
     1,628,825  shares  and  1,628,825  warrants exercisable for $0.22 per share
     until  March  31,  2002  for  net  proceeds  of  $356,305.

     In  fiscal  year  1999, additional options and warrants were granted as set
     forth  below.

     -    Option  to  acquire 150,000 shares for $.25 per share through December
          31,  2001  were  granted  to  certain  non-employee  directors.

See accompanying notes to the financial statements.


<PAGE>
                                      B-37


The  following  tables  summarizes the option and warrant activity for the years
ended  June  30,  2000  and  1999:

<TABLE>
<CAPTION>
                                           June 30, 2000          June 30, 1999
                                      ----------------------  ---------------------
                                                   Weighted               Weighted
                                                    Average               Average
                                        Number     Exercise     Number    Exercise
                                       Of Shares     Price    of Shares     Price
                                      -----------  ---------  ----------  ---------
<S>                                   <C>          <C>        <C>         <C>
      Outstanding, beginning of year   5,563,800   $    1.10  3,908,975   $    1.87
        Granted to:
          Employees, officers and
          directors                    8,000,000         .24    150,000         .25
          Others                       9,575,143         .20  1,628,825         .22
          Expired/canceled            (3,749,629)        .74   (124,000)       2.60
          Exercised                   (4,984,524)        .22          -           -
                                      -----------             ----------
      Outstanding, end of year        14,404,790         .43  5,563,800        1.10
                                      ===========             ==========
</TABLE>

     All  outstanding  warrants  and  options,  except for 150,000 options, were
     exercisable  at  June  30,  2000. If not previously exercised, warrants and
     options  outstanding  at  June  30,  2000  will  expire  as  follows:

<TABLE>
<CAPTION>
                                  Weighted
                                  Average
                        Number    Exercise
 Year Ending June 30,  of Shares   Price
---------------------  ----------  ------
<S>                    <C>         <C>
2001                    4,130,619  $  .36
2002                    2,154,171    1.05
2003                    8,020,000     .29
2004                            -       -
2005                       25,000     .14
2006                       75,000     .14
                       ----------
Total                  14,404,790
                       ==========
</TABLE>

     Presented below is a comparison of the weighted average exercise prices and
     market  price of the Company's common stock on the measurement date for all
     warrants  and  stock  options  granted  during  fiscal years 2000 and 1999:

<TABLE>
<CAPTION>
                                       2000                           1999
                                    ---------                      ---------
                          Number    Exercise   Market    Number     Exercise   Market
                        Of Shares     Price     Price   Of Shares    Price     Price
                        ----------  ---------  -------  ---------  ---------  -------
<S>                     <C>         <C>        <C>      <C>        <C>        <C>
Fair value equal to
    Exercise price      13,803,334  $     .22  $   .22  1,778,825  $     .22  $   .22
Fair value greater
   Than exercise price           -  $       -  $     -          -  $       -  $     -
Exercise price
   Greater than fair
   Value                 3,771,809  $     .22  $   .18          -  $       -  $     -
</TABLE>

     Pro  Forma  Stock-Based  Compensation Disclosures - The Company applies APB
     ------------------------------------------------
     Opinion  25 and related interpretations in accounting for its stock options
     and warrants which are granted to employees. Accordingly, compensation cost
     has not been recognized for grants of options and warrants to employees and
     directors  unless  the exercise prices were less than the fair value of the
     Company's  common  stock  on  the  grant  dates. Had compensation cost been
     determined  based  on  the  fair  value at the grant dates for awards under
     those  plans  consistent  with  the  method  of FASB 123, the Company's net
     earnings  (loss)  and  earnings (loss) per share would have been changed to
     the  pro  forma  amounts  indicated below. The fair values generated by the
     Black-Scholes  model  may  not be indicative of the future benefit, if any,
     that  may  be  received  by  the  option  or  warrant  holder.

See accompanying notes to the financial statements.


<PAGE>
                                      B-38

<TABLE>
<CAPTION>
                                              Year Ended June 30,
                                          ----------------------------
                                              2000           1999
                                          -------------  -------------
<S>                                       <C>            <C>
Net earnings (loss) applicable to common
stockholders:
As reported                               $     94,116   $(11,479,086)
Pro forma                                 $ (1,544,760)  $(11,499,526)

Net earnings (loss) per common share:
As reported                               $          -   $       (.57)
Pro forma                                 $       (.02)  $       (.57)
</TABLE>

     The  fair  value  of  each  non  employee  option  granted in 1999 and each
     employee  option  and  warrant granted in 1998 was estimated on the date of
     grant  using  the  Black-Scholes  option-pricing  model  with the following
     assumptions:

<TABLE>
<CAPTION>
                         Year Ended June 30,
                        -------------------
                           2000   1999
                           -----  -----
<S>                        <C>    <C>

Expected volatility         128%    99%
Risk-free interest rate     5.5%   5.5%
Expected dividends            -      -
Expected terms (in years)   5.0    5.0
</TABLE>

6.   RELATED  PARTY  TRANSACTIONS
     ----------------------------

     Effective April 1, 2000, the Company acquired ownership interests in 35 oil
     and  gas  producing  properties  and  239  net mineral acres from a company
     affiliated  with  an  officer  of  the Company for 940,000 shares of common
     stock.  The  stock  was  recorded  at  $323,172.

     During  fiscal 2000, the Company issued 3,125,000 shares of common stock in
     settlement  of  $500,000  of  accrued  salaries  and  advances from related
     parties,  and  1,281,115 shares of common stock in settlement of a $256,223
     note  payable  to  a  related  party.

     Legal  expenses  of  $14,000 were paid to a firm of which an officer of the
     Company  is  a  stockholder  during  fiscal  2000.

7.   INCOME  TAXES
     -------------

     The  Company's  deferred tax assets (liabilities) consist of the following:

See accompanying notes to the financial statements.


<PAGE>
                                      B-39

<TABLE>
<CAPTION>
                                                                     June 30,
                                                            --------------------------
                                                                2000          1999
                                                            ------------  ------------
<S>                                                         <C>           <C>
Deferred tax liabilities:
   Difference in bases of oil and gas properties acquired   $         -   $(1,598,000)
   Costs capitalized for books and deducted for tax            (797,000)     (759,000)
                                                            ------------  ------------
           Total deferred tax liabilities                      (797,000)   (2,357,000)

Deferred tax asset (net operating loss carryforwards)         6,232,000     5,204,000
Less valuation allowance                                     (5,435,000)   (2,847,000)
                                                            ------------  ------------
           Net deferred tax liability                       $         -   $         -
                                                            ============  ============
</TABLE>

     The difference from the expected income tax expense for the year ended June
     30, 2000 at the statutory federal tax rate of 34% and the actual income tax
     expense  is  primarily  the result of net operating loss carryforwards. The
     difference from the expected income tax benefit for the year ended June 30,
     1999  at  the  statutory  federal tax rate of 34% and the actual income tax
     benefit  is  primarily  the result of deferred tax assets which more likely
     than  not,  will  not  be  realized.

     At  June  30,  2000,  the  Company  has  available  net  operating  loss
     carryforwards of approximately $18,331,000 to reduce future taxable income.
     These  carryforwards  expire  from  2001  to  2019.

8.   CONCENTRATION  OF  CREDIT  RISK  AND  FAIR VALUE OF FINANCIAL INSTRUMENTS
     -------------------------------------------------------------------------

     Financial  instruments  that  potentially  subject  the  Company  to
     concentrations  of  credit  risk  consist  principally of cash and accounts
     receivable. The Company maintains its cash with banks primarily in Oklahoma
     City, Oklahoma. The terms of these deposits are on demand to minimize risk.
     The  Company  has not experienced any losses related to these cash deposits
     and  believes  it  is  not  exposed  to  any  significant  credit  risk.

     Accounts  receivable  consist of uncollateralized receivables from domestic
     and  international  customers  primarily  in  the  oil and gas industry. To
     minimize  risk  associated  with  international transactions, all sales are
     denominated  in U.S. currency. The Company routinely assesses the financial
     strength  of  it customers. The Company considers accounts receivable to be
     fully  collectible;  accordingly,  no  allowance  for  doubtful accounts is
     required.  If  amounts  become  uncollectible,  they  will  be  charged  to
     operations  when  that  determination is made. The Company had one customer
     that  accounted for approximately 18% of gas sales revenue and one customer
     that  accounted  for  approximately  11% of oil sales revenues for the year
     ended  June  30,  2000.

     Fair  value  of  financial  instruments  are  estimated  to approximate the
     related book value, unless otherwise indicated, based on market information
     available  to  the  Company.

9.   COMMITMENTS  AND  CONTINGENCIES
     -------------------------------

     Leases
     ------
     The  Company  conducts  its  operations  utilizing  leased facilities under
     long-term  lease  agreements,  classified  as operating leases. The Company
     also  leases certain equipment and vehicles under operating leases. Certain
     leases  provide  that  the  Company  pay  taxes, maintenance, insurance and
     certain  other  operating  expenses  and  contain  purchase  options.

     Future  minimum  lease payments in the aggregate required by noncancellable
     operating  leases with initial or remaining terms in excess of one year are
     $224,756,  $232,693, $221,088, $127,389 and $27,066 for fiscal years ending
     June 30, 2001, 2002, 2003, 2004 and 2005, respectively. Total rent expense,
     all  of  which  was  minimum  rentals,  for  fiscal  2000  and  1999  was
     approximately  $111,200  and  $91,000,  respectively and is net of sublease
     rentals  of  $44,600  in  2000.


<PAGE>
                                      B-40


     Litigation
     ----------
     The  Company,  in  the normal course of business, is a party to a number of
     lawsuits  and  other  proceedings. The Company's management does not expect
     that  the  results  in  these lawsuits and proceedings will have a material
     adverse  effect  on  the financial position or results of operations of the
     Company.

     Guarantee  of  Debt
     -------------------
     The  Company  is  the  guarantor  of  certain  obligations  of  Hat  Creek
     Exploration  in  the  aggregate amount of $4,000,000 in connection with the
     purchase  of  certain oil and gas properties. The note payable is dated May
     4,  2000, bears interest at 8%, and is payable in monthly installments over
     nine  years. The debt is expected to be paid with proceeds from the revenue
     interest  in  the oil and gas properties. In the opinion of management, the
     ultimate  disposition  of  this  guarantee will not have a material adverse
     effect  on  the  Company's  consolidated  financial  condition,  results of
     operations  or  future  cash  flows.

     Letters  of  Credit
     -------------------
     At  June  30,  2000,  the  Company  had  $125,940 of outstanding letters of
     credit.

     Employment  Contracts
     ---------------------
     The  Company  maintains employment contracts with two officers through 2005
     that  provide for a minimum annual salary, benefits and incentives based on
     the  Company's  earnings.  The  contracts  provide  for  lump sum severance
     payments,  certain  benefits  and  accelerated  vesting  of  options  upon
     termination  of  employment  under  certain  circumstances  or  a change of
     control,  as  defined.  At  June  30, 2000, the total commitment, excluding
     incentives,  was  $1,148,000.

     Environmental  Matters
     ----------------------
     The  Company  is  engaged in oil and gas exploration and production and may
     become  subject  to  certain  liabilities  as  they relate to environmental
     cleanup of well sites or other environmental restoration procedures as they
     relate  to  the  drilling  of  oil and gas wells and the operation thereof.
     Although  environmental  assessments  are  conducted  on  all  purchased
     properties,  in the Company's acquisition of existing or previously drilled
     well  bores,  the Company may not be aware of what environmental safeguards
     were  taken  at  the  time  such wells were drilled or during such time the
     wells  were  operated. Should it be determined that a liability exists with
     respect to any environmental clean up or restoration, the liability to cure
     such  a  violation could fall upon the Company. No claim has been made, nor
     is  the Company aware of any liability, which it may have, as it relates to
     any  environmental  clean  up, restoration or the violation of any rules or
     regulations  relating  thereto.

     Year  2000
     ----------
     The  Company's  computer  systems and products successfully transitioned to
     the  Year  2000  with no significant problems. The Company will continue to
     monitor  latent  problems  that could surface at key dates or events in the
     future.  It  is not anticipated that there will be any significant problems
     related  to  these  dates  or events. To date, the Company has not incurred
     material  costs associated with Year 2000 compliance or any disruption with
     vendors  or  operations.  Furthermore, the Company believes that any future
     costs  associated  with  Year  200 compliance efforts will not be material.

10.  SUPPLEMENTAL  INFORMATION  (UNAUDITED)
     --------------------------------------

     Costs  incurred  by  the  Company with respect to its oil and gas producing
     activities  are  set  forth  below.

<TABLE>
<CAPTION>
                                                    Years Ended June 30,
                                                        2000      1999
                                                    -----------  --------
<S>                                                 <C>          <C>

Exploration activities                              $         -  $ 26,500
Proved property acquisition cost                     29,954,437    81,874
Development costs                                       646,614   677,501
Drilling & well service equipment acquisition cost            -         -
Drilling & well service equipment tooling out cost            -         -
                                                    -----------  --------
         Total                                      $30,601,051  $785,875
                                                    ===========  ========
</TABLE>


<PAGE>
                                      B-41


11.  OIL  AND  GAS  RESERVE  INFORMATION  (UNAUDITED)
     ------------------------------------------------

     Proved  oil  and  gas  reserves  are the estimated quantities of crude oil,
     condensate  and  natural  gas  which  geological  and  engineering  data
     demonstrate  with  reasonable  certainty  to be recoverable in future years
     from  known  reservoirs  under  existing economic and operating conditions.
     Proved  developed oil and gas reserves are reserves that can be expected to
     be  recovered  through existing wells with existing equipment and operating
     methods. The following estimated net interests in proved reserves are based
     upon  subjective  engineering  judgments  and  may  be  affected  by  the
     limitations inherent in such estimation. The process of estimating reserves
     is  subject  to  continual  revision  as  additional  information  becomes
     available  as  a  result  of  drilling,  testing,  reservoir  studies  and
     production  history. There can be no assurance that such estimates will not
     be  materially  revised  in  subsequent  periods.

     The  Company  emphasizes  that  reserve  estimates  of  new  discoveries or
     undeveloped  properties  are more imprecise than those of producing oil and
     gas  properties.  The Company's reserves are substantially from undeveloped
     properties.  Accordingly, these estimates are expected to change materially
     as  future  information  becomes  available.  The  Company's  reserves were
     estimated by independent petroleum engineers. All of the Company's reserves
     are located onshore in the continental United States. The recoverability of
     the  proved  undeveloped  reserves is dependent upon obtaining financing to
     exploit  the  reserves.

     The  following  table  sets  forth  proved oil and gas reserves at June 30,
     2000,  1999  and  1998  together  with  changes  therein:

<TABLE>
<CAPTION>
                                               Oil and      Natural
                                             Condensate       GAS
                                               (BBLS)        (MCF)
                                             -----------  ------------
<S>                                          <C>          <C>
Balance at June 30, 1998                      5,770,000    12,761,000
        Purchase of minerals in place                 -             -
        Production                              (12,000)     (106,000)
        Sales/disposal of minerals in place  (2,438,000)  (10,353,000)
        Revision of prior estimates            (192,000)   (2,302,000)
                                             -----------  ------------
Balance at June 30, 1999                      3,128,000             -

        Purchase of minerals in place         2,278,000    34,449,000
        Production                              (34,000)     (966,000)
        Sales/disposal of minerals in place           -             -
        Revision of prior estimates                   -             -
                                             -----------  ------------
Balance at June 30, 2000                      5,372,000    33,483,000
                                             ===========  ============

Proved developed reserves at June 30:
        1999                                     36,000             -
                                             ===========  ============
        2000                                  1,293,000    16,376,000
                                             ===========  ============
</TABLE>

     The  standardized  measure  of discounted future net cash flows at June 30,
     2000  and  1999 relating to proved oil and gas reserves is set forth below.
     The  assumptions  used  to  compute  the  standardized  measure  are  those
     prescribed  by the Financial Accounting Standards Board and as such, do not
     necessarily  reflect  the  Company's  expectations of actual revenues to be
     derived  from  those  reserves  nor  their  present  worth. The limitations
     inherent  in  the  reserve  quantity estimation process described above are
     equally  applicable  to  the  standardized measure computations since these
     estimates  are  the  basis  for  the  valuation  process.


<PAGE>
                                      B-42


     Standardized measure of discounted future net cash flows relating to proved
     reserves:

<TABLE>
<CAPTION>
                                                    At June 30,
                                           ----------------------------
                                               2000           1999
                                           -------------  -------------
<S>                                        <C>            <C>
Future cash inflows                        $324,553,000   $ 53,178,000
Future production costs                     (76,939,000)   (17,657,000)
Future development costs                    (17,650,000)   (11,260,000)
                                           -------------  -------------
Future net cash flows, before income tax    229,964,000     24,261,000
Future income tax expenses                  (72,642,000)    (7,278,000)
                                           -------------  -------------
Future net cash flows                       157,322,000     16,983,000
10% discount to reflect timing of net
      cash flows                            (82,801,000)    (5,661,000)
                                           -------------  -------------
Standardized measure of discounted future
      net cash flows                       $ 74,521,000   $ 11,322,000
                                           =============  =============
</TABLE>

     Changes  in  standardized  measure  of  discounted  future  net  cash flows
     relating  to  proved  reserves:

<TABLE>
<CAPTION>
                                                     Year Ended June 30,
                                                 ----------------------------
                                                     2000           1999
                                                 -------------  -------------
<S>                                              <C>            <C>
Standardized measure, beginning of period        $ 11,322,000   $ 25,733,000
Net change in prices and production costs          43,006,000        746,000
Accretion of discount                             (77,140,000)     1,197,000
Sales of oil and gas, net of production costs      (2,508,000)      (118,000)
Sales and disposition of reserves in place                  -    (22,795,000)
Purchase of reserves, net of future development
    costs                                         152,455,000              -
Development costs which reduced future
    development costs                                 647,000              -
Revisions of quantity estimates                    12,103,000     (2,705,000)
Change in timing of production and other                    -              -
Net changes in income taxes                       (65,364,000)     9,264,000
                                                 -------------  -------------
Standardized measure, end of period              $ 74,521,000   $ 11,322,000
                                                 =============  =============
</TABLE>

12.  SUBSEQUENT  EVENT
     -----------------

     On  August  7, 2000, the Company signed an agreement to acquire the oil and
     gas  operations of Crawford Oil Company and Leiker-Crawford Oil Company for
     a  cash purchase price of $1,375,000. This purchase includes wells, leases,
     equipment,  licenses,  instruments and production. The Company financed the
     acquisition  with credit available under its credit agreement (see Note 4).


<PAGE>
                                      B-43


13.  EARNINGS  PER  SHARE
     --------------------

     The  following  data show the amounts used in computing earnings (loss) per
     share and the effect on income and the weighted average number of shares of
     dilutive  potential  common  stock.

<TABLE>
<CAPTION>
                                                     Year Ended June 30,
                                                ----------------------------
                                                     2000          1999
                                                -------------  -------------
<S>                                             <C>            <C>

Net earnings (loss)                             $     94,116   $(11,479,086)
Effect of dilutive securities                              -              -
                                                -------------  -------------

Net earnings (loss) after effect of
   dilutive securities                          $     94,116   $(11,479,086)
                                                =============  =============
Weighted average number of common shares used
    in basic earnings per share                   83,676,588     20,036,818
Effect of dilutive securities
   Stock options and warrants                        884,895              -
                                                -------------  -------------
Weighted average number of common shares and
    dilutive potential commons stock used in
    diluted earnings per share                    84,561,483     20,036,818
                                                =============  =============
</TABLE>

     Options  and  warrants  to  purchase  approximately 9,266,000 shares of the
     Company's common stock, with exercise prices of ranging from $.25 to $3.50,
     were  excluded  from  the  June  30, 2000 diluted earnings (loss) per share
     calculation  because  their  effects  were  antidilutive.


<PAGE>
                                      B-44



                        ASPEN GROUP RESOURCES CORPORATION
                                  CONSOLIDATED
                               FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


<PAGE>
<TABLE>
<CAPTION>
                                      B-45


                  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                        ASPEN GROUP RESOURCES CORPORATION

                       CONDENSED CONSOLIDATED BALANCE SHEET
                         SEPTEMBER 30, 2001   (UNAUDITED)


                                     ASSETS
                                     ------

CURRENT ASSETS:
<S>                                                                  <C>
    Cash                                                             $    254,620
    Accounts receivable
      Trade                                                             2,144,034
      Other                                                                 3,461
    Materials and supplies inventory                                      451,740
    Prepaid expenses                                                      244,480
                                                                     -------------
      Total current assets                                              3,098,335

PROVED OIL & GAS PROPERTIES (FULL COST METHOD)
    Net of accumulated depletion of $4,294,603                         49,365,939

PROPERTY AND EQUIPMENT
    Net of accumulated depreciation of $2,112,323                       2,547,226
OTHER ASSETS
    Notes receivable                                                      203,000
    Note receivable - related party                                       125,000
    Nonmarketable security                                                236,119
    Prepaid expenses                                                      165,816
    Deposits and other assets                                             108,880
                                                                     -------------

Total Assets                                                         $ 55,850,315
                                                                     =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable
      Trade                                                          $  1,994,590
      Revenue distribution                                                482,568
    Accrued expenses                                                      117,533
    Accrued interest                                                      150,593
                                                                     -------------
                                                                        2,745,284
    Current maturities of long-term debt                                2,291,243
                                                                     -------------

      Total current liabilities                                         5,036,527
                                                                     -------------

LONG-TERM DEBT, LESS CURRENT MATURITIES                                15,799,266

MINORITY INTERESTS                                                              -


<PAGE>
                                      B-46


STOCKHOLDERS' EQUITY:
  Preferred stock, no par value, authorized-unlimited, issued-none              -
  Common stock, no par value, authorized-unlimited,
     Issued - 19,325,657 shares                                        46,169,125
  Less subscriptions for 122,535 shares                                  (214,436)
  Warrants and beneficial conversion feature                            2,020,252
  Accumulated deficit                                                 (12,960,419)
                                                                     -------------
      Total stockholders' equity                                       35,014,522
                                                                     -------------
Total Liabilities and Stockholders' Equity                           $ 55,850,315
                                                                     =============


See  accompanying  notes  to  these  Condensed Consolidated Financial Statements
</TABLE>


<PAGE>
                                      B-47


<TABLE>
<CAPTION>
                         ASPEN GROUP RESOURCES CORPORATION

                        CONDENSED CONSOLIDATED STATEMENTS OF
                                    OPERATIONS
                                    ----------
                                    (UNAUDITED)



                                             Period from           Period from
                                           July 1, 2001 to       July 1, 2000 to
                                          September 30, 2001    September 30, 2000
                                         --------------------  --------------------
<S>                                      <C>                   <C>
REVENUE:
  Oil and gas sales                      $         1,978,957   $         2,187,562
  Product and service revenues                       353,120                     -
                                         --------------------  --------------------
  Total revenue                                    2,332,077             2,187,562
                                         --------------------  --------------------

EXPENSES:
  Oil and gas production                             719,133               590,463
  Operating expenses                                 307,919                     -
  General and administrative                         480,656               419,896
  Depreciation and depletion                         642,519               469,806

  Total expenses                                   2,150,227             1,480,165

EARNINGS FROM OPERATIONS                             181,850               707,397

OTHER INCOME (EXPENSE)
Interest and financing expense                      (258,290)             (273,307)

EARNINGS (LOSS) BEFORE INCOME TAXES
  AND MINORITY INTEREST                              (76,440)              434,090

INCOME TAXES (None, due to application                     -                     -
              of prior loss)             --------------------  --------------------

NET EARNINGS (LOSS) BEFORE
  MINORITY INTERESTS                                 (76,440)              434,090

MINORITY INTERESTS                                       222                     -

NET EARNINGS (LOSS)                      $           (76,218)  $           434,090
                                         ====================  ====================

NET EARNINGS (LOSS) PER SHARE            $              0.00   $              0.02
                                         ====================  ====================

WEIGHTED AVERAGE SHARES                           19,293,553            18,121,278
                                         ====================  ====================
</TABLE>

See  accompanying  notes  to  these  Condensed Consolidated Financial Statements


<PAGE>
                                      B-48

<TABLE>
<CAPTION>
                                      ASPEN GROUP RESOURCES CORPORATION
                               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (Unaudited)

                                                                      Period from           Period from
                                                                      July 1, 2001          July 1, 2000
                                                                           to                    to
                                                                   September 30, 2001    September 30, 2000
                                                                  --------------------  --------------------
<S>                                                               <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net earnings (loss)                                           $           (76,218)  $           434,090

    Adjustments to reconcile net earnings (loss) to net cash
        provided by operating activities:
    Depreciation and depletion                                                642,520               469,806
    Minority interests                                                           (222)                    -
    Changes in operating assets and liabilities:
       Accounts payable and accrued liabilities                               469,103               166,694
       Materials and supplies inventory                                       (12,895)                    -
       Accounts payable and accrued liabilities                               113,520              (536,177)
       Other                                                                        -                36,601
                                                                  --------------------  --------------------

    Net cash provided by operating activities                               1,135,808               571,014
                                                                  --------------------  --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
        Sale of common stock and exercise of warrants                               -               226,500
        Proceeds from long-term debt                                          634,733             1,718,712
        Repayment of notes payable                                            (30,000)                    -
                                                                  --------------------  --------------------

    Net cash provided by financing activities                                 604,733             1,945,212
                                                                  --------------------  --------------------

CASH FLOWS FROM INVESTING ACTIVITIES
        Additions to oil and gas properties                                (1,454,717)           (1,892,506)
        Exploration and development cost capitalized                         (822,405)             (522,409)
        Additions to furniture and equipment                                 (116,593)              (62,231)
                                                                  --------------------  --------------------

    Net cash by investing activities                                       (2,393,715)           (2,477,146)
                                                                  --------------------  --------------------

INCREASE (DECREASE) IN CASH                                                  (653,174)               39,080

CASH - Beginning of period                                                    907,794               319,246
                                                                  --------------------  --------------------

CASH - End of period                                              $           254,620   $           358,326
                                                                  ====================  ====================

SUPPLEMENTAL INFORMATION
Cash paid for interest                                            $           258,290   $           273,307
Conversion of payables to common stock                                        234,000                     -
</TABLE>

See  accompanying  notes  to  these  Condensed Consolidated Financial Statements


<PAGE>
                                      B-49


                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                           (Expressed in U.S. Dollars)
                                   (Unaudited)

(A)  NATURE  OF  BUSINESS  AND  BASIS  OF  PREPARATION  AND  PRESENTATION

Aspen  Group  Resources  Corporation's  (the "Company" or "Aspen Group") primary
strategic  business  focus  is  to  build  value  through the development of its
existing  producing  Oil and Gas Properties by conducting an active exploitation
program  on  these  Properties  and  pursuing  the acquisition, development, and
exploitation  of  Oil  and Gas Properties that offer the potential for increased
production  while  continuing  to  control  cost.

The  Condensed  Consolidated  Financial  Statements  of  Aspen  Group  Resources
Corporation  and  Subsidiaries  (collectively  the  "Company"  or "Aspen Group")
included  herein  have  been  prepared  by  Aspen  Group without audit.  Certain
information  and  footnote disclosures normally included in financial statements
prepared  in accordance with generally accepted U. S. accounting principles have
been  condensed  or  omitted,  since  Aspen  Group believes that the disclosures
included  are adequate to make the information presented not misleading.  In the
opinion  of  Management, the Condensed Consolidated Financial Statements include
all  adjustments consisting of normal recurring adjustments necessary to present
fairly  the  financial position, results of operations, and cash flows as of the
dates  and  for  the  periods presented.  These Condensed Consolidated Financial
Statements  should  be  read  in  conjunction  with  the  Consolidated Financial
Statements  and  the  notes  thereto included for the fiscal year ended June 30,
2001.

These  consolidated  financial  statements have been prepared in accordance with
accounting principals generally accepted in the United States (US GAAP) which in
most  respects,  conform  to  accounting principals generally accepted in Canada
(Canadian  GAAP).  The primary difference is with the application of the ceiling
test  under  full  cost  accounting.

Under  US  GAAP,  a ceiling test is applied to ensure that the capitalized costs
accumulated  in  each  cost centre are limited to an amount equal to the present
value,  discounted  at  10%,  of  the unescalated estimated future net operating
revenues  from  proved  reserves,  net  of  restoration  costs and income taxes.

Under  Canadian GAAP, a ceiling test is applied to ensure that capitalized costs
do not exceed the sum of estimated undiscounted, unescalated future net revenues
from  proved  reserves  less  the  cost incurred or administrative costs, and an
estimate  for  restoration  costs  and  applicable  taxes.

As  a result of applying the tests under both US and Canadian GAAP there were no
material  differences  found.

Therefore  the  Company's  accounting  policies  are consistently applied in all
material  respects  in  accordance  with  Canadian generally accepted accounting
principles.

(B)  EARNINGS  PER  SHARE

Diluted earnings per share for the three month periods ending September 30, 2001
and  2000  are  the  same  as  basic  earnings per share because the exercise of
potentially  dilutive  securities  would  not  have  a  significant  effect.

(C)  COMMON  STOCK

During  the  three  month  period  ended  September 30, 2001, the Company issued
250,000 shares of common stock for $ 1.00 per share as part of the consideration
given  for  the  purchase  of  United  Cementing  &  Acid  Company.


<PAGE>
                                      C-1

                        APPROVAL AND CERTIFICATE OF ASPEN

The  contents  of the Offer and the Circular have been approved and the sending,
communication  or delivery thereof to the Securityholders has been authorized by
the  board  of  directors  of  Aspen.

The  foregoing contains no untrue statement of a material fact and does not omit
to  state  a material fact that is required to be stated or that is necessary to
make  a  statement  not misleading in light of the circumstances in which it was
made.  In  addition, the foregoing does not contain any misrepresentation likely
to  affect the value or the market price of the securities which are the subject
of  the  Offer.

DATED  the  23rd  day  of  November,  2001.


          "Jack  E.  Wheeler"            "Peter  Lucas"

          JACK  E.  WHEELER                     PETER  LUCAS
          Chairman  and                         Chief  Financial  Officer
          Chief Executive Officer


                       On behalf of the Board of Directors


           "Wayne  T.  Egan"                     "James  E.  Hogue"
            WAYNE  T.  EGAN                      JAMES  E.  HOGUE
            Director                             Director


<PAGE>
                                      C-2


                           OFFICES OF THE DEPOSITARY,
                      Computershare Trust Company of Canada

                       Telephone: (403) 267-6555 (Calgary)
                            Facsimile: (403) 266-1490
                       Toll Free (Canada): 1-888-267-6555

 BY HAND, MAIL OR COURIER        BY HAND OR COURIER

        Calgary                                              Toronto
Corporate Actions Department                      Corporate Actions Department
 600, 530 - 8th Avenue S.W.                     100 University Avenue, 9th Floor
     Calgary, Alberta                                   Toronto, Ontario
         T2P 3S8                                             M5J 2Y1
 Telephone: (403) 267-6555                          Telephone: (416) 981-9633
 Facsimile: (403) 266-1490                          Facsimile: (416) 981-9663
 Toll Free: 1-888-267-6555
                                                             BY MAIL

                                                             Toronto
                                                   Corporate Actions Department
                                                           P.O.Box 7021
                                                     31 Adelaide Street East
                                                         Toronto, Ontario
                                                              M5C 3H2


<PAGE>
                                                                    EXHIBIT (2)B

THIS  DOCUMENT  IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IT SHOULD BE
READ  IN  CONJUNCTION  WITH  THE  OFFER AND ACCOMPANYING CIRCULAR OF ASPEN GROUP
RESOURCES  CORPORATION  DATED  NOVEMBER 23, 2001.  IF YOU ARE IN ANY DOUBT AS TO
HOW  TO  DEAL  WITH  IT, YOU SHOULD CONSULT YOUR INVESTMENT DEALER, STOCKBROKER,
BANK  MANAGER,  LAWYER  OR  OTHER  PROFESSIONAL  ADVISOR.

                                                               December 21, 2001

                        ASPEN GROUP RESOURCES CORPORATION

                         NOTICE OF CHANGE AND EXTENSION

                                     TO ITS

                                OFFER TO PURCHASE

   all of the outstanding common shares, 5,000,000 Series I special warrants and
                      3,750,000 Series II special warrants

                                       of

                            ENDEAVOUR RESOURCES INC.

                     on the basis of, subject to adjustment,

  0.2375 common shares of Aspen Group Resources Corporation plus 0.11875 share
    purchase warrants of Aspen Group Resources Corporation (each whole share
  purchase warrant entitling the holder to purchase one common share of Aspen
   Group Resources Corporation at US$1.25 until September 30, 2002 or US$1.75
  thereafter until June 30, 2003) for each common share of Endeavour Resources
                                      Inc.

                                     - and -

  0.2375 common shares of Aspen Group Resources Corporation plus 0.11875 share
    purchase warrants of Aspen Group Resources Corporation (each whole share
  purchase warrant entitling the holder to purchase one common share of Aspen
   Group Resources Corporation at US$1.25 until September 30, 2002 or US$1.75
 thereafter until June 30, 2003) for each Series I special warrant of Endeavour
                                 Resources Inc.

                                     - and -

  0.2375 common shares of Aspen Group Resources Corporation plus 0.11875 share
    purchase warrants of Aspen Group Resources Corporation (each whole share
  purchase warrant entitling the holder to purchase one common share of Aspen
   Group Resources Corporation at US$1.25 until September 30, 2002 or US$1.75
  thereafter until June 30, 2003) and 0.2375 Class B purchase warrants of Aspen
 Group Resources Corporation (each whole Class B purchase warrant entitling the
holder to acquire one common share of Aspen Group Resources Corporation for the
    US dollar equivalent of Cdn.$2.11 until June 28, 2002) for each Series II
                  special warrant of Endeavour Resources Inc.


This  is  a  notice  of change and extension (the "NOTICE") that supplements and
extends  the  offer (the "OFFER") and the accompanying Circular (the "CIRCULAR")
dated  November 23, 2001 of Aspen Group Resources Corporation ("ASPEN") pursuant
to  which  Aspen  is  offering  to purchase all of the outstanding common shares
(including  common  shares  which  may  become outstanding after the date of the
Offer  upon  the  exercise  of  currently outstanding options, warrants or other
rights  to  purchase  common  shares),  Series  I special warrants and Series II
special  warrants  (collectively  the  "ENDEAVOUR  SECURITIES")  of  Endeavour


<PAGE>
                                        2


Resources Inc. ("ENDEAVOUR").  Except as otherwise set forth in this Notice, the
information,  terms  and  conditions  contained  in  the  Offer  continue  to be
applicable.

ASPEN  INTENDS TO TAKE UP AND PAY FOR ALL ENDEAVOUR SECURITIES DEPOSITED AND NOT
WITHDRAWN ON DECEMBER 31, 2001.  THE OFFER HAS BEEN EXTENDED AND IS NOW OPEN FOR
ACCEPTANCE  UNTIL  5:00  (TORONTO TIME) (3:00 CALGARY TIME) ON JANUARY 31, 2002,
UNLESS  WITHDRAWN  OR  FURTHER  EXTENDED.

Holders of Endeavour Securities ("SECURITYHOLDERS") who wish to accept the Offer
must  properly  complete  and execute the Letter of Transmittal that accompanied
the Offer or a manually executed facsimile thereof and deposit it, together with
the  certificate(s)  representing  their  Endeavour Securities, at the office of
Computershare  Trust  Company  of  Canada  (the  "DEPOSITARY") identified on the
Letter  of Transmittal and on the last page of this document, in accordance with
the  instructions  in  the Letter of Transmittal. Alternatively, Securityholders
who  desire  to  deposit  their  securities  and  whose certificate(s) for their
securities  are  not  immediately  available  may deposit such certificate(s) by
completing  the  Notice  of  Guaranteed  Delivery that accompanied the Offer and
following  the  procedures  for  guaranteed  delivery set forth in the Notice of
Guaranteed  Delivery  and  Section  3  of  the  Offer,  "Manner  of Acceptance".

Questions and requests for assistance may be directed to the Depositary, or your
broker  or  other financial advisor, and additional copies of this document, the
Offer  and  the Circular, the Letter of Transmittal and the Notice of Guaranteed
Delivery  may  be obtained without charge on request from those persons at their
respective  offices  shown  on the Letter of Transmittal and on the last page of
this  document. Persons whose Endeavour Securities are registered in the name of
a  nominee  should  contact  their  stockbroker,  investment dealer, bank, trust
company  or  other  nominee  for  assistance  in  depositing  their  Endeavour
Securities.

                         NOTICE TO UNITED STATES HOLDERS
                             OF ENDEAVOUR SECURITIES

The Offer is made for the securities of an Alberta, Canada corporation and while
the  Offer  is subject to the disclosure requirements of Canada, Securityholders
should  be  aware  that  such  requirements  are  different  from  disclosure
requirements  in the United States.  Aspen is permitted to prepare the Offer and
Circular  in  accordance  with  Canadian  disclosure  requirements.  Financial
statements  included in the Offer, if any, have been prepared in accordance with
United  States  generally  accepted  accounting  principles  with  the  material
differences,  if  any,  between  such principles and Canadian generally accepted
accounting  principles  disclosed  in  the  notes  to such financial statements.

Securityholders should be aware that the acquisition of the Endeavour Securities
described  in  the Offer may have tax consequences both in the United States and
Canada.  Such  consequences  for  investors who are resident in, or citizens of,
the  United  States  may  not  be  described  fully  in  the  Circular.

The  enforcement  by  investors  of  civil  liabilities  under the United States
federal  securities  laws  may  be  affected adversely by the fact that Aspen is
continued  under the laws of the Yukon Territory, that some of the directors and
officers  of  Aspen  may  be  residents  of  Canada  and that some or all of the
Depositary  and  the  experts named in the Offer or Circular may be residents of
Canada  and  that all or a substantial portion of the assets of such persons may
be  located  outside  the  United  States.

Securityholders  should  be  aware  that  Aspen  or  its affiliates, directly or
indirectly,  may  bid  for  or make purchases of Endeavour Securities or related
securities  of  Endeavour  during  the  period  of  the  Offer,  as permitted by
applicable  Canadian  federal  or  provincial  laws  or  regulations.

No  broker,  dealer, salesperson or other person has been authorized to give any
information  or make any representation other than those contained in the Offer,
the  Circular  or  this  document  and,  if  given  or made, such information or
representation must not be relied upon as having been authorized by Aspen or the
Depositary.

THIS  TRANSACTION  HAS  NOT  BEEN  APPROVED  OR  DISAPPROVED  BY  ANY SECURITIES
REGULATORY  AUTHORITY  IN  CANADA  OR  THE  UNITED STATES NOR HAS ANY SECURITIES
REGULATORY  AUTHORITY IN CANADA OR THE UNITED STATES PASSED UPON THE FAIRNESS OR
MERITS  OF  SUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED  IN THIS DOCUMENT, AND ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.


<PAGE>
                                        3


THIS  DOCUMENT  DOES  NOT CONSTITUTE AN OFFER OR A SOLICITATION TO ANY PERSON IN
ANY  JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.  THE OFFER IS
NOT  BEING  MADE  TO,  NOR  WILL  DEPOSITS  BE  ACCEPTED  FROM  OR ON BEHALF OF,
SECURITYHOLDERS  IN  ANY  JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF
WOULD  NOT  BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.  HOWEVER, ASPEN
MAY, IN ITS SOLE DISCRETION, TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO EXTEND
THE  OFFER  TO  HOLDERS  OF  ENDEAVOUR  SHARES  IN  SUCH  JURISDICTION.

                           CURRENCY AND EXCHANGE RATES

All dollar amounts stated in this document, the Offer and Circular are expressed
in  Canadian  currency,  except where otherwise indicated.  On December 20, 2001
the  noon  buying  rate  in  New York for cable transfers in Canadian dollars as
certified  for  customs  purposes  by  the  Federal Reserve Bank of New York was
US$1.00  =  $1.5782  (Cdn.),  $1.00  (Cdn.)  =  US$0.6336.

                               __________________

                         NOTICE OF CHANGE AND EXTENSION

                                                               December 21, 2001

TO:  THE HOLDERS OF ENDEAVOUR SECURITIES

By notice to the Depositary, Aspen has supplemented the information contained in
the  Circular  and  has  extended  the  time  during which the Offer is open for
acceptance  as  set  forth  herein.

Except  as  otherwise  set  forth  in  this  Notice,  the information, terms and
conditions  in  the original Offer continue to be applicable in all respects and
this  Notice should be read in conjunction therewith. All capitalized terms used
herein  and  not  specifically  defined shall have the meanings set forth in the
Offer  unless  the  context  otherwise  requires.

1.   ENDEAVOUR  FLOW  THROUGH  OFFERING

Endeavour  has indicated to Aspen with Aspen's consent, that it will offer up to
5  million  common  shares on a flow through basis, to be concluded prior to the
Expiry.  In the event Endeavour completes such a transaction, Aspen will take up
any  such  shares of Endeavour deposited under the Offer and not withdraw on the
terms  of  the  Offer.

2.   ASPEN  ACCOUNTING  ISSUES

Background  to  and  Reason  for  the  Change
---------------------------------------------

In  the  Circular  Aspen  made  the  following  disclosure:

     "On  April  4,  2001, Aspen issued 1,230,000 special warrants, each of
     which  entitled  the  holder  thereof  to  receive,  upon exercise and
     without  payment of any additional consideration, 1.1 units, each unit
     consisting  of  an Aspen Share and one-half of a common share purchase
     warrant  exercisable at a price of US$1.80 per Aspen Share until April
     4,  2003.  Pursuant to its agreement with the agent for such offering,
     Aspen  was  obligated  to  file a prospectus in Ontario to qualify the
     securities issuable upon the exercise of such special warrants. In its
     review  of the prospectus and the relevant financial statements of the
     Aspen,  the  OSC raised an issue concerning the accounting method used
     by  Aspen  for  the  acquisition of East Wood in its audited financial
     statements. Aspen has made submissions to the OSC with respect to this
     issue and is waiting confirmation from the OSC that the issue has been
     resolved.  If the issue is not resolved to the OSC's satisfaction, the
     OSC could take action against Aspen, including the imposition of cease
     trade  order  against  the  Aspen  Shares. If the cease trade order is
     imposed,  Aspen  would be prevented from completing the acquisition of
     the  Endeavour  Securities  pursuant  to  the  Offer."

As  of  the  date hereof, Aspen and the OSC remain in discussions concerning the
accounting  method used by Aspen for the acquisition of East Wood in its audited
financial  statements.  Given  the  ongoing  discussions  and  that  it  is  not


<PAGE>
                                        4


anticipated  that  this  issue  will  be  resolved  prior to the Expiry Time, on
December  20,  2001  the  OSC  requested  that  Aspen supplement the information
contained  in  the  Circular  regarding  this  issue.

The  East  Wood  Acquisition
----------------------------

As  disclosed  in  the  Circular,  Aspen acquired 100% of the outstanding common
stock  of  East  Wood  Equity  Venture,  Inc.  ("EAST  WOOD")  in  two  separate
transactions.  All  references  to Aspen Shares in this Notice, unless otherwise
indicated,  give  effect to the one for seven (1:7) share consolidation effected
by  Aspen  on  February  12,  2001.

On  September  16,  1999 (but effective July 1, 1999), Aspen acquired 50% of the
outstanding  common  stock  of  East  Wood  from  Jack  E.  Wheeler, the current
Chairman,  Chief  Executive  Officer  and a Director of Aspen and others. At the
time  of  the closing of the transaction, 4,885,457 Aspen Shares were issued and
outstanding.  Under  the  terms of the purchase agreement, Aspen agreed to issue
to  the  East Wood selling shareholders a total of 6,604,414 Aspen Shares.  As a
consequence  of  being subject to the rules and policies of the Canadian Dealing
Network,  Aspen  was  precluded  from  issuing  more than 25% of its outstanding
common  shares  during  any  one year period without prior shareholder approval.
However,  because  Aspen was able to issue 3,571,429 Aspen Shares at the time of
the  closing, pursuant to a prior approval from shareholders, the parties agreed
that  the  remaining  securities  would  be  issued  in  the  form  of 3,032,985
non-voting  special  warrants,  each  of which was exercisable, upon shareholder
approval  but  for  no  additional  consideration,  into  one  Aspen  Share.

On  February  28,  2000,  Aspen  purchased  the remaining 50% of the outstanding
capital  stock  of  East  Wood for 3,747,271 Aspen Shares and Aspen's promissory
note  for  US$3,000,000.  At  the  time  of  the  closing  of  this transaction,
9,488,246  Aspen  Shares  were  issued  and  outstanding.

On February 29, 2000, pursuant to the approval of the shareholders of Aspen, the
special  warrants  issued at the closing of the September, 1999 transaction were
exercised  into  3,032,985  Aspen  Shares.

Aspen's  Accounting  for  the  East  Wood  Acquisition
------------------------------------------------------

In  negotiating  the  East  Wood  acquisition, management of Aspen and East Wood
determined that the fairest method of structuring the transaction would be based
upon  analysis  of  the  oil and gas reserves of the two companies, adjusted for
balance  sheet  items to be remaining at closing, and providing the shareholders
of  Aspen  a  negotiated  premium  for being a public company.  The value of the
respective  companies  was  based on their respective business histories and the
stock  trading  history  of  Aspen.

The  purchase  of  the  initial  50% of East Wood for 3,571,429 Aspen Shares and
3,032,985 special warrants was recorded at US$5,895,840 (US$0.89 per Aspen Share
and  special  warrant).  On  September  16,  1999 the closing price of the Aspen
Shares  was  US$1.8594.  For  the five days prior to and subsequent to September
16,  1999  the  closing  stock prices ranged from US$1.5312 to US$2.0781 and the
average  was  US$1.7997.

The  purchase of the remaining 50% of East Wood for 3,747,271 Aspen Shares and a
note  payable  of  US$3,000,000  was  recorded  at  US$12,033,170 (US$2.4106 per
share).  On  February  28,  2000  the  closing  price  of  the  Aspen Shares was
US$2.4062  and  the  five-day  average  closing  price  was  US$2.21.

For  financial statement purposes the acquisition of East Wood was accounted for
as  a  purchase  and,  accordingly  East  Wood's  results  were  included in the
consolidated  financial  statements  since  the  date of acquisition.  Under the
purchase  method,  Aspen  recorded  the net assets received at their fair value.
The  aggregate  purchase price was approximately US$17.9 million, which exceeded
the  net  assets  of East Wood by approximately US$16.6 million.  The excess was
allocated  to  oil  and  gas  properties  and  is  being  amortized.

Discussions  with  the  OSC
---------------------------

In  its  review  of Aspen's preliminary prospectus dated May 31, 2001 (which was
filed  by Aspen in connection with the issuance of 1,230,000 special warrants on
April  4,  2001), the OSC questioned whether the acquisition of East Wood should
have  been  accounted  for as a purchase. Aspen has made numerous submissions to
the  OSC in support of the accounting treatment that it has accorded to the East
Wood  acquisition.  Aspen  has  not received a receipt for its prospectus and is


<PAGE>
                                        5


continuing discussions with the OSC regarding this issue.  The OSC has taken the
position  that  the  East  Wood  acquisition should have been accounted for as a
reverse take-over.  In addition, the OSC has taken the position that if the East
Wood  acquisition  was  accounted  for as a reverse take-over then the aggregate
purchase  price  for  East  Wood  would have been somewhat less than the US$17.9
million  figure.

Aspen  intends to work with the OSC to resolve this issue and to comply with the
requirements  of  the  OSC.  If  the  issue  is  not  resolved  to  the  OSC's
satisfaction,  the  OSC could take action against Aspen, including by imposing a
cease  trade order on the Aspen Shares following the closing of the Offer, which
action  may  affect  Aspen's  listing  on  the  TSE.

Accounting  for  the  East  Wood  Transactions  as  a  Reverse  Take-Over
-------------------------------------------------------------------------

The  OSC has stated its position that the reverse take-over method of accounting
would  be  applicable  to  the  acquisition  of  East  Wood.  Under  the reverse
take-over  method of accounting, the exchange of Aspen Shares for shares of East
Wood  would be treated for accounting purposes as an acquisition by East Wood of
the  assets  and  business of Aspen.  Reverse take-over accounting provides that
consolidated financial statements be prepared reflecting the continuation of the
legal subsidiary (East Wood) as the acquiring company.  Accordingly, East Wood's
net  assets  would be included in the balance sheet of the combined companies at
their  book  values and those of Aspen at their fair market value on the date of
"acquisition".  The  result  would  be  a  reduction  in  the  assets  in  the
consolidated  balance  sheet of Aspen of a maximum of a maximum of approximately
$10 million.  There would also be a corresponding reduction in the depreciation,
depletion  and  amortization  of  the  reserves  of Aspen which would impact the
income  statement  since  July  1,  1999.

3.   EXTENSION  OF  THE  OFFER

Aspen has amended the Offer by extending the time during which the Offer is open
for acceptance from 5:00 (Toronto time) (3:00 Calgary time) on December 31, 2001
to 5:00 (Toronto time) (3:00 Calgary time) on January 31, 2002, unless withdrawn
or  further extended.  Accordingly, the Expiry Time shall be 5:00 (Toronto time)
(3:00  Calgary  time) on January 31, 2002, or such later time or times as may be
fixed  by Aspen from time to time pursuant to Section 5 of the Offer, "Extension
and  Variation  of  the  Offer"

4.   REASONS  FOR  THE  EXTENSION

Aspen  wishes  to  extend the time for the deposit of Endeavour Securities under
the  Offer to permit Endeavour Securityholders to tender their securities to the
Offer.

5.   DATE  UP  TO  WHICH  ENDEAVOUR  SECURITIES  MAY  BE  DEPOSITED

Endeavour Securities which have not already been deposited pursuant to the Offer
may be deposited pursuant to this Notice at one of the offices of the Depositary
listed on the last page of this document at or prior to 5:00 p.m. (Toronto time)
(3:00  p.m.  Calgary  time)  on  January  31,  2002.

6.   DATE  BY  WHICH  DEPOSITED  ENDEAVOUR  SECURITIES  MUST  BE  TAKEN  UP

If  all  the conditions referred to under Section 4 of the Offer, "Conditions of
the  Offer"  have  been  satisfied  or waived by Aspen, Aspen will (unless Aspen
shall  have  withdrawn  or terminated the Offer) become obligated to take up the
Endeavour  Securities  validly  deposited  under the Offer and not withdrawn not
later  than  ten  days after the Expiry Date and to pay for Endeavour Securities
taken  up  as  soon  as possible, but in any event not later than three Business
Days  after  taking  up  the Endeavour Securities. In accordance with applicable
law,  any  Endeavour Securities deposited under the Offer subsequent to the date
on  which  Aspen  first  takes up Endeavour Securities deposited under the Offer
will  be  taken  up and paid for by Aspen within ten days of the deposit of such
Endeavour  Securities.

Where  the  terms of the Offer are varied, the Offer shall not expire before ten
days after the notice of variation in respect of such variation has been mailed,
delivered  or  otherwise  communicated  to  Securityholders  unless  otherwise
permitted  by  applicable  law and subject to abridgement or elimination of that
period  pursuant  to  such  orders  as  may  be  granted  by  Canadian courts or
securities  regulatory  authorities.  See  Section  6 of the Offer, "Payment for
Deposited  Endeavour  Securities".


<PAGE>
                                        6


7.   WITHDRAWAL  OF  DEPOSITED  ENDEAVOUR  SECURITIES

All  deposits  of  Endeavour  Securities  pursuant to the Offer are irrevocable,
provided  that any Endeavour Securities deposited in acceptance of the Offer may
be  withdrawn by or on behalf of the depositing Securityholder (unless otherwise
required  or  permitted  by  applicable  law):

(a)  at any time where Endeavour Securities have not been taken up by Aspen; and

(b)  at  any  time  after  3  Business  Days  from  the  date Aspen takes up the
     Endeavour  Securities,  if such Endeavour Securities have not been paid for
     by  Aspen.

In addition, if:

(a)  there  is  a  variation  of  the  terms of the Offer before the Expiry Time
     including any extension of the period during which Endeavour Securities may
     be  deposited  hereunder  or the modification of a term or condition of the
     Offer,  but  excluding,  unless  otherwise  required  by  applicable law, a
     variation  consisting  solely  of  an increase in the consideration offered
     where the time for deposit is not extended for more than ten days after the
     notice  of  variation  has  been  delivered;  or

(b)  at or before the Expiry Time or after the Expiry Time but before the expiry
     of all rights of withdrawal in respect of the Offer, a change occurs in the
     information contained in the Offer or the Circular, as amended from time to
     time,  that would reasonably be expected to affect the decision of a holder
     of  Endeavour  Securities to accept or reject the Offer, unless such change
     is not within the control of Aspen or of any Affiliate of Aspen (except, to
     the  extent  required by applicable law, where it is a change in a material
     fact  relating  to  the  Aspen  Shares);

any Endeavour Securities deposited under the Offer and not taken up and paid for
by  Aspen  at  such  time  may  be  withdrawn  by or on behalf of the depositing
Securityholder  at  the place of deposit at any time until the expiration of ten
days  after  the date upon which a notice of such variation or change is mailed,
delivered  or  otherwise  communicated,  subject  to  abridgement of that period
pursuant  to  such  order  or  orders  as  may  be granted by Canadian courts or
securities  regulatory  authorities.

In  addition  to  the  foregoing,  Securityholders  who  wish  to withdraw their
Endeavour  Securities  must  do  so  in the manner described in Section 7 of the
Offer,  "Withdrawal  of  Deposited  Endeavour  Securities".

8.   CONSEQUENTIAL  AMENDMENTS

Consequential  amendments  in  accordance with this Notice are deemed to be made
where  required  to  the  Offer  and Circular, the Letter of Transmittal and the
Notice of Guaranteed Delivery. Except as varied by this Notice, all terms of the
Offer  remain  in  effect,  unamended.

9.   STATUTORY  RIGHTS

Securities  legislation  in  certain  of the provinces and territories of Canada
provides  securityholders with, in addition to any other rights they may have at
law,  rights  of  rescission  or  to  damages,  or  both,  if  there  is  a
misrepresentation  in a circular or a notice that is required to be delivered to
such  securityholders.  However, such rights must be exercised within prescribed
time  limits.  Securityholders  should refer to the applicable provisions of the
securities  legislation  of their province or territory for particulars of those
rights  or  consult  with  a  lawyer.


<PAGE>
                                        7


                        APPROVAL AND CERTIFICATE OF ASPEN

The  contents of the Offer, the Circular and this Notice have been approved, and
the  sending,  communication or delivery thereof to the Securityholders has been
authorized  by  the  board  of  directors  of  Aspen.

The  foregoing contains no untrue statement of a material fact and does not omit
to  state  a material fact that is required to be stated or that is necessary to
make  a  statement  not misleading in light of the circumstances in which it was
made.  In  addition, the foregoing does not contain any misrepresentation likely
to  affect the value or the market price of the securities which are the subject
of  the  Offer.

DATED the 21st day of December, 2001.



     JACK E. WHEELER                         PETER LUCAS
     Chairman and                            Chief Financial Officer
     Chief Executive Officer


                       On behalf of the Board of Directors



     WAYNE T. EGAN                           JAMES E. HOGUE
     Director                                Director


<PAGE>
                                        8


                           OFFICES OF THE DEPOSITARY,
                      Computershare Trust Company of Canada

                       Telephone: (403) 267-6555 (Calgary)
                            Facsimile: (403) 266-1490
                       Toll Free (Canada): 1-888-267-6555



    BY HAND, MAIL OR COURIER                        BY HAND OR COURIER

            Calgary                                       Toronto
  Corporate Actions Department                 Corporate Actions Department
   600, 530 - 8th Avenue S.W.                  100 University Avenue, 9th Floor
       Calgary, Alberta                              Toronto, Ontario
            T2P 3S8                                      M5J 2Y1
   Telephone: (403) 267-6555                     Telephone: (416) 981-9633
   Facsimile: (403) 266-1490                     Facsimile: (416) 981-9663
   Toll Free: 1-888-267-6555

                                                          BY MAIL

                                                          Toronto
                                               Corporate Actions Department
                                                      P.O. Box 7021
                                                  31 Adelaide Street East
                                                      Toronto, Ontario
                                                           M5C 3H


<PAGE>

</TEXT>
</DOCUMENT>
</SUBMISSION>
