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<STATE>OK
<ZIP>731028805
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<FORMER-CONFORMED-NAME>COTTON VALLEY RESOURCES CORP
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<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


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


                                    FORM 8-KA
                                 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>
This Amendment No. 1 supplements the Current Report on Form 8-K filed on January
14,  2002  (the  "Form  8-K")  by  Aspen  Group  Resources  Corporation  (the
"Registrant").  At the time of filing the Form 8-K, it was impracticable for the
Registrant  to provide the financial statements of the business acquired and pro
forma  financial  information  required  by  Item  7(a)  and  (b).

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


                                        2
<PAGE>
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.

ITEM  7.  FINANCIAL  STATEMENTS  AND  EXHIBITS.

     (a)  Financial  statements  of  business  acquired.

          1.     Auditors'  Report  dated  May  22,  2001;

          2.     Auditors'  Report  dated  May  31,  2000;

          3.     Consolidated  Balance  Sheets as of December 31, 1999 and 1998;

          4.     Consolidated Statements of Operations and Retained Earnings for
     the  years  ended  December  31,  1999  and  1998;

          5.     Consolidated  Statements  of  Cash  Flow  for  the  years ended
     December  31,  1999  and  1998;

          6.     Notes  to  the  Consolidated Financial Statements for the years
     ended  December  31,  1999  and  1998;

          7.     Consolidated  Balance  Sheets as of December 31, 2000 and 1999;

          8.     Consolidated Statements of Operations and Retained Earnings for
     the  years  ended  December  31,  2000  and  1999;

          9.     Consolidated  Statements  of  Cash  Flow  for  the  years ended
     December  31,  2000  and  1999;

          10.     Notes  to  the Consolidated Financial Statements for the years
     ended  December  31,  2000  and  1999;

          11.     Consolidated  Balance  Sheets as of March 31, 2001 (unaudited)
     and  December  31,  2000  (audited);

          12.     Consolidated  Statements  of  Operations and Retained Earnings
     (unaudited)  for  the  three  months  ended  March  31,  2001  and  2000;

          13.     Consolidated Statements of Cash Flow (unaudited) for the three
     months  ended  March  31,  2001  and  2000;


                                        3
<PAGE>
          14.     Notes to  the  Consolidated  Financial  Statements (unaudited)
     for  the  three  months  ended  March  31,  2001;

          15.     Consolidated  Balance  Sheets  as of June 30, 2001 (unaudited)
     and  December  31,  2000  (audited);

          16.     Consolidated  Statements  of  Operations and Retained Earnings
     (unaudited) for the three months ended June 30, 2001 and June 30, 2000, and
     for  the  six  months  ended  June  30,  2001  and  June  30,  2000;

          17.     Consolidated Statements of Cash Flow (unaudited) for the three
     months  ended June 30, 2001 and June 30, 2000, and for the six months ended
     June  30,  2001  and  June  30,  2000;

          18.     Notes  to  the  Financial  Statements  (unaudited) for the six
     months  ended  June  30,  2001;

          19.     Consolidated  Balance  Sheets  as  of  September  30,  2001
     (unaudited)  and  December  31,  2000  (audited);

          20.     Consolidated  Statements  of  Operations and Retained Earnings
     (unaudited) for the three months ended September 30, 2001 and September 30,
     2000,  and  for  the nine months ended September 30, 2001 and September 30,
     2000;

          21.     Consolidated Statements of Cash Flow (unaudited) for the three
     months  ended  September  30, 2001 and September 30, 2000, and for the nine
     months  ended  September  30,  2001  and  September  30,  2000;  and

          22.     Notes  to  the  Financial  Statements (unaudited) for the nine
     months  ended  September  30,  2001.

     (b)     Pro  forma  financial  information.

          1.     Pro  forma Consolidated Balance Sheet as of September 30, 2001;

          2.     Pro  forma  Consolidated  Statement  of  Earnings for the three
     months  ended  September  30,  2001;

          3.     Pro  forma  Consolidated  Balance  Sheet  as  of June 30, 2001;

          4.     Pro forma Consolidated Statement of Earnings for the year ended
     June  30,  2001;  and

          5.     Notes  to  the  Pro  forma  Consolidated  Financial  Statements
     (unaudited).


                                        4
<PAGE>
      (c)   Exhibits.

            1.  Offer  to  Purchase  dated  November  23,  2001.*

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

________________
*    Filed  as  an  exhibit  to Registrant's Current Report on form 8-K filed on
     January  14,  2002.



                                    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:  March 18, 2002                    By:  /s/  Jack E. Wheeler
                                               ---------------------------------
                                               Name:  Jack  E.  Wheeler
                                               Title: Chairman of the Board and
                                                      Chief Executive Officer


                                        5
<PAGE>
GRANT THORNTON LLP                                                GRANT THORNTON
CHARTERED ACCOUNTANTS
MANAGEMENT CONSULTANTS
CANADIAN MEMBER FIRM OF
GRANT THORNTON INTERNATIONAL




Auditors'  Report


To  the  Shareholders  of
Endeavour  Resources  Inc.


We  have  audited the consolidated balance sheets of Endeavour Resources Inc. as
at  December 31, 2000 and 1999 and the consolidated statements of operations and
retained  earnings  and  cash flows for the years then ended. These consolidated
financial  statements  are  the  responsibility of the Company's management. Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audits.

We  conducted our audits in accordance with Canadian generally accepted auditing
standards.  Those  standards require that we plan and perform an audit to obtain
reasonable  assurance  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.

In  our  opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2000
and 1999 and the results of its operations and its cash flows for the years then
ended  in  accordance  with  Canadian  generally accepted accounting principles.


Calgary, Alberta                                         /s/  Grant Thornton LLP
May 22, 2001                                               Chartered Accountants




Suite 2800
500 - 4 Avenue SW
Calgary, Alberta T2P 2V6
Tel: (403) 260-2500
Fax: (403) 260-2571


<PAGE>
GRANT THORNTON LLP                                                GRANT THORNTON
CHARTERED ACCOUNTANTS
MANAGEMENT CONSULTANTS
CANADIAN MEMBER FIRM OF
GRANT THORNTON INTERNATIONAL



Auditors'  Report


To  the  Shareholders  of
Endeavour  Resources  Inc.


We  have  audited the consolidated balance sheets of Endeavour Resources Inc. as
at  December 31, 1999 and 1998 and the consolidated statements of operations and
retained  earnings  and  cash flows for the years then ended. These consolidated
financial  statements  are  the  responsibility of the Company's management. Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards require that we plan and perform an audit to obtain
reasonable  assurance  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.

In  our  opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 1999
and 1998 and the results of its operations and its cash flows for the years then
ended  in  accordance  with  generally  accepted  accounting  principles.


Calgary, Alberta                                         /s/  Grant Thornton LLP
May 31, 2000                                               Chartered Accountants




Suite 2800
500 - 4 Avenue SW
Calgary, Alberta T2P 2V6
Tel: (403) 260-2500
Fax: (403) 260-2571


<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  BALANCE  SHEETS

December 31                                             1999                  1998
------------------------------------------------------------------------------------------
                                                                      (restated - note 9)
<S>                                             <C>                   <C>
ASSETS
Current
  Cash                                          $           101,795   $            26,994
  Accounts receivable                                       462,069               218,124
  Advances to operators                                      39,194                97,838
  Due from related company (note 10)                              -             1,395,254
  Current portion of contract receivable                     42,000                42,000
                                                --------------------  --------------------
                                                            645,058             1,780,210

Contract receivable (note 4)                                137,786               175,235
Investment and advances (note 6)                          3,216,105             1,586,915
Property and equipment (note 3)                           6,549,955             5,658,174
                                                --------------------  --------------------

                                                $        10,548,904   $         9,200,534
                                                ====================  ====================

LIABILITIES
Current
  Accounts payable and accrued liabilities      $           448,756   $           266,918
  Due to related companies (note 10)                        198,270               863,457
  Current portion of contract payable (note 4)               13,200                12,840
  Current portion of long-term debt (note 5)                      -               390,000
                                                --------------------  --------------------
                                                            660,226             1,533,215

Contract payable (note 4)                                    43,972                56,242
Long-term debt (note 5)                                   1,080,000               320,000
Provision for site restoration costs (note 3)               167,855               108,571
Future income taxes (note 8)                              1,422,175             1,038,933
                                                --------------------  --------------------
                                                          3,374,228             3,056,961
                                                --------------------  --------------------
SHAREHOLDERS' EQUITY
Capital stock (note 7)                                    6,043,023             5,014,223
Retained earnings                                         1,131,653             1,129,350
                                                --------------------  --------------------
                                                          7,174,676             6,143,573
                                                --------------------  --------------------

                                                $        10,548,904   $         9,200,534
                                                ====================  ====================
</TABLE>


Commitments, contingencies and measurement uncertainty (note 12)


On behalf of the Board

"Jeffrey J. Chad"(signed)     Director       "Allan J. Kent"(signed)    Director
---------------------------                  ------------------------



See accompanying notes to the consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  STATEMENTS  OF
OPERATIONS  AND  RETAINED  EARNINGS


Year ended December 31                          1999                  1998
----------------------------------------------------------------------------------
                                                              (restated - note 9)
<S>                                     <C>                   <C>
REVENUE
  Petroleum and natural gas sales       $         3,324,537   $         2,140,606
  Less royalties, net                              (797,064)             (407,062)
                                        --------------------  --------------------
                                                  2,527,473             1,733,544
                                        --------------------  --------------------

EXPENSES
  Operating                                       1,088,234               788,376
  Depletion and depreciation                        916,712               826,032
  Site restoration costs                             59,284                39,833
  General and administrative                        629,679               406,088
  Interest on long-term debt                         76,445                83,971
                                        --------------------  --------------------
                                                  2,770,354             2,144,300
                                        --------------------  --------------------

Loss from operations                               (242,881)             (410,756)
                                        --------------------  --------------------
OTHER
  Interest income                                         -                32,619
  Gain on sale of investment                              -                11,627
                                        --------------------  --------------------
                                                          -                44,246
                                        --------------------  --------------------

Loss before income taxes                           (242,881)             (366,510)

Income taxes (note 8)                               245,184               265,006
                                        --------------------  --------------------

NET EARNINGS (LOSS)                     $             2,303   $          (101,504)
                                        ====================  ====================

Retained earnings, beginning of year
  - as previously reported              $         1,051,383   $         1,215,493
  Change in accounting policy (note 9)               77,967                15,361
                                        --------------------  --------------------

  - as restated                                   1,129,350             1,230,854

Net earnings (loss)                                   2,303              (101,504)
                                        --------------------  --------------------

RETAINED EARNINGS, END OF YEAR          $         1,131,653   $         1,129,350
                                        ====================  ====================

NET EARNINGS (LOSS) PER SHARE           $              0.00   $             (0.00)
                                        ====================  ====================
</TABLE>



See accompanying notes to the consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  STATEMENTS
OF  CASH  FLOW

Year ended December 31                                        1999                  1998
-----------------------------------------------------------------------------------------------
                                                                            (restated - note 9)
<S>                                                   <C>                   <C>
Cash derived from (applied to)

OPERATING
  Net earnings (loss)                                 $             2,303   $          (101,504)
  Depletion and depreciation                                      916,712               826,032
  Site restoration costs                                           59,284                39,833
  Future income taxes recoverable                                (295,231)             (265,006)
  Gain on sale of investment                                            -               (11,627)
                                                      --------------------  --------------------

  Cash flow from operations                                       683,068               487,728

  Change in non-cash operating working capital                   (216,850)             (596,778)
                                                      --------------------  --------------------
                                                                  466,218              (109,050)
                                                      --------------------  --------------------

FINANCING
  Repayment of bank debt                                         (390,000)           (1,155,000)
  Proceeds from bank debt                                         760,000               450,000
  Issue of common shares, net of issuance costs                 1,616,000               557,000
  Change in non-cash financing working capital                   (573,915)              842,964
                                                      --------------------  --------------------
                                                                1,412,085               694,964
                                                      --------------------  --------------------

INVESTING
  Increase in Cubacan investment                                 (187,241)                    -
  Advances to Cubacan                                          (1,441,948)                    -
  Proceeds on disposal of Cubacan investment                            -               100,000
  Business acquisitions                                                 -              (579,108)
  Acquisition of furniture and equipment                          (28,523)                    -
  Prepaid gas contract net of contract payable                     25,539                27,545
  Acquisition of Canadian petroleum and natural gas
    properties and equipment                                   (1,437,380)             (933,399)
  Disposal of Canadian petroleum and natural gas
    properties and equipment                                            -             1,898,358
  Acquisition of U.S. petroleum and natural gas
    properties and equipment                                     (342,591)             (156,074)
  Change in non-cash investing working capital                  1,608,642              (947,913)
                                                      --------------------  --------------------
                                                               (1,803,502)             (590,591)
                                                      --------------------  --------------------

NET CHANGE IN CASH                                                 74,801                (4,677)
                                                      --------------------  --------------------

CASH,
  Beginning of year                                                26,994                31,671

  END OF YEAR                                         $           101,795   $            26,994
                                                      ====================  ====================

CASH FLOW FROM OPERATIONS PER SHARE                   $              0.03   $              0.02
                                                      ====================  ====================
</TABLE>


See accompanying notes to the consolidated financial statements.


<PAGE>
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS

Years  ended  December  31,  1999  and  1998
--------------------------------------------------------------------------------

1.   NATURE  OF  OPERATIONS  AND  BASIS  OF  PRESENTATION

     The  Company  is  engaged primarily in the exploration for, development and
     production  of  petroleum  and natural gas in Canada and the United States.
     All  revenues  and  expenses  during  the  current  year were from Canadian
     operations. These consolidated financial statements include the accounts of
     the  Company and its two wholly-owned subsidiaries, 615434 Alberta Ltd. and
     Endeavour  Resources  Limited.

2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     These  consolidated  financial  statements have been prepared in accordance
     with  generally  accepted  accounting principles, and reflect the following
     policies:

     a)   PETROLEUM AND NATURAL GAS PROPERTIES AND EQUIPMENT
          The  Company  follows  the  full  cost  method  of  accounting for its
          petroleum  and  natural gas operations. All costs of exploring for and
          developing  oil  and  gas  reserves  are  capitalized,  including land
          acquisition  costs, geological and geophysical costs, carrying charges
          on  nonproducing  properties,  costs  of  drilling both productive and
          non-productive  wells,  production  equipment  costs, related overhead
          costs,  and  capitalized  interest  related to unproven properties and
          major  development  projects.  Such  costs, net of proceeds from minor
          disposal  of  property, are accumulated, depleted and depreciated on a
          country-by-country  basis  by using the unit-ofproduction method based
          on  estimated  gross  proved  reserves of oil and natural gas. Oil and
          natural  gas  production  and  reserves  are converted into equivalent
          units  based  upon  estimated  relative  energy  content.

          Costs  of  acquiring  and  evaluating  unproved  properties  and major
          development  projects  are  excluded  from  depletion and depreciation
          calculations until it is determined whether or not proved reserves are
          attributable  to  the  properties,  the major development projects are
          completed,  or  impairment  occurs.

          The  capitalized  costs  less  accumulated depletion, depreciation and
          future  income  taxes  are limited to an amount equal to the estimated
          net  revenue  from  proved  reserves (based on prices and costs at the
          balance  sheet  date) less estimated future general and administrative
          expenses,  financing  costs  and  taxes.

          Resource  expenditure  deductions  for  income tax purposes related to
          exploration  and  development  activities funded by flow-through share
          arrangements  are renounced to investors in accordance with income tax
          legislation.  Capital  stock  is  reduced  and future income taxes are
          increased  by  the estimated tax benefits transferred to shareholders.
          Gains  or  losses  are  recognized  upon  the  sale  or disposition of
          properties  if  either  proved  reserves  of  those  properties  are
          significant in relation to the Company's total reserves or the sale or
          disposition  is  that  of  a  major  development  project.

     b)   FUTURE  SITE  RESTORATION  AND  ABANDONMENT  COSTS

          Estimated  future  costs relating to site restoration and abandonments
          are  provided  for  over  the  life  of  proved  reserves  on  a
          unit-of-production  basis.  Costs  are  estimated,  net  of  expected
          recoveries,  based  upon  current  legislation,  costs, technology and
          industry  standards.  The  annual  provision is recorded as additional
          depletion  and depreciation. The accumulated provision is reflected as
          a  non-current  liability  and actual expenditures are charged against
          the  accumulated  provision  when  incurred.


<PAGE>
2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     c)   JOINT  OPERATIONS
          Certain  of  the  petroleum  and  natural gas activities are conducted
          jointly  with  others. These consolidated financial statements reflect
          only  the  Company's  proportionate  interest  in  such  activities.

     d)   INVESTMENT
          Investment in Cubacan Exploration Inc. is accounted for using the cost
          method.

     e)   NET  EARNINGS  (LOSS)  AND  CASH  FLOW  FROM  OPERATIONS  PER  SHARE
          Net earnings (loss) and cash flow from operations per common share are
          calculated  based  upon  the  weighted average number of common shares
          outstanding during the year (note 7c). Fully diluted per share amounts
          are  not  provided  where  the  exercise  of  options is non-dilutive.

     f)   FINANCIAL  INSTRUMENTS
          The  Company has estimated the fair value of its financial instruments
          which include cash, accounts receivable, advances to operators, due to
          and  from related companies, contract receivable and payable, accounts
          payable  and accrued liabilities, and long-term debt. The Company used
          valuation  methodologies  and  market information available as at year
          end  and  unless  otherwise noted, it is management's opinion that the
          Company  is  not  exposed  to significant interest, currency or credit
          risks arising from their financial instruments. It has been determined
          that  the  carrying  amounts of such financial instruments approximate
          fair  value  in  all  cases,  unless  otherwise  noted.

     g)   USE  OF  ESTIMATES
          The preparation of the consolidated financial statements in accordance
          with  generally  accepted accounting principles requires management to
          make  estimates  and  assumptions  that affect the reported amounts of
          assets  and liabilities at the date of the financial statement and the
          reported amounts of revenues and expenses during the reporting period.
          Actual  results  could  differ from and affect the results reported in
          these  consolidated  financial  statements  (note  12).

     h)   FOREIGN  CURRENCY
          Monetary  assets and liabilities denominated in foreign currencies are
          translated into Canadian dollars at rates of exchange in effect at the
          date  of  the  consolidated  balance  sheet.  Nonmonetary  items  are
          translated  at  the  rate  of  exchange in effect when the assets were
          acquired  or  obligations  incurred.  Foreign exchange gains or losses
          arising  from  the  settlement  of  foreign currency denominated items
          associated  with exploration activities are capitalized in the related
          petroleum and natural gas properties. Other assets and liabilities and
          items affecting income are converted at rates of exchange in effect at
          the  date  of  the  transaction.

     i)   INCOME  TAXES
          Income  taxes  are  calculated  using  the  liability  method  of  tax
          allocation  accounting.  Temporary  differences  arising  from  the
          difference  between  the  tax  basis  of an asset or liability and its
          carrying  amount  on  the  balance  sheet are used to calculate future
          income  tax  liabilities  or  assets. Future income tax liabilities or
          assets  are  calculated  using  tax  rates anticipated to apply in the
          periods  that  the  temporary  differences  are  expected  to reverse.
          Temporary  differences arising on acquisitions result in future income
          tax  liabilities  or  assets.

     j)   STATEMENT  OF  CASH  FLOW
          The Company has adopted in the current year, the Handbook requirements
          of  the  Canadian  Institute  of  Charted Accountants in preparing its
          statement  of  cash  flow.  Certain of the comparative figures for the
          year  ended  December  31,  1998  have  been  restated  to reflect the
          presentation  adopted  in  the  current  year.


<PAGE>
<TABLE>
<CAPTION>
3.   PROPERTY AND EQUIPMENT

                                                                     1999        1998
                                                   Accumulated    ----------  ----------
                                                  Depletion and    NET BOOK    Net Book
                                       Cost       Depreciation      VALUE       Value
                                    -----------  ---------------  ----------  ----------
<S>                                 <C>          <C>              <C>         <C>
     CANADIAN
     Petroleum and natural gas
       properties and equipment     $ 9,603,790  $   (3,587,906)  $6,015,884  $5,486,366
     Office furniture and fixtures       72,652         (37,247)      35,405      15,734
                                    -----------  ---------------  ----------  ----------
                                      9,676,442      (3,625,153)   6,051,289   5,502,100
     UNITED STATES
     Petroleum and natural gas
       properties and equipment         498,666               -      498,666     156,074
                                    -----------  ---------------  ----------  ----------
                                    $10,175,108  $   (3,625,153)  $6,549,955  $5,658,174
                                    ===========  ===============  ==========  ==========
</TABLE>

     a)   SITE RESTORATION AND ABANDONMENTS
          At  December  31, 1999 the costs, net of expected recoveries, relating
          to  future  site  restoration  and  abandonments  are  estimated to be
          $389,202  (1998  -  $315,799)  of which $167,855 (1998 - $108,571) has
          been  provided  for  in  the  consolidated  financial  statements.

     b)   DEPLETION  AND  DEPRECIATION
          In  accordance  with  the  Companys accounting policies, the amount of
          $498,666 (1998 - $156,074) attributable to the United States petroleum
          and  natural  gas  properties  and  equipment  were excluded from this
          calculation  as  these  properties  were  in the pre-production stage.

     c)   CAPITALIZED  OVERHEAD
          During the year the Company capitalized overhead expenditures directly
          relating  to  exploration  and development activities in the amount of
          $213,920  (1998  -  $99,407).

4.   CONTRACT  RECEIVABLE  AND  PAYABLE

<TABLE>
<CAPTION>
                                  1999       1998
                                ---------  ---------
<S>                             <C>        <C>
        Contract receivable     $179,786   $217,235
          Less current portion   (42,000)   (42,000)
                                ---------  ---------
                                $137,786   $175,235
                                =========  =========
        Contract payable        $ 57,172   $ 69,082
          Less current portion   (13,200)   (12,840)
                                ---------  ---------
                                $ 43,972   $ 56,242
                                =========  =========
</TABLE>

     At  December 31, 1999, the contract receivable is comprised of a Production
     Pre-Purchase  Agreement  for  volumes of gas to be delivered to the Company
     from  interests  held  by  a  related  private  company.


<PAGE>
<TABLE>
<CAPTION>
5.   LONG-TERM  DEBT
                                                           1999       1998
<S>                                                      <C>         <C>
     Demand, revolving and reducing production loan
     bearing interest at prime plus 1.5%, secured by a
     5 million fixed and floating charge debenture
     covering various petroleum and natural gas leases   $1,080,000  $710,000

     Less current portion                                         -   390,000
                                                         ----------  --------

                                                         $1,080,000  $320,000
                                                         ==========  ========
</TABLE>

     During  the  year, the Company increased the demand, revolving and reducing
     production loan to $1,750,000. Commencing December 1, 1999 and on the first
     day of each month thereafter, the maximum available principal amount of the
     loan shall be permanently reduced and repaid, to the extent outstanding, in
     35  equal  monthly  principal  amounts of $50,000. The result of this would
     reduce  the maximum principal amount to be outstanding at December 31, 2000
     to  $1,100,000.  As  the  current  balance  of $1,080,000 is less than this
     amount,  no  principal  payments are required over the current year, and as
     such,  no  current  portion  is  required  to  be  shown in these financial
     statements.

<TABLE>
<CAPTION>
6.   INVESTMENT AND ADVANCES
                                                          1999        1998
                                                       ----------  ----------
<S>                                                    <C>         <C>
     CUBACAN EXPLORATION INC
     ADVANCES
         Advances to Cubacan                           $1,441,948  $1,395,254
         Less current portion                                   -   1,395,254
                                                       ----------  ----------
                                                        1,441,948           -

     INVESTMENT
         Common shares - 7,870,676 (1998 - 4,750,000)   1,774,156   1,586,915
         A Warrants - 3,120,676 (1998 - nil)                    -           -
         B Warrants - 3,120,676 (1998 - nil)                    -           -
                                                       ----------  ----------

                                                       $3,216,104  $1,586,915
                                                       ==========  ==========
</TABLE>

     a)   During  the  year,  the Company received 4,750,000 rights, by way of a
          Prospectus  Rights  Offering,  for  each  common share held in Cubacan
          Exploration  Inc. Two rights entitled the Company to purchase one Unit
          of  Cubacan,  each  Unit consisting of one common share, one A Warrant
          and  one  B  Warrant at a price of $0.06 per Unit. Two A Warrants will
          entitle  the  Company  to  acquire  one  additional common share at an
          exercise  price  of $0.15 until June 30, 2000, and two B Warrants will
          entitle  the  Company  to  acquire  one  additional common share at an
          exercise  price  of  $0.25  until  December  31,  2000.

     b)   On  December  22,  1999, the Company exercised all of its rights along
          with  an  additional 1,490,352 rights. In exercising these rights, the
          Company  acquired  an  additional  2,375,000  common  shares  plus the
          additional  subscription  for  745,676  common  shares  for  a  total
          additional  investment in Cubacan of 3,120,676 common shares at a cost
          of  $0.06  per  share.

     c)   On  December  31, 1999, the closing share price of Cubacan Exploration
          Inc.  was  $0.06  for a market value of $472,241 (1998 - $0.08, market
          value  $380,000).


<PAGE>
7.   CAPITAL  STOCK

     The  Company  was  incorporated  on  February  12,  1987 under the Business
     Corporations  Act  (Alberta)  with  the  following  capital:

<TABLE>
<CAPTION>
AUTHORIZED
     Unlimited  number  of  common  shares

     ISSUED                                       1999                    1998
                                                  ----                    ----
                                          NUMBER OF               Number of
                                            SHARES      AMOUNT      Shares      Amount
                                          ----------  ----------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>
     COMMON SHARES ISSUED
       Beginning of year                  24,523,152  $5,014,223  20,809,823  $4,702,303

     TRANSACTIONS DURING THE YEAR
       Stock options exercised             2,000,000     300,000           -           -
       Flow-through share offerings for
       cash, net of estimated tax
       benefit renounced to the
       shareholders of $587,200
       (1998 - $245,080)                   6,064,000     728,800   3,713,329     311,920
                                          ----------  ----------  ----------  ----------

     ISSUED AND OUTSTANDING               32,587,152  $6,043,023  24,523,152  $5,014,223
                                          ==========  ==========  ==========  ==========
</TABLE>

     a)   STOCK  OPTIONS
          The  Company  reserves  up  to 10% of the outstanding common shares or
          3,258,715  common  shares  under  a stock option plan enabling certain
          officers,  directors  and key personnel to purchase shares at exercise
          prices  equal  to  the market price on the date the option is granted.

          As  at  December  31,  1999, the Company had no outstanding options to
          acquire  common  shares  (1998  2,000,000  at  $0.15  per  share).

          During  the  year,  2,000,000 common shares were issued as a result of
          the  exercising  of  stock  options  at an exercise price of $0.15 per
          share  for  a  total  cash  consideration of $300,000. Of this amount,
          $120,000 was advanced to employees to exercise 800,000 of these common
          shares by way of a non-interest bearing note due December 31, 2000 and
          secured  by  these  shares.  This  amount  is  included  in  accounts
          receivable.

     b)   FLOW-THROUGH  SHARES
          During  the year, the Company issued 6,064,000 (1998 3,713,329) common
          shares by way of various flow-through share offerings for a total cash
          consideration  of $1,316,000 (1998 - $557,000). Under the terms of the
          Flow-through  Share  Agreements, the Company is required to expend the
          proceeds  of $1,316,000 on qualifying oil and natural gas expenditures
          prior  to  February  28, 2001. As at December 31, 1999 the Company has
          incurred  qualifying  expenditures of $243,983, leaving an outstanding
          commitment  of  $1,072,017.

<TABLE>
<CAPTION>
     c)   WEIGHTED AVERAGE NUMBER OF SHARES                   1999      1998
                                                          ----------  ----------
<S>                                                       <C>         <C>
          Weighted  average  number  of  common  shares
            outstanding  during  the  year                26,201,382  20,819,996
          Fully diluted weighted average number of common
            shares  outstanding  during  the  year        27,826,177  21,088,490
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
8.   INCOME  TAXES

     a)   INCOME  TAXES
          Future income tax  recovery                        1999         1998
                                                          -----------  -----------
<S>                                                       <C>          <C>
            Tax recovery at 44.7% of loss before
              income taxes                                $ (108,374)  $ (163,537)
            Crown payments not deductible for tax purposes    37,593       32,590
            Attributed Canadian royalty income               (38,917)     (38,915)
            Resource allowance                              (107,589)     (67,593)
            Other                                            (77,944)     (27,551)
                                                          -----------  -----------
                                                            (295,231)    (265,006)

        Current taxes                                         50,047            -
                                                          -----------  -----------

                                                          $ (245,184)  $ (265,006)
                                                          ===========  ===========

     b)   FUTURE  INCOME  TAXES

          The components of the net future income  tax liability are as follows:
                                                             1999         1998
                                                          -----------  -----------
          Future income tax assets
            Non-capital loss carry forwards               $ (169,508)  $ (305,468)
            Future site restoration                          (74,897)     (48,444)
            Share issue costs                                (11,626)     (29,837)
            Other                                           (109,726)    (117,241)
                                                          -----------  -----------
                                                            (365,757)    (500,990)
          Future income tax liabilities
            Property and equipment                         1,787,932    1,539,923
                                                          -----------  -----------

                                                          $1,422,175   $1,038,933
                                                          ===========  ===========
</TABLE>

     c)   LOSS  CARRY  FORWARDS

          The  Company  has  $379,800  (1998 - $684,600) of available loss carry
          forwards  for  income  tax purposes which may be used to reduce future
          taxable  income,  the  benefit  of  which has been recognized in these
          consolidated  financial  statements.  These  losses expire in the year
          2001.

     d)   TAX  POOLS

          The Company has available the following approximate costs which may be
          deducted  in the prescribed manner to determine future taxable income:

<TABLE>
<CAPTION>
                                                  Rate       1999       1998
                                                 -------  ----------  --------
<S>                                              <C>      <C>         <C>
          Undepreciated  capital  costs          20%-30%  $  556,000  $351,000
          Canadian oil and gas property expense      10%  $  820,000  $442,000
          Canadian development expense               30%  $1,215,000  $594,000
          Canadian exploration expense              100%  $  524,000  $663,000
          Foreign exploration and development
            expense                                  10%  $  500,000  $157,000
</TABLE>


<PAGE>
9.   CHANGE  IN  ACCOUNTING  POLICY

     During  the  year,  the Company changed its method of accounting for income
     taxes  from  the  deferral  method  to  the liability method (note 2). This
     policy  has been adopted retroactively resulting in the restatement of 1998
     results.  The  impact  of  this  restatement  on  the  December  31,  1998
     consolidated  financial  statements  is  as  follows:

<TABLE>
<CAPTION>
                                         As
                                      Reported    Adjustment    Restated
                                     -----------  -----------  -----------
<S>                                  <C>          <C>          <C>
     CONSOLIDATED  BALANCE  SHEET
       AS AT DECEMBER 31, 1998
         Property and equipment      $5,964,467   $   306,293  $5,658,174
         Future income taxes         $1,423,193   $   384,260  $1,038,933
         Retained earnings           $1,051,383   $    77,967  $1,129,350
     CONSOLIDATED STATEMENTS OF
       OPERATIONS AND CASH FLOW
       YEAR ENDED DECEMBER 31, 1998
         Future income taxes         $  202,400   $    62,606  $  265,006
         Net loss                    $ (164,110)  $    62,606  $ (101,504)
         Net loss per share          $    (0.01)  $      0.01  $    (0.00)
</TABLE>

10.  RELATED  PARTY  TRANSACTIONS

     a)   PROSPECT  OIL  &  GAS  MANAGEMENT  LTD.
          The  Company  contracts  services  from  Prospect Oil & Gas Management
          Ltd.,  a  company  related  by  common  management and controlled by a
          director  of  the  Company,  for  general  and  administrative,  land,
          development and exploration services for a monthly fee of $35,000. The
          total  contract  fees  charged during the year ended December 31, 1999
          total  $420,000  (1998  - $240,000). Other fees and reimbursable costs
          totaled  $50,276  (1998  -  $46,514).  These transactions were made at
          normal  market  prices,  terms  and  conditions.

          Certain  of  the  petroleum  and  natural gas activities are conducted
          jointly  with  Prospect  Oil  & Gas Management Ltd. at normal industry
          terms  and  conditions.

          At  December  31, 1999, the Company owed Prospect Oil & Gas Management
          Ltd.  $47,542 (1998 - $664,437) which bears no interest and has no set
          terms  of  repayment.

     b)   CUBACAN  EXPLORATION  INC.
          The  Company  is related by way of common management. The Company is a
          shareholder of Cubacan Exploration Inc. and at December 31, 1999 owned
          7,870,676  common  shares  (1998 4,750,000) or 15.5% (1998 - 12.2%) of
          the  outstanding  capital  (note  6).

          At  December  31,  1999,  Cubacan  Exploration  Inc.  owed the Company
          $1,441,948  (  1998  -  $1,395,254)  as  a result of cash advances and
          reimbursable  costs  which  bear  no interest and have no set terms of
          repayment.  These  transactions  were made at normal prices, terms and
          conditions.

          The  Company  has guaranteed the repayment of certain notes payable by
          Cubacan  Exploration  Inc.  to  third  parties  totaling  $292,693  at
          December  31,  1999  (1998  -  $390,514).

     c    RIECHAD  INC.
          The Company contracts Riechad Inc., a Company controlled by a director
          of the Company, for engineering and management services at a daily fee
          of  $350.  The total contract fees charged and accrued during the year
          ended December 31, 1999 total $87,980 (1998 - $63,700). Other fees and
          reimbursable costs totaled $40,528 (1998 - $3,528). These transactions
          were  made  at  normal  prices,  terms  and  conditions.

          At  December  31, 1999, the Company owed Riechad Inc. $150,728 (1998 -
          $199,020),  which bears no interest and has no set terms of repayment.


<PAGE>
11.  ACQUISITIONS

     Effective  October  1,  1998,  the  Company  acquired all of the issued and
     outstanding shares of two private related companies, engaged in oil and gas
     exploration  for  cash consideration of $200. The acquisitions of Endeavour
     Resources  Limited  and  615434 Alberta Ltd. were made at fair market value
     and  accounted  for  by the purchase method. The results of operations have
     been  included  in these consolidated financial statements from the date of
     acquisition.

<TABLE>
<CAPTION>
                                              Endeavour
                                              Resources       615434
                                               Limited     Alberta Ltd.      Total
                                             -----------  --------------  -----------
<S>                                          <C>          <C>             <C>
     ASSETS ACQUIRED
       Current assets                        $  785,477   $     888,072   $1,673,549
       Investment in Cubacan                          -         172,950      172,950
       Petroleum and natural gas properties     154,894       1,570,030    1,724,924
                                             -----------  --------------  -----------
                                                940,371       2,631,052    3,571,423
                                             -----------  --------------  -----------
     LIABILITIES ASSUMED
       Current liabilities                      868,694       1,596,108    2,464,802
       Deferred income taxes                          -         527,513      527,513
                                             -----------  --------------  -----------
                                                868,694       2,123,621    2,992,315
                                             -----------  --------------  -----------
     NET NON-CASH ASSETS ACQUIRED                71,677         507,431      579,108

     BANK INDEBTEDNESS ACQUIRED                 (71,577)       (507,331)    (578,908)
                                             -----------  --------------  -----------

                                             $      100   $         100   $      200
                                             ===========  ==============  ===========
     FUNDED BY
       Cash                                  $      100   $         100   $      200
                                             ===========  ==============  ===========
</TABLE>

12.  COMMITMENTS,  CONTINGENCIES  AND  MEASUREMENT  UNCERTAINTY

     a)   COMMITMENT
          Under  the terms of various flow-through share agreements, the Company
          is  required  to  expend  $1,072,017 on qualifying oil and natural gas
          expenditures  prior  to  February 28, 2001 (note 7b). Management is of
          the  opinion  that  the  commitment  to  expend  these  qualifying
          expenditures  will  be  met.

     b)   MEASUREMENT UNCERTAINTY
          The  preparation  of  these consolidated financial statements requires
          managements  best estimate related to events whose outcome will not be
          fully  resolved  until  future  periods.  The  Companys  Advances  and
          Investment  in  Cubacan  Exploration  Inc.  are  recorded at cost, and
          management  believes  that  Cubacan will continue in operation for the
          foreseeable  future  and  will  be  able  to  realize  its  assets and
          discharge  its liabilities in the normal course of operations. Cubacan
          requires  the  continuing  financial  support  of  its  lenders  and
          additional  financing  in  order  to  fund  its  existing obligations.
          Management  of Cubacan intends to raise the required financing through
          a  combination  of  equity  issues,  the  exercising  of  its  A and B
          warrants, financings and farm-outs. Changes in the ultimate outcome of
          these  events  or  in  the  significant assumptions made by management
          could  result  in a material impairment in the carrying value of these
          assets.

     c)   GUARANTEES
          The  Company  has guaranteed the repayment of certain notes payable by
          Cubacan  Exploration  Inc.  to  third  parties  totaling  $292,693  at
          December  31,  1999  (1998  -  $390,514).


<PAGE>
12.  COMMITMENTS,  CONTINGENCIES  AND  MEASUREMENT  UNCERTAINTY (CONTINUED)

     d)   LITIGATION
          During  a  prior  year,  the  Company  was named in a lawsuit claiming
          against  the  Company  and  others jointly and severally a 25% working
          interest in the Namaka area. All interests in the Namaka area acquired
          by  the  Company and other corporate defendants were legally acquired.
          It  is therefore the opinion of the management of the Company that the
          claim is without merit and will ultimately be dismissed by the Courts.
          During  this  prior  year, the Company filed a counterclaim requesting
          damages  in  the  amount  of  $2,250,000  (note  13).

13.  SUBSEQUENT  EVENT

     Subsequent  to  the  year end, all parties agreed to settle the outstanding
     lawsuit  and  the  counterclaim  as  outlined above (note 12d), by mutually
     releasing  each  other  from  any  further  actions and discontinuing their
     respective  lawsuits.


<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------

ENDEAVOUR  RESOURCES  INC.
CONSOLIDATED  BALANCE  SHEETS

December  31                                        2000          1999
------------------------------------------------------------------------
<S>                                             <C>          <C>

ASSETS
Current
  Cash and term deposits                        $ 1,798,142  $   101,795
  Accounts receivable                             1,996,527      462,069
  Advances to operators                             454,895       39,194
  Due from related company (note 10)                714,543            -
  Current portion of contract receivable             35,000       42,000
                                                -----------  -----------
                                                  4,999,107      645,058

Contract receivable (note 4)                        109,902      137,786
Investment and advances (note 6)                  1,548,400    3,216,105
Property and equipment (note 3)                  11,317,025    6,549,955
                                                -----------  -----------

                                                $17,974,434  $10,548,904
                                                ===========  ===========

LIABILITIES
Current
  Accounts payable and accrued liabilities      $ 2,349,465  $   448,756
  Due to related companies (note 10)                125,104      198,270
  Current portion of contract payable (note 4)       11,000       13,200
  Current portion of long-term debt (note 5)      1,130,000            -
                                                -----------  -----------
                                                  3,615,569      660,226

Contract payable (note 4)                            35,079       43,972
Long-term debt (note 5)                           3,150,000    1,080,000
Provision for site restoration costs (note 3)       253,652      167,855
Future income taxes (note 9)                      1,803,653    1,422,175
                                                -----------  -----------
                                                  8,857,953    3,374,228
                                                -----------  -----------

SHAREHOLDERS' EQUITY
Capital stock (note 7)                            7,336,203    6,043,023
Special warrants (note 8)                         1,249,750            -
Retained earnings                                   530,528    1,131,653
                                                -----------  -----------
                                                  9,116,481    7,174,676
                                                -----------  -----------

                                                $17,974,434  $10,548,904
                                                ===========  ===========
</TABLE>


Commitments  (note 12)


On behalf of the Board

"Jeffrey J. Chad"(signed)     Director       "Allan J. Kent"(signed)    Director
---------------------------                  ------------------------


See accompanying notes to the consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------

ENDEAVOUR  RESOURCES  INC.
CONSOLIDATED  STATEMENTS  OF
OPERATIONS  AND  RETAINED  EARNINGS

Year ended December  31                                    2000          1999
---------------------------------------------------------------------------------
<S>                                                     <C>           <C>

REVENUE
  Petroleum and natural gas sales                       $ 6,232,970   $3,324,537
  Less royalties, net                                    (1,709,135)    (797,064)
                                                        ------------  -----------
                                                          4,523,835    2,527,473
                                                        ------------  -----------

EXPENSES
  Operating                                               1,496,986    1,088,234
  Depletion and depreciation                              1,609,664      975,996
  General and administrative                                652,606      629,679
  Interest on long-term debt                                175,430       76,445
                                                        ------------  -----------
                                                          3,934,686    2,770,354
                                                        ------------  -----------

Earnings (loss) from operations before income taxes
  and the following                                         589,149     (242,881)

Income taxes (note 9)                                       (82,674)     245,184
                                                        ------------  -----------

NET EARNINGS FROM OPERATIONS BEFORE THE UNDERNOTED          506,475        2,303

Other
  Provision for write down of investment and advances
    (net of income taxes (note 6))                       (1,107,600)           -
                                                        ------------  -----------

NET (LOSS) EARNINGS                                     $  (601,125)  $    2,303
                                                        ============  ===========

Retained earnings, beginning of year                    $ 1,131,653   $1,129,350

Net (loss) earnings                                        (601,125)       2,303
                                                        ------------  -----------

RETAINED EARNINGS, END OF YEAR                          $   530,528   $1,131,653
                                                        ============  ===========


NET EARNINGS PER SHARE FROM OPERATIONS                  $      0.02   $     0.00
                                                        ============  ===========

NET (LOSS) EARNINGS PER SHARE                           $     (0.02)  $     0.00
                                                        ============  ===========
</TABLE>


See accompanying notes to the consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------

ENDEAVOUR  RESOURCES  INC.
CONSOLIDATED  STATEMENTS
OF  CASH  FLOW

Year ended December  31                                               2000          1999
--------------------------------------------------------------------------------------------
<S>                                                               <C>           <C>

Cash derived from (applied to)

OPERATING
  Net (loss) earnings                                             $  (601,125)  $     2,303
  Provision for write down of investment and
    advances (net of income taxes)                                  1,107,600             -
  Depletion and depreciation                                        1,609,664       975,996
  Future income taxes recoverable                                     132,721      (295,231)
                                                                   ----------  -------------

  Cash flow from operations                                         2,248,860       683,068

  Change in non-cash operating working capital                       (416,791)     (216,850)
                                                                   ----------  -------------
                                                                    1,832,069       466,218
                                                                   ----------  -------------

FINANCING
  Repayment of bank debt                                                    -      (390,000)
  Proceeds from bank debt                                           1,600,000       760,000
  Issue of common shares for stock options                                  -       300,000
  Issue of flow-through common shares                                 300,000     1,316,000
  Issue of flow-through special warrants, net of issuance costs     2,309,000             -
  Change in non-cash financing working capital                         83,976      (573,915)
                                                                   ----------  -------------
                                                                    4,292,976     1,412,085
                                                                   ----------  -------------

INVESTING
  Increase in Cubacan investment                                            -      (187,241)
  Advances to Cubacan                                                (332,295)   (1,441,948)
  Business acquisition                                               (499,884)            -
  Acquisition of furniture and equipment                               (8,656)      (28,523)
  Prepaid gas contract net of contract payable                         23,791        25,539
  Acquisition of Canadian petroleum and natural gas
    properties and equipment                                       (2,426,379)   (1,437,380)
  Acquisition of U.S. petroleum and natural gas
    properties and equipment                                         (541,745)     (342,591)
  Change in non-cash investing working capital                       (643,530)    1,608,642
                                                                   ----------  -------------
                                                                   (4,428,698)   (1,803,502)
                                                                   ----------  -------------

NET CHANGE IN CASH                                                  1,696,347        74,801

CASH,
  Beginning of year                                                   101,795        26,994
                                                                   ----------  -------------

  END OF YEAR                                                     $ 1,798,142   $   101,795
                                                                   ==========  =============

CASH FLOW FROM OPERATIONS PER SHARE                               $      0.07   $      0.03
                                                                   ==========  =============
</TABLE>


See accompanying notes to the consolidated financial statements.


<PAGE>
--------------------------------------------------------------------------------

ENDEAVOUR  RESOURCES  INC.
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS

Years  ended  December  31,  2000  and  1999
--------------------------------------------------------------------------------

1.   NATURE  OF  OPERATIONS  AND  BASIS  OF  PRESENTATION

     The  Company  is  engaged primarily in the exploration for, development and
     production  of  petroleum  and natural gas in Canada and the United States.
     Greater  than 95% of the revenues and expenses during the current year were
     from Canadian operations and accordingly segmented information has not been
     provided.  These  consolidated financial statements include the accounts of
     the  Company  and its three wholly-owned subsidiaries, Lyse Petroleum Ltd.,
     615434  Alberta  Ltd.,  Endeavour  Resources  Limited  and  its partnership
     interest  in  ERU  Oil  &  Gas  Management.

2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     These  consolidated  financial  statements have been prepared in accordance
     with  Canadian  generally  accepted  accounting principles, and reflect the
     following  policies:

     a)   PETROLEUM  AND  NATURAL  GAS  PROPERTIES  AND  EQUIPMENT
          The  Company  follows  the  full  cost  method  of  accounting for its
          petroleum  and  natural gas operations. All costs of exploring for and
          developing  oil  and  gas  reserves  are  capitalized,  including land
          acquisition  costs, geological and geophysical costs, carrying charges
          on  nonproducing  properties,  costs  of  drilling both productive and
          non-productive  wells,  production  equipment  costs, related overhead
          costs,  and  capitalized  interest  related to unproven properties and
          major  development  projects.  Such  costs, net of proceeds from minor
          disposal  of  property, are accumulated, depleted and depreciated on a
          country-by-country  basis by using the unit-of-production method based
          on  estimated  gross  proved  reserves of oil and natural gas. Oil and
          natural  gas  production  and  reserves  are converted into equivalent
          units  based  upon  estimated  relative  energy  content.

          Costs  of  acquiring  and  evaluating  unproved  properties  and major
          development  projects  are  excluded  from  depletion and depreciation
          calculations until it is determined whether or not proved reserves are
          attributable  to  the  properties,  the major development projects are
          completed,  or  impairment  occurs.

          The  capitalized  costs  less  accumulated depletion, depreciation and
          future  income  taxes  are limited to an amount equal to the estimated
          net  revenue  from  proved  reserves (based on prices and costs at the
          balance  sheet  date) less estimated future general and administrative
          expenses,  financing  costs  and  taxes.

          Resource  expenditure  deductions  for  income tax purposes related to
          exploration  and  development  activities funded by flow-through share
          arrangements  are renounced to investors in accordance with income tax
          legislation.  Capital  stock  is  reduced  and future income taxes are
          increased  by  the estimated tax benefits transferred to shareholders.

          Gains  or  losses  are  recognized  upon  the  sale  or disposition of
          properties  if  either  proved  reserves  of  those  properties  are
          significant in relation to the Company's total reserves or the sale or
          disposition  is  that  of  a  major  development  project.


<PAGE>
2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     b)   FUTURE  SITE  RESTORATION  AND  ABANDONMENT  COSTS
          Estimated  future  costs relating to site restoration and abandonments
          are  provided  for  over  the  life  of  proved  reserves  on  a
          unit-of-production  basis.  Costs  are  estimated,  net  of  expected
          recoveries,  based  upon  current  legislation,  costs, technology and
          industry  standards.  The  annual  provision is recorded as additional
          depletion  and depreciation. The accumulated provision is reflected as
          a  non-current  liability  and actual expenditures are charged against
          the  accumulated  provision  when  incurred.

     c)   JOINT  OPERATIONS
          Certain  of  the  petroleum  and  natural gas activities are conducted
          jointly  with  others. These consolidated financial statements reflect
          only  the  Company's  proportionate  interest  in  such  activities.

     d)   INVESTMENT
          Investment in Cubacan Exploration Inc. is accounted for using the cost
          method  (see  note  6).

     e)   NET  EARNINGS  AND  CASH  FLOW  FROM  OPERATIONS  PER  SHARE
          Net  earnings  and  cash  flow  from  operations  per common share are
          calculated  based  upon  the  weighted average number of common shares
          outstanding during the year (note 7d). Fully diluted per share amounts
          are  not  provided  as  the  exercise  of  share  purchase and special
          warrants  are  not  materially  dilutive.

     f)   FINANCIAL  INSTRUMENTS
          The  Company has estimated the fair value of its financial instruments
          which include cash, accounts receivable, advances to operators, due to
          and  from related companies, contract receivable and payable, accounts
          payable  and accrued liabilities, and long-term debt. The Company used
          valuation  methodologies  and  market  information  available  as  at
          year-end  and  unless otherwise noted, it is management's opinion that
          the Company is not exposed to significant interest, currency or credit
          risks arising from their financial instruments. It has been determined
          that  the  carrying  amounts of such financial instruments approximate
          fair  value  in  all  cases,  unless  otherwise  noted.

     g)   USE  OF  ESTIMATES
          The preparation of the consolidated financial statements in accordance
          with  generally  accepted accounting principles requires management to
          make  estimates  and  assumptions  that affect the reported amounts of
          assets  and liabilities at the date of the financial statement and the
          reported amounts of revenues and expenses during the reporting period.
          Actual  results  could  differ from and affect the results reported in
          these  consolidated  financial  statements  (note  12).

     h)   FOREIGN  CURRENCY
          Monetary  assets and liabilities denominated in foreign currencies are
          translated into Canadian dollars at rates of exchange in effect at the
          date  of  the  consolidated  balance  sheet.  Nonmonetary  items  are
          translated  at  the  rate  of  exchange in effect when the assets were
          acquired  or  obligations  incurred.  Foreign exchange gains or losses
          arising  from  the  settlement  of  foreign currency denominated items
          associated  with exploration activities are capitalized in the related
          petroleum and natural gas properties. Other assets and liabilities and
          items affecting income are converted at rates of exchange in effect at
          the  date  of  the  transaction.

     i)   INCOME  TAXES
          Income  taxes  are  calculated  using  the  liability  method  of  tax
          allocation  accounting.  Temporary  differences  arising  from  the
          difference  between  the  tax  basis  of an asset or liability and its
          carrying  amount  on  the  balance  sheet are used to calculate future
          income  tax  liabilities  or  assets. Future income tax liabilities or
          assets  are  calculated  using  tax  rates anticipated to apply in the
          periods  that  the  temporary  differences  are  expected  to reverse.
          Temporary  differences arising on acquisitions result in future income
          tax  liabilities  or  assets.


<PAGE>
<TABLE>
<CAPTION>
3.   PROPERTY  AND  EQUIPMENT

                                                                2000         1999
                                                             -----------  ----------
                                              Accumulated
                                             Depletion and    NET BOOK     Net Book
                                  Cost       Depreciation       VALUE       Value
                               -----------  ---------------  -----------  ----------
<S>                            <C>          <C>              <C>          <C>
CANADIAN
Petroleum and natural gas
  properties and equipment     $17,023,607  $   (6,684,942)  $10,338,665  $6,015,884
Office furniture and fixtures      105,578         (61,821)       43,757      35,405
                               -----------  ---------------  -----------  ----------
                                17,129,185      (6,746,763)   10,382,422   6,051,289
UNITED STATES
Petroleum and natural gas
  properties and equipment       1,027,446         (92,843)      934,603     498,666
                               -----------  ---------------  -----------  ----------
                               $18,156,631  $   (6,839,606)  $11,317,025  $6,549,955
                               ===========  ===============  ===========  ==========
</TABLE>

     a)   SITE  RESTORATION  AND  ABANDONMENTS
          At  December  31, 1999 the costs, net of expected recoveries, relating
          to  future  site  restoration  and  abandonments  are  estimated to be
          $660,896  (1999  -  $389,202)  of which $253,652 (1999 - $167,855) has
          been  provided  for  in  the  consolidated  financial  statements.

     b)   DEPLETION  AND  DEPRECIATION
          In  accordance with the Company's accounting policies, the 1999 amount
          of  $498,666  attributable  to the United States petroleum and natural
          gas  properties  and  equipment  was excluded from this calculation as
          these  properties  were  in  the  pre-production  stage.

     c)   CAPITALIZED  OVERHEAD
          During the year the Company capitalized overhead expenditures directly
          relating  to  exploration  and development activities in the amount of
          $240,000  (1999  -  $213,920).

4.   CONTRACT  RECEIVABLE  AND  PAYABLE

<TABLE>
<CAPTION>
                          2000       1999
                        ---------  ---------
<S>                     <C>        <C>
Contract receivable     $144,902   $179,786
  Less current portion   (35,000)   (42,000)
                        ---------  ---------

                        $109,902   $137,786
                        =========  =========

Contract payable        $ 46,079   $ 57,172
  Less current portion   (11,000)   (13,200)
                        ---------  ---------

                        $ 35,079   $ 43,972
                        =========  =========
</TABLE>

     At  December 31, 2000, the contract receivable is comprised of a Production
     Pre-Purchase  Agreement  for  volumes of gas to be delivered to the Company
     from  interests  held  by  a  related  private  company.


<PAGE>
<TABLE>
<CAPTION>
5.   LONG-TERM  DEBT

                                                         2000         1999
                                                     ------------  ----------
<S>                                                  <C>           <C>
Demand, revolving and reducing production loan
bearing interest at prime plus 1.5%, secured by a
5 million fixed and floating charge debenture
covering various petroleum and natural gas leases
of the Company                                       $ 2,530,000   $1,080,000

Less current portion                                  (1,130,000)           -
                                                     ------------  ----------
                                                       1,400,000    1,080,000

Demand, revolving production loan bearing interest
prime plus 1% with no set terms of repayment,
secured by an $8 million fixed and floating
charge debenture covering various petroleum and
natural gas leases of Lyse Petroleum Ltd.              1,750,000            -
                                                     ------------  ----------

                                                     $ 3,150,000   $1,080,000
                                                     ===========  ===========
</TABLE>

     During  the  year, the Company increased the demand, revolving and reducing
     production  loan  to  $3,000,000.  Commencing  September 1, 2000 and on the
     first  day of each month thereafter, the maximum available principal amount
     of  the  loan  shall  be  permanently  reduced  and  repaid,  to the extent
     outstanding,  in 30 equal monthly principal amounts of $100,000. The result
     of  this  would  reduce  the  maximum principal amount to be outstanding at
     December  31,  2000  to $2,600,000. As the current balance of $2,530,000 is
     $70,000 less than this amount, principal payments required over the current
     year  are  reduced  by  this  same  amount.

<TABLE>
<CAPTION>
6.   INVESTMENT  AND  ADVANCES

                                     2000         1999
                                 ------------  ----------
<S>                              <C>           <C>
CUBACAN EXPLORATION INC
ADVANCES
  Advances to Cubacan            $ 1,774,244   $1,441,948
  Less provision for write down     (698,085)           -
                                 ------------  ----------
                                   1,076,159    1,441,948
                                 ------------  ----------

INVESTMENT
  Common shares                    1,774,156    1,774,156
  Less provision for write down   (1,301,915)           -
                                 ------------  ----------
                                     472,241    1,774,156
                                 ------------  ----------
                                 $ 1,548,400   $3,216,104
                                 ===========   ==========
</TABLE>

     a)   On  December  31,  2000  and  1999  the Company owned 7,870,676 common
          shares  of  Cubacan or 14.7% (1999 - 15.5%) of the outstanding shares,
          the  closing  share  price  of Cubacan was $0.02 for a market value of
          $157,414  (1999  -  $0.06  market  value  $472,241).

     b)   Management  believes  that  with the current negotiations in progress,
          Cubacan will continue in operation for the foreseeable future and will
          be  able  to  realize  its assets and discharge its liabilities in the
          normal  course  of  operations.  Cubacan  will  require the continuing
          financial  support of its lenders and additional financing in order to
          fund  its  future  and  existing  obligations.  Management  of Cubacan
          intends  to  raise  the  required  financing  through a combination of
          equity  issues,  financings  and  farm-outs.

          Notwithstanding  the  above,  the Company's advances and investment in
          Cubacan  Exploration  Inc.  are  recorded at cost less a provision for
          writedown  based  on  a  market  value  of  $0.06  per  share.


<PAGE>
7.   CAPITAL  STOCK

     The  Company  was  incorporated  on  February  12,  1987 under the Business
     Corporations  Act  (Alberta)  with  an  unlimited  number  of common shares
     authorized.

<TABLE>
<CAPTION>
ISSUED COMMON SHARES                           2000                    1999
                                               ----                    ----
                                        NUMBER OF               Number of
                                         SHARES      AMOUNT      Shares      Amount
                                       ----------------------------------------------
<S>                                    <C>         <C>         <C>         <C>
BALANCE, BEGINNING OF YEAR             32,587,152  $6,043,023  24,523,152  $5,014,223

TRANSACTIONS DURING THE YEAR
  Stock options exercised                       -           -   2,000,000     300,000
  Acquisition of subsidiary (note 11)   5,931,790   1,127,040           -           -
  Flow-through share offerings for
    cash, net of estimated tax
    benefit renounced to the
    shareholders of $133,860
    (1999 - $587,200)                   1,200,000     166,140   6,064,000     728,800
                                        ---------------------------------------------

BALANCE, END OF YEAR                   39,718,942  $7,336,203  32,587,152  $6,043,023
                                       ==============================================
</TABLE>

     a)   STOCK  OPTIONS
          The  Company reserves up to 10% of the outstanding common shares under
          a  stock  option  plan  enabling  certain  officers, directors and key
          personnel  to  purchase  shares at exercise prices equal to the market
          price  on  the  date  the  option  is  granted.

<TABLE>
<CAPTION>
                                        2000                 1999
                                        ----                 ----
                                          WEIGHTED                Weighted
                                          AVERAGE                  Average
                                          EXERCISE                Exercise
Options                           SHARES   PRICE       Shares       Price
                                  -----------------------------------------
<S>                               <C>     <C>       <C>           <C>
Outstanding at beginning of year       -            $ 2,000,000   $    0.15
Granted                                -         -            -           -
Exercised                              -         -   (2,000,000)       0.15
Expired                                -         -            -           -
                                  -----------------------------------------
Outstanding at end of year             -                      -
                                  =========================================
</TABLE>

          During  the 1999 year, 2,000,000 common shares were issued as a result
          of  the  exercising  of  stock  options  for  a  cash consideration of
          $300,000.  Of  this  amount,  $120,000  was  advanced  to employees to
          exercise  800,000  of  these  common  shares  by way of a non-interest
          bearing  note  due  June  30,  2001  and secured by these shares. This
          amount is included in accounts receivable. As at December 31, 1999 and
          2000, the Company had no outstanding options to acquire common shares.

     b)   FLOW-THROUGH  COMMON  SHARE  OFFERING
          During  the  year,  the  Company  issued  1,200,000 (1999 - 6,064,000)
          common  shares  by  way  of a flow-through common share offering for a
          total  cash  consideration  of $300,000 (1999 - $1,316,000). Under the
          terms  of  the Flow-through Share Agreements, the Company was required
          to  expend  these  proceeds  on  qualifying  oil  and  natural  gas
          expenditures  prior  to December 31, 2001. As at December 31, 2000 the
          Company  has incurred all of these qualifying expenditures, leaving an
          outstanding  commitment  of  nil  (1999  -  $1,072,017).


<PAGE>
7.   CAPITAL  STOCK  (CONTINUED)

     c)   SHARE  PURCHASE  WARRANTS
          During  the  year,  the  Company  acquired  all  of  the  issued  and
          outstanding  shares  of  Lyse  Petroleum  Ltd.  for  a  cash and share
          consideration  (see  note  11) which included 2,965,895 share purchase
          warrants.  Each  share purchase warrant entitles the holder to acquire
          one  additional  common share of the Company at a price of $0.40 until
          November  30,  2001.
<TABLE>
<CAPTION>
     d)   WEIGHTED AVERAGE NUMBER OF SHARES                   2000        1999
                                                              ----        ----
<S>                                                        <C>         <C>
          Weighted average number of common shares
            outstanding during the year                    33,781,637  26,201,382
          Fully diluted weighted average number of common
            shares outstanding during the year             34,766,857  27,826,177
</TABLE>

<TABLE>
<CAPTION>
8.   SPECIAL  WARRANTS

     ISSUED SPECIAL WARRANTS                  2000                   1999
                                              ----                   ----
                                       NUMBER OF              Number of
                                        SHARES      AMOUNT     Shares    Amount
                                       ------------------------------------------
<S>                                    <C>        <C>         <C>        <C>
     Balance, beginning of year                -  $        -          -  $     -

     TRANSACTIONS DURING THE YEAR
       Flow-through Series I special
       warrant option offering         5,000,000     662,500          -        -
       Flow-through Series II special
       warrant offering                3,750,000     587,250          -        -
                                       ------------------------------------------
     BALANCE, END OF YEAR              8,750,000  $1,249,750          -  $     -
                                       ==========================================
</TABLE>

     a)   FLOW-THROUGH  SPECIAL  WARRANT  OFFERING  -  SERIES  I
          During  the  year,  the  Company  issued  5,000,000  Series  I Special
          Warrants  at  an  issue price of $0.25 per special warrant for a total
          cash  consideration  of  $1,250,000 less issuance costs of $30,000 and
          estimated  tax  benefit  renounced  to  the  holders of $557,500. Each
          Series I Special Warrant entitles the holder to one Series I Unit with
          no  further  compensation  being  paid  upon regulatory approval. Each
          Series  I  Unit will be comprised of one common share and one Series I
          Purchase  Warrant.  Each Series I Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.40 on or before November
          30,  2001.

     b)   FLOW-THROUGH  SPECIAL  WARRANT  OFFERING  -  SERIES  II
          During  the  year,  the  Company  issued  3,750,000  Series II Special
          Warrants  at  an  issue price of $0.30 per special warrant for a total
          cash  consideration  of  $1,125,000 less issuance costs of $36,000 and
          estimated  tax  benefit  renounced  to  the  holders of $501,750. Each
          Series  II  Special  Warrant entitles the holder to one Series II Unit
          with no further compensation being paid upon regulatory approval. Each
          Series II Unit will be comprised of one common share and one Series II
          Purchase  Warrant. Each Series II Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.50 on or before June 28,
          2002.


<PAGE>
<TABLE>
<CAPTION>
9.   INCOME  TAXES

                                                           2000        1999
                                                        ----------  ----------
<S>                                                     <C>         <C>
     a)   PROVISION  FOR  INCOME  TAXES
          Earnings before income taxes                  $ 589,149   $(242,881)
                                                        ----------  ----------

          Expected tax expense (recovery) at combined
            federal and provincial rate of 44.62%         262,878    (108,374)
          Increase (decrease) resulting from;
            Non deductible crown charges                   56,196      37,593
            Provincial royalty deduction                  (38,917)    (38,917)
            Resource allowance                           (210,107)   (107,589)
            Other                                          12,624     (27,897)
                                                        ----------  ----------

          Provision for future income taxes             $  82,674   $(245,184)
                                                        ==========  ==========
</TABLE>

     b)   FUTURE  INCOME  TAXES
          The  temporary  differences of the net future income tax liability are
          as  follows:
<TABLE>
<CAPTION>
                                                 2000         1999
                                             ------------  -----------
<S>                                          <C>           <C>
          Future income tax assets
            Non-capital loss carry forwards  $  (328,856)  $ (169,508)
            Future site restoration             (113,180)     (74,897)
            Share issue costs                    (23,559)     (11,626)
            Investments                         (926,780)     (34,380)
            Other                                (86,988)     (75,346)
                                             ------------  -----------
                                              (1,479,363)    (365,757)
          Future income tax liabilities
            Property and equipment             3,283,016    1,787,932
                                             ------------  -----------
                                             $ 1,803,653   $1,422,175
                                             ============  ===========
</TABLE>

     c)   LOSS  CARRY  FORWARDS
          The  Company  has  $737,000  (1999 - $379,800) of available loss carry
          forwards  for  income  tax purposes which may be used to reduce future
          taxable  income,  the  benefit  of  which has been recognized in these
          consolidated  financial  statements.  These  losses expire as follows:

                         2001  $379,800
                         2004  $103,700
                         2005  $130,700
                         2006  $122,800

     d)   AVAILABLE  TAX  DEDUCTIONS
          The Company has available the following approximate costs which may be
          deducted  in the prescribed manner to determine future taxable income:
<TABLE>
<CAPTION>
                                        Rate       2000        1999
                                       -------  ----------  ----------
<S>                                    <C>      <C>         <C>
Undepreciated capital costs            20%-30%  $1,281,800  $  556,000
Canadian oil and gas property expense      10%  $1,046,500  $  820,000
Canadian development expense               30%  $1,970,600  $1,215,000
Canadian exploration expense              100%  $1,143,000  $  524,000
Foreign exploration and development
  expense                                  10%  $  931,000  $  500,000
</TABLE>


<PAGE>
10.  RELATED  PARTY  TRANSACTIONS

     a)   PROSPECT  OIL  &  GAS  MANAGEMENT  LTD.
          The  Company  contracts  services  from  Prospect Oil & Gas Management
          Ltd.,  a  company  related  by  common  management and controlled by a
          director  of  the  Company,  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  (1999  - $420,000). Other fees and reimbursable costs
          totalled  $31,554  (1999  -  $50,276).  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  Oil  & Gas Management Ltd. at normal industry
          terms  and  conditions.

          At  December  31,  2000,  Prospect  Oil & Gas Management Ltd. owed the
          Company  $714,543 for oil and gas revenues in the normal course, which
          bears  no  interest  and  has  no  set  terms  of  repayment.

     b)   CUBACAN  EXPLORATION  INC.
          The  Company  is related by way of common management. The Company is a
          shareholder  of  Cubacan Exploration Inc. and at December 31, 2000 and
          1999  owned  7,870,676  common  shares  or 14.7% (1999 - 15.5%) of the
          outstanding  capital  (note  6).

          At  December  31,  2000,  Cubacan  Exploration  Inc.  owed the Company
          $1,774,244  (1999  -  $1,441,948)  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.

          The  Company  has guaranteed the repayment of certain notes payable by
          Cubacan  Exploration  Inc.  to  third  parties  totalling  $29,349  at
          December  31,  2000  (1999  -  $292,693).

     c)   RIECHAD  INC.  AND  APT  INC.
          The  Company contracts Riechad Inc. and APT Inc., companies controlled
          by a director of the Company, for engineering and management services.
          The  total  contract  fees  charged  and accrued during the year ended
          December  31,  2000  total  $140,550  (1999 - $87,980). Other fees and
          reimbursable  costs  totaled  $34,871  (1999  -  $40,528).  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, the Company owed Riechad Inc. $125,104 (1999 -
          $150,728),  which bears no interest and has no set terms of repayment.


<PAGE>
11.  BUSINESS  ACQUISITION

     Effective  December  4,  2000,  the  Company acquired all of the issued and
     outstanding  shares  of  Lyse Petroleum Ltd., a private company, engaged in
     the oil and gas exploration for share and cash consideration of $1,626,924.
     The  acquisition  of  Lyse Petroleum Ltd. was made at fair market value and
     accounted  for  by the purchase method. The results of operations have been
     included  in  these  consolidated  financial  statements  from  the date of
     acquisition.
<TABLE>
<CAPTION>
ASSETS ACQUIRED
<S>                                              <C>
  Current assets                                 $ 1,024,305
  Petroleum and natural gas properties             3,328,057
  Future income tax recovery                          51,953
                                                 ------------
                                                   4,404,315
                                                 ------------
LIABILITIES ASSUMED
  Current liabilities                              1,152,616
  Future site restoration                             13,900
                                                 ------------
                                                   1,166,516
                                                 ------------

NET NON-CASH ASSETS ACQUIRED                       3,237,799

BANK INDEBTEDNESS ACQUIRED
  Bank loan                                       (1,600,000)
  Overdraft                                          (10,875)
                                                 ------------
                                                 $ 1,626,924
                                                 ============

FUNDED BY
  Cash                                           $   499,884
  Issuance of 5,931,790 Endeavour common shares    1,127,040
                                                 ------------
                                                 $ 1,626,924
                                                 ============
</TABLE>

12.  COMMITMENTS

     a)   COMMITMENT
          Under  the  terms  of  various  flow-through share and special warrant
          agreements, the Company is required to expend $2,414,304 on qualifying
          oil  and natural gas expenditures prior to December 31, 2001 (note 8).
          Management  is  of  the  opinion  that  the commitment to expend these
          qualifying  expenditures  will  be  met.

     b)   GUARANTEES
          The  Company  has guaranteed the repayment of certain notes payable by
          Cubacan  Exploration  Inc.  to  third  parties  totalling  $29,349  at
          December  31,  2000  (1999  -  $292,693).

13.  SUBSEQUENT  EVENT

     The  Company  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  counter claim claiming damages in the amount of $6.8 million.
     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  undeterminable.


<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------

ENDEAVOUR RESOURCES INC.
CONSOLIDATED BALANCE SHEETS
                                              MARCH 31     December 31
                                                2001          2000
-----------------------------------------------------------------------
                                             (UNAUDITED)      (Audited)
<S>                                         <C>           <C>
ASSETS
Current
  Cash and term deposits                    $  2,281,350  $   1,798,142
  Accounts receivable                          1,300,752      1,996,527
  Advances to operators                          330,411        454,895
  Due from related company                       236,003        714,543
  Current portion of contract receivable          35,000         35,000
                                            ------------  -------------
                                               4,183,516      4,999,107

Contract receivable                              103,103        109,902
Investment and advances                        1,588,812      1,548,400
Property and equipment                        11,588,470     11,317,025
                                            ------------  -------------

                                            $ 17,463,901  $  17,974,434
                                            ============  =============
LIABILITIES
Current
  Accounts payable and accrued liabilities  $  1,522,503  $   2,349,465
  Due to related companies                        99,941        125,104
  Current portion of contract payable             11,000         11,000
  Current portion of long-term debt            1,200,000      1,130,000
                                            ------------  -------------
                                               2,833,444      3,615,569

Contract payable                                  32,916         35,079
Long-term debt                                 2,850,000      3,150,000
Provision for site restoration costs             276,712        253,652
Future income taxes                            2,038,653      1,803,653
                                            ------------  -------------
                                               8,031,725      8,857,953
                                            ------------  -------------
SHAREHOLDERS' EQUITY
Capital stock                                  7,336,203      7,336,203
Special warrants                               1,249,750      1,249,750
Retained earnings                                846,223        530,528
                                            ------------  -------------
                                               9,432,176      9,116,481
                                            ------------  -------------

                                              17,463,901  $  17,974,434
                                            ============  =============
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------

ENDEAVOUR RESOURCES INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND RETAINED EARNINGS
(Unaudited)

Three months ended March 31                 2001         2000
-----------------------------------------------------------------
<S>                                      <C>          <C>

REVENUE
  Petroleum and natural gas sales        $2,592,022   $1,080,612
  Less royalties, net                      (720,525)    (268,067)
                                         -----------  -----------
                                          1,871,497      812,545
                                         -----------  -----------

EXPENSES
  Operating                                 538,552      382,497
  Depletion and depreciation                513,525      254,050
  General and administrative                209,353      102,652
  Interest on long-term debt                 59,372       28,730
                                         -----------  -----------
                                          1,320,802      767,929
                                         -----------  -----------

Earnings from operations                    550,695       44,616

Income taxes                               (235,000)     (27,918)
                                         -----------  -----------

NET EARNINGS                             $  315,695   $   16,698
                                         ===========  ===========

Retained earnings, beginning of period      530,528    1,131,653

Net earnings                                315,695       16,698
                                         -----------  -----------

RETAINED EARNINGS, END OF PERIOD         $  846,223   $1,148,351
                                         ===========  ===========

NET EARNINGS PER SHARE                   $     0.01   $     0.00
                                         ===========  ===========
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------

ENDEAVOUR RESOURCES INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)

Three months ended March 31                                     2001         2000
-----------------------------------------------------------------------------------
<S>                                                          <C>          <C>

Cash derived from (applied to)

OPERATING ACTIVITIES
  Net earnings                                               $  315,695   $  16,698
  Depletion and depreciation                                    513,525     254,050
  Future income taxes                                           235,000      27,918
                                                             -----------  ----------
  Cash flow from operations                                   1,064,220     298,666

  Change in non-cash operating working capital                  347,353     116,027
                                                             -----------  ----------

                                                              1,411,573     414,693
                                                             -----------  ----------

FINANCING ACTIVITIES
  Issuance of common shares                                           -     300,000
  Notes payable                                                       -     200,000
  Repayment of bank debt                                       (300,000)   (130,000)
  Change in non-cash financing working capital                   44,837    (131,038)
                                                             -----------  ----------
                                                               (255,163)    238,962
                                                             -----------  ----------

INVESTING ACTIVITIES
  Advances to Cubacan                                           (40,412)   (107,469)
  Prepaid gas contract net of contract payable                    4,636       6,782
  Acquisition of Canadian petroleum and natural gas
    properties and equipment                                   (491,708)   (671,617)
  Acquisition of U.S. petroleum and natural gas properties
    and equipment                                              (270,202)          -
  Change in non-cash investing working capital                  124,484      43,168
                                                             -----------  ----------
                                                               (673,202)   (729,136)
                                                             -----------  ----------

NET CHANGE IN CASH                                              483,208     (75,481)

CASH,
  Beginning of period                                         1,798,142     101,795
                                                             -----------  ----------

END OF PERIOD                                                $2,281,350   $  26,314
                                                             ===========  ==========

CASH FLOW FROM OPERATIONS PER SHARE                          $     0.03   $    0.01
                                                             ===========  ==========
</TABLE>


<PAGE>
--------------------------------------------------------------------------------
ENDEAVOUR  RESOURCES  INC.
NOTES  TO  THE  CONSOLIDATED  FINANCIAL  STATEMENTS
(Unaudited)

Three  months  ended  March  31,  2001
--------------------------------------------------------------------------------

1.   ACCOUNTING POLICIES

     These  interim  financial  statements have been prepared by management with
     the  same accounting policies and methods of computation as the most recent
     audited  annual  financial  statements  at  December  31,  2000,  except as
     outlined  in  note  2(b)  below.

2.   CAPITAL STOCK

<TABLE>
<CAPTION>
     a)   ISSUED COMMON SHARES                          2001                    2000
                                                        ----                    ----
                                               NUMBER OF               Number of
                                                 SHARES      AMOUNT      Shares      Amount
                                               ----------------------------------------------
<S>                                            <C>         <C>         <C>         <C>
          BALANCE, BEGINNING OF PERIOD         39,718,942  $7,336,203  32,587,152  $6,043,023

          TRANSACTION DURING THE PERIOD
          Flow-through share offerings for
          cash, net of estimated tax benefit
          renounced to the shareholders of
          133,860                                       -           -   1,200,000     166,140
                                               ----------------------------------------------
          BALANCE, END OF PERIOD               39,718,942  $7,336,203  33,787,152  $6,209,163
                                               ==============================================
</TABLE>

     b)   NET EARNINGS AND CASH FLOW FROM OPERATIONS PER SHARE

          Endeavour  has  adopted,  in the first quarter, in accordance with new
          guidelines  from  the Canadian Institute of Chartered Accountants, the
          "treasury  stock"  method  in  calculating  fully diluted earnings per
          share  and  fully diluted cash flow from operations per share amounts,
          instead  of  the  previous  "imputed  earnings  approach".

          Earnings  and cash flow per common share are calculated based upon the
          weighted average number of common shares outstanding during the period
          being  39,718,942  (2000  32,987,152). Fully diluted per share amounts
          are  not  provided  as  the  exercise  of  share  purchase and special
          warrants  are  not  materially  dilutive.

     c)   SHARE PURCHASE WARRANTS

          During the fourth quarter 2000, the Company acquired all of the issued
          and  outstanding  shares  of  Lyse Petroleum Ltd. for a cash and share
          consideration  which  included 2,965,895 share purchase warrants. Each
          share  purchase  warrant entitles the holder to acquire one additional
          common  share  of  the  Company at a price of $0.40 until November 30,
          2001.


<PAGE>
<TABLE>
<CAPTION>
3.  SPECIAL  WARRANTS

     a)   ISSUED SPECIAL SHARES                         2001                    2000
                                                        ----                    ----
                                               NUMBER OF               Number of
                                                 SHARES      AMOUNT      Shares      Amount
                                               ----------------------------------------------
<S>                                            <C>         <C>         <C>         <C>
         BALANCE, BEGINNING AND END OF PERIOD   8,750,000  $1,249,750           -  $        -
                                               ==============================================
</TABLE>

     b)   FLOW-THROUGH  SPECIAL  WARRANT  OFFERING  SERIES  I

          During  the fourth quarter 2000, the Company issued 5,000,000 Series I
          Special  Warrants at an issue price of $0.25 per special warrant for a
          total  cash consideration of $1,250,000 less issuance costs of $30,000
          and  estimated  tax benefit renounced to the holders of $557,500. Each
          Series I Special Warrant entitles the holder to one Series I Unit with
          no  further  compensation  being  paid  upon regulatory approval. Each
          Series  I  Unit will be comprised of one common share and one Series I
          Purchase  Warrant.  Each Series I Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.40 on or before November
          30,  2001.

     c)   FLOW-THROUGH SPECIAL WARRANT OFFERING SERIES II

          During the fourth quarter 2000, the Company issued 3,750,000 Series II
          Special  Warrants at an issue price of $0.30 per special warrant for a
          total  cash consideration of $1,125,000 less issuance costs of $36,000
          and  estimated  tax benefit renounced to the holders of $501,750. Each
          Series  II  Special  Warrant entitles the holder to one Series II Unit
          with no further compensation being paid upon regulatory approval. Each
          Series II Unit will be comprised of one common share and one Series II
          Purchase  Warrant. Each Series II Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.50 on or before June 28,
          2002.


<PAGE>
<TABLE>
<CAPTION>
ENDEAVOUR RESOURCES INC.
CONSOLIDATED BALANCE SHEETS

                                             JUNE 30      December 31
                                                2001             2000
                                          (UNAUDITED)       (Audited)
                                                   $               $
                                          ------------  -------------
<S>                                       <C>           <C>
ASSETS
Current
  Cash                                          22,708      1,798,142
  Accounts receivable                        1,280,522      1,996,527
  Advances to Operators                        204,027        454,895
  Due from related companies                   228,100        714,543
  Current portion of contract receivable        35,000         35,000
                                          ------------  -------------
                                             1,770,357      4,999,107

Contract receivable                             96,791        109,902
Investment                                   1,604,243      1,548,400
Property and equipment                      12,114,046     11,317,025
                                          ------------  -------------

                                            15,585,437     17,974,434
                                          ============  =============

LIABILITIES
Current
  Accounts payable and accruals              1,416,888      2,349,465
  Due to related companies                     131,302        125,104
  Current portion of contract payable           11,000         11,000
  Current portion of long-term debt                  -      1,130,000
                                          ------------  -------------
                                             1,559,190      3,615,569

Contract payable                                30,910         35,079
Long-term debt                               2,120,000      3,150,000
Provision for site restoration costs           297,363        253,652
Future income taxes                          1,789,662      1,803,653
                                          ------------  -------------
                                             5,797,125      8,857,953
                                          ------------  -------------

SHAREHOLDERS' EQUITY
Capital stock                                7,336,203      7,336,203
Special warrants                             1,249,750      1,249,750
Retained earnings                            1,188,368        530,528
                                          ------------  -------------
                                             9,774,321      9,116,481
                                          ------------  -------------

                                            15,585,437     17,974,434
                                          ============  =============
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
ENDEAVOUR  RESOURCES  INC.
CONSOLIDATED  STATEMENTS  OF
OPERATIONS  AND  RETAINED  EARNINGS
(Unaudited)

                                         For the three months ended        For six months ended
                                         JUNE 30, 2001     June 30,     JUNE 30, 2001      June 30,
                                          (UNAUDITED)        2000        (UNAUDITED)        2000
                                                         (unaudited)                     (unaudited)
                                                   $              $               $               $
                                        ---------------  ------------  ---------------  ------------
<S>                                     <C>              <C>           <C>              <C>
REVENUE
  Petroleum and natural gas sales            1,684,323     1,422,148        4,276,345     2,502,760
  Less royalties, net                         (422,519)     (416,636)      (1,143,044)     (684,703)
                                        ---------------  ------------  ---------------  ------------
                                             1,261,804     1,005,512        3,133,301     1,818,057
                                        ---------------  ------------  ---------------  ------------

EXPENSES
  Operating                                    473,193       349,461        1,011,745       731,958
  Depreciation and depletion                   468,229       249,591          981,754       503,641
  General and administrative                   160,229       101,538          369,582       204,190
  Interest on long-term debt                    53,008        33,480          112,380        62,210
                                        ---------------  ------------  ---------------  ------------
                                             1,154,659       734,070        2,475,461     1,501,999
                                        ---------------  ------------  ---------------  ------------

Earnings before income taxes                   107,145       271,442          657,840       316,058

Income taxes - future                          248,991      (120,491)          13,991      (148,409)
                                        ---------------  ------------  ---------------  ------------

NET EARNINGS                                   356,136       150,951          671,831       167,649
                                        ===============  ============  ===============  ============

Retained earnings, beginning of period         846,223     1,148,351          530,528     1,131,653

Net earnings                                   356,136       150,951          671,831       167,649
                                        ---------------  ------------  ---------------  ------------

RETAINED EARNINGS, END OF PERIOD             1,202,136     1,299,302        1,202,359     1,299,302
                                        ===============  ============  ===============  ============

NET EARNINGS PER SHARE                            0.01          0.00             0.02          0.01
                                        ===============  ============  ===============  ============
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
ENDEAVOUR  RESOURCES  INC.
CONSOLIDATED  STATEMENTS  OF  CASH  FLOW
(Unaudited)

                                                   For the three months ended       For six months ended
                                                   JUNE 30, 2001     June 30,     JUNE 30, 2001     June 30,
                                                    (UNAUDITED)        2000        (UNAUDITED)        2000
                                                                   (unaudited)                    (unaudited)
                                                             $              $               $              $
                                                  ---------------  ------------  ---------------  ------------
<S>                                               <C>              <C>           <C>              <C>
CASH DERIVED FROM (APPLIED TO)
OPERATING ACTIVITIES
  Net earnings                                           356,136       150,951          671,831       167,649
  Depreciation and depletion                             468,229       249,591          981,754       503,641
  Future income taxes recoverable                       (248,991)      120,491          (13,991)      148,409
                                                  ---------------  ------------  ---------------  ------------

  Cash flow from operations                              575,374       521,033        1,639,594       819,699

  Change in non-cash operating working capital          (116,121)        2,763          276,069       118,790
                                                  ---------------  ------------  ---------------  ------------

                                                         459,253       523,796        1,915,663       938,489
                                                  ---------------  ------------  ---------------  ------------

FINANCING ACTIVITIES
  Issue of flow-through common shares                          -             -                -       300,000
  Notes payable                                                -             -                -       200,000
  Repayment of bank debt                              (1,860,000)     (160,000)      (2,160,000)     (290,000)
  Change in non-cash financing working capital                 -       (25,638)               -      (156,676)
                                                  ---------------  ------------  ---------------  ------------

                                                      (1,860,000)     (185,638)      (2,160,000)       53,324
                                                  ---------------  ------------  ---------------  ------------

INVESTING ACTIVITIES
  Advances to Cubacan                                    (15,431)     (116,948)         (55,843)     (224,417)
  Prepaid gas contract, net of contract payable            4,306         6,041            8,942        12,823
  Acquisition of Canadian property &                    (721,052)     (227,392)      (1,212,760)     (899,009)
  equipment
  Acquisition of US property & equipment                (252,102)       (2,719)        (522,304)       (2,719)
  Change in non-cash investing working capital           126,384       (44,868)         250,868        (1,700)
                                                  ---------------  ------------  ---------------  ------------

                                                        (857,895)     (385,886)      (1,531,097)   (1,115,022)
                                                  ---------------  ------------  ---------------  ------------

NET CHANGE IN CASH                                    (2,258,642)      (47,728)      (1,775,434)     (123,209)

Cash, beginning of period                              2,281,350        26,314        1,798,142       101,795
                                                  ---------------  ------------  ---------------  ------------

CASH, END OF PERIOD                                       22,708       (21,414)          22,708       (21,414)
                                                  ===============  ============  ===============  ============


CASH FLOW FROM OPERATIONS PER SHARE                         0.01          0.01             0.04          0.03
                                                  ===============  ============  ===============  ============
</TABLE>


<PAGE>
ENDEAVOUR  RESOURCES  INC.
NOTES  TO  THE  FINANCIAL  STATEMENTS
(Unaudited)
June  30,  2001

Six  months  ended  June  30,  2001
--------------------------------------------------------------------------------
1.   ACCOUNTING POLICIES

     These  interim  financial  statements have been prepared by management with
     the  same  accounting policies and methods of computation as, and should be
     read  in  conjunction  with,  the  most  recent  audited  annual  financial
     statements  at  December  31,  2000, except as outlined in note 2(b) below.

2.   CAPITAL  STOCK

<TABLE>
<CAPTION>
     a)   ISSUED COMMON SHARES
                                                        2001                    2000
                                                        ----                    ----
                                              NUMBER OF               Number of
                                                SHARES      AMOUNT      Shares      Amount
                                              ----------------------------------------------
<S>                                           <C>         <C>         <C>         <C>
          BALANCE, BEGINNING OF PERIOD        39,718,942  $7,336,203  32,587,152  $6,043,023

          TRANSACTION DURING THE PERIOD
          Flow-through share offerings for
          cash, net of estimated tax benefit
          renounced to the shareholders of
          $133,860                                     -           -   1,200,000     166,140
                                              ----------------------------------------------

          BALANCE, END OF PERIOD              39,718,942  $7,336,203  33,787,152  $6,209,163
                                              ==============================================
</TABLE>

     b)   NET  EARNINGS  AND  CASH  FLOW  FROM  OPERATIONS  PER  SHARE

          Endeavour  has  adopted,  in the first quarter, in accordance with new
          guidelines  from  the Canadian Institute of Chartered Accountants, the
          "treasury  stock"  method  in  calculating  fully diluted earnings per
          share  and  fully diluted cash flow from operations per share amounts,
          instead  of  the  previous  "imputed  earnings  approach".

          Earnings  and cash flow per common share are calculated based upon the
          weighted average number of common shares outstanding during the period
          being  39,718,942  (2000  33,391,548). Fully diluted per share amounts
          are  not  provided  as  the  exercise  of  share  purchase and special
          warrants  are  not  materially  dilutive.

     c)   SHARE  PURCHASE  WARRANTS

          During the fourth quarter 2000, the Company acquired all of the issued
          and  outstanding  shares  of  Lyse Petroleum Ltd. for a cash and share
          consideration  which  included 2,965,895 share purchase warrants. Each
          share  purchase  warrant entitles the holder to acquire one additional
          common  share  of  the  Company at a price of $0.40 until November 30,
          2001.


<PAGE>
<TABLE>
<CAPTION>
3.   SPECIAL  WARRANTS

     a)   ISSUED SPECIAL SHARES                         2001                    2000
                                                        ----                    ----
                                                NUMBER OF               Number of
                                                 SHARES      AMOUNT      Shares      Amount
                                               ----------------------------------------------
<S>                                            <C>         <C>         <C>         <C>
         BALANCE, BEGINNING AND END OF PERIOD   8,750,000  $1,249,750           -  $        -
                                               ==============================================
</TABLE>

     b)   FLOW-THROUGH  SPECIAL  WARRANT  OFFERING  SERIES  I

          During  the fourth quarter 2000, the Company issued 5,000,000 Series I
          Special  Warrants at an issue price of $0.25 per special warrant for a
          total  cash consideration of $1,250,000 less issuance costs of $30,000
          and  estimated  tax benefit renounced to the holders of $557,500. Each
          Series I Special Warrant entitles the holder to one Series I Unit with
          no  further  compensation  being  paid  upon regulatory approval. Each
          Series  I  Unit will be comprised of one common share and one Series I
          Purchase  Warrant.  Each Series I Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.40 on or before November
          30,  2001.

     c)   FLOW-THROUGH  SPECIAL  WARRANT  OFFERING  SERIES  II

          During the fourth quarter 2000, the Company issued 3,750,000 Series II
          Special  Warrants at an issue price of $0.30 per special warrant for a
          total  cash consideration of $1,125,000 less issuance costs of $36,000
          and  estimated  tax benefit renounced to the holders of $501,750. Each
          Series  II  Special  Warrant entitles the holder to one Series II Unit
          with no further compensation being paid upon regulatory approval. Each
          Series II Unit will be comprised of one common share and one Series II
          Purchase  Warrant. Each Series II Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.50 on or before June 28,
          2002.

4.   SUBSEQUENT  EVENT

     On  July  19,  2001, the Company re-negotiated the terms of the bank loans.
     Upon  closing,  the  $1,750,000  production  loan  covering the oil and gas
     leases  of  Lyse  Petroleum  Ltd.  will  be  paid  out.

     The  remaining  demand  revolving  production  loan  will  be  decreased to
     $1,000,000  bearing  interest  at  prime plus 0.75% with principal payments
     commencing  May  1,  2003  of  $100,000  per  month.

     In  addition,  a  new demand non-revolving production loan in the amount of
     $3,000,000  will  be  available  bearing  interest at prime plus 0.75% with
     principal  payments  commencing  November  1,  2001  of $100,000 per month.

     The June 30, 2001 financial statements reflect long-term debt in the amount
     of  $2,120,000,  leaving  an  available  credit  line  of  $1,880,000.


<PAGE>
<TABLE>
<CAPTION>
ENDEAVOUR RESOURCES INC.
CONSOLIDATED BALANCE SHEETS
                                           SEPTEMBER 30    December 31
                                               2001            2000
                                           (UNAUDITED)       (Audited)
                                                    $               $
                                          --------------  -------------
<S>                                       <C>             <C>
ASSETS
  Current
  Cash                                            96,427      1,798,142
  Accounts receivable                          1,381,998      1,996,527
  Advances to Operators                          113,724        454,895
  Due from related companies                     884,833        714,543
  Current portion of contract receivable          35,000         35,000
                                          --------------  -------------
                                               2,511,982      4,999,107

Contract receivable                               91,115        109,902
Investment and advances                        1,648,266      1,548,400
Property and equipment                        12,539,990     11,317,025
                                          --------------  -------------

                                              16,791,353     17,974,434
                                          ==============  =============

LIABILITIES
Current
  Accounts payable and accruals                1,614,077      2,349,465
  Due to related companies                        37,407        125,104
  Current portion of contract payable             11,000         11,000
  Current portion of long-term debt              540,000      1,130,000
                                          --------------  -------------
                                               2,202,484      3,615,569

Contract payable                                  29,105         35,079
Long-term debt                                 3,100,000      3,150,000
Provision for site restoration costs             313,927        253,652
Future income taxes                            1,646,097      1,803,653
                                          --------------  -------------
                                               7,291,613      8,857,953
                                          --------------  -------------

SHAREHOLDERS' EQUITY
Capital stock                                  7,336,203      7,336,203
Special warrants                               1,249,750      1,249,750
Retained earnings                                913,787        530,528
                                          --------------  -------------
                                               9,499,740      9,116,481
                                          --------------  -------------

                                              16,791,353     17,974,434
                                          ==============  =============
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
ENDEAVOUR  RESOURCES  INC.
CONSOLIDATED  STATEMENTS  OF
OPERATIONS  AND  RETAINED  EARNINGS
(Unaudited)

                                             For the three months ended          For nine months ended
                                          SEPT 30, 2001    Sept 30, 2000    SEPT 30, 2001    Sept 30, 2000
                                           (UNAUDITED)      (unaudited)      (UNAUDITED)      (unaudited)
                                                $                $                $                $
                                         ---------------  ---------------  ---------------  ---------------
<S>                                      <C>              <C>              <C>              <C>

REVENUE
  Petroleum and natural gas sales             1,197,152        1,543,521        5,473,497        4,046,281
  Less royalties, net                          (304,832)        (381,135)      (1,447,876)      (1,065,838)
                                         ---------------  ---------------  ---------------  ---------------
                                                892,320        1,162,386        4,025,621        2,980,443
                                         ---------------  ---------------  ---------------  ---------------

EXPENSES
  Operating                                     521,796          426,473        1,533,541        1,158,431
  Depreciation and depletion                    551,935          258,367        1,533,689          762,008
  General and administrative                    195,884          167,188          565,466          371,378
  Interest on long-term debt                     54,842           52,373          167,222          114,583
                                         ---------------  ---------------  ---------------  ---------------
                                              1,324,457          904,401        3,799,918        2,406,400
                                         ---------------  ---------------  ---------------  ---------------

Earnings (loss) before income taxes            (432,137)         257,985          225,703          574,043
Income taxes - future                           143,565          (62,689)         157,556         (211,098)
                                         ---------------  ---------------  ---------------  ---------------

NET EARNINGS (LOSS)                            (288,572)         195,296          383,259          362,945
                                         ===============  ===============  ===============  ===============

Retained earnings, beginning of period        1,202,359        1,299,302          530,528        1,131,653

Net earnings (loss)                            (288,572)         195,296          383,259          362,945
                                         ---------------  ---------------  ---------------  ---------------

RETAINED EARNINGS, END OF PERIOD                913,787        1,494,598          913,787        1,494,598
                                         ===============  ===============  ===============  ===============

NET EARNINGS (LOSS) PER SHARE                     (0.01)            0.01             0.01             0.01
                                         ===============  ===============  ===============  ===============
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
ENDEAVOUR  RESOURCES  INC.
CONSOLIDATED  STATEMENTS  OF  CASH  FLOW
(Unaudited)

                                                     For the three months ended          For nine months ended
                                                   SEPT 30, 2001    Sept 30, 2000    SEPT 30, 2001    Sept 30, 2000
                                                    (UNAUDITED)      (unaudited)      (UNAUDITED)      (unaudited)
                                                         $                $                $                 $
<S>                                               <C>              <C>              <C>              <C>
CASH DERIVED FROM (APPLIED TO)

OPERATING ACTIVITIES
  Net income (loss)                                     (288,572)         195,296          383,259          362,945
  Depreciation and depletion                             551,935          258,367        1,533,689          762,008
  Future income taxes                                   (143,565)          62,689         (157,556)         211,098
                                                  ---------------  ---------------  ---------------  ---------------

  Cash flow from operations                              119,798          516,352        1,759,392        1,336,051
                                                  ---------------  ---------------  ---------------  ---------------

  Change in non-cash operating working capital          (654,915)          62,439         (378,846)         181,229
                                                  ---------------  ---------------  ---------------  ---------------
                                                        (535,117)         578,791        1,380,546        1,517,280
                                                  ---------------  ---------------  ---------------  ---------------

FINANCING ACTIVITIES
  Issuance of flow-through common shares                       0                0                0          300,000
  Notes payable                                                0                0                0          200,000
  Proceeds from bank debt                              2,420,000        1,560,000        2,420,000        1,560,000
  Repayment of bank debt                                (900,000)               0       (3,060,000)        (290,000)
  Change in non-cash financing working capital                 0          (12,757)               0         (169,433)
                                                  ---------------  ---------------  ---------------  ---------------

                                                       1,520,000        1,547,243         (640,000)       1,600,567
                                                  ---------------  ---------------  ---------------  ---------------

INVESTING ACTIVITIES
  Advances to Cubacan                                    (44,024)         (53,946)         (99,866)        (278,363)
  Prepaid gas contract, net of contract payable            3,870            5,542           12,813           18,365
  Acquisition of Canadian property &                    (864,904)        (441,518)      (2,064,700)      (1,340,527)
  equipment
  Acquisition of US property & equipment                 (96,409)         (39,077)        (631,679)         (41,796)
  Change in non-cash investing working capital            90,303       (1,168,560)         341,171       (1,170,260)

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

                                                        (911,164)      (1,697,559)      (2,442,261)      (2,812,581)
                                                  ---------------  ---------------  ---------------  ---------------

NET CHANGE IN CASH                                        73,719          428,475       (1,701,715)         305,266

Cash, beginning of period                                 22,708          (21,414)       1,798,142          101,795
                                                  ---------------  ---------------  ---------------  ---------------

CASH, END OF PERIOD                                       96,427          407,061           96,427          407,061
                                                  ===============  ===============  ===============  ===============

CASH FLOW FROM OPERATIONS PER SHARE                         0.00             0.02             0.05             0.04
                                                  ===============  ===============  ===============  ===============
</TABLE>


<PAGE>
ENDEAVOUR  RESOURCES  INC.
NOTES  TO  THE  FINANCIAL  STATEMENTS
(Unaudited)

Nine  months  ended  September  30,  2001
--------------------------------------------------------------------------------

1.   ACCOUNTING  POLICIES

     These  interim  financial  statements have been prepared by management with
     the  same  accounting policies and methods of computation as, and should be
     read  in  conjunction  with,  the  most  recent  audited  annual  financial
     statements  at  December  31,  2000, except as outlined in note 2(b) below.

2.  CAPITAL  STOCK

<TABLE>
<CAPTION>
     a)   ISSUED COMMON SHARES
                                                        2001                    2000
                                                        ----                    ----
                                               NUMBER OF               Number of
                                                SHARES      AMOUNT      Shares      Amount
                                              ----------------------------------------------
<S>                                           <C>         <C>         <C>         <C>
          BALANCE, BEGINNING OF PERIOD        39,718,942  $7,336,203  32,587,152  $6,043,023

          TRANSACTION DURING THE PERIOD
          Flow-through share offerings for
          cash, net of estimated tax benefit
          renounced to the shareholders of
          $133,860                                     -           -   1,200,000     166,140
                                              ----------------------------------------------

          BALANCE, END OF PERIOD              39,718,942  $7,336,203  33,787,152  $6,209,163
                                              ==============================================
</TABLE>

     b)   NET  EARNINGS  AND  CASH  FLOW  FROM  OPERATIONS  PER  SHARE

          Endeavour  has  adopted,  in the first quarter, in accordance with new
          guidelines  from  the Canadian Institute of Chartered Accountants, the
          "treasury  stock"  method  in  calculating  fully diluted earnings per
          share  and  fully diluted cash flow from operations per share amounts,
          instead  of  the  previous  "imputed  earnings  approach".

          Earnings  and cash flow per common share are calculated based upon the
          weighted average number of common shares outstanding during the period
          being  39,718,942  (2000  33,524,378). Fully diluted per share amounts
          are  not  provided  as  the  exercise  of  share  purchase and special
          warrants  are  not  materially  dilutive.

     c)   SHARE  PURCHASE  WARRANTS

          During the fourth quarter 2000, the Company acquired all of the issued
          and  outstanding  shares  of  Lyse Petroleum Ltd. for a cash and share
          consideration  which  included 2,965,895 share purchase warrants. Each
          share  purchase  warrant entitles the holder to acquire one additional
          common  share  of  the  Company at a price of $0.40 until November 30,
          2001.


<PAGE>
ENDEAVOUR  RESOURCES  INC.
NOTES  TO  THE  FINANCIAL  STATEMENTS  (CONTINUED)
(Unaudited)

Nine  months  ended  September  30,  2001
--------------------------------------------------------------------------------

3.   SPECIAL  WARRANTS

<TABLE>
<CAPTION>
     a)   ISSUED SPECIAL SHARES                         2001                    2000
                                                        ----                    ----
                                                NUMBER OF               Number of
                                                 SHARES      AMOUNT      Shares      Amount
                                               ----------------------------------------------
<S>                                            <C>         <C>         <C>         <C>
         BALANCE, BEGINNING AND END OF PERIOD   8,750,000  $1,249,750           -  $        -
                                               ==============================================
</TABLE>

     b)   FLOW-THROUGH  SPECIAL  WARRANT  OFFERING  SERIES  I

          During  the fourth quarter 2000, the Company issued 5,000,000 Series I
          Special  Warrants at an issue price of $0.25 per Special Warrant for a
          total  cash consideration of $1,250,000 less issuance costs of $30,000
          and  estimated  tax benefit renounced to the holders of $557,500. Each
          Series I Special Warrant entitles the holder to one Series I Unit with
          no  further  compensation  being  paid  upon regulatory approval. Each
          Series  I  Unit will be comprised of one common share and one Series I
          Purchase  Warrant.  Each Series I Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.40 on or before November
          30,  2001.

     c)   FLOW-THROUGH  SPECIAL  WARRANT  OFFERING  SERIES  II

          During the fourth quarter 2000, the Company issued 3,750,000 Series II
          Special  Warrants at an issue price of $0.30 per Special Warrant for a
          total  cash consideration of $1,125,000 less issuance costs of $36,000
          and  estimated  tax benefit renounced to the holders of $501,750. Each
          Series  II  Special  Warrant entitles the holder to one Series II Unit
          with no further compensation being paid upon regulatory approval. Each
          Series II Unit will be comprised of one common share and one Series II
          Purchase  Warrant. Each Series II Purchase Warrant entitles the holder
          to purchase one common share at a price of $0.50 on or before June 28,
          2002.

4.   SUBSEQUENT  EVENT

     a)   BANK  LOAN

          On  July  19,  2001,  the  Company re-negotiated the terms of the bank
          loans.  Upon closing, which occurred on October 11, 2001, the $850,000
          remaining as at September 30, 2001 on the production loan covering the
          oil  and  gas  leases  of  Lyse  Petroleum  Ltd.  was  paid  out.

          The  remaining  demand  revolving  production  loan  was  decreased to
          $1,000,000  bearing  interest  at  prime  plus  0.75%  with  principal
          payments  commencing  May  1,  2003  of  $100,000  per  month.

          In  addition, a new demand non-revolving production loan in the amount
          of  $3,000,000  is available bearing interest at prime plus 0.75% with
          principal  payments  commencing January 1, 2002 of $100,000 per month.

          The  September  30, 2001 financial statements reflect bank debt in the
          amount  of  $3,640,000,  of which, $3,100,000 is long-term, leaving an
          available  credit  line  of  $360,000.


<PAGE>
ENDEAVOUR  RESOURCES  INC.
NOTES  TO  THE  FINANCIAL  STATEMENTS  (CONTINUED)
(Unaudited)

Nine  months  ended  September  30,  2001
--------------------------------------------------------------------------------

     b)   TAKE-OVER  BID

          (i)  On  October 23, 2001, Aspen Group Resources Corporation ("Aspen")
               entered  into  a  Pre-  Acquisition Agreement with the Company to
               acquire  all  of  the  outstanding  common  shares, the 5,000,000
               Series  I  Special  Warrants  and the 3,750,000 Series II Special
               Warrants  on  the  following  terms:

               A)   0.2375  common  shares  of Aspen plus 0.11875 share purchase
                    warrants  of  Aspen  (each  whole  share  purchase  warrant
                    entitling  the  holder to purchase one common share of Aspen
                    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

               B)   0.2375  common  shares  of Aspen plus 0.11875 share purchase
                    warrants  of  Aspen  (each  whole  share  purchase  warrant
                    entitling  the  holder to purchase one common share of Aspen
                    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

               C)   0.2375  common  shares  of Aspen plus 0.11875 share purchase
                    warrants  of  Aspen  (each  whole  share  purchase  warrant
                    entitling  the  holder to purchase one common share of Aspen
                    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  (each  whole  Class  B purchase warrant entitling the
                    holder  to  acquire  one  common  share  of Aspen for the US
                    dollar equivalent of Cdn.$2.11 until June 28, 2002) for each
                    Series  II  special  warrant  of  Endeavour  Resources  Inc.

          (ii) On  October  23, 2001 Aspen entered into a Lock-up Agreement with
               significant  shareholders  of  the  Company,  including Endeavour
               management,  holding  up  to  approximately 49% of the issued and
               outstanding  shares  of  the  Company. In addition, Endeavour has
               agreed to pay a break-up fee of US $500,000 to Aspen in the event
               of a successful competing bid. Aspen has agreed to pay a break-up
               fee  of  US $500,000 to Endeavour in the event that more than 50%
               of Endeavour shares are not tendered and not acquired by Aspen or
               if  a  third party acquires more than 50% of the shares of Aspen.

     c)   CUBACAN  EXPLORATION  INC.

          On  November 2, 2001, the Company converted $1,831,531 of its advances
          to  Cubacan Exploration Inc. ("Cubacan") into an additional 18,315,306
          common  shares  of  Cubacan.  This  increases  Endeavour's holdings in
          Cubacan  to  26,185,982  common shares (2000 7,870,676) or 33.4% (2000
          14.7%).


<PAGE>


                        ASPEN GROUP RESOURCES CORPORATION
                   PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS


                               SEPTEMBER 30, 2001
                                       AND
                                  JUNE 30, 2001



                                        6
<PAGE>
<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,             46,169,125      5,233,945    (5,233,945)  (2.2)      53,218,449
  issued - 19,075,657
                                                                                               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


                                        7
<PAGE>
<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


                                        8
<PAGE>
<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


                                        9
<PAGE>
<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


                                       10
<PAGE>
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.


                                       11
<PAGE>
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
                                                                          --------------  -------------------
                                                                                       -                    -
                                                                          ==============  ===================
<FN>
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.
</TABLE>


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


                                       12
<PAGE>
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>

See accompanying notes to these financial statements


                                       13
<PAGE>








</TEXT>
</DOCUMENT>
</SUBMISSION>
