<SUBMISSION>
<ACCESSION-NUMBER>0001062993-13-005882
<TYPE>424B3
<PUBLIC-DOCUMENT-COUNT>5
<FILING-DATE>20131118
<DATE-OF-FILING-DATE-CHANGE>20131118
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AMERICAN PETRO-HUNTER INC
<CIK>0001040482
<ASSIGNED-SIC>1389
<IRS-NUMBER>980171619
<STATE-OF-INCORPORATION>NV
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>424B3
<ACT>33
<FILE-NUMBER>333-190287
<FILM-NUMBER>131226157
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>17470  NORTH PACESETTER WAY
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85255
<PHONE>480-305-2052
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>17470  NORTH PACESETTER WAY
<CITY>SCOTTSDALE
<STATE>AZ
<ZIP>85255
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>TRAVELPORT SYSTEMS INC
<DATE-CHANGED>20001129
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>WOLF INDUSTRIES INC
<DATE-CHANGED>19970604
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>form424b3.htm
<DESCRIPTION>FORM 424B3
<TEXT>
<HTML>
<HEAD>
   <TITLE>American Petro-Hunter, Inc.: Form 424B3 - Filed by newsfilecorp.com</TITLE>
</HEAD>
<BODY style="font-size:10pt;">
<HR noshade align="center" width=100% size=3 color="black">
<p align="right">Filed Pursuant to Rule 424(b)(3) <br>
Registration No. 333-190287   </p>
<p align="center"><b>PROSPECTUS SUPPLEMENT   </b></p>
<p align="center"><b>16,182,230 SHARES OF COMMON STOCK </b></p>
<p align="center"><b>AMERICAN PETRO-HUNTER INC.       </b></p>
<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Prospectus Supplement supplements and amends our Prospectus dated September 11, 2013, as amended and supplemented.  This Prospectus Supplement includes our attached Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013, as filed with the Securities and Exchange Commission on November 18, 2013. </p>
<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Prospectus, any prospectus supplements filed before the date hereof, and this Prospectus Supplement relate to the resale of up to an aggregate of 16,182,230 shares of our common stock, par value $0.001 per share, by Hanover Holdings I, LLC, a New York limited liability company (&ldquo;Hanover&rdquo; or &ldquo;Selling Stockholder&rdquo;), 14,417,524 of which (the &ldquo;Purchase Shares&rdquo;) are issuable to Hanover pursuant to the terms of the Common Stock Purchase Agreement, between the Company and Hanover, dated March 22, 2013 (the &ldquo;Purchase Agreement&rdquo;) and 1,764,706 of which were issued to Hanover on March 22, 2013 in satisfaction of a $150,000 commitment fee paid to Hanover for entering into the Purchase Agreement, based upon a price per share equal to $0.085 per share. </p>
<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Prospectus Supplement should be read in conjunction with the Prospectus and any prospectus supplements filed before the date hereof.  Any statement contained in the Prospectus and any prospectus supplements filed before the date hereof shall be deemed to be modified or superseded to the extent that information in this Prospectus Supplement modifies or supersedes such statement.  Any statement that is modified or superseded shall not be deemed to constitute a part of the Prospectus except as modified or superseded by this Prospectus Supplement. </p>
<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is quoted on the OTC Bulletin Board under the symbol &ldquo;AAPH&rdquo; The shares of our common stock registered hereunder are being offered for sale by Selling Stockholder at prices established on the OTC Bulletin Board during the term of this offering. On November 14, 2013, the closing bid price of our common stock was $0.017 per share. These prices will fluctuate based on the demand for our common stock.      </p>
<p align="justify"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE &ldquo;RISK FACTORS&rdquo; BEGINNING ON PAGE 6 OF THE PROSPECTUS. </b></p>
<p align="justify"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THE PROSPECTUS OR THIS PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.</b> </p>
<p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The date of this Prospectus Supplement is November 18, 2013. </p>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<A name=page_1></A>
<P align=center><B><FONT size=5>UNITED STATES </FONT><BR><FONT size=5>SECURITIES
AND EXCHANGE COMMISSION</FONT><BR></B><B>Washington, D.C. 20549</B></P>
<P align=center><B><FONT size=5>FORM 10-Q</FONT></B></P>
<P align=center>[X] <B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934</B></P>
<P align=center>For the quarterly period ended: <u><b>September 30, 2013</b></u></P>
<P align=center>[&nbsp;&nbsp;&nbsp;] <B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934</B></P>
<P align=center>For the transition period from __________to __________</P>
<P align=center>Commission File Number <u><b>0-22723</b></u></P>
<P align=center><B><FONT size=5><U>AMERICAN PETRO-HUNTER
INC.<BR></U></FONT></B>(Exact name of registrant as specified in its
charter)</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=center><U><B>Nevada </B></U></TD>
    <TD width="50%" align=center><U><B>90-0552874 </B></U></TD></TR>
  <TR vAlign=top>
    <TD align=center>(State or Other Jurisdiction of </TD>
    <TD width="50%" align=center>(I.R.S. Employer </TD></TR>
  <TR vAlign=top>
    <TD align=center>Incorporation or Organization) </TD>
    <TD width="50%" align=center>Identification Number) </TD></TR></TABLE>
<P align=center><B>250 N. Rock Rd., Suite 365 <BR><U>Wichita KS,
67206<BR></U></B>(Address of principal executive offices) (Zip Code)</P>
<P align=center><B><U>(316) 201-1853<BR></U></B>(Registrant&#146;s telephone number,
including area code)</P>
<P align=justify>Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.<BR>
[X] Yes&nbsp;&nbsp;&nbsp; [&nbsp;&nbsp;&nbsp;] No</P>
<P align=justify>Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (&#167;232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).<BR>
[X] Yes&nbsp;&nbsp;&nbsp; [&nbsp;&nbsp;&nbsp;]
No</P>
<P align=justify>Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company. See the definitions of &#147;large accelerated
filer,&#148; &#147;accelerated filer,&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of
the Exchange Act.</P>
<DIV>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="50%" align=left>[&nbsp;&nbsp;&nbsp;] Large accelerated filer </TD>
    <TD width="50%" align=left>[&nbsp;&nbsp;&nbsp;] Accelerated filer </TD>
    </TR>
  <TR vAlign=top>
    <TD width="50%" align=left>[&nbsp;&nbsp;&nbsp;] Non-accelerated filer <br>
(Do not check if
      smaller reporting company) </TD>
    <TD width="50%" align=left>[X] Smaller Reporting company </TD>
    </TR>
  </TABLE>
</DIV>
<P align=justify>Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).<BR>
[&nbsp;&nbsp;&nbsp;] Yes[X] No </P>
<P align=justify>Indicate the number of shares outstanding of each of the
issuer&#146;s classes of common stock, as of the latest practicable date.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=center><U>Class </U></TD>
    <TD width="50%" align=center><u>Outstanding at November 14, 2013</u></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center>Common stock, $.001 par value </TD>
    <TD width="50%" align=center>81,267,441</TD>
  </TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_2></A><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=center><B>AMERICAN PETRO HUNTER INC.</B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center><B>FORM 10-Q</B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center><B>September 30, 2013</B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center><B>INDEX</B> </TD></TR></TABLE>
<P align=right><B>PAGE</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left>PART I&#151;FINANCIAL
      INFORMATION </TD>
    <TD bgColor=#eeeeee  width="5%" align=left
    >&nbsp;</TD></TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_4">Item 1. Financial
      Statements. </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_4">4</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  align=left >&nbsp;</TD>
    <TD bgColor=#eeeeee  width="90%" align=left><a href="#page_4">Condensed Balance
      Sheets as of September 30, 2013 (Unaudited) and December 31, 2012 </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_4">4</a></TD>
  </TR>
  <TR>
    <TD  align=left >&nbsp;</TD>
    <TD  width="90%" align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  align=left ></TD>
    <TD bgColor=#eeeeee  width="90%" align=left><a href="#page_F-2">Condensed
      Statements of Operations for the three and nine month periods ended
      September 30, 2013 and 2012 (Unaudited) </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
  ><a href="#page_F-2">5</a></TD>
  </TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="90%" align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  align=left ></TD>
    <TD bgColor=#eeeeee  width="90%" align=left><a href="#page_F-3">Condensed
      Statements of Cash Flows for the nine month period ended September 30,
      2013 and 2012 (Unaudited) </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
  ><a href="#page_F-3">6</a></TD>
  </TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="90%" align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  align=left >&nbsp;</TD>
    <TD bgColor=#eeeeee  width="90%" align=left><a href="#page_4b">Notes to
      Condensed Financial Statements </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_4b">7</a></TD>
  </TR>
  <TR>
    <TD  align=left >&nbsp;</TD>
    <TD  width="90%" align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_19">Item 2.
      Management&#146;s Discussion and Analysis of Financial Condition and Results of
      Operations </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
  ><a href="#page_19">22</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_23">Item 3.
      Quantitative and Qualitative Disclosures About Market Risk </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_23">26</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_24">Item 4. Controls
      and Procedures </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_24">27</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_25">PART II&#151;OTHER
      INFORMATION </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_25">28</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_25">Item 1. Legal
      Proceedings </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_25">28</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_25">Item 1A. Risk
      Factors </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_25">28</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_25">Item 2.
      Unregistered Sales of Equity Securities and Use of Proceeds </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_25">28</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_25">Item 3. Defaults
      Upon Senior Securities </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_25">28</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_25">Item 4. Mine Safety
      Disclosures </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_25">28</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_26">Item 5. Other
      Information </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_26">29</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_26">Item 6. Exhibits</a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_26">29</a></TD>
  </TR>
  <TR>
    <TD  colSpan=2 align=left>&nbsp;</TD>
    <TD  width="5%" align=right >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee  colSpan=2 align=left><a href="#page_27">Signatures </a></TD>
    <TD bgColor=#eeeeee  width="5%" align=right
    ><a href="#page_27">30</a></TD>
  </TR></TABLE>
<P align=center>2</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_3></A>
<P align=center><B>FORWARD-LOOKING STATEMENTS</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Report on Form 10-Q contains
forward-looking statements within the meaning of the &#147;safe harbor&#148; provisions of
the Private Securities Litigation Reform Act of 1995. Reference is made in
particular to the description of our plans and objectives for future operations,
assumptions underlying such plans and objectives, and other forward-looking
statements included in this report. Such statements may be identified by the use
of forward-looking terminology such as &#147;may,&#148; &#147;expect,&#148; &#147;believe,&#148; &#147;estimate,&#148;
&#147;anticipate,&#148; &#147;intend,&#148; &#147;continue,&#148; or similar terms, variations of such terms,
or the negative of such terms. Such statements are based on management&#146;s current
expectations and are subject to a number of factors and uncertainties, which
could cause actual results to differ materially from those described in the
forward-looking statements. Such statements address future events and conditions
concerning, among others, capital expenditures, earnings, litigation, regulatory
matters, liquidity and capital resources, and accounting matters. Actual results
in each case could differ materially from those anticipated in such statements
by reason of factors such as future economic conditions, changes in consumer
demand, legislative, regulatory and competitive developments in markets in which
we operate, results of litigation, and other circumstances affecting anticipated
revenues and costs, and the risk factors set forth under the heading &#147;Risk
Factors&#148; in our Annual Report on Form 10-K for the fiscal year ended December
31, 2012, filed on April 15, 2013.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this Form 10-Q, &#147;we,&#148;
&#147;us&#148; and &#147;our&#148; refer to American Petro-Hunter Inc., which is also sometimes
referred to as the &#147;Company.&#148;</P>
<P align=center><B>YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING
STATEMENTS</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The forward-looking statements
made in this report on Form 10-Q relate only to events or information as of the
date on which the statements are made in this report on Form 10-Q. Except as
required by law, we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events, or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events. You should read this report and
the documents that we reference in this report, including documents referenced
by incorporation, completely and with the understanding that our actual future
results may be materially different from what we expect or hope.</P>
<P align=center>3</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_4></A>
<P align=justify><B>Item 1. Financial Statements.</B></P>
<P align=justify>&nbsp;</P>
<P align=center><B>American Petro-Hunter, Inc.<BR>
  </B><B>Condensed Balance
    Sheets</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center nowrap>(Unaudited) </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="12%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=center nowrap>September 30, </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="12%" align=center nowrap>December 31, </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2013 </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%"
    align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2012 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Assets</B> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Current assets: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Cash </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;1,454 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;16,216 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accounts receivable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>20,242 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>13,735 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total
      current assets </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>21,696 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>29,951 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Investments in mineral properties, net of
      accumulated&nbsp;<BR>
      &nbsp;&nbsp;&nbsp;amortization of $185,457 and
      $132,499, respectively </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
      400,000 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
      1,582,324 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Capitalized financing costs, net of
      amortization&nbsp;<BR>
      &nbsp;&nbsp;&nbsp;of $38,724 and $6,737,
      respectively </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><BR>
      171,353 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><BR>
      41,263 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total assets </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;593,049 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;1,653,538 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Liabilities and Stockholders' Equity (Deficit)</B> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Current liabilities: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accounts payable and other
      liabilities </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;827,441 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;567,629 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Short term note from officer </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>39,200 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;&nbsp;&nbsp;Note payable - current,
      net of discount of $81,041 and $0 at <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; September 30, 2013 and
      December 31, 2012, respectively </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
      110,259 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
      - </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accrued interest </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>117,599 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>41,073 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Derivative liability </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>559 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B>Total current
      liabilities</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>1</B>,<B>055</B>,<B>299</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>648</B>,<B>461</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Long term liabilities: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp;&nbsp;&nbsp;Note payable, net of
      discount of $161,916 and $178,471 at <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; September 30, 2013
      and December 31, 2012, respectively </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
      538,425 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
      359,529 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Convertible debenture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>428,306 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>633,306 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total
      long term liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>966,731 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>992,835 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD
      align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Total liabilities </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>2,022,030 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>1,641,296 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Stockholders' equity: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap bgColor=#e6efff>&nbsp;&nbsp;&nbsp;Common stock, $0.001 par
      value, 200,000,000 shares authorized, <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 72,067,441 and
      47,620,406 shares issued and outstanding
      as&nbsp;<BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
      September 30, 2013 and December 31, 2012, respectively </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
        <BR>
      72,068 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><BR>
        <BR>
      47,621 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left nowrap>&nbsp;&nbsp;&nbsp;Common stock to be issued; 11,918,020 and
      6,423,708 shares&nbsp;<BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      as of September 30, 2013 and December 31, 2012 </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><BR>
      11,918 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><BR>
      6,424 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Additional paid-in capital </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>14,481,090 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>13,731,097 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accumulated comprehensive gain (loss) </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>4,706 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accumulated deficit </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(15,994,057</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(13,777,606</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total stockholders'
      equity </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(1,428,981</TD>
    <TD width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>12,242 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total liabilities and stockholders' equity </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;593,049 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;1,653,538 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>The accompanying notes are an integral part of these condensed
  financial statements</P>
<P align=center>4</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=-->
<A name=page_F-2></A>
<P align=center><B>American Petro-Hunter, Inc.<BR>
  </B><B>Condensed Statements of
    Operations</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD width="23%" colSpan=4 align=center vAlign=bottom nowrap>For the three months
      ended </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="23%" colSpan=4 align=center vAlign=bottom nowrap>For the nine months
      ended </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD width="23%" colSpan=4 align=center vAlign=bottom nowrap>September 30, </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="23%" colSpan=4 align=center vAlign=bottom nowrap>September 30, </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD width="10%"
    align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">2013 </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%"
    align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%"
    align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">2012 </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%"
    align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%"
    align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">2013 </TD>
    <TD width="2%" align=center vAlign=bottom nowrap>&nbsp;</TD>
    <TD width="1%"
    align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%"
    align=center vAlign=bottom nowrap style="BORDER-BOTTOM: #000000 1px solid">2012 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=bottom>&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=bottom>&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>Revenue </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>&nbsp;32,934 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>&nbsp;78,671 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>&nbsp;107,943 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>&nbsp;266,348 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=bottom>&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>Cost of Goods Sold </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp;Production and
      amortization </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>42,487 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>52,006 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>107,044 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>172,226 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Gross profit (loss) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>(9,553</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>26,665 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>899 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>94,122 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>General and administrative </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>143,577 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>157,681 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>429,600 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>414,777 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>Executive compensation </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>51,000 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>69,000 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>153,000 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>430,000 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Impairment expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>1,172,547 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>1,172,547 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>256,737 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>&nbsp; &nbsp; &nbsp;
      &nbsp;Total expenses </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>1,367,124 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>226,681 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>1,755,147 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>1,101,514 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD vAlign=bottom>&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>Net loss before other income
      (expense) </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>(1,376,677</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>(200,016</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>(1,754,248</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>(1,007,392</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD vAlign=bottom>&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
    <TD vAlign=bottom width="1%">&nbsp;</TD>
    <TD vAlign=bottom width="10%">&nbsp;</TD>
    <TD vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>Other income (expense): </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Gain (loss) on sale of mineral properties </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(33,530</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(33,530</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>Gain on forgiveness of debt </TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>- </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>- </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>- </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%" align=right>322,731 </TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Gain (loss) on derivative liability </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(138,073</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(138,073</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff vAlign=bottom align=left>Interest expense </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>(166,164</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>(1,220,898</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>(462,203</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="1%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff vAlign=bottom
    width="10%" align=right>(1,681,602</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>&nbsp; &nbsp; &nbsp; &nbsp;Total other income
      (expense) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>(166,164</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>(1,392,501</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>(462,203</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>(1,530,474</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Net loss before income taxes </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(1,542,841</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(1,592,517</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(2,216,451</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(2,537,866</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Provision for income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Net loss </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(1,542,841</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(1,592,517</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(2,216,451</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD vAlign=bottom width="1%" align=left>&nbsp;</TD>
    <TD vAlign=bottom width="10%" align=right>(2,537,866</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Other comprehensive income (expense) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>12,131 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>- </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>(4,706</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width="10%"
    align=right>8,114 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right>&nbsp;(1,530,710</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right>&nbsp;(1,592,517</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right>&nbsp;(2,221,157</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right>&nbsp;(2,529,752</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Weighted average common shares <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; outstanding - basic and fully
      diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      64,021,355 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      47,470,406 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      56,380,005 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      42,307,840 </TD>
    <TD vAlign=bottom width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff vAlign=bottom>&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="10%">&nbsp;</TD>
    <TD bgColor=#e6efff vAlign=bottom width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD vAlign=bottom align=left>Net loss per common share <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; basic and fully diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      $ (0.024</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      $ (0.034</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      $ (0.039</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width="10%"
    align=right><BR>
      $ (0.060</TD>
    <TD vAlign=bottom width="2%" align=left>) </TD>
  </TR>
</TABLE>
<P align=center>The accompanying notes are an integral part of these condensed
  financial statements</P>
<P align=center>5</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=-->
<A name=page_F-3></A>
<P align=center><B>American Petro-Hunter, Inc. <BR>
  </B><B>Condensed Statement of
    Cash Flows</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="27%" colSpan=4 align=center nowrap>For the nine months ended </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="27%" colSpan=4 align=center nowrap>September 30, </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2013 </TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="1%"
    align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=center nowrap style="BORDER-BOTTOM: #000000 1px solid">2012 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flows from operating activities</B> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Net (loss) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(2,216,451</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="12%" align=right>&nbsp;(2,537,866</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Adjustments to reconcile net (loss) to net cash used in
      operating activities: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Shares issued for compensation </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>189,000 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Amortization of
      discount </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>251,238 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>225,306 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Impairment expense </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,172,547 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>256,737 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Amortization of
      mineral properties </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>52,957 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>86,218 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Amortization of prepaid financing costs </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>31,987 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>2,477 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Recognized (gain)
      loss on fair market value of derivative liability </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>138,073 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Stock and warrants issued for financing </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>43,886 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>1,107,886 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Gain on
      forgiveness of debt </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>-</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>(322,731</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;Loss on sale of mineral properties </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>33,530 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Changes in operating assets and liabilities: </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;(Increase) decrease in
      accounts receivable </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(6,507</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>15,528 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;(Increase) decrease in prepaid expenses </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>-</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>29,100 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Increase (decrease) in
      accounts payable and accrued liabilities </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>295,469 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>204,222 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Increase (decrease) in accrued interest </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>76,526 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>175,980 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Net cash provided (used) by operating
      activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(298,348</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(396,540</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left><B>Cash flows from investing activities</B> </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Proceeds from sale of mineral properties </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right><B>-</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>110,500 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Acquisition of mineral
      properties </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(43,180</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>(406,744</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Net cash provided (used) by investing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(43,180</TD>
    <TD width="2%" align=left>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>(296,244</TD>
    <TD width="2%" align=left>) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="12%">&nbsp;</TD>
    <TD bgColor=#e6efff width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Cash flows from financing activities</B> </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=left>&nbsp;</TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Short-term note from
      officer, net </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right><B>-</B> </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>39,200 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Proceeds from sale of common stock </TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>14,500 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD width="1%" align=left>&nbsp;</TD>
    <TD width="12%" align=right>- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp; &nbsp;Proceeds from note
      payable, net </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>312,266 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>473,350 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Proceeds from convertible debenture </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right><B>-</B> </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>198,000 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Net cash provided (used) by financing
      activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>326,766 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff width="12%"
    align=right>710,550 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Net increase (decrease) in cash </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>(14,762</TD>
    <TD bgColor=#e6efff width="2%" align=left>) </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=right>17,766 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Cash - beginning </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%"
      align=right>16,216 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="12%" align=right>2,609 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Cash - ending </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;1,454 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;20,375 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Supplemental disclosures: </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Interest paid </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;55,959 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;107,517 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Income taxes paid </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>Non-cash transactions: </TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="12%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Shares issued for compensation </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;- </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;189,000 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Shares issued for capitalized
      financing costs </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;150,000 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Accounts payable converted to stock </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;35,800 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="1%" align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" width="12%"
      align=right>&nbsp;239,469 </TD>
    <TD width="2%" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Note payable and accrued
      interest converted to stock </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;218,200 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="1%"
    align=left>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" bgColor=#e6efff width="12%"
    align=right>&nbsp;3,375,846 </TD>
    <TD bgColor=#e6efff width="2%" align=left>&nbsp;</TD>
  </TR>
</TABLE>
<P align=center>The accompanying notes are an integral part of these condensed
  financial statements</P>
<P align=center>6</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade><!--$$/page=--><A name=page_4b></A>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=bottom>
    <TD align=center><B>American Petro-Hunter Inc.</B> </TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Notes to Condensed Financial Statements</B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center><B>September 30, 2013</B> </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>1.</B> </TD>
    <TD>
      <P align=justify><B>Nature and Continuance of Operations</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>American Petro-Hunter Inc. (the &#147;Company&#148;) was
      incorporated in the State of Nevada on January 24, 1996 as Wolf
      Exploration Inc. On March 17, 1997, Wolf Exploration Inc. changed its name
      to Wolf Industries Inc.; on November 21, 2000, they changed its name to
      Travelport Systems Inc., and on August 17, 2001, changed its name to
      American Petro- Hunter Inc.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company is evaluating the acquisition of certain
      natural resource projects with the intent of developing such projects. The
      Company focus is currently in locating and assessing potential acquisition
      targets, including real property, oil and gas companies.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Basis of presentation</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The accompanying unaudited condensed financial statements
      contain all adjustments (consisting only of normal recurring adjustments)
      which, in the opinion of management, are necessary to present fairly the
      financial position of the Company as of September 30, 2013, and the
      results of its operations and cash flows for the nine months ended
      September 30, 2013 and 2012. Certain information and footnote disclosures
      required under accounting principles generally accepted in the United
      States of America (&#147;U.S. GAAP&#148;) have been condensed or omitted from the
      following condensed financial statements pursuant to the rules and
      regulations of the SEC. In the opinion of management, the accompanying
      financial statements include all adjustments, which are of a normal and
      recurring nature, necessary to present fairly our financial position and
      results of operations. Certain reclassifications have been made to prior
      periods to conform to current presentations.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>It is suggested that the following financial statements
      be read in conjunction with the financial statements and notes thereto
      included in the Company&#146;s annual report on Form 10-K for the year ended
      December 31, 2012. The Company does not believe there are any recently
      issued, but not yet effective, accounting standards that would have a
      significant impact on the Company&#146;s financial position or results of
      operations as of and for the nine months ended September 30,
  2013.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The results of operations for the nine months ended
      September 30, 2013 and 2012 are not necessarily indicative of the results
      of the entire fiscal year or for any other period.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Going Concern</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>These financial statements have been prepared in
      accordance with accounting principles generally accepted in the United
      States of America (&#147;GAAP&#148;) applicable to a going concern, which
      contemplates the realization of assets and the satisfaction of liabilities
      and commitments in the normal course of business. The Company has an
      accumulated deficit of $15,994,057 as of September 30, 2013 and has
      current liabilities that are $1,033,603 in excess of its current assets.
      The Company has limited assets and requires additional funds to maintain
      its operations. Management&#146;s plan in this regard is to raise equity
      financing as required. There can be no assurance that sufficient funding
      will be obtained. The foregoing matters raise substantial doubt about the
      Company&#146;s ability to continue as a going concern. The financial statements
      do not include any adjustments relating to the recoverability and
      classification of recorded assets, or the amounts of and classification of
      liabilities that might be necessary in the event the Company cannot
      continue in existence.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD>
      <P align=justify><B>Significant Accounting Policies</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The following is a summary of significant accounting
      policies used in the preparation of these financial statements.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>Income taxes</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company accounts for income taxes under FASB
      Codification Topic 740-10-25 (&#147;ASC 740-10-5&#148;). Under
ASC 740-10-25, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. See footnote 8 for further details.</P></TD></TR></TABLE>
<P align=center>7</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_5></A>
<P style="MARGIN-LEFT: 5%" align=justify><B>Revenue Recognition</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>It is our policy that revenues will be
recognized in accordance with ASC subtopic 605-10. Under ASC 605-10, product
revenues are recognized when persuasive evidence of an arrangement exists,
delivery has occurred, the sales price is fixed and determinable and
collectability is reasonably assured.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Use of estimates</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>The preparation of financial
statements, in conformity with accounting principles generally accepted in the
United States, requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Cash Equivalents</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company maintains cash balances in
interest and non-interest bearing accounts. For the purpose of these financial
statements, all highly liquid cash and investments with a maturity of three
months or less are considered to be cash equivalents.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Net loss per share</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>In accordance with ASC subtopic 260-10,
the basic loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares outstanding.
Diluted loss per common share is computed similar to basic loss per common share
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive. For the three
months and nine months ended September 30, 2013 and 2012, the denominator in the
diluted EPS computation is the same as the denominator for basic EPS due to the
anti-dilutive effect of the stock warrants and convertible debt on the Company&#146;s
net loss.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Financial instruments</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company&#146;s financial instruments
consist of cash and cash equivalents, accounts receivable, accounts payable, and
notes payable. Unless otherwise noted, it is management&#146;s opinion that the
Company is not exposed to significant interest, or credit risks arising from
these financial instruments. The fair values of these financial instruments
approximate their carrying values because of their relatively short-term
maturities. See Note 5 for further details.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B><U>Fair Value of Financial
Instruments<BR><BR></U></B>The Company has financial instruments whereby the
fair value of the financial instruments could be different from that recorded on
a historical basis in the accompanying balance sheets. The Company's financial
instruments consist of cash, accounts receivable, accounts payable, and notes
payable. The carrying amounts of the Company's financial instruments approximate
their fair values as of September 30, 2013 and December 31, 2012, due to their
short-term nature. See Note 5 for further details.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Reclassifications</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Certain reclassifications have been
made to the prior years&#146; financial statements to conform to the current year
presentation. These reclassifications had no effect on previously reported
results of operations or retained earnings.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Oil and Gas Properties </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>We follow the successful efforts method
of accounting for oil and gas exploration and production activities. All costs
for development wells, related plant and equipment, proved mineral interests in
oil and gas properties are capitalized. Costs of exploratory wells are
capitalized pending determination of whether the wells found proved reserves.
Cost of wells that are assigned proved reserves remain capitalized. All other
exploratory wells and costs are expensed. </P>
<P align=center>8</P>
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width="100%" noShade>
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<P style="MARGIN-LEFT: 5%" align=justify>Depreciation, depletion and
amortization of all capitalized costs of proved oil and gas producing properties
are expensed using the straight-line method over the estimated life of each
well. Period valuation provisions for impairment of capitalized costs of
unproved mineral interests are expensed. The costs of unproved properties are
excluded from amortization until the properties are proved. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Unproved properties are assessed
periodically individually when drilling and flow testing results indicate
whether there is an economic resource or not. All capitalized costs associated
with properties that have been determined to be a &#147;dry-hole&#148; or &#147;uneconomic&#148; are
impaired when that determination is made. Proved properties are assessed
periodically for impairment on an individual basis. Events that can trigger the
test for possible impairment include significant decreases in the market value
of a property, significant change in the extent or manner of use or change in
property and the expectation that a property will be sold or otherwise disposed
of significantly sooner than the previously estimated useful life. The
assessment is done by comparing each property&#146;s carrying value to their
associated estimated undiscounted future net cash flows. Impaired properties are
written down to their estimated fair values. The resulting impairment would be
expensed to operations as impairment expense in the period in which it was
determined that the impairment was indicated and calculated. </P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>3.</B> </TD>
    <TD width="95%" align=left><B>Recent Accounting Pronouncements</B>
  </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Management has reviewed recent
accounting pronouncements issued by the FASB (including its Emerging Issues Task
Force), the AICPA, and the SEC and they do not or are not believed by management
to have a material impact on the Company's present or future financial
statements</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD>
      <P align=justify><B>Investments in Mineral
Properties</B></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company invested $43,180 in one investment of mineral properties.
During the year ended December 31, 2012, the Company invested a total of
$355,242 in four mineral properties and exchanged a Poston Prospect well with a
book value of $41,000 plus cash in the amount of $6,500 for partial payment on a
well located in the Oklahoma prospect. Management reviewed the carrying amount
of the Company&#146;s investments in its oil and gas properties as of the balance
sheet date and recognized an impairment expense in the amount of $1,172,547 and
$256,737 for the nine months ended September 30, 2013 and 2012, respectively. As
of September 30, 2013 and December 31, 2012, the estimated fair value of mineral
properties totaled $400,000 and $1,582,324, net of accumulated amortization of
$185,457 and $132,499, respectively. As of September 30, 2013, the Company has
total capitalized costs of mineral properties (gross) of $585,457; $367,394 in
proved properties and $218,063 in unproved properties. As of December 31, 2012,
the Company has total capitalized costs of mineral properties (gross) of
$1,714,822; $1,103,205 in proved properties and $611,617 in unproved properties.
Capitalized costs of proved properties are amortized using the straight-line
method over the estimated useful life of each well. Unproved properties are
excluded from amortization. Amortization expense for the nine months ended
September 30, 2013 and 2012 was $52,957 and $86,218, respectively. A summary of
investments follows:</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>S&amp;W Oil &amp; Gas, LLC - Poston
Prospect</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>On May 4, 2009, the Company entered
into an Agreement with S&amp;W Oil &amp; Gas, LLC (&#147;S&amp;W&#148;) to participate in
the drilling for oil in the Poston Prospect #1 Lutters in Southwest Trego
County, Kansas (the &#147;Poston Prospect&#148;). Pursuant to the agreement, the Company
paid $64,500 in exchange for a 25% working interest in the 81.5% net revenue
interest in the Poston Prospect. Subsequent to acquiring the working interest,
the Company paid $138,615 in capitalized development costs necessary for
completion of the initial well and the drilling and completion of a second well
in the Poston Prospect. In 2011, the Company recognized an impairment of the
investment in the amount of $93,879. During the year ended December 31, 2012,
the Company sold its interest in the Poston Prospect for cash in the amount of
$69,500, resulting in a gain of $2,621. This well contributed approximately 5%
of the Company&#146;s 2012 revenue and 0% of the revenue for the nine months ended
September 30, 2013.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Oklahoma prospects</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>During 2010 and 2011, the Company
acquired various working interest percentages ranging from 5% to 50%, from Bay
Petroleum for mineral properties located in Oklahoma in exchange for cash
totaling $1,992,330. During the year ended December 31, 2011, one well was
determined to be a &#147;dry hole&#148; and its full $80,000 carrying value was impaired.
During the year ended December 31, 2012, the Company acquired additional working
interests in the Oklahoma prospects for cash in the amount of $355,242 and
property valued at $41,000. During the year ended December 31, 2012, two of the
wells were determined to be uneconomic and $565,737 of impairment was taken to
reduce the properties to their fair
value. During the nine months ended September 30, 2013, the Company invested
$43,180 in these properties. Management reviewed the carrying amount of the
Company&#146;s investments in its oil and gas properties as of the balance sheet date
and recognized an impairment expense in the amount of $1,172,547 for the nine
months ended September 30, 2013 related to these properties. The Oklahoma
prospects wells contributed approximately 95% of the Company&#146;s 2012 revenue and
100% of the revenue for the nine months ended September 30, 2013.</P>
<P align=center>9</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_7></A>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD align=left ><B>5.</B> </TD>
    <TD width="95%" align=left><B>Fair Value Measurements</B>
</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company adopted ASC Topic 820-10 at
the beginning of 2009 to measure the fair value of certain of its financial
assets required to be measured on a recurring basis. The adoption of ASC Topic
820-10 did not impact the Company&#146;s financial condition or results of
operations. ASC Topic 820-10 establishes a fair value hierarchy that prioritizes
the inputs to valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and the lowest priority
to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair
value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants on the
measurement date. A fair value measurement assumes that the transaction to sell
the asset or transfer the liability occurs in the principal market for the asset
or liability. The three levels of the fair value hierarchy under ASC Topic
820-10 are described below:</P>
<P style="MARGIN-LEFT: 10%" align=justify>Level 1 &#150; Valuations based on quoted
prices in active markets for identical assets or liabilities that an entity has
the ability to access.</P>
<P style="MARGIN-LEFT: 10%" align=justify>Level 2 &#150; Valuations based on quoted
prices for similar assets and liabilities in active markets, quoted prices for
identical assets and liabilities in markets that are not active, or other inputs
that are observable or can be corroborated by observable data for substantially
the full term of the assets or liabilities.</P>
<P style="MARGIN-LEFT: 10%" align=justify>Level 3 &#150; Valuations based on inputs
that are supportable by little or no market activity and that are significant to
the fair value of the asset or liability.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The following table presents a
reconciliation of all assets and liabilities measured at fair value on a
recurring basis as of:</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>Level 1 </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>Level 2 </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>Level 3 </TD>
    <TD  width="2%" align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid"  width="1%"
    align=center>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="10%"
      align=center>Total </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>September 30, 2013: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Cash </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;1,454 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;1,454 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Accounts receivable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>20,242 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>20,242 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accounts payable and other
      liab. </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(945,040</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(945,040</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Notes payable, net of discount </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(1,076,990</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(1,076,990</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%">&nbsp;</TD>
    <TD bgColor=#e6efff width="10%">&nbsp; </TD>
    <TD bgColor=#e6efff  width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>December 31, 2012: </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=left>&nbsp; </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Cash </TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;16,216 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>$</TD>
    <TD bgColor=#e6efff width="10%" align=right>&nbsp;16,216 </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Accounts receivable </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>13,735 </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>13,735 </TD>
    <TD  width="2%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Accounts payable and other
      liab. </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(608,702</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(608,702</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Derivative liability </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(559</TD>
    <TD  width="2%" align=left>) </TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>- </TD>
    <TD  width="2%" align=left>&nbsp;</TD>
    <TD  width="1%" align=left>&nbsp;</TD>
    <TD width="10%" align=right>(559</TD>
    <TD  width="2%" align=left>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff align=left>&nbsp; &nbsp;Notes payable, net of discount
    </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(1,032,035</TD>
    <TD bgColor=#e6efff  width="2%" align=left>) </TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>- </TD>
    <TD bgColor=#e6efff  width="2%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff  width="1%" align=left>&nbsp;</TD>
    <TD bgColor=#e6efff width="10%" align=right>(1,032,035</TD>
    <TD bgColor=#e6efff  width="2%" align=left>)
</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>6.</B> </TD>
    <TD>
      <P align=justify><B>Debt and Debt Guarantee</B></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B>Short term note from Officer</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2012, the Company issued a promissory note in the amount of $39,200 for cash
advances received from an officer of the Company. The note is non-interest
bearing, unsecured and due on demand. On September 27, 2013, the Company entered
into an agreement to issue 3,768,844 restricted shares of stock at $0.0199 for
an amount of $75,000 in lieu of payment towards this note and $35,800 in other
payables owed. As of September 30, 2013, the balance on this note is $0.</P>
<P align=center>10</P>
<HR style="PAGE-BREAK-AFTER: always" align=center color=black SIZE=5
width="100%" noShade>
<!--$$/page=--><A name=page_8></A>
<P style="MARGIN-LEFT: 5%" align=justify><B>Miscellaneous Notes Payable</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>On October 18, 2006, the Company issued
a promissory note in the amount of $25,000. The note bears interest at a rate of
12% per annum, is unsecured and matured on May 18, 2007. On March 26, 2012, the
holder of the note elected to convert the entire principal balance together with
accrued interest of $21,819 into 187,277 shares of the Company&#146;s common stock at
a conversion rate of $0.25 per share. As of December 31, 2012, there was no
balance due on this note.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In August 2011, the Company issued a
promissory note in the amount of $71,000. The note bears interest at a rate of
24% per annum, is unsecured and due on demand. On April 30, 2012, the holder of
the note elected to convert the entire principal balance together with accrued
interest of $12,140 into 332,561 shares of the Company&#146;s common stock at a
conversion rate of $0.25 per share. As of December 31, 2012, there was no
balance due on this note. </P>
<P style="MARGIN-LEFT: 5%" align=justify>In December, 2011, the Company issued a
promissory note in the amount of $79,980 to Centennial Petroleum Partners LLC
(&#147;CPP&#148;). The note bears interest at a rate of 6% per annum, is unsecured and due
on demand. On April 30, 2012, the holder of the note elected to convert the
entire principal balance together with accrued interest of $2,688 into 330,671
shares of the Company&#146;s common stock at a conversion rate of $0.25 per share. As
of December 31, 2012, there was no balance due on this note. </P>
<P style="MARGIN-LEFT: 5%" align=justify>In 2011, CPP was assigned the 6%
royalty interest originally granted to Maxum Overseas Fund. The royalty interest
was valued at $113,164 utilizing the present value of estimated future payments
due over the remaining life of the wells. The liability was recorded with
corresponding prepaid financing costs to be amortized over the remaining term of
the debt. For the years ended December 31, 2012 and 2011, $42,436 and $35,364,
respectively, was amortized into interest expense in relation to this prepaid.
During the year ended December 31, 2012, in connection with the royalty
termination agreement discussed below, the Company has recorded a gain of
$77,800 on the forgiveness of future royalty payments of $108,746 net of the
unamortized financing costs of $30,946.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On July 3, 2012 in connection with the
Purchase Agreement between the Company and ASYM Energy Opportunities, LLC, CPP
agreed to enter into a royalty termination agreement, resulting in the
elimination of their 6% royalty interest in exchange for anti-dilution
protection with respect to the shares issued in the conversion of their note
payable at a conversion rate of $0.25. The anti-dilution protection provides
that in the event the Company issues warrants to a third party with an exercise
price less than the conversion rate of $0.25, the Company will issue additional
shares for the previous conversions equal to the difference between the number
of shares calculated utilizing the variable ASYM warrant exercise price less the
number of shares previously issued subject to a ceiling of 4.99% of the total
outstanding shares of the Company. On July 3, 2012, the Company estimated the
potential future number of anti-dilution share issuances required pursuant to
the agreements to be 2,385,311 and recorded a derivative liability and
corresponding comprehensive income (loss) in the amount of $333,943 representing
the fair value of the potential anti-dilution shares on that date. As of
December 31, 2012, the Company has authorized the issuance of 3,003,104 shares
as a result of the anti-dilution provision and recorded a financing expense in
the amount of $406,615, the fair value of the shares on the date of grant. As of
December 31, 2012, CPP there were an additional 4,633 additional anti-dilution
shares potentially issuable to meet the beneficial ownership ceiling as a
result; the Company recorded a decrease in derivative liability of $333,664 and
a corresponding change in comprehensive gain (loss). During the nine months
ended September 30, 2013, the Company authorized the issuance of an additional
2,163,656 shares as a result of the anti-dilution provision and recorded a
financing expense in the amount of $21,823; the fair value of the shares on the
date of the grant. During the nine months ended September 30, 2013, the Company
recorded a decrease in derivative liability of $559 and a corresponding change
in accumulated comprehensive gain (loss) on the balance sheet. As of September
30, 2013, the Company has not issued any of the shares discussed above and CPP
is owed 5,166,760 shares. These shares are recorded as owed but not issued on
the balance sheet.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Convertible Debentures -
2009</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>In August and September of 2009, the
issued two Secured Convertible Promissory Notes in the amount of $500,000 each
to an investor for total proceeds of $1,000,000. The notes bear interest at a
rate of 18% per annum, are secured by the assets of the Company, and matured on
August 13 and September 15, 2010, respectively. In accordance with the
agreement, the Company is required to make monthly interest payments until the
principal balances are paid in full. Additionally, the Company issued warrants
to purchase up to 2,857,142 shares of the Company&#146;s common stock at an exercise
price of $0.50. The warrants expired in 2011 and were unexercised. In March
2010, the holder elected to convert $350,000 of the notes into
1,000,000 shares of the Company&#146;s common stock at a conversion rate of $0.35 per
share. In December 2010 and August 2011, the debentures were subsequently
amended whereby extending the original maturity date to August 13 and September
15, 2012 and reducing the conversion rate from the lower of $0.35 or a 25%
discount to the five day average trading price to the lower of $0.25 or a 25%
discount to the five day average. </P>
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<P style="MARGIN-LEFT: 5%" align=justify>On July 3, 2012, in connection with the
Purchase Agreement between the Company and ASYM Energy Opportunities, LLC, the
Company entered into a third amendment whereby the holder agreed to terminate
his security interest in the assets of the Company, reduce the interest rate
from 18% to 10% per annum upon receipt of the initial financing tranche of
$1,000,000 and to revise the repayment terms, whereby the entire unpaid
principle together with accrued interest will be payable in two equal
installments upon successful financing obtained by the Company, but in no event
later than December 31, 2014. The initial funding tranche of $1,000,000 has not
been received; therefore this loan remains at an interest rate of 18% per
annum.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 4, 2013, $140,000 of the
outstanding convertible debt was assigned to Magna Group, LLC. See &#147;Notes
Payable &#150; Magna Group&#148; below for further details. On August 20, 2013, an
additional $65,000 of the outstanding convertible debt was assigned to Magna
Group, LLC.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As of September 30, 2013 and December
31, 2012, the principal balance related to this note totaled $428,306 and
$633,306, respectively, and is shown as a long term liability on the balance
sheet.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Convertible Debentures -
2010</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>In 2010, the company entered into a
Convertible Line of Credit Agreement with Maxum Overseas Fund (&#147;Maxum&#148;) in the
amount of $1,500,000 and received an initial advance in the amount of
$1,462,774. The line of credit bears interest at a rate of 24% per annum, is
convertible at $0.90, and was secured by certain assets of the Company and due
in full on May 17, 2011. In November of 2010, the Company amended the line of
credit agreement to reduce the conversion price to $0.25 per share. In May and
July of 2011, the Company entered into a third and fourth amendment to the line
of credit whereby increasing the line of credit to $2,000,000 in exchange for a
3% royalty interest in production revenue generated by the Company. The Company
was advances additional proceeds of $1,700,918. In August 2011, the agreement
was further amended to extend the maturity date to November 17, 2012 and
increase the line to $3,000,000 in exchange for an additional 3% royalty
interest. The royalty interest was subsequently assigned by Maxum to Centennial
Petroleum Partners, LLC (&#147;CPP&#148;). See CPP information above for further details
on the royalty interest and its termination in 2012.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In December 2011, the holder elected to
convert $1,090,902 of the balance owed into 4,363,611 shares of the Company&#146;s
common stock at a conversion rate of $0.25 per share. In the first quarter of
2012, the Company was advanced an additional $198,000 against the line of credit
and In March and April of 2012; the holder elected to convert the entire unpaid
principle balance and accrued interest in the amount of $3,163,218 into
12,652,869 shares of the Company&#146;s common stock at a conversion rate of $0.25.
As of December 31, 2012 there is no balance on this note. Additionally, in 2012,
Maxum agreed to forgive the finders&#146; fee and the Company recorded debt
forgiveness of $158,185. As of December 31, 2012 and 2011, the Company recorded
amortization expense related to the beneficial conversion feature in the amount
of $212,070 and $646,760, respectively. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On July 3, 2012 in connection with the
Purchase Agreement between the Company and ASYM Energy Opportunities, LLC, the
investor group agreed to enter into a lien termination agreement, resulting in
the termination of their security interest in certain assets of the Company in
exchange for anti-dilution protection with respect to the shares issued in the
conversion of the line of credit at a conversion rate of $0.25 The anti-dilution
protection provides that in the event the Company issues warrants to a third
party with an exercise price less than the conversion rate of $0.25, the Company
will issue additional shares for the previous conversions equal to the
difference between the number of shares calculated utilizing the exercise price
of the warrants less the number of shares previously issued subject to a ceiling
of 4.99% of the total outstanding shares of the Company. The Company estimated
the number of shares that could be issued pursuant to the agreements on July 3,
2012 to be 2,576,975 and recorded a derivative liability and corresponding
comprehensive income (loss) in the amount of $360,776 representing the fair
value of the shares on that date. During the year ended December 31, 2012, the
Company authorized the issuance of 3,003,104 shares as a result of the
anti-dilution provision and recorded a financing expense in the amount of
$425,468, the fair value of the shares on the date of grant. As of December 31,
2012, there were an additional 4,633 additional anti-dilution shares potentially
issuable to meet the beneficial ownership ceiling as a result; the Company
recorded a decrease in derivative liability of $360,497 and a corresponding change in
comprehensive gain (loss). During the nine months ended September 30, 2013, the
Company authorized the issuance of an additional 2,163,656 shares as a result of
the anti-dilution provision and recorded a financing expense in the amount of
$21,823; the fair value of the shares on the date of the grant. During the nine
months ended September 30, 2013, the Company recorded an decrease in derivative
liability of $559 and a corresponding change in accumulated comprehensive gain
(loss) on the balance sheet. As of September 30, 2013, the Company has not
issued any of the shares discussed above and Maxum is owed 5,166,760 shares.
These shares are recorded as owed but not issued on the balance sheet.</P>
<P style="MARGIN-LEFT: 5%" align=center>12</P>
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<P style="MARGIN-LEFT: 5%" align=justify><B>Note Payable &#150; ASYM</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>On July 3, 2012, the Company entered
into a Purchase Agreement with ASYM Energy Opportunities LLC (&#147;ASYM&#148;), pursuant
to which ASYM agreed to provide up to $10,000,000 in debt financing to be
advanced in approximately ten tranches of $1,000,000 each, with $300,000 of the
initial tranche to be paid upon closing and the remaining $700,000 to be funded
upon the satisfaction of certain conditions, including completion of due
diligence by ASYM, satisfaction by the Company of certain financial tests, and
the availability of funds of ASYM. Each tranche will be evidenced by a senior
secured promissory note which bears interest at a rate of 15% per annum, with
all tranches maturing on June 30, 2015 at an amount equal to 110% of the
principle amount funded. Additionally, each note is subject to early repayment
in the event the Company does not meet certain financial covenants. In
accordance with the agreement, the Company has issued a First Lien Security
Agreement, Mortgage, Deed of Trust, Assignment of Production, Fixture Filing and
Financing Statement to ASYM as collateral to the financing. In connection with
each tranche of funding, the Company is required to issue a warrant to purchase
shares of the Company&#146;s common stock equal to 83% the tranche amount, divided by
the warrant exercise price. Additionally, the Company has entered into a Deposit
Account Control Agreement with ASYM to perfect ASYM&#146;s security interest in
certain bank accounts maintained by the Company. The Company is required to pay
an administrative fee of $100,000 payable upon receipt of the second tranche of
$1,000,000. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Further, pursuant to the Purchase
Agreement, the Company entered into a perpetual Management Services Agreement
with ASYM Management LLC ("ASYM Management") for managerial, financial,
strategic and operational consulting services. The agreement expires only upon
the sale, liquidation or dissolution of the Company or termination by ASYM
Management. Pursuant to the terms of the agreement, the Company has agreed to
pay a monthly management fee of $12,000 plus two percent of the unfunded balance
of the Purchase Agreement. In addition, ASYM Management will be entitled to
receive a warrant equal to 17% of the tranche amount divided by the exercise
price of the warrant.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In March of 2013, the Company amended
its agreement with ASYM Management to raise the monthly management fee to
$20,000 per month and to eliminate the fee on the unused portion of the funding.
The amended agreement lowers the amount owed to ASYM as of March of 2013 by
approximately $47,000 if the full balance owed to them is paid in full by July
31, 2013. The amounts owed to ASYM were not paid in full by July 31, 2013, so
the $47,000 was not forgiven.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The aforementioned warrants had a
variable exercise price computed based on the lesser of (i) $0.20, (ii) eighty
five percent (85%) of the volume weighted average price per share of the
Company&#146;s common stock for the fifteen days preceding the issuance of any
tranche, or (iii) the trailing ninety (90) net average daily oil production
multiplied by $40,000, the product of which is reduced by the Company&#146;s total
liabilities, but not less than $500,000, and then divided by the Company&#146;s fully
diluted number of common shares outstanding. Each warrant will have a term of
five years from the date of issuance and will be limited to an amount where the
underlying shares of common stock issuable upon exercise does not cause ASYM
collectively, to exceed a 4.99% ownership interest in the Company. Upon exercise
of any warrant, the warrant shares are subject to demand registration rights
utilizing best efforts. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On July 3, 2012, the Company estimated
the number of shares underlying warrants that could be issued pursuant to the
Purchase Agreement, while not exceeding an ownership interest of 4.99%, to be
2,576,975 and recorded a derivative liability and corresponding comprehensive
income (loss) in the amount of $354,049 representing the fair value of the of
the warrants on that date. The warrants were valued utilizing the Black-Sholes
Model and the following terms: i) five-year life ii) exercise price of $0.031
iii) volatility of 181% iv) risk free rate of 0.69% and v) share price on the
date of grant of $0.14.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On July 6, 2012, the Company received
$300,000 of the initial tranche and in accordance with the Purchase Agreement
the Company granted two warrants to purchase a total of 2,576,975 shares of the
Company&#146;s common stock, 2,138,889 to ASYM and 438,086 to ASYM Management,
at an exercise price of $0.031 and recorded a financing expense in the amount of
$354,049, the fair value of the warrants on the date of grant. On September 27,
2012, the Company received additional proceeds of $180,000 due under the first
tranche. As consideration for the limitation of funding the entire remaining
$700,000 per the Purchase Agreement, ASYM agreed to a $0.35 exercise price for
the warrant due them in connection with the September 27<sup>th </sup>funding.
As a result, the Company granted two warrants to purchase a total of 376,209
shares of the Company&#146;s common stock and recorded a financing expense in the
amount of $59,124, the fair value of the warrants on the date of grant. The
warrants were valued utilizing the Black-Sholes Model and the following terms:
i) five-year life ii) exercise price of $0.2946 iii) volatility of 179% iv) risk
free rate of 0.64% and v) share price on the date of grant of $0.16 </P>
<P align=center>13</P>
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<P style="MARGIN-LEFT: 5%" align=justify>On November 19 and December 17, the
Company received two additional tranches in the amount of $5,000 each. In
accordance with the terms of the financing agreement the Company granted the
issuance of two warrants to purchase 18,773 and 31,147, respectively in
connection with the funding advances and recorded financing costs of $4,452. The
warrants were valued utilizing the Black-Sholes Model and the following terms:
i) five-year life ii) exercise price of $0.01 iii) volatility of 184%-185 iv)
risk free rate of 0.64% -0.77% and v) share price on the date of grant of $0.12
-$0.07.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 31, 2013, the Company and ASYM
agreed to modify the terms of the July 3, 2012 agreement whereby eliminating the
variable exercise price of each warrant grant due pursuant to the agreement to a
fixed exercise price of $0.01 applicable to both past and future warrant grants.
As a result of the retrospective modification of terms, the Company re-valued
all warrants previously issued and recorded a financing expense in the amount of
$174,683. As of December 31, 2012, the derivative liability related to the fair
value of the variable number of warrants potentially issuable has been
eliminated due to the fixed conversion rate.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The ASYM agreement contains
miscellaneous debt covenant requirements. As of December 31, 2012 and March 31,
2013, the Company was not in compliance with those covenants. On March 28, 2013,
ASYM granted the Company a waiver of those covenants through March 31, 2013 in
return for a 3% overriding royalty interest in all existing and future
properties and a $25,000 waiver fee. The $25,000 waiver fee was not paid but
rather recorded as a tranche loan under the agreement. In accordance with the
terms of the financing agreement the Company granted the issuance of two
warrants to purchase 3,869 and 793, respectively in connection with the funding
advances and recorded financing costs of $240. The warrants were valued
utilizing the Black-Sholes Model and the following terms: i) five-year life ii)
exercise price of $0.01 iii) volatility of 120.5% iv) risk free rate of 0.72%
and v) share price on the date of grant of $0.055.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As of June 30, 2013, the Company was
not in compliance with those covenants. On September 5, 2013, ASYM granted the
Company a waiver of those covenants through September 11, 2013 in return for a
$25,000 waiver fee. The $25,000 waiver fee was not paid but rather recorded as a
tranche loan under the agreement. In July of 2013, the Company received an
additional tranche in the amount of $60,766. During the quarter ended September
30, 2013, In accordance with the terms of the financing agreement the Company
granted the issuance of two warrants to purchase 1,791,965 and 367,029,
respectively in connection with the funding advances and valued the warrants at
$21,590. The warrants were valued utilizing the Black-Sholes Model and the
following terms: i) five-year life ii) exercise price of $0.01 iii) volatility
of 203.77% iv) risk free rate of 1.39% and v) share price on the date of grant
of $0.01.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Subsequent to September 30, 2013, ASYM granted an extension of the waiver of those covenants for all periods prior to November 20, 2013 in return for $25,000 waiver fee in the form of an additional tranche loan under the agreement. </P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Notes Payable &#150; Magna Group</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Effective March 4, 2013, in connection
with the assignment of $140,000 of outstanding convertible debt of the Company
to Magna Group, LLC (&#147;Magna&#148;), the Company issued to Magna a Twelve Percent
(12%) Convertible Note, which matured on September 4, 2013. The Note provides
that Magna, at any time, and the Company, on the maturity date, may convert any
remaining outstanding principal balance and accrued interest under the Note into
shares of common stock of the Company. The conversion price of the Note shall be
equal to a forty five percent (45%) discount from the lowest trading price of
the Company&#146;s common stock in the five days prior to the day Magna requests
conversion. An additional eight percent (8%) discount will be applied if the
Company&#146;s common stock is chilled for deposit at DTC and/or becomes chilled at
any point while the Note is outstanding. In no event will the conversion price
be less than $0.00004 per share. If at any time the Company issues any stock or
grants options or warrants at a price per share less than the
conversion price, then the conversion price will be reduced to such lesser
amount. The Company may prepay the note at any time, upon three business days&#146;
written notice, at a price equal to one hundred and fifty percent (150%) of the
outstanding principal balance of the Note, plus accrued interest. This note
contains a beneficial conversion feature that was calculated at $140,000 and a
discount was recorded. The discount will be amortized over the six-month of the
loan and adjusted for any conversions to common stock. During the nine months
ended September 30, 2013, $140,000 was amortized into interest expense in
relation to the discount and the discount is $0 as of September 30, 2013.</P>
<P align=center>14</P>
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<P style="MARGIN-LEFT: 5%" align=justify>In March of 2013, the company issued
1,305,034 shares of common stock in relation to a conversion of $40,000 of the
Note. In April of 2013, the Company entered into an exchange agreement with
Magna which changed the conversion price to $.008. During the three months
ended, June 30, 2013, the company issued 11,283,784 shares of common stock in
relation to a conversion of $90,000 of the note. In August of 2013, Magna
converted an additional $10,000 of the note into 1,250,000 shares of common
stock. As of September 30, 2013, there is no balance due on this note.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In August of 2013, an additional
$65,000 of outstanding convertible debt of the Company was assigned to Magna.
The Company issued to Magna a Twelve Percent (12%) Convertible Note, which
matures on August 20, 2014. The Note provides that Magna, at any time, and the
Company, on the maturity date, may convert any remaining outstanding principal
balance and accrued interest under the Note into shares of common stock of the
Company. The conversion price of the Note shall be equal to $0.005 on the day of
conversion request. An additional eight percent (8%) discount will be applied if
the Company&#146;s common stock is chilled for deposit at DTC and/or becomes chilled
at any point while the Note is outstanding. In no event will the conversion
price be less than $0.00004 per share. If at any time the Company issues any
stock or grants options or warrants at a price per share less than the
conversion price, then the conversion price will be reduced to such lesser
amount. The Company may prepay the note at any time, upon three business days&#146;
written notice, at a price equal to one hundred and fifty percent (150%) of the
outstanding principal balance of the Note, plus accrued interest. This note
contains a beneficial conversion feature that was calculated at $39,806 and a
discount was recorded. The discount will be amortized over the one year term of
the loan and adjusted for any conversions to common stock. During the nine
months ended September 30, 2013, $7,895 was amortized into interest expense in
relation to the discount and the discount is $31,911 as of September 30,
2013.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In September of 2013, the company
issued 1,500,000 shares of common stock in relation to a conversion of $7,500 of
the note. Subsequent to September 30, 2013, an additional $22,500 of this note
has been converted into 4,500,000 shares of common stock.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, interest in the amount of $1,113 was accrued. As of September 30,
2013, the balance of the note was $57,500. </P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Notes Payable &#150; JMJ
Financial</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Effective March 27, 2013, the Company
issued a convertible promissory note in the total possible amount of $335,000
and borrowed $50,000 under the note. The note bears no interest if repaid within
ninety days and bears interest of 12% if not repaid within ninety dates. The
maturity date of each loan under this promissory note is one year from the date
of the draw. The loan balance is convertible at the lesser of $0.075 or 60% of
the lowest trade price in the 25 trading days previous to the conversion. In
June of 2013, the Company amended its agreement with JMJ Financial to change the
conversion price to be the lesser of $0.01 or 60% of the lowest trade price in
the 25 trading days previous to the conversion. This note contains a beneficial
conversion feature that was bifurcated out of the loan proceeds of the initial
$50,000 draw. A discount on notes payable related to the beneficial conversion
feature was recorded in the amount of $20,000 and will be amortized over the one
year of the loan.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On June 27, 2013, the Company borrowed an additional $25,000 under the note.  A discount on this notes payable related to the beneficial conversion feature was recorded in the amount of $10,000 and will be amortized over the one year of the loan. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On September 27, 2013, the Company
borrowed an additional $25,000 under the note. A discount on this notes payable
related to the beneficial conversion feature was recorded in the amount of
$19,643 and will be amortized over the one year of the loan. </P>
<P style="MARGIN-LEFT: 5%" align=justify>In September of 2013, JMJ converted
$18,000 of the note into 3,000,000 shares of common stock.</P>
<P align=center>15</P>
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<P style="MARGIN-LEFT: 5%" align=justify>As of September 30, 2013, the note
balance on this note is $82,000 and no interest had been accrued. This note
contains a beneficial conversion feature that was calculated in total at $49,643
and a discount was recorded. The discount is being amortized over the life of
the loan and adjusted for any conversions to common stock. During the nine
months ended September 30, 2013, $25,000 was amortized into interest expense in
relation to the discount and the discount is $24,643 as of September 30,
2013.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Subsequent to September 30, 2013,
2,000,000 shares of common stock was issued in conversion of $11,500 of the note
payable.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Notes Payable &#150; Hanover Holdings I,
LLC </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Effective March 4, 2013, the Company
issued a convertible promissory note in the amount of $51,500. The note bears
interest at 12% and matures on December 4, 2013. The loan balance is convertible
at 55% of the lowest trade price in the 10 trading days previous to the
conversion. This note contains a beneficial conversion feature that was
bifurcated out of the loan proceeds. A discount on notes payable related to the
beneficial conversion feature was recorded in the amount of $25,925 and will be
amortized over the life of the loan. In April of 2013, the Company entered into
an exchange agreement with Hanover which changed the maturity date of the note
to November 4, 2014 and changed the conversion price to $.008. The discount on
the notes payable related to the beneficial conversion feature was increased by
$13,768. The note balance is shown as a long term liability on the balance
sheet. In September of 2013, $12,000 of the note was converted to 1,500,000
shares of common stock. During the nine months ended September 30, 2013, $17,858
was amortized into interest expense in relation to the discount and the discount
is $21,835 as of September 30, 2013. As of September 30, 2013, the balance of
the note was $39,500 and $3,567 of interest had been accrued.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Effective April 25, 2013, the Company
issued a convertible promissory note in the amount of $5,000. The note bears
interest at 12% payable on December 26, 2013.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the three months ended September
30, 2013, the Company issued an additional $31,800 convertible promissory note,
bearing interest at 12% and payable on August 20, 2014. A discount on notes
payable related to the beneficial conversion feature was recorded in the amount
of $20,112 and will be amortized over the life of the loan. As of September 30,
2013, the short term note balance was $31,800 with $987 accrued interest. </P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Notes Payable &#150; Friesen</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Effective June 1, 2013, the Company
issued a convertible promissory note in the amount of $15,000. The note bears
interest at 10% and matures one year from date of loan. The loan balance is
convertible at the lesser of $.01 or 25% discount to the average closing trading
price during 5 trading days prior to conversion. This note contains a beneficial
conversion feature that was bifurcated out of the loan proceeds of the initial
$15,000 draw. A discount on notes payable related to the beneficial conversion
feature was recorded in the amount of $7,500 and will be amortized over the one
year of the loan. During the nine months ended September 30, 2013, $3,125 was
amortized into interest expense in relation to the discount and the discount is
$4,375 as of September 30, 2013. As of September 20, 2013, the balance on the
note was $15,000.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Loan Guarantee</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>In 2004, the Company received a demand
for payment from Canadian Western Bank (&#147;CWB&#148;) pursuant to a guarantee provided
by the Company in favor of Calgary Chemical, a former subsidiary. The Company
divested itself of Calgary Chemical in 1998 under an agreement with a former
president and purchaser. The agreements included an indemnity guarantee from the
purchaser of Calgary Chemical, whereby the purchaser would indemnify and save
harmless the Company from any and all liability, loss, damage or expenses. Upon
receipt of the demand, the Company accrued the estimated amount of the claim,
$94,860 along with a comprehensive loss on foreign currency of $8,114, since in
the opinion of legal counsel it is more likely than not that CWB would prevail
in this action. As of December 31, 2012, the Company has determined the loan
guarantee is no longer valid due to its age and the statute of limitations. As a
result, the Company recognized a gain on debt in the amount of $86,746 in the
year ended December 31, 2012.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Financing and interest
expense</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>Financing and interest costs related to
the Company&#146;s aforementioned financing activities for the nine months ended
September 30, 2013 and 2012, totaled $462,203 and $1,681,602, respectively.</P>
<P align=center>16</P>
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  <TR vAlign=top>
    <TD align=left ><B>7.</B> </TD>
    <TD width="95%" align=left><B>Stockholders&#146; Equity Transactions</B>
  </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><B>Common Stock </B></P>
<P style="MARGIN-LEFT: 5%" align=justify>As of December 31, 2011, there are
32,867,028 shares of common stock issued and outstanding and no common stock
owed but not issued.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In January of 2012, the Company issued
900,000 shares of common stock in lieu of executive compensation. The shares
were valued at $189,000, which was market value on the day of the grant.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year December 31, 2012, the
Company authorized the issuance of 767,500 shares of common stock for the
conversion of $239,469 of accounts payable balances. As of the balance sheet
date 84,500 shares were unissued. </P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2012, the Company authorized the issuance of 12,652,869 shares of common stock
for the conversion of $3,163,218 in convertible debt and accrued interest as
discussed in Note 6.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2012, the Company authorized the issuance of 850,509 shares of common stock for
the conversion of $212,628 in notes payable and accrued interest as discussed in
Note 6.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2012, the Company authorized the issuance of 6,006,208 shares of common stock
valued at $832,083 in connection with the anti-dilution provisions provided to
Maxum and CPP. </P>
<P style="MARGIN-LEFT: 5%" align=justify>As of December 31, 2012 there are
47,620,406 shares of common stock issued and outstanding and 6,423,708 shares of
common stock owed but not issued.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company issued 241,667 shares of common stock for cash of
$14,500.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company issued 19,838,818 shares of common stock for the
conversion of $218,200 in convertible debt as discussed in Note 6. As of
September 30, 2013, 1,500,000 of these shares have not been issued and are shown
as common stock to be issued. The shares were issued subsequent to September 30,
2013.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company issued 1,764,706 shares of common stock as a commitment
fee in relation to the Hanover Holdings I, LLC agreement as discussed below. The
shares were valued at $150,000 and capitalized as financing costs. The fee will
be amortized over the two-year life of the agreement.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company authorized the issuance of 3,768,844 shares of common
stock to an officer for the conversion of $39,200 of short term loans and
$35,800 of accounts payable balances. </P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, 333,000 shares that were owed but not issued were issued to an
officer.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As of September 30, 2013 there are
72,067,441 shares of common stock issued and outstanding and 11,918,020 shares
of common stock owed but not issued.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Hanover Holdings I, LLC Purchase
Agreement:</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 22, 2013, the Company entered
into a common stock purchase agreement with Hanover Holdings I, LLC, a New York
limited liability company (the &#147;<U>Investor</U>&#148;). The Purchase Agreement
provides that, upon the terms and subject to the conditions set forth therein,
the Investor is committed to purchase up to $5,000,000 worth of the Company&#146;s
common stock over the 24-month term of the Purchase Agreement.</P>
<P style="MARGIN-LEFT: 5%" align=justify>From time to time over the term of the
Purchase Agreement, commencing on the trading day immediately following the date
on which the initial registration statement is declared effective by the
Securities and Exchange Commission (the &#147;<U>Commission&#148;</U>), as further
discussed below, the Company may, in its sole discretion, provide the Investor
with draw down notices to purchase a specified dollar amount of Shares over a 10
consecutive trading day period commencing on the trading day specified
in the applicable Draw Down Notice, with each draw down subject to the
limitations discussed below. The maximum amount of Shares requested to be
purchased pursuant to any single Draw Down Notice cannot exceed 300% of the
average daily trading volume of the Company&#146;s common stock for the 10 trading
days immediately preceding the date of the Draw Down Notice. </P>
<P align=center>17</P>
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<P style="MARGIN-LEFT: 5%" align=justify>Once presented with a Draw Down Notice,
the Investor is required to purchase a pro rata portion of the applicable Draw
Down Amount on each trading day during the applicable Pricing Period on which
the daily volume weighted average price for the Company&#146;s common stock (the
&#147;<U>VWAP</U>&#148;) equals or exceeds a floor price determined by the Company for
such draw down (the &#147;<U>Floor Price</U>&#148;). If the VWAP falls below the
applicable Floor Price on any trading day during the applicable Pricing Period,
the Purchase Agreement provides that the Investor will not be required to
purchase the pro rata portion of the applicable Draw Down Amount allocated to
that trading day. The per share purchase price for the Shares subject to a Draw
Down Notice shall be equal to 90.0% of the arithmetic average of the three
lowest VWAPs that equal or exceed the applicable Floor Price during the
applicable Pricing Period; provided, however, that if the VWAP does not equal or
exceed the applicable Floor Price for at least three trading days during the
applicable Pricing Period, then the per share purchase price shall be equal to
90.0% of the arithmetic average of all VWAPs that equal or exceed the applicable
Floor Price during such Pricing Period. Each purchase pursuant to a draw down
shall reduce, on a dollar-for-dollar basis, the Total Commitment under the
Purchase Agreement.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company is prohibited from issuing
a Draw Down Notice if (i) the amount requested in such Draw Down Notice exceeds
the Maximum Draw Down Amount, (ii) the sale of Shares pursuant to such Draw Down
Notice would cause the Company to issue or sell or the Investor to acquire or
purchase an aggregate dollar value of Shares that would exceed the Total
Commitment, or (iii) the sale of Shares pursuant to the Draw Down Notice would
cause the Company to sell or the Investor to purchase an aggregate number of
shares of the Company&#146;s common stock which would result in beneficial ownership
by the Investor of more than 4.99% of the Company&#146;s common stock (as calculated
pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder). The Company cannot make more than one
draw down in any Pricing Period and must allow 24 hours to elapse between the
completion of the settlement of any one draw down and the commencement of a
Pricing Period for any other draw down. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Purchase Agreement contains
customary representations, warranties and covenants by, among and for the
benefit of the parties. The Purchase Agreement may be terminated at any time by
the mutual written consent of the parties. Unless earlier terminated, the
Purchase Agreement will terminate automatically on the earlier to occur of (i)
the first day of the month next following the 24-month anniversary of the date
on which the initial registration statement is declared effective by the
Commission or (ii) the date on which the Investor purchases the Total Commitment
worth of common stock under the Purchase Agreement. Under certain circumstances
set forth in the Purchase Agreement, the Company and the Investor each may
terminate the Purchase Agreement on one trading day prior written notice to the
other.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company paid to the Investor a
commitment fee for entering into the Purchase Agreement equal to $150,000 (or
3.0% of the Total Commitment under the Purchase Agreement) in the form of
1,764,706 restricted shares of the Company&#146;s common stock, calculated at a price
equal to $0.085 per share, which was the closing price of our Common Stock on
March 4, 2013. The Commitment shares were issued in March of 2013. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company also agreed to pay up to
$15,000 of reasonable attorneys' fees and expenses (exclusive of disbursements
and out-of-pocket expenses) incurred by the Investor in connection with the
preparation, negotiation, execution and delivery of the Purchase Agreement and
related transaction documentation. Further, if the Company issues a Draw Down
Notice and fails to deliver the shares to the Investor on the applicable
settlement date, and such failure continues for 10 trading days, the Company
agreed to pay the Investor, in addition to all other remedies available to the
Investor under the Purchase Agreement, an amount in cash equal to 2.0% of the
purchase price of such shares for each 30-day period the shares are not
delivered, plus accrued interest.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Purchase Agreement also provides
for indemnification of the Investor and its affiliates in the event that the
Investor incurs losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses related to a breach by the Company of any of its
representations and warranties under the Purchase Agreement or the other related
transaction documents or any action instituted
against the Investor or its affiliates due to the transactions contemplated by
the Purchase Agreement or other transaction documents, subject to certain
limitations.</P>
<P align=center>18</P>
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<P style="MARGIN-LEFT: 5%" align=justify>As of September 30, 2013, no shares
have been purchased under this agreement. Subsequent to September 30, 2013, the
Company did sell shares under this agreement. See Note 10 for further
details.</P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Warrants</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2011, the Company issued 200,000 warrants in relation to a stock sale. The
warrants have a $0.40 exercise price and a two-year life. The warrants expired
on November 7, 2013.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2012, the Company issued 3,003,104 warrants in connection with the ASYM Purchase
Agreement discussed in Note 6. The warrants are exercisable for a term of five
years and at a strike price of $0.01. These warrants expire in the third and
fourth quarter of 2017.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As of December 31, 2012, there are
3,203,104 warrants outstanding at a weighted average exercise price of
$0.0344.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company issued an additional 2,163,656 warrants in connection with
the ASYM Purchase Agreement discussed in Note 6. The warrants are exercisable
for a term of five years and at a strike price of $0.01. These warrants expire
in the first, second, and third quarter of 2018.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As of September 30, 2013, there are
5,366,760 warrants outstanding at a weighted average exercise price of $0.0245.
200,000 of these warrants expired on November 7, 2013. All the remaining
warrants have an exercise price of $0.01.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
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  <TR vAlign=top>
    <TD align=left ><B>8.</B> </TD>
    <TD width="95%" align=left><B>Income Taxes</B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company follows ASC subtopic 740-10
(formerly Statement of Financial Accounting Standard No. 109, &#147;Accounting for
Income Taxes&#148;) for recording the provision for income taxes. ASC 740-10 requires
the use of the asset and liability method of accounting for income taxes. Under
the asset and liability method, deferred tax assets and liabilities are computed
based upon the difference between the financial statement and income tax basis
of assets and liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or settled. Deferred
income tax expenses or benefits are based on the changes in the asset or
liability each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the deferred tax assets to
the amount that is more likely than not to be realized. Future changes in such
valuation allowance are included in the provision for deferred income taxes in
the period of change.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Deferred income taxes may arise from
temporary differences resulting from income and expense items reported for
financial accounting and tax purposes in different periods. Deferred taxes are
classified as current or non-current, depending on the classification of assets
and liabilities to which they relate. Deferred taxes arising from temporary
differences that are not related to an asset or liability are classified as
current or non-current depending on the periods in which the temporary
differences are expected to reverse.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company&#146;s effective income tax rate
is higher than would be expected if the federal statutory rate were applied to
income before tax, primarily because of expenses deductible for financial
reporting purposes that are not deductible for tax purposes. The Company&#146;s
operations for the years ended December 31, 2012 and the nine months ended
September 30, 2013 resulted in losses. Accordingly, no provisions for current
income taxes have been reflected in the accompanying statements of
operations.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As of December 31, 2012 and September
30, 2013, the Company has total net operating loss carry forwards of
approximately $11,500,000 which may or may not be used to reduce future income
taxes payable. Current federal tax law limits the amount of loss available to
offset against future taxable income when a substantial change in ownership
occurs. Therefore, the amount of these losses available to offset future taxable
income may be limited. A valuation allowance has been recorded to reduce the net
benefit recorded in the financial statements related to this deferred asset to
$0. The valuation allowance is deemed necessary as a result of the uncertainty
associated with the ultimate realization of these deferred tax assets.
Accordingly, no provisions for deferred income taxes have been reflected in the
accompanying statements of operations.</P>
<P align=center>19</P>
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  <TR vAlign=top>
    <TD  align=left ><STRONG>9. </STRONG></TD>
    <TD width="95%" align=left><B>Related Party Transactions</B>
</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company issued 4,101,844 shares to an officer. 3,768,844 were
issued for conversion of $75,000 in notes and accounts payable as discussed in
Note 6 and 333,000 were issued that were owed for compensation from prior
periods. During the nine months ended September 30, 2012, the Company issued
900,000 shares to officers and directors in lieu of executive compensation.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the nine months ended September
30, 2013, the Company reimbursed an officer approximately $8,967 in connection
with travel, lodging and meals. During the nine months ended September 30, 2012,
the Company reimbursed an officer $10,996 for a residential lease and related
utilities in Wichita, Kansas, which was being used as the corporate offices. The
Company also reimbursed the officer approximately $9,810 in connection with
travel, lodging and meals.</P>
<P style="MARGIN-LEFT: 5%" align=justify>As noted in Note 7, during the year
December 31, 2012, the Company authorized the issuance of 767,500 shares of
common stock for the conversion of $239,469 of accounts payable balances. As of
the September 30, 2013 and December 31, 2012, 84,500 shares were unissued.
$173,205 of the accounts payable converted was held by officers/directors of the
Company. Subsequent to September 30, 2013, 50,000 of these shares were
issued.</P>
<TABLE
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border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B>Subsequent Events</B></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>In preparing these financial
statements, the Company has evaluated events and transactions for potential
recognition or disclosure through the date the financial statements were issued.
The Company has determined that there were no events to record and the following
events to disclose:</P>
<P style="MARGIN-LEFT: 5%" align=justify>During October of 2013, the Company
received $11,151 in exchange for 450,000 shares of stock. </P>
<P style="MARGIN-LEFT: 5%" align=justify>During October of 2013, the Company
issued 700,000 shares of common stock in exchange for $15,000 of accounts
payable.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During October of 2013, the Company
issued 50,000 shares shown as common stock to be issued as of September 30,
2013.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During October and November of 2013,
$22,500 of notes payable was converted into 4,500,000 shares of common
stock.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During November of 2013, $11,500 of
notes payable was converted into 2,000,000 shares of common stock.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During November of 2013, Hanover
Holdings loaned an additional $50,000 to the Company.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Subsequent to September 30, 2013, ASYM granted an extension of the waiver of debt covenants for all periods prior to November 20, 2013 in return for $25,000 waiver fee in the form of an additional tranche loan under the agreement. </P>
<P style="MARGIN-LEFT: 5%" align=justify><B>Acquisition and Development
Agreement:</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>During November of 2013, the Company
executed definitive agreements for the acquisition and development of the Kansas
Mississippi-Osage Project (the "Kansas Project"), a 15,000 acre Mississippi Lime
package located in Rice and Reno Counties, Kansas (the "Agreement"). </P>
<P style="MARGIN-LEFT: 5%" align=justify>The expenditure commitment and
obligation for the Kansas Project totals $5.4 million to the benefit of the
seller, which we expect to be fully paid after drilling approximately 10 wells.
The acreage, if fully developed on a 640-acre unit basis, could potentially
support the drilling of a minimum of 23 wells, however, we expect down spacing
will increase the number of drilling locations upon development of the assets.
The Company will earn its 80% working interest on each 640-acre unit drilled,
until it ultimately will have ownership of 15,000 gross, or 12,000 net acres.
The play carries an overall 81.25% Net Revenue Interest (N.R.I.). The Company
and the seller have structured a timely development of a new well every ninety
(90) days, allowing sufficient time to drill, complete and evaluate the well
prior to proceeding to the next planned location. </P>
<P align=center>20</P>
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<P style="MARGIN-LEFT: 5%" align=justify>Under the terms of the Agreement, the
Company will not be required to provide the seller any upfront funds, however,
the Company will be obligated to drill a minimum of three (3) initial horizontal
wells to earn its interest in each 640 acre parcel per well. The Company
estimates that for the first ten (10) wells, the Agreement requires the Company
to fund 100% of the drilling and completion costs including installation of
storage tanks on horizontal Mississippi-Osage wells for the Company to earn its
80% Working Interest (W.I.). The Company is required to begin the permitting of
the first well within thirty days (30) and has begun the process on the first
location. The well must be spudded prior to March 15 2014; however the Company
is endeavoring to begin the drilling of the first well as soon as development
capital has been acquired. Each well is estimated to cost $2.5 million to drill
and complete. </P>
<P align=center>21</P>
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<P align=justify><B>Item 2. Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion should
be read in conjunction with our financial statements and notes thereto included
elsewhere in this quarterly report. Forward-looking statements are statements
not based on historical information and which relate to future operations,
strategies, financial results, or other developments. Forward-looking statements
are based upon estimates, forecasts, and assumptions that are inherently subject
to significant business, economic, and competitive uncertainties and
contingencies, many of which are beyond our control and many of which, with
respect to future business decisions, are subject to change. These uncertainties
and contingencies can affect actual results and could cause actual results to
differ materially from those expressed in any forward-looking statements made by
us, or on our behalf. We disclaim any obligation to update forward-looking
statements.</P>
<P align=justify><B>Background</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are an oil and natural gas
exploration and production (E&amp;P) company with current projects in Rice and
Reno Counties in Kansas and Payne and Lincoln Counties in Oklahoma. As of
November 11, 2013, we have six producing wells in Oklahoma. We also have
ownership of 1,410.7 net acres and rights for the exploration and production of
oil and gas on an aggregate of approximately 4,733.8 gross acres in Oklahoma.
This includes rights to explore on 1,847 gross acres in Oklahoma in the North
Oklahoma Mississippi Project and in 2,886 gross acres in south-central Oklahoma
(the &#147;South Oklahoma Project&#148;). We also have rights to develop 15,000 gross
acres, 12,000 net acres in Kansas. In 2012, oil sales from our producing wells
averaged 13.1 cumulative barrels per day.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Typically, our interest in a well
arises from a contract with another entity pursuant to which we provide
financial support for certain costs incurred in the exploration and development
of a project, which may include land costs, seismic or other exploration, and
test drilling. In exchange, we typically receive an interest in the proceeds
from the project&#146;s production.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were formed on January 24,
1996 pursuant to the laws of the State of Nevada under the name Wolf
Exploration, Inc. In August 2001, we changed our name to American Petro-Hunter
Inc. and began focusing our business on the exploration and eventual
exploitation of oil and gas. The Company operates from its offices at 250 N Rock
Rd., Suite 365 Wichita, KS. </P>
<P align=justify><U>Producing Properties</U></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>North Oklahoma Project (North
Oklahoma Woodford &#147;Yale&#148; and North Oklahoma Mississippi Lime Projects) </I>-On
April 21, 2010, we entered into an operating agreement with Bay Petroleum Corp.
(&#147;Bay&#148;) to participate in the drilling for oil in northern Oklahoma (the
&#147;Prospect&#148;). Pursuant to such operating agreement, we agreed to pay to Bay
$52,125 for all costs in connection with the acquisition and operation of the
Prospect, up to the drilling of an initial test well, in exchange for a 25%
working interest and 80% net revenue interest in the Prospect. We are also
responsible for 25% of all expenditures in connection with the development and
operation of the Prospect for drilling. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June 1, 2010, we announced
that the No. 1 well had been put into production. The well produced 1,638
barrels in 2012 at an average of 4.4 barrels per day. The current daily rate is
5 barrels per day.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June 29, 2011, we announced
that NOS122, a re-entry project where the well bore and casing was opened and
cleaned, had begun commercial production. Inaugural loads of oil began shipping
in July of 2011. The well produced 888 barrels in 2012 at a rate of 2.43 barrels
per day. On October 1, 2012 we announced the commencement of drilling of the
NOS222 oil and gas well in Payne County, Oklahoma. The well is an offset to the
NOS122. On October 15, 2012 we announced that the completion program was
underway. It was determined, after the program was completed that the Skinner
sand portion, the primary objective of the well, was the only viable commercial
producer. Currently, the NOS 122 and 222 wells are co-mingled to one tank
battery and produce a combined 3 barrels per day, and sell one 160 barrel load
of oil every other month.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March 25, 2011, we announced
that we had acquired a varied working interest in an additional 2,000 acres
located in Payne County in northern Oklahoma, near the Company&#146;s Yale Prospect.
The project has been named &#147;North Oklahoma Mississippi Lime Project&#148;. On May 16,
2011, we announced that drilling operations had commenced at the Company&#146;s first
horizontal well, NOM1H. The Company owns a 25% Working Interest in the lease. On
June 29, 2011, we announced that NOM1H had begun commercial production. The well
produced 5,199 barrels in 2012 at a rate of 14.2 barrels per day. The well is
currently producing currently six barrels per day and 30 Mcf gas and has
cumulatively produced 12,922 barrels of oil to October 30th, 2013.</P>
<P align=center>22</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July 27, 2011 we announced the
NOW2H, an 80 acre offset to NOM1H. On November 7, 2011, the well commenced
commercial oil and gas production. On March 26, 2012, we announced that after
undergoing a second frack and the installation of a submersible pump, the well
was producing at a daily rate of 30 barrels per day. Since that time the well
has drastically declined and produced a total of 888 barrels in 2012, and 5,837
Mcf of gas. The well is currently no longer economically viable, has had no
sales since June of 2012, and would require re-drilling of the lateral and
re-completion to return to commercial viability. There are no plans at this time
to implement this program.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January 9, 2012, we announced
plans to drill a third horizontal well at the North Oklahoma Project, NOM3H, on
the same section of land as our two previously completed wells, NOM1H and NOW2H.
On February 6, 2012, we announced that we had drilled a total of 1,988 feet in
the horizontal well segment penetrating into the 100 plus foot thick Mississippi
pay zone. The NOM3H began commercial oil and gas production on March 7, 2012.
The average daily rate of production during 2013 has been in the 10-20 barrels
of oil per day range, and the well is currently producing 8 barrels per day with
daily gas production in the 60 Mcf/day range. The well has cumulatively produced
11,131 barrels of oil to October 30<SUP>th</SUP>, 2013.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July 18, 2011, we announced
drilling plans for a total of eleven horizontal wells at the North Oklahoma
Project. As of September 5, 2013, there are at least eight locations left to
drill on the acreage in each of the Woodford Shale and Mississippi Lime that
would be horizontal wells spaced on 180 acres. We previously announced a
drilling schedule that involved drilling one horizontal well approximately every
90 days. However, based on estimated engineering expenses of $3,200,000 for
drilling and completion, we were unable to implement that drilling schedule. Our
revised drilling schedule for 2013 is between one to three wells, depending upon
available capital.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operator of the Oklahoma projects has divested and sold out of all wells, leases and production to a new operator, who in turn prepared an offer to purchase all the Company&rsquo;s interests.  This offer of $400,000 represented what the new operator believed to represent fair market sale price, specifically to our decreased oil and gas production from our six Oklahoma wells, and the fact that the offer did not assign any value to our leases which are due to expire within 12 months. The Company rejected the offer.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>South Oklahoma Project </I>-
On July 20, 2011, we announced the acquisition of a forty percent (40%) working
interest in the South Oklahoma Project on 3,000 acres of land in south-central
Oklahoma. Our engineers have identified five key areas which, if developed on
160 acre spacing, could allow future development of 18 additional locations for
horizontal Mississippi lime and Woodford Shale oil and gas wells.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 2, 2012, we announced
the spud of the first well on the South Oklahoma Project, designated SOM-1H. On
July 10, 2012, the well began commercial production. As of March 1, 2013, the
well had cumulatively produced 5,696 barrels of oil, with 4,618 barrels for the
2012 calendar year, and sales beginning in July 2012 at an average daily rate of
25.4 barrels per day. Current production has cumulatively produced 9,111 barrels
of oil through October 30, 2013, at a daily rate of 13 barrels per day. Daily
gas production is in the 35 Mcf/day range.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Osage Kansas Project - </I>On
October 28, 2013 we entered into a Participation Agreement (the &#147;Participation
Agreement&#148;) with Warpaint Kansas LP (&#147;Warpaint&#148;) for an 80% working interest and
an 81.25% net revenue interest in 15,000 acres, 12,000 net acres, of land in
Kansas. We will be acting as the operator of the project and will be able to
dictate the timeline for the lease development. Additionally, we plan to fund
the majority of this and future developmental drilling transactions by
establishing tax-advantaged direct investment oil and natural gas partnerships
with the goal of raising up to $20 million (the &#147;Partnerships&#148;). We believe that
the development of our oil and natural gas properties through a syndicated
drilling program business model would enable us to earn a fee-based revenue
stream, while at the same time allowing us to continue as a working interest
owner in each well.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend that the Partnerships
will own 40% to 80% of our working interest, with the Company retaining any
remaining working interest not provided to the Partnerships. By seeking direct,
retail driven investment of working interest in the wells, we believe we may be
able to fund development drilling programs without having to incur any
additional debt or issue equity.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our geographical focus will
initially be the Mid-continent (Arkansas, Kansas, Louisiana, New Mexico, Texas
and Oklahoma) and may expand to include other known producing areas located in
the U.S., with a focus on operated properties, such as the Osage Kansas Project.
We have formed a wholly-owned subsidiary, APH Operating Inc., which will act as
operator of the Osage Kansas Project as well as any future oil and natural gas
development projects. In addition, we plan to form a wholly-owned subsidiary to
act as managing general partner of the Partnerships.</P>
<P align=center>23</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of the
Participation Agreement, we will not be required to pay Warpaint any upfront
funds, however, we will be obligated to drill a minimum of three (3) initial
horizontal wells to earn our interest in each 640 acre parcel per well. We
estimate that for the first ten (10) wells, the Participation Agreement requires
us to fund 100% of the drilling and completion costs including installation of
storage tanks on horizontal Mississippi-Osage wells for us to earn our 80%
working interest. We are required to begin the permitting of the first well
within thirty days (30) and have begun the process on the first location. The
well must be spudded prior to March 15 2014, however, we are endeavoring to
begin the drilling of the first well as soon as we can raise the necessary
capital. Each well is estimated to cost $2.5 million to drill and complete.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expenditure commitment and
obligation to Warpaint for the Osage Kansas Project totals in the aggregate $5.4
million, which we expect to be fully paid after drilling approximately 10 wells.
We believe the acreage, if fully developed on a 640-acre unit basis, could
potentially support the drilling of a minimum of 23 wells, however, we expect
down spacing will increase the number of drilling locations upon development of
the assets. We will earn its 80% working interest on each 640-acre unit drilled.
Subject to available capital, the Company and Warpaint have plans for
development of a new well every ninety (90) days, allowing sufficient time to
drill, complete and evaluate the well prior to proceeding to the next planned
location. </P>
<P align=justify><U>Customers</U></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our crude oil production is sold
to Sunoco in Oklahoma. We receive Oklahoma spot prices for our oil and sell our
oil in minimum allotments of 160 barrels.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have commercial sales of
natural gas at our Oklahoma Project through our connection to nearby pipeline
infrastructure. We sell natural gas through such pipeline to DCP Midstream, LP
of Tulsa, Oklahoma and receive a premium to the NYMEX spot natural gas prices
due to the higher BTU content of the gas produced.</P>
<P align=justify><B>Critical Accounting Policies</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial
statements in conformity with United States generally accepted accounting
principles (&#147;U.S. GAAP&#148;) requires management of our Company to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The discussion and analysis of
our financial condition and results of operations are based upon our financial
statements, which have been prepared in accordance with U.S. GAAP. We believe
certain critical accounting policies affect our more significant judgments and
estimates used in the preparation of the financial statements. A description of
our critical accounting policies is set forth in our Annual Report on Form 10-K
for the year ended December 31, 2012. As of, and for the three months ended
September 30, 2013, there have been no material changes or updates to our
critical accounting policies.</P>
<P align=justify><B>Results of Operations</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion of the
financial condition, results of operations, cash flows, and changes in our
financial position should be read in conjunction with our audited consolidated
financial statements and notes included in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2012.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements
mentioned above have been prepared in conformity with U.S. GAAP and are stated
in United States dollars.</P>
<P align=justify><B>Comparison of nine month periods ended September 30, 2013
and September 30, 2012</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the nine month periods ended September 30, 2013 and September 30, 2012, we incurred a comprehensive loss of $2,221,157 and $2,529,752, respectively.  The decrease was largely attributed to a decrease in interest expense, offset by an increase in our net loss before other income resulting from an increase in impairment expense.</P>
<P align=center>24</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administration
expenses for the nine month period ended September 30, 2013 amounted to $429,600
compared to $414,777 in the same period of 2012. Executive compensation for the
nine month period ended September 30, 2013 was $153,000 compared to $430,000, in
the same period of 2012.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the nine month period ended
September 30, 2013, we used net cash of $298,348 in operations. Net cash used in
operating activities decreased from $396,540 in the nine month period ended
September 30, 2012.</P>
<P align=justify><B>Comparison of three month periods ended September 30, 2013
and September 30, 2012</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three month periods ended September 30, 2013 and September 30, 2012, we incurred a comprehensive loss of $1,530,710 and $1,592,517, respectively.  The slight decrease was the result of an increase in net loss before other income resulting from an increase in impairment expense, offset by a decrease in interest expense.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administration
expenses for the three month period ended September 30, 2013 amounted to
$143,577 compared to $157,681 in the same period of 2012. Executive compensation
for the three month period ended September 30, 2013 was $51,000 compared to
$69,000, in the same period of 2012.</P>
<P align=justify><B>Liquidity and Capital Resources</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of September 30, 2013, we had cash of $1,454 and working capital deficiency of $1,033,603.  During the three month period ended September 30, 2013, we funded our operations from revenue received, and proceeds of private sales of equity and notes.  During the three month period ended September 30, 2013, we raised $140,766 from proceeds from a note payable and $0 from sales of our common stock and subsequent to September 30, 2013, as of November 13, 2013, we have raised $75,000 from proceeds of notes payable and $11,151 from sales of our common stock.  We are currently seeking further financing and we believe that will provide sufficient working capital to fund our operations for at least the next six months.  Changes in our operating plans, increased expenses, acquisitions, or other events, may cause us to seek additional equity or debt financing in the future.  For the three months ended September 30, 2013, we used net cash of $175,404 in operations.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June 24, 2013, we announced that we had entered into a common stock purchase agreement dated as of the Closing Date (the &ldquo;Purchase Agreement&rdquo;) with Hanover Holdings I, LLC, a New York limited liability company (&ldquo;Hanover&rdquo;).  The Purchase Agreement provides that, upon the terms and subject to the conditions set forth therein including volume based share and price limitations, Hanover is committed to purchase up to $5,000,000 (the &ldquo;Total Commitment&rdquo;) worth of our common stock, $0.001 par value (the &ldquo;Shares&rdquo;), over the 24-month term of the Purchase Agreement, beginning on the trading day following the date on which a registration statement covering the resale of the Shares by Hanover is declared effective.  The per share purchase price for the shares shall be equal to 90.0% of the arithmetic average of the three lowest volume weighted average prices for our common stock during the applicable pricing period that equal or exceed an applicable floor price equal to the product of (i) 0.70 and (ii) the volume weighted average price for the Company&rsquo;s common stock over the 10 trading days immediately preceding the date the draw down notice is delivered.  We previously paid to Hanover, in March 2013, a commitment fee for entering into the Purchase Agreement equal to $150,000 (or 3.0% of the Total Commitment under the Purchase Agreement) in the form of 1,764,706 restricted shares of our common stock, calculated at a price equal to $0.085 per share, which was the closing price of our Common Stock on March 4, 2013.   In connection with the execution of the Purchase Agreement, we agreed to file an initial registration statement with the Commission to register an agreed upon number of Shares, which shall not exceed 1/3 of the number of shares of our common stock held by non-affiliates of the Company, which registration statement was filed on July 31, 2013 and declared effective as of September 4, 2013.  As of November 8, 2013, Hanover had purchased an aggregate of $11,151 of the Total Commitment.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July 9, 2012, we announced that we entered into a three-year credit facility with ASYM Energy Partners LLC and its affiliates (&ldquo;ASYM&rdquo;), a private investment firm focused on the energy industry (the &ldquo;Credit Facility&rdquo;).  The Credit Facility is secured by all of our assets.  As of November 8, 2013 $600,766 has been advanced under the ASYM Credit Facility, including $50,000 attributed to tranche loans in exchange for waivers by ASYM of the Company&rsquo;s noncompliance with certain covenants of the Credit Facility.  We do not expect to receive additional funds from the ASYM Credit Facility at this time as we do not qualify under the agreement covenants.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and ASYM agreed to
modify the terms of the agreement with ASYM whereby eliminating the variable
exercise price of each warrant grant due pursuant to the agreement to a fixed
exercise price of $0.01 applicable to both past and future warrant grants.</P>
<P align=center>25</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April 25, 2013 and in August
2013, respectively, in exchange for the cancellation of existing indebtedness,
the Company issued promissory notes in the principal amount of $71,000 and
$65,000 to Magna Group, LLC (&#147;Magna&#148;) and promissory notes in the aggregate
principal amount of $83,300 to Hanover Holdings I, LLC (&#147;Hanover&#148;), respectively
(collectively, the &#147;Exchange Notes&#148;). Each of the Exchange Notes is convertible
into common stock of the Company at a fixed conversion price of $0.008 per
share. Additionally, on June 7, 2013, the Company issued to Hanover a
convertible note in the principal amount of $5,000, convertible at a fixed
conversion price of $0.008 per share (the &#147;June 2013 Note&#148;). On August 27, 2013,
Magna loaned an additional $25,000 to the Company.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective June 1, 2013, the
Company issued a convertible promissory note in the amount of $15,000 to an
investor. The note bears interest at 10% and matures one year from date of loan.
The loan balance is convertible at the lesser of $0.01 or 25% discount to the
average closing trading price during the five trading days prior to
conversion.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June 27, 2013, the Company
borrowed $25,000 pursuant to the convertible promissory note issued March 27,
2013 to JMJ Financial. The note bears no interest if repaid within ninety days
and bears interest of 12% if not repaid within ninety dates. The maturity date
is one year from the date of the draw. The loan balance is convertible at the
lesser of $0.075 or 60% of the lowest trade price in the 25 trading days
previous to the conversion. On September 27, 2013, the Company borrowed an
additional $25,000 under the note.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August 7, 2013 we announced
that the Company has executed a term sheet for the acquisition of a 15,000 acre
land package located in the Mississippian &#147;Osage&#148; of central Kansas. The total
purchase price is $5,400,000. We currently have insufficient capital to make the
total purchase price payment. We will need to secure additional debt or equity
financing to pay such obligation, and there is no assurance that we will be able
to raise the required capital on terms favorable to the Company, or that such
capital will be available on any terms.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September 28, 2013, we issued 3,768,844 shares of common stock of the Company to Robert B. McIntosh, the Company&rsquo;s sole officer and director, in consideration for the cancellation of an aggregate of approximately $75,000 in indebtedness owed by the Company to Mr. McIntosh, based upon the closing price of $0.0199 per share of our common stock.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the nine months ended September 30, 2013, we raised $312,266 from proceeds of notes payable and $14,500 from sales of our common stock.  We also earned $107,943 in revenue during the nine months ended September 30, 2013 from our producing wells.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our current cash requirements are significant due to planned exploration and development of current projects.  We anticipate drilling four wells in 2014 which is estimated to cost $10,000,000.  Additionally, we have an aggregate of $191,300 in outstanding short term borrowings.  We will need to secure additional debt or equity financing to pay such obligations as they become due.  Accordingly, we expect to continue to use debt and equity financing to fund operations for the next twelve months, as we look to expand our asset base and fund exploration and development of our properties. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management believes that we
will be able to generate sufficient revenue or raise sufficient amounts of
working capital through debt or equity offerings, as may be required to meet our
short-term and long-term obligations. In order to execute on our business
strategy, we will require additional working capital, commensurate with the
operational needs of our planned drilling projects and obligations. Such working
capital will most likely be obtained through equity or debt financings until
such time as acquired operations are integrated and producing revenue in excess
of operating expenses. There are no assurances that we will be able to raise the
required working capital on terms favorable, or that such working capital will
be available on any terms when needed. If we are unable to raise the required
working capital we will be unable to satisfy our short term borrowing
obligations as they become due.</P>
<P align=justify><B>Off-Balance Sheet Arrangements</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; There are no off-balance sheet
arrangements.</P>
<P align=justify><B>Item 3. Quantitative and Qualitative Disclosures About
Market Risk.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; Not applicable.</P>
<P align=center>26</P>
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<!--$$/page=--><A name=page_24></A>
<P align=justify><B>Item 4. Controls and Procedures.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management with the
participation and under the supervision of our Principal Executive Officer and
Principal Financial Officer reviewed and evaluated the effectiveness of the
design and operation of our disclosure controls and procedures (as defined by
Rule 13a-15(e) or 15d-15(e)) of the Exchange Act Rule 13a-15 as of the end of
the period covered by this report. Based upon that evaluation, our Principal
Executive Officer and Principal Financial Officer concluded that, as of the end
of such period, our disclosure controls and procedures are not effective as of
September 30, 2013 in ensuring that information required to be disclosed by us
in reports that we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the Securities and
Exchange Commission&#146;s rules and forms. This conclusion is based on findings that
constituted material weaknesses. A material weakness is a deficiency, or a
combination of control deficiencies, in internal control over financial
reporting such that there is a reasonable possibility that a material
misstatement of the Company&#146;s interim financial statements will not be prevented
or detected on a timely basis.</P>
<P align=justify><B>Management&#146;s Report on Internal Control Over Financial
Reporting</B></P>
<P style="MARGIN-LEFT: 5%" align=justify>In performing the above-referenced
assessment, our management identified the following material weaknesses:</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">i) </TD>
    <TD>
      <P align=justify>We have not achieved the optimal level of segregation of
      duties relative to key financial reporting functions.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">ii) </TD>
    <TD>
      <P align=justify>We have insufficient quantity of dedicated resources and
      experienced personnel involved in reviewing and designing internal
      controls. As a result, a material misstatement of the interim and annual
      financial statements could occur and not be prevented or detected on a
      timely basis.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">iii) </TD>
    <TD>
      <P align=justify>We did not perform an entity level risk assessment to
      evaluate the implication of relevant risks on financial reporting,
      including the impact of potential fraud related risks and the risks
      related to non-routine transactions, if any, on our internal control over
      financial reporting. Lack of an entity-level risk assessment constituted
      an internal control design deficiency which resulted in more than a remote
      likelihood that a material error would not have been prevented or
      detected, and constituted a material weakness.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%">iv) </TD>
    <TD>
      <P align=justify>We did not have an audit committee or an independent
      audit committee financial expert. While not being legally obligated to
      have an audit committee or independent audit committee financial expert,
      it is the management&#146;s view that to have an audit committee, comprised of
      independent board members, and an independent audit committee financial
      expert is an important entity-level control over our financial
      statements.</P></TD></TR></TABLE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are currently reviewing our
disclosure controls and procedures related to these material weaknesses and
expect to implement changes as our financial situation allows, including
identifying specific areas within our governance, accounting and financial
reporting processes to add adequate resources and personnel to potentially
mitigate these material weaknesses.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our present management will
continue to monitor and evaluate the effectiveness of our internal controls and
procedures and our internal controls over financial reporting on an ongoing
basis and are committed to taking further action and implementing additional
enhancements or improvements, as necessary and as funds allow.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There were no changes in our
internal controls over financial reporting that occurred during the quarterly
period ended September 30, 2013 that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.</P>
<P align=center>27</P>
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<P align=center><B>PART II</B>&#151;<B>OTHER INFORMATION</B></P>
<P align=justify><B>Item 1. Legal Proceedings.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, we may become
involved in various lawsuits and legal proceedings which arise in the ordinary
course of business. However, litigation is subject to inherent uncertainties and
an adverse result in these or other matters may arise from time to time that may
harm our business. To the best knowledge of management, there are no material
legal proceedings pending against the Company.</P>
<P align=justify><B>Item 1A. Risk Factors.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; None.</P>
<P align=justify><B>Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Credit Facility
with ASYM, in July of 2013, the Company received an additional tranche in the
amount of $60,766 and the Company granted the issuance of two warrants to
purchase 1,791,965 and 367,029 shares of common stock, respectively in
connection with the funding advances. The warrants were valued at $21,590.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August 2013, in exchange for
the cancellation of existing indebtedness, the Company issued a convertible
promissory note in the principal amount of $65,000 to Magna and a convertible
promissory note in the aggregate principal amount of $31,800 to Hanover. Each of
the Exchange Notes is convertible into common stock of the Company at a fixed
conversion price of $0.008 per share.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September of 2013, the Company
issued 1,500,000 shares of common stock to Magna upon the conversion of $7,500
of Exchange Notes. Subsequent to September 30, 2013, an additional $22,500 of
Exchange Notes has been converted into 4,500,000 shares of common stock.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September of 2013, JMJ
Financial converted $18,000 of promissory notes into 3,000,000 shares of common
stock. Subsequent to September 30, 2013, an additional $11,500 of promissory
notes was converted into 2,000,000 shares of common stock.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent to September 30, 2013,
in October of 2013, the Company sold 450,000 shares of common stock to an
investor for $11,151.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent to September 30, 2013,
in October of 2013, the Company issued 700,000 shares of common stock in
exchange for $15,000 of accounts payable.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These issuances were made in reliance upon Rule 506 of Regulation D of the Securities Act, and comparable exemptions for sales to &ldquo;accredited&rdquo; investors under state securities laws.</P>
<P align=justify><B>Item 3. Defaults Upon Senior Securities.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; None.</P>
<P align=justify><B>Item 4. Mine Safety Disclosures</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp; Not applicable.</P>
<P align=center>28</P>
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<!--$$/page=--><A name=page_26></A>
<P align=justify><B>Item 5. Other Information.</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October 28, 2013 we entered
into the Participation Agreement with Warpaint for an 80% working interest and
an 81.25% net revenue interest in 15,000 acres, 12,000 net acres, of land in
Kansas. Under the terms of the Participation Agreement, we will not be required
to pay Warpaint any upfront funds, however, we will be obligated to drill a
minimum of three (3) initial horizontal wells to earn our interest in each 640
acre parcel per well. We estimate that for the first ten (10) wells, the
Participation Agreement requires us to fund 100% of the drilling and completion
costs including installation of storage tanks on horizontal Mississippi-Osage
wells for us to earn our 80% working interest. We are required to begin the
permitting of the first well within thirty days (30) and have begun the process
on the first location. The well must be spudded prior to March 15 2014, however,
we are endeavoring to begin the drilling of the first well as soon as we can
raise the necessary capital. Each well is estimated to cost $2.5 million to
drill and complete.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The expenditure commitment and
obligation to Warpaint for the Osage Kansas Project totals in the aggregate $5.4
million, which we expect to be fully paid after drilling approximately 10 wells.
We will earn its 80% working interest on each 640-acre unit drilled. Subject to
available capital, the Company and Warpaint have plans for development of a new
well every ninety (90) days, allowing sufficient time to drill, complete and
evaluate the well prior to proceeding to the next planned location.</P>
<P align=justify><B>Item 6. Exhibits.</B></P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
      ><B>Exhibit Number</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="90%"
      align=left><B>Name</B> </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center >3.1(1) </TD>
    <TD bgColor=#eeeeee width="90%" align=left>Articles of Incorporation, and
      all amendments thereto </TD></TR>
  <TR vAlign=top>
    <TD align=center >3.2(2) </TD>
    <TD width="90%" align=left>Bylaws </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center ><a href="exhibit10-1.htm">10.1 </a></TD>
    <TD bgColor=#eeeeee width="90%" align=left><a href="exhibit10-1.htm">Participation Agreement with Warpaint Kansas LP, dated October 28, 2013 </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center ><a href="exhibit31.htm">31</a></TD>
    <TD width="90%" align=left><a href="exhibit31.htm">Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer and Principal Financial Officer) </a></TD>
  </TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center ><a href="exhibit32.htm">32</a></TD>
    <TD bgColor=#eeeeee width="90%" align=left><a href="exhibit32.htm">Section 1350 Certifications </a></TD>
  </TR>
  <TR vAlign=top>
    <TD align=center >101.INS* </TD>
    <TD width="90%" align=left>XBRL Instance Document </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center >101.SCH* </TD>
    <TD bgColor=#eeeeee width="90%" align=left>XBRL Taxonomy Extension Schema
    </TD></TR>
  <TR vAlign=top>
    <TD align=center >101.CAL* </TD>
    <TD width="90%" align=left>XBRL Taxonomy Extension Calculation Linkbase
  </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center >101.DEF* </TD>
    <TD bgColor=#eeeeee width="90%" align=left>XBRL Taxonomy Extension
      Definition Linkbase </TD></TR>
  <TR vAlign=top>
    <TD align=center >101.LAB* </TD>
    <TD width="90%" align=left>XBRL Taxonomy Extension Label Linkbase </TD></TR>
  <TR vAlign=top>
    <TD bgColor=#eeeeee align=center >101.PRE* </TD>
    <TD bgColor=#eeeeee width="90%" align=left>XBRL Taxonomy Extension
      Presentation Linkbase </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%" BCLLIST>

  <TR>
    <TD vAlign=top  colSpan=2>Footnotes to Exhibits Index</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>Incorporated by reference to the Quarterly Report on Form
      10-Q/A, filed August 30, 2012.</P></TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>Incorporated by reference to Form 10-SB12G dated June 19,
      1997.</P></TD></TR></TABLE>
<P align=justify>* Pursuant to Rule 406T of Regulation S-T, these interactive
data files are deemed not filed or part of a registration statement or
prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or
Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject
to liability.</P>
<P align=center>29</P>
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<P align=center><B>SIGNATURES</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD width="48%" colSpan=2 align=left>AMERICAN PETRO-HUNTER INC. </TD></TR>
  <TR>
    <TD  >&nbsp;</TD>
    <TD width="5%" >&nbsp; </TD>
    <TD width="43%">&nbsp; </TD></TR>
  <TR>
    <TD  >&nbsp;</TD>
    <TD width="5%" >&nbsp; </TD>
    <TD width="43%">&nbsp; </TD></TR>
  <TR>
    <TD  >&nbsp;</TD>
    <TD width="5%" >&nbsp; </TD>
    <TD width="43%">&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD  align=left >Date: November 18, 2013</TD>
    <TD width="5%" align=left >By: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" width="43%" align=left><I>/s/
      Robert B McIntosh</I> </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="43%" align=left>Robert B, McIntosh, President, Chief Executive
      Officer and </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="43%" align=left>Chief Financial Officer </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="43%" align=left>(Principal Executive Officer, Principal
      Financial Officer and </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD width="5%" align=left >&nbsp; </TD>
    <TD width="43%" align=left>Principal Accounting Officer)
</TD></TR></TABLE>
<P align=center>30</P>
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit10-1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
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   <TITLE>American Petro-Hunter, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com</TITLE>
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<P align=center><B>PARTICIPATION AGREEMENT</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Participation Agreement (the
&#147;Agreement&#148;) is entered into effective as of October 28, 2013, by, between, and
between Warpaint Kansas LP (&#147;Owner&#148;), and American Petro-Hunter, Inc., together
with its successors, subsidiaries, and any assignees, (&#147;APH&#148;) (together the
&#147;Parties&#148; and individually a &#147;Party&#148;).</P>
<P align=center><B>RECITALS</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Owner owns interests as lessee
under certain oil and gas leases set forth on <B>Exhibit A </B>(collectively the
&#147;Owner&#146;s Leases,&#148; which term shall also include all leases and oil and gas
interests hereafter acquired by or through Owner or APH and owned by Owner and
APH pursuant to the terms of the AMI Agreement provided for in <B>Exhibit D</B>,
below). As to each current Owner&#146;s Lease, <B>Exhibit A </B>reflects the gross
and net acres to the Owner&#146;s working interest believed to be covered by the
lease, the landowner royalty reserved therein, and any additional burdens to
which the interest of Owner is subject.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. APH intends to participate in
the development of the Owner&#146;s Leases for the purposes of exploring for, and
producing, oil, gas and other hydrocarbons. To that end, APH will make available
FIVE MILLION FOUR HUNDRED THOUSAND DOLLARS ($5,400,000) towards Owner&#146;s share of
the costs and expenses associated with the Drilling and Completion activities
provided below (the &#147;Exploration Funds&#148;).</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Owner agrees that APH may
acquire an interest in the Owner&#146;s Leases under the terms and conditions set
forth herein.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The &#147;Lands&#148; as used herein
refers to the land covered by the Owner&#146;s Leases.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. The Parties agree that they
are not entering into any partnership, joint venture, or any other legal
business relationship under this Agreement. The rights, duties, and obligations
of the Parties are established solely by this Agreement.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW THEREFORE </B>in
consideration of the conditions and mutual benefits contained herein, the
Parties, intending to be legally bound, agree as follows:</P>
<P align=center><B><U>ARTICLE 1</U></B></P>
<P align=center><B>DEFINITIONS</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement, the
following terms shall have the following meaning:</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>AFE </U></B>means an
Authority for Expenditure in the form customarily used in the oil and gas
industry setting forth the estimated costs of drilling, testing, logging, and,
if appropriate, perforating, fracing, and equipping to the Completion of such
Program Well, as well as required salt water disposal wells, gathering systems,
pipelines and other infrastructure.</P>
<P align=center>1</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>AMI Agreement
</U></STRONG>has the meaning ascribed to it in <B>Exhibit D</B>.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Business Day </U></B>means
a day other than Saturday, Sunday or any other day that is a federally
recognized holiday.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Complete, Completion, or
Completing </U></B>means to attempt to finish work on a Program Well and attempt
to bring such wells to productive status (which may include the installation of
permanent wellhead and well location surface equipment for the production of oil
and gas, including salt water disposal wells and facilities (whether or not
located on the lease)) or to plug and abandon (including surface restoration and
reclamation in accordance with applicable Laws and contractual obligations) such
Program Well without production, if appropriate. For the purposes of this
Agreement productive status means first sales.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Completion Costs
</U></B>means, with respect to a Program Well, all costs and expenses relating
to the preparation for, Drilling, testing, logging, and, if appropriate,
perforating, fracing, and equipping, or plugging and abandonment, as the case
may be, to the point of Completion of such Program Well. Completion Costs also
include necessary lease facilities but do not include any off-lease facilities
such as gathering systems and pipelines. For the purposes of this Agreement,
salt water disposal wells, regardless of the location, are considered
Completions Costs; however, it is in APH&#146;s discretion, as operator, to propose
and utilize third part disposal wells at a cost to the working interest
owners.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Drill or Drilling
</U></B>means, with respect to a Program Well, the actual drilling, testing, and
logging, as appropriate, of such Program Well.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Existing Burdens
</U></B>means as to each Owner&#146;s Lease, the lease royalty and any overriding
royalties, payments from or out of production or the proceeds thereof and other
burdens or production affecting all or any portion of any of the Owner&#146;s Leases
that are disclosed on <B>Exhibit A</B>.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Exploration Funds
</U></STRONG>has the meaning ascribed to that term in Recital B.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Governmental Authority
</U></B>means (a) United States of America, (b) any state, county, municipality
or other governmental subdivision within the United States of America, and (c)
any court or any governmental department, commission, board, bureau, agency or
other instrumentality of the United States of America or of any state, county,
municipality or other governmental subdivision within the United States of
America.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>JOA </U></STRONG>has
the meaning ascribed to that term in Section 5.1.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Lands </U></STRONG>has
the meaning ascribed to that term in Recital D.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Laws </U></B>means all
applicable statutes, laws, ordinances, regulations, rules, rulings, orders,
decrees or other official acts of any Governmental Authority.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Operator
</U></STRONG>has the meaning ascribed to that term in the relevant JOA.</P>
<P align=center>2</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Owner </U></STRONG>has
the meaning ascribed to that term in Recital A.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Owner&#146;s Leases
</U></STRONG>has the meaning ascribed to that term in Recital A.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Owner&#146;s Lease Payments
</U></STRONG>has the meaning ascribed to that term in Section 6.3.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Person </U></B>means any
individual, firm, corporation, partnership, joint venture, trust, unincorporated
organization, Governmental Authority, or other entity or organization.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Program Area
</U></STRONG>means all of the lands described in <B>Exhibit B</B>.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Program Objections
</U></STRONG>has the meaning ascribed to that term in Section 3.2. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Program Well Assignment
</U></B>has the meaning ascribed to that term in Section 5.2. </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Program Well Unit
</U></B>has the meaning ascribed to that tern in Section 2.1 </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Service or Served
</U></B>has the meaning ascribed to that term in Section 9.2.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Spud, Spudding or Spudded
</U></B>a Program Well means the commencement of actual drilling operations (the
bit entering the ground) for that well with a rig capable of drilling to the
target formation.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>Termination
</U></STRONG>shall have the meaning specified in Section 4.2.</P>
<P align=center><B><U>ARTICLE 2</U></B></P>
<P align=center><B>EXPLORATION AND DEVELOPMENT PROGRAM</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1 </B><B><U>Exploration and
Development. </U></B>APH shall propose wells on the Lands or on lands with which
portions of the Lands will be pooled or unitized, each such well being a
&#147;Program Well&#148; and each such proposal being a &#147;Proposal&#148;. Each Proposal shall be
in writing delivered to Owner and shall include all engineering, geologic,
geophysical, and other information held by APH and relevant to such Proposal. As
currently anticipated, the target depth for each Program Well shall be
sufficient to test the Mississippian Formation, but future Program Wells may
test other formations, in accordance with Section 2.3 Each Proposal shall
specify a spacing unit as required by governmental regulation or order or, in
the absence of the same, on a spacing unit designated by APH, subject to the
approval of Owner, which approval shall not be unreasonably withheld. In the
event that the spacing unit requires the combination of separate tracts by
pooling or unitization, at least forty (40) net mineral acres covered by Owner&#146;s
Leases shall be included in such pooled or unitized spacing unit and at least
fifty percent (50%) of the net mineral acres included in such pooled or unitized
spacing unit shall consist of Owner&#146;s Leases. Each such spacing unit, whether or
not a pooled or unitized tract, shall be a &#147;Program Well Unit.&#148; A Proposal shall
include any necessary lease facilities, including saltwater disposal facilities,
but shall not include any off-lease facilities such as gathering systems or pipelines. Subject to regulatory
constraints, a Proposal may be made for the drilling of an additional Program
Well on an existing Program Well Unit.</P>
<P align=center>3</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.2 </B><B><U>Drilling
Schedule. </U></B>APH shall deliver a Proposal and file all required permit
applications for the first Program Well within thirty (30) days of the date of
this Agreement and shall Spud such well within ninety (90) days of receipt of
all required permits but not later than March 31, 2014. Thereafter, APH shall
Spud a Program Well at intervals of no longer than ninety (90) days from
Spudding the previous Program Well, without regard to the status of any prior
Program Well, until the expenditure of all Exploration Funds as provided below
or Termination as defined below. During such period, but after the Spudding of
the third Program Well, APH may extend one such ninety (90) day period by an
additional thirty (30) days, by written notice given before the end of such
ninety (90) day period and APH may request additional extensions, by written
request explaining the reasons therefor and submitted before the end of the
period sought to be extended. Owner shall consider each such request and may
grant or reject such requests in its discretion, reasonably exercised. In
exercising its discretion Owner may consider, in addition to the reasons
specified, the general conduct of operations by APH as well as its own interest
in the complete and orderly development of the Owner&#146;s Leases. As to each
Program Well, once Spudded, APH shall conduct operations as a reasonable and
prudent operator, diligently and without unreasonable interruption (any
interruption of more than thirty (30) days being conclusively deemed
unreasonable), until Completion. APH shall continue to propose, Drill, and
Complete Program Wells on the schedule just provided until twenty percent (20%)
of its Completion Costs equals the amount of the Exploration Funds. This Section
2.2 shall be subject to availability of costs effective and competent oilfield
services at all times.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.3 </B><B><U>Initial
Commitment</U></B>. Notwithstanding any requests for extensions, APH shall Drill
and Complete as wells capable of production in paying quantities with first
sales of natural gas having occurred, three (3) Program Wells prior to December
31, 2014. Failure to do so shall result in the Termination, as defined in
Section 4.2, below, a subject only to Owner&#146;s obligation to make any assignments
of interest due based on any Program Wells. It is the Parties mutual preference
that at least two (2) of the three (3) Program Wells, under the initial
commitment, shall test the Mississippian horizontally; alternatively, if only
one (1) well tests the Mississippian formation horizontally, APH is committed to
spending seven million five hundred thousand dollars ($7,500,000) drilling
wells, on an 8/8ths basis, or twenty percent (20%) on behalf of the owner,
before December 31, 2014; failure to do so shall result in Termination.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.4 </B><B><U>Earning.
</U></B>By Drilling and attempting to Completing a Program Well as a well
capable of production in paying quantities and commencing sales of gas therefrom
and paying one hundred percent (100%) of any Completion Cost thereof
attributable to Owner&#146;s
Leases:&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
APH will earn an assignment from Owner
of:<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i) an undivided two percent (2%) working interest, on an eight-eights (8/8ths)
basis, in any Owner&#146;s Lease (or portion thereof) in which APH has not already
received an assignment of a total of an eighty percent (80%) working interest
(in the event that Owner&#146;s Leases comprise less than one hundred percent (100%)
of the interest in the Program Well Unit for such Program Well then the two
percent (2%) working interest shall be reduced proportionately to the extent
that the Program Well Unit contains working interests other than Owner&#146;s
Leases); and</P>
<P align=center>4</P>
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align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
a working interest in Owner&#146;s Leases to the extent that they cover acreage
within the Program Well Unit for such Program Well equal to the difference
between all working interest in such leases to such extent previously assigned
to APH or assigned to APH pursuant to (i) above, and eighty percent (80%) (as a
result, if the Program Well in question is an additional well on an existing
Program Well Unit then no additional interest in such unit shall be earned),
provided
that,&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
(i) any assignment of each Owner&#146;s Lease as just provided that is earned prior
to the Completion by APH of three Program Wells that are capable of production
in paying quantities and the commencement of sales from each such Program Well
shall be made at a Net Revenue Interest of seventy five percent (75%), with
Owner retaining an overriding royalty interest equal to the positive difference,
if any, between all existing burdens as to such Owner&#146;s Lease and twenty five
percent (25%), provided, however, that Completion from the last of such three
Program Wells to commence such sales, such assignments shall automatically vest
in APH, prospectively, an additional net revenue interest such that APH shall
own the working interests conveyed at a net revenue interest of eighty one and
one quarter percent (81.25%) and any overriding royalty interest retained by
shall be reduced to the positive difference, if any, between all existing
burdens as to such Owner&#146;s Lease and eighteen and three quarters percent
(18.75%);&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
any assignment of each Owner&#146;s Lease as just provided that is earned after the
Completion by APH of three Program Wells that are capable of production in
paying quantities and the commencement of natural gas sales from each such
Program Well shall be made at a Net Revenue Interest of eighty one and one
quarter percent (81.25%), with Owner retaining an overriding royalty interest
equal to the positive difference, if any, between all existing burdens as to
such Owner&#146;s Lease and eighteen and three quarters percent (18.75%).</P>
<P align=center><B><U>ARTICLE 3</U></B></P>
<P align=center><B>EXPLORATION FUNDS AND PROCEDURES</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.1 </B><B><U>Exploration
Funds</U></B>. The Exploration Funds will be committed to the payment of that
portion of the Completion Costs of Program Wells attributable to Owner&#146;s
retained twenty percent (20%) interest. APH&#146;s obligations regarding the
application of the Exploration Funds shall survive Termination; as such, even if
this Agreement is terminated, and APH can no longer earn additional acreage
under Section 2.4, APH will be obligated to pay twenty percent (20%) of the
Owner&#146;s Completion Costs on any well proposed by APH under the JOA, including
additional wells in Program Well Units and additional pooled units.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>3.2 <U>Adjustments to
Exploration Fund</U></STRONG>.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
If either party determines and provides written notice of such determination as
soon as identified, but no event later than February 28, 2014, following the
execution of this Agreement any of the Owner&#146;s Leases listed on <B>Exhibit A
</B>is subject to a title defect or actually covers a different number of net
mineral acres than that shown on such exhibit as to such Owner&#146;s Lease, then the
amount of the Exploration Funds shall be adjusted downward or upward by the
change in the number of net acres covered in such lease, as compared to the
number shown on <B>Exhibit A</B>, times eighty percent (80%) times four hundred
and fifty dollars ($450) per net mineral acre. If such Lease is subject to a
complete title defect then it shall no longer be considered an Owner&#146;s Lease and the adjustment shall be based
on the entire number of net mineral acres shown on <B>Exhibit A.</B></P>
<P align=center>5</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Any such notice shall specify the Owner&#146;s Lease in question and shall specify
the basis for the adjustment of the net mineral acres attributable to such
lease. The absence of a document from Owner&#146;s files does not establish the
existence of a title defect or otherwise provide the basis of an adjustment
hereunder. An Owner&#146;s Lease shall be considered to be subject to a title defect
if:&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
is subject to any (x) security interest, lien, mortgage, pledge, hypothecation,
restriction on transfer, including any conditional sale or other title retention
contract or lease in the nature thereof; (y) any filing or agreement to file a
financing statement as debtor under the applicable Uniform Commercial Code or
any similar statute; and (z) any subordination arrangement in favor of another
person (including artificial persons), except for matters to be released at
Seller&#146;s expense at or prior to
Closing;&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
is subject to some matter such that Owner and Owner&#146;s heirs, successors and
assigns will not be entitled to receive, throughout the life of such Lease, a
share of the hydrocarbons produced, saved from or attributable to such Lease,
after giving effect to all valid royalties, overriding royalties, production
payments, net profits interests, carried interests, reversionary interests, or
other similar interests constituting burdens upon, measured by, or payable out
of the hydrocarbons produced and saved from or attributable to such Lease of not
less than eighty-one and one quarter percent
(81.25%);&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
such Lease does not grant to the oil and gas lessee all of the rights considered
usual and necessary to explore for and produce oil and gas;
and&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
Is subject to, or will subject Buyer to, any area of mutual interest, preference
right, option or similar right, other than that created hereby.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
If the parties disagree on the validity of any such notice the matter shall be
resolved by submission to an attorney knowledgeable regarding oil and gas title
matters agreeable to both parties, with costs shared equally by the parties. No
adjustment shall be made to the amount of the Exploration Funds for any matter
not covered by a notice delivered within such thirty (30) day period.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>3.3 <U>Exploration
Procedures</U></STRONG>. The following procedures shall be
used:&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Each Proposal by APH shall
include:<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
an AFE for each individual Program Well including any necessary lease facilities
providing the Program
Well;&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
a description of the Program Well Unit, including a list of all Owner&#146;s Leases
affected by same and a list of all other oil and gas leases affected thereby,
including as to each a list of all working interests owners therein, to APH&#146;s
knowledge;&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
detail regarding the well design and specifications regarding the Program Well;
the description of the nature, function, design, and justification for any such
other
undertaking;&nbsp;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
if available at the time of Proposal, a drilling title opinion from an attorney
satisfactory to Owner covering all tracts in the Program Well Unit for such
Program Well, together with curative satisfactory to Owner regarding any
requirements contained in such opinion, and if not provided at the time of Proposal, a
drilling title opinion must be provided to Owner prior to Spudding a Program
Well and <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v) the proposed timing for the Drilling and Completion of the Program
Well.</P>
<P align=center>6</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
The Owner shall have twenty (20) days from Service of the Proposal to object to
the same, which objections shall be limited to engineering, geological, well
design, the necessity for and design of lease facilities, well location, Program
Well Unit size or configuration, title, and permitting issues (the &#147;Program
Objections&#148;). The Program Objections shall be in writing and shall include a
detailed explanation of the objections, and shall be Served on APH within the
aforementioned twenty-day period</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Within ten (10) days of timely Service of the Program Objections, the Parties
shall meet in a good faith effort to resolve the Program Objections or to
establish an alternate Program Well. In the event the Parties are unable to
resolve a Program Objection within ten (10) days after the forgoing meeting,
then if any Program Objection is based on (i) the Program Well, the proposed
Program Well Unit or the Proposal not being in conformity with the requirements
of this Agreement then the AFE shall be deemed withdrawn and no operations
pursuant thereto shall be conducted, or (ii) other matters, then APH shall be
entitled to proceed under the applicable AFE, notwithstanding the unresolved
Program Objections, provided , however, that no portion of any costs in excess
of AFE shall be chargeable against Exploration Funds.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.4 </B><B><U>Proposals by
Owner. </U></B>Owner shall have the right to propose the Drilling of wells on
Owner&#146;s Leases or on pooled units, whether voluntary or imposed by regulatory
authority, including Lands. The following provisions shall apply to any such
proposal made prior to the complete expenditure of the Exploration Funds in
regard to Program Wells or upon payment to Owner directly as provided in Section
4.1, below. Any such proposal by Owner shall be in the form set forth in Section
3.3, above (each an &#147;Owner Proposal&#148;). APH shall notify Owner within twenty (20)
days of its receipt of an Owner Proposal if it elects to participate in the
Drilling of such well. Absent such a notice, APH shall be deemed to have
declined to participate. If APH declines to participate in the Drilling of such
well then APH shall reassign to Owner all interests Owner&#146;s Leases to the extent
that they cover Lands within the Program Well Unit specified in the Owner&#146;s
Proposal (less and except the wellbore of any Program Well located within such
Program Well Unit), and APH will not be liable for Exploration Funds in the
proposed well. If APH elects to participate in the Drilling of such well then
such Well shall be a Program Well and will be treated for all purposes hereunder
as such.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>3.5 <U>Expenditure of
Exploration Funds</U></STRONG>.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
In connection with any Program Well or other AFE which APH is authorized to
implement pursuant to the foregoing, APH shall bill the Owner pursuant to the
JOA, as the case may be, in connection with the expenditures in connection with
such Project Well or other AFE, provided that any such bills, to the extent
attributable to the interest of such Owner based on its interest in an Owner&#146;s
Lease shall be chargeable, when due, against the Exploration Funds to the extent
of those funds and paid by APH and, therefore, APH shall to the extent of the
Exploration Funds shall pay such amounts.</P>
<P align=center>7</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Owner&#146;s right to charge its share of Completion Costs, or of any other AFE as
referenced above, against Exploration Funds and, therefore, to have them paid by
APH shall continue without regard to whether additional interests in Owner&#146;s
Leases will be earned by APH pursuant hereto as a result of the Drilling of such
Program Well or the accomplishment of the work contemplated by such other AFE
and, specifically, will not be affected by the termination of APH's right to
earn additional assignments of Owner&#146;s Leases hereunder.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
For the avoidance of doubt, Owner&#146;s right to have its Completion Costs
attributable to its interest in any well drilled on Owner&#146;s Leases, or on lands
pooled therewith, in which APH participates, without regard for who proposes
such well, shall continue until the complete expenditure of the Exploration
Funds in regard to such wells or until payment to Owner directly as provided in
Section 4.1, below. Owner directly as provided in Section 4.1, below. If APH
elects to sell any interest in Owner&#146;s Leases prior thereto, then it shall pay
the proceeds of any such sale to Owner to the extent of the remaining balance of
the Exploration Funds as a credit against such funds.</P>
<P align=center><B><U>ARTICLE 4</U></B></P>
<P align=center><B><U>Payoff/Termination</U></B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.1 </B><B><U>Payoff.
</U></B>At any time prior to Termination APH may pay to Owner the outstanding
balance of the Exploration Funds. Unless Termination has occurred prior to such
payment, upon the complete expenditure of the Exploration Funds in regard to
Program Wells or upon payment to Owner directly as just provided, APH shall earn
an undivided eighty percent (80%) working interest in all of Owner&#146;s Leases at
an eighty-one and one quarter percent (81.25%) net revenue interest (with Owner
retaining a twenty Percent (20%) working interest and an overriding royalty
interest as to APH&#146;s working interest equal to the positive difference between
eighteen and three quarters percent (18.75%) and existing burdens) and Owner
shall assign to APH such interest in Owner&#146;s Leases that when combined with
previous assignments shall vest such interest in APH. Thereafter, APH shall have
no obligation to pay Owner&#146;s share of any of the costs incurred in connection
with the ownership or operation of the Owner&#146;s Leases.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.2 </B><B><U>Termination.
</U></B>If APH fails to maintain the Drilling schedule provided for above or
otherwise breaches its obligations hereunder Owner may terminate APH&#146;s right to
earn additional assignments under this Agreement, to earn assignments of
additional interests by making payments under Section 6.3, and to participate in
the acquisition of leases under the AMI (&#147;Termination&#148;), unless Termination is
waiver by Owner. Termination shall be effective immediately upon Owner&#146;s
delivery to APH of notice thereof.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.5 </B><B><U>Effect of
Termination</U></B>. Termination shall not release any of the Parties from any
obligations arising hereunder prior to such termination. Termination does not
preclude Owner from exercising other remedies that are provided in this
Agreement or that are available at law or in equity. Except as otherwise set
forth in this Agreement, all remedies are cumulative, and the exercise of, or
failure to exercise, one or more of them by a Party shall not, to the extent
provided by law, limit or preclude the exercise of, or constitute a
waiver of, other remedies by such Party. In the event of a Termination each JOA
shall remain in full force and effect.</P>
<P align=center>8</P>
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<P align=center><B><U>ARTICLE 5</U></B></P>
<P align=center><B>JOA AND ASSIGNMENT OF OWNER&#146;S LEASES</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.1 </B><B><U>JOA</U></B>. The
Parties shall enter into a model form A.A.P.L. FORM 610 &#150; 1989 Joint Operating
Agreement in the form attached hereto as <B>Exhibit E </B>for each Program Well
covering the Program Well Unit. APH shall be appointed as the Operator under the
JOA. After Completion, all further costs and expenses concerning the Program
Well will be shared proportionately by the parties to the JOA pursuant thereto.
If any Program Well Unit will include any third party working interests Owner
then the Parties agree to seek to negotiate a joint operating agreement with
such third parties as near in its terms to the JOA as may be and upon concluding
such negotiation on terms acceptable to each of the Parties such joint operating
agreement shall be executed.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.2
</B><B><U>Assignment</U></B>. The assignments of working interest provided for
in this Agreement shall be made on the form attached hereto as <B>Exhibit
C</B>.</P>
<P align=center><B><U>ARTICLE 6</U></B></P>
<P align=center><B>OPERATIONS; PAYMENT OF EXPENSES</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.1 </B><B><U>Drilling and
Completion</U></B>. APH shall use reasonable efforts to cause each Program Well
to be drilled to their respective depth as provided in the Proposal for such
Program Well, in accordance with the terms of this Agreement and the JOA.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.2 </B><B><U>Application of
JOA; Conflicts</U></B>. All operations conducted with respect to any Program
Well shall be governed by and conducted in accordance with the provisions of
this Agreement and the applicable JOA. In the event of any conflict or
discrepancy between the terms of this Agreement and a JOA, the terms and
provisions of this Agreement shall control, regardless of any other provision to
the contrary herein, and in the case this Agreement is terminated.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.3 </B><B><U>Payment of Lease
Rentals and Other Payments</U></B>. From the effective date of this Agreement
until termination of the same, the Parties will be responsible for their
proportionate share (80% APH and 20% Owner, without regard for the actual
ownership at the time such payment becomes due) of all rentals, minimum royalty,
bonuses due on extensions and all other payments related to the maintenance of
the Owner&#146;s Leases in effect (but not including any bonus or other payment due
in connection with the acquisition of any Owner&#146;s Lease) (the &#147;Owner&#146;s Lease
Payments&#148;). Unless otherwise agreed to by the Parties, Owner shall notify APH in
writing twenty (20) days before each payment is due which notice shall identify
such Owner&#146;s Lease and the amount of the Owner&#146;s Lease Payment that is due and
shall inform APH whether Owner is willing to make its twenty percent (20%) share
of such payment. If Owner is not willing to make its twenty percent (20%) share
of such payment then APH may make such Owner&#146;s Lease Payment. Upon receipt of written confirmation
that such payment has been made by APH, Owner shall assign to APH all of Owner&#146;s
interest in such Owner&#146;s Lease to the extent that such lease would have
terminated but for such payment, such conveyance being made at an eighty-one and
one quarter percent (81.25%) net revenue interest (with Owner retaining an
overriding royalty interest equal to the positive difference between eighteen
and three quarters percent (18.75%) and existing burdens). Such leases to such
extent shall no longer be considered Owner&#146;s Leases. If Owner&#146;s notice to APH
indicates Owner&#146;s willingness to fund its twenty percent (20%) share of such
Owner&#146;s Lease Payment then APH shall pay such Owner&#146;s Lease Payment and Owner
shall reimburse the APH for Owner&#146;s share of the same. Upon receipt of written
confirmation that such payment has been made by APH, Owner shall assign to APH
any additional interest in such Owner&#146;s Lease, to the extent that such lease
would have terminated but for such payment, which when combined with any
interest in such Owner&#146;s Lease previously assigned to APH equals an eighty
percent (80%) working interest at an eighty-one and one quarter percent (81.25%)
net revenue interest. No portion of the Owner&#146;s Lease Payments shall be a part
of the Exploration Funds.</P>
<P align=center>9</P>
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<P align=center><B><U>ARTICLE 7</U></B></P>
<P align=center><B>WELL INFORMATION AND DATA; CONFIDENTIALITY</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.1 </B><B><U>Seismic,
Geologic and Engineering Information</U></B>. Each Party shall furnish to the
other Parties, copies of all geologic and geophysical data, engineering reserve
reports, electric and other logs pertaining to the Program Wells owned by or
under the control of the disclosing Party (whether currently owned or
subsequently acquired), which the disclosing Party may disclose without
violating any contractual or other restriction and without the incurrence of a
fee. Subject to applicable contractual restrictions, the Parties shall make
copies of any seismic information covering the Program Area owned by or under
their individual control (whether currently owned or subsequently acquired)
available for review by the other Parties at the offices of such disclosing
Party during normal business hours. Upon request, each Party shall provide the
requesting Party with all cores, cuttings, and other geological, geophysical
well and production data and maps secured from, or prepared in connection with,
operations on a Program Well; provided, however, that all reasonable costs
associated with providing any of the forgoing items shall be promptly paid by
the requesting party.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.2 </B><B><U>Title
Information</U></B>. Each Party shall furnish the other Parties with any title
opinions and other title information in the disclosing Party&#146;s possession or
control relating to any Program Well.</P>
<P align=center><B><U>ARTICLE 8</U></B></P>
<P align=center><B>RELATIONSHIP OF PARTIES</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.1 </B><B><U>Independent
Owner</U></B>. The Parties expressly do not intend to create, and no provision
hereof shall be construed as creating a partnership, joint venture, mining
partnership, corporation, association or other relationship whereby any Party
shall ever be held liable for the acts, either by omission or commission, of the
other. Each Party shall be individually responsible for its own obligations as set out in this
Agreement and in the JOA, and no Party shall be a fiduciary of the other Parties
under this Agreement.</P>
<P align=center>10</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.2 </B><B><U>Third
Parties</U></B>. Nothing in this Agreement (express or implied) is intended or
shall be construed to confer upon any person or entity not a Party any right,
remedy or claim under, or by reason of, this Agreement.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.3 </B><B><U>Several
Obligations</U></B>. All obligations of the Parties shall be several and not
joint and several, and all rights of the Parties shall be separate and
independent.</P>
<P align=center><B><U>ARTICLE 9</U></B></P>
<P align=center><B>NOTICES</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.1 </B><B><U>Notices</U></B>.
Unless this Agreement specifically requires otherwise, any notice, demand,
consent or request provided for in this Agreement (including but not limited to
Program Objections, Termination Notice, and AFEs), or served, given or made in
connection with it, shall be in writing and shall be deemed properly served,
given or made if delivered in person or sent by fax or sent by registered or
certified mail, postage prepaid, or by a nationally recognized overnight courier
service that provides a receipt of delivery, or by electronic mail (with a copy
of the notice given no later than the next Business Day in one of the other
forms described in this Section 9.1), in each case, to the Parties at the
addresses specified below:</P>
<TABLE
style="BORDER-COLOR: black; BORDER-COLLAPSE: collapse; FONT-SIZE: 10pt; "
border=0 cellSpacing=0 cellPadding=0 width="100%">

  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="94%" colSpan=2 align=left>If to Owner: </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Warpaint Kansas, LP </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Attn: Robert O. Dow </TD></TR>
  <TR vAlign=bottom>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>1925 Cedar Springs Road, Suite #103 </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Dallas, Texas 75201-1783 </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Phone: (469) 250-7555 </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Fax: (469) 250-7588 </TD></TR>
  <TR vAlign=bottom>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Email: dow@warpaintresources.com </TD></TR>
  <TR>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="94%" colSpan=2 align=left>If to APH: </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>American Petro-Hunter, Inc. </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Attn: Robert B. McIntosh </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>250 N. Rock Rd. Suite 365 </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Wichita, Kansas 67206 </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Phone: (316) 201-1853 </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Fax: (316) 201-1862 </TD></TR>
  <TR vAlign=top>
    <TD  align=left >&nbsp;</TD>
    <TD  width="5%" align=left >&nbsp;</TD>
    <TD width="89%" align=left>Email: rmcintosh@americanpetrohunter.com
  </TD></TR></TABLE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.2 </B><B><U>Effective Date
of Notice</U></B>. The effective date of notice shall be as follows (&#147;Service&#148;
or &#147;Served&#148;): (a) notice given by personal delivery, mail, or overnight courier
pursuant to this Section 9.1 shall be effective upon physical receipt; (b)
notice given by fax pursuant to Section 9.1 shall be effective as of (i) the
date of confirmed delivery if delivered before 5:00 p.m. Central time on any
Business Day; or (ii) the next succeeding Business Day if confirmed delivery is after 5:00 p.m. Central time on any
Business Day or during any non-Business Day; (c) notice given by electronic mail
pursuant to this Section 9.1 shall be effective as of (i) the date sent if sent
before 5:00 p.m. Central time on any Business Day; or (ii) the next succeeding
Business Day if sent after 5:00 p.m. Central time on any Business Day or during
any non-Business Day, <U>provided </U>that a copy of the notice given is sent no
later than the next Business Day following the date on which the electronic mail
was sent in one of the other forms described in Section 9.1.</P>
<P align=center>11</P>
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<P align=center><B><U>ARTICLE 10</U></B></P>
<P align=center><B>REPRESENTATIONS AND WARRANTIES</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.1 </B><B><U>APH
Representations and Warranties</U></B>. APH represents and warrants to the other
Parties, as of the effective date hereof, as
follows:&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
<U>Existence of APH. </U>APH is a corporation duly formed and validly existing
under the laws of the State of Nevada and has all requisite power and authority
to conduct its business as it is now being conducted. APH is qualified to do
business in the State of Kansas and to own or operate real and personal property
in the State of
Kansas.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
<U>Authority</U>. APH has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery by APH of this
Agreement, and the performance by APH of its obligations hereunder, have been
duly and validly authorized by all necessary action on the part of APH, no other
action on the part of APH being
necessary.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
<U>Enforceability. </U>This Agreement has been duly and validly executed and
delivered by APH and constitutes, and upon the execution and delivery by APH of
this Agreement, such Agreement shall constitute, legal, valid and binding
obligations of APH enforceable against APH in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar Laws relating to or affecting the
enforcement of the rights of creditors generally, or by general equitable
principles.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
<U>No Conflicts</U>. The execution and delivery by APH of this Agreement, the
performance by APH of its obligations under this Agreement and the consummation
of the transactions contemplated hereby will
not:&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
conflict with or result in a violation or breach of any of terms, conditions or
provisions of APH&#146;s organizational
documents;&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
require any consent, approval, authorization or permit, or filing with or
notification to, any Person;
or&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
conflict with or result in a violation or breach of any term or provision of any
Law applicable to APH or its assets and properties, except for such violations
or breaches which would not, individually or in the aggregate, reasonably be
expected to materially and adversely affect the ability of APH to perform its
obligations under this
Agreement.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
<U>Governmental Approvals and Filings</U>. No consent, approval or action of,
filing with or notice to any Governmental Authority on the part of APH is
required in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby, with the
exception of permits and approvals required by any Governmental Authority relating to a Program Well and
associated activities or any securities laws or other regulatory requirements
related to being a public company.</P>
<P align=center>12</P>
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width="100%" noShade>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
<U>Legal Proceedings. </U>There are no actions or proceedings pending (service
of process against APH having been made) or, to APH&#146;s knowledge, specifically
threatened in writing against APH that would, in the aggregate, reasonably be
expected to result in the issuance of any order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
<U>Bankruptcy. </U>There are no bankruptcy, reorganization, or insolvency
proceedings pending with respect to, or being contemplated by, or, to APH&#146;s
knowledge, threatened against, APH.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
<U>Due Diligence. </U>APH has independently performed its own due diligence on
the Program Area and is not relying upon representations, whether expressed or
implied, made by Owner, including but not limited to production rates, reserves
(if any), prices, drilling or recompletion opportunities and the costs to be
incurred for developing or operating the Owner&#146;s Leases. Further, APH has
performed its own independent geologic, engineering, regulatory and economic
assessment of the Program Area and in signing this Agreement is relying solely
on its own assessment and conclusions.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
<U>Capital Raising. </U>APH understands and agrees that APH&#146;s capital raising
efforts, whether via equity, debt, retail syndication and/or other means, are
paramount to APH&#146;s ability to perform under the terms of this Agreement. As
such, APH will raise at least its initial commitment under Section 2.3, or seven
million five hundred thousand dollars ($7,500,000), before January 31, 2014, as
evidenced by signed agreements to fund, monies held in escrow, and/or available
cash.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.2 </B><B><U>Owner
Representations and Warranties</U></B>. Owner represents and warrants to the
other Parties, as of the date hereof, as follows: </P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
<U>Existence of Owner. </U>Owner is a corporation duly formed and validly
existing under the laws of the State of Texas and has all requisite power and
authority to conduct its business as it is now being conducted. Owner is
qualified to do business in the State of Kansas and to own or operate real and
personal property in the State of Kansas.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
<U>Authority</U>. Owner has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery by Owner of
this Agreement, and the performance by Owner of its obligations hereunder, have
been duly and validly authorized by all necessary action on the part of Owner,
no other action on the part of Owner being necessary.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
<U>Enforceability. </U>This Agreement has been duly and validly executed and
delivered by Owner and constitutes, and upon the execution and delivery by Owner
of this Agreement, such Agreement shall constitute, legal, valid and binding
obligations of Owner enforceable against APH in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar Laws relating to or affecting the
enforcement of the rights of creditors generally, or by general equitable
principles.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
<U>No Conflicts</U>. The execution and delivery by Owner of this Agreement, the
performance by Owner of its obligations under this Agreement and the
consummation of the transactions contemplated hereby will not:</P>
<P align=center>13</P>
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width="100%" noShade>
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<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
conflict with or result in a violation or breach of any of terms, conditions or
provisions of Owner&#146;s organizational
documents;&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
require any consent, approval, authorization or permit, or filing with or
notification to, any Person;
or&nbsp;<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
conflict with or result in a violation or breach of any term or provision of any
Law applicable to Owner or its assets and properties, except for such violations
or breaches which would not, individually or in the aggregate, reasonably be
expected to materially and adversely affect the ability of Owner to perform its
obligations under this Agreement.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E)
<U>Governmental Approvals and Filings</U>. No consent, approval or action of,
filing with or notice to any Governmental Authority on the part of Owner is
required in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby, with the
exception of permits and approvals required by any Governmental Authority
relating to a Program Well and associated activities.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
<U>Legal Proceedings. </U>There are no actions or proceedings pending (service
of process against Owner having been made) or, to Owner&#146;s knowledge,
specifically threatened in writing against Owner that would, in the aggregate,
reasonably be expected to result in the issuance of any order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
<U>Bankruptcy. </U>There are no bankruptcy, reorganization, or insolvency
proceedings pending with respect to, or being contemplated by, or, to Owner&#146;s
knowledge, threatened against, Owner.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
<U>Foreign Person. </U>Owner is not a &#147;foreign person&#148; within the meaning of
Code Section 1445 (See <B>Exhibit F</B>).</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
<U>Leases. </U>To the Owner&#146;s knowledge, the Owner&#146;s Leases listed on Exhibit A
are materially accurate and in good standing. However, Owner is not warranting
title.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
<U>Net Revenue Interest. </U>The revenue interest for the Owner&#146;s Leases will be
greater or equal to eighty one and one quarter percent (81.25%), after any and
all overriding royalty interests to all parties, inclusive of Owner and its
affiliates.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.3 </B><B><U>Disclaimer of
Representations and Warranties</U></B>. THE PARTIES HERETO MAKE NO, AND HEREBY
DISCLAIM ANY, REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AND
WHETHER BY COMMON LAW, STATUTE, OR OTHERWISE EXCEPT AS EXPRESSLY SET FORTH IN
THIS ARTICLE 10.</P>
<P align=center><B><U>ARTICLE 11</U></B></P>
<P align=center><B>MISCELLANEOUS</B></P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.1
</B><B><U>Assignment</U></B>. Any Party may assign its interest under this
Agreement provided that such Party remains liable for or guarantees the
performance of its assignee and provided that such Party gives the other Parties
appropriate documentation evidencing such assignment. Any assignment made will
be subject to the terms and provisions of this Agreement. In addition, said
assignee will be required to ratify this Agreement.</P>
<P align=center>14</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.2 </B><B><U>Governing
Law</U></B><B>. </B>This Agreement and other instruments executed in accordance
with it, except for assignments of lands, or the execution hereof shall be
governed by and interpreted according to the laws of the State of Texas. As to
assignments of the Owner&#146;s Leases shall be governed by the laws of the State of
Kansas. The Parties agree to the jurisdiction of the courts of the State Kansas
and that venue for any action hereunder shall lie in state or federal courts
sitting in Sedgwick County, Kansas.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.4 </B><B><U>Entire
Agreement. </U></B>This Agreement, the documents to be executed hereunder, and
the exhibits attached hereto constitute the entire agreement between the
Parties, supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the Parties, and there are no
warranties, representations or other agreements between the Parties except as
specifically set forth herein. No supplement, amendment, alteration,
modification, waiver or termination of the Agreement shall be binding unless
executed in writing by the Parties hereto. Notwithstanding anything contained
herein or therein to the contrary, this Agreement specifically supersedes,
replaces, and terminates the Term Sheet executed by the Parties dated July 26,
2013 and the &#147;Drill to Earn&#148; letter agreement dated October 1, 2013.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.5 </B><B><U>Waiver</U></B>.
No delay or omission by a Party in the exercise of any right, power or remedy
under this Agreement will impair any such right, power or remedy or operate as a
waiver thereof or of any other right, power or remedy then or thereafter
existing. No waiver of any of the provisions of the Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.6 </B><B><U>Captions;
Definition of &#147;Including&#148;. </U></B>The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. The term
&#147;including&#148; or &#147;includes&#148;, as used herein, shall mean &#147;including, without
limitation,&#148; and &#147;includes, without limitation&#148;.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.7 </B><B><U>Binding.
</U></B>This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective permitted successors, assigns and legal
representatives.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.8 </B><B><U>Expenses.
</U></B>Except as otherwise provided herein, each Party shall be solely
responsible for all expenses incurred by it in connection with this transaction
(including fees and expenses of its own counsel and accountants).</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.9 </B><B><U>Execution.
</U></B>This Agreement may be executed in multiple original counterparts, all of
which shall together constitute a single agreement and each of which, when
executed, shall be binding for all purposes thereof on the executed Party, its
successors, legal representatives and assigns.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.10
</B><B><U>Severability</U></B>. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any materially adverse manner to any
Party.</P>
<P align=center>15</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.11 </B><B><U>Further
Assurances. </U></B>During the time in which this Agreement is in effect, the
Parties shall, at any time and from time to time, and without further
consideration, execute and deliver or use reasonable efforts to cause to be
executed and delivered such other instruments of conveyance and contract, and to
take such other actions as either party may reasonably request that effect the
intent of this Agreement.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.12 </B><B><U>Not to be
Construed Against Drafter</U></B>. The Parties acknowledge that they have had an
adequate opportunity to review each and every provision contained in this
Agreement, that they have participated equally in the drafting hereof and that
they have had adequate time to submit same to legal counsel for review and
comment. Based on said review and consultation, the Parties agree with each and
every term contained in this Agreement. Based on the foregoing, the Parties
agree that the rule of construction that a contract be construed against the
drafter, if any, shall not be applied in the interpretation and construction of
this Agreement.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.13 </B><B><U>Third-Party
Beneficiaries</U></B>. This Agreement is not intended to confer any rights or
remedies upon any Person other than the Parties and their respective successors,
legal representatives and permitted assigns.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.14 </B><B><U>Subject to
Existing Agreements</U></B>. This Agreement, any and all JOA&#146;s, the Assigned
Properties and the Program Well Assignments shall be subject to all existing
agreements and obligations of the Owner that relate to or affect any of the
forgoing, including but not limited to any and all Existing Burdens.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.15 </B><B><U>Attorneys&#146;
Fees and Costs</U></B>. If any action is commenced to recover any damages or
enforce any rights or obligations under this Agreement, then the prevailing
Party or Parties shall recover and the losing Party or Parties shall pay the
reasonable attorneys&#146; fees, costs and expenses incurred by the prevailing Party
or Parties at the trial and upon any appeals therefrom (including in any
bankruptcy proceeding), as determined by the respective courts.</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>11.16 <U>Time is of the
Essence</U></STRONG>. Time is of the essence of this Agreement.</P>
<P align=center>16</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.17 </B><B><U>Investment
Representations. </U></B>APH understands (a) that the interests evidenced by
this Agreement have not been registered under the United States Securities Act
of 1933, or any state securities laws (the &#147;Securities Acts&#148;), (b) that the
Owner have relied upon the fact that the interests are to be held by APH for
investment, (c) that exemption from registration under the Securities Acts may
not be available if the interests were acquired by APH with a view to
distribution, and (d) APH is an &#147;accredited investor&#148; as defined in Regulation D
adopted by the Securities and Exchange Commission. Accordingly, APH hereby
confirms to the Owner that it is acquiring the interests for its own account,
for investment and not with a view to the resale or distribution thereof. APH
agrees not to transfer, sell or offer for sale any or any portion of the
interests unless there is an effective registration or other qualification
relating thereto under the Securities Act of 1933 and under any applicable state
securities laws or unless APH delivers to the Owner, if any of the Owner
request, an opinion of counsel, that such registration or other qualification
under such Act and applicable state securities laws is not required in
connection with such transfer, offer or sale. APH understands that the Owner are
under no obligation to register the interests or to assist APH in complying with any
exemption from registration under the Securities Acts if APH should at a later
date, wish to dispose of the interests. Prior to acquiring the interests, APH
has made an investigation of the Owner and their respective businesses and has
had made available to it all information with respect thereto which it needed to
make an informed decision to acquire the interests contemplated herein. APH
considers itself to be an entity possessing experience and sophistication as an
investor which are adequate for the evaluation of the merits and risks of its
investment in the interests and transaction contemplated herein.</P>
<P align=center>[<B>Intentionally Left Blank</B>]</P>
<P align=center>17</P>
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<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, this
Participation Agreement, effective as of the date and year first written above,
has been duly executed and delivered by the duly authorized representative of
each Party as of the date written below each such Party&#146;s name.</P>
<P align=justify><B>WARPAINT KANSAS, LP</B></P>
<P align=justify>By: Oklaunion Management, LP, its General Partner <BR>By:
Warpaint Resources, LLC, its General Partner</P><IMG border=0 src="exhibit10-1x18x1.jpg">
<BR>
<P align=center>18</P>
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<TYPE>EX-31
<SEQUENCE>3
<FILENAME>exhibit31.htm
<DESCRIPTION>EXHIBIT 31
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    <TD align=right><B>EXHIBIT 31 </B></TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=center><B>CERTIFICATION PURSUANT TO </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>18 USC, SECTION 1350, </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>AS ADOPTED PURSUANT TO </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
  </B></TD></TR></TABLE>
<P align=justify>I, Robert B. McIntosh, certify that:</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this report on
Form 10-Q of American Petro-Hunter Inc.;</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this
report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the
financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods
presented in this report;</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant&#146;s other
certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared; </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles; </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
Disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal
quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the
registrant&#146;s internal control over financial reporting; and</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant&#146;s other
certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrant&#146;s auditors and
the audit committee of the registrant&#146;s board of directors (or persons
performing the equivalent functions): (a) All significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant&#146;s ability to record, process, summarize and report financial
information; and (b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant&#146;s
internal control over financial reporting.</P>
<P align=justify>Date: November 18, 2013</P>
<P style="MARGIN-LEFT: 50%" align=justify><I><U>/s/ Robert B.
McIntosh</U><BR></I>Robert B. McIntosh<BR>President, Chief Executive Officer,
Chief Financial Officer <BR>(Principal Executive Officer, Principal Financial
Officer <BR>and Principal Accounting Officer)</P>
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<TYPE>EX-32
<SEQUENCE>4
<FILENAME>exhibit32.htm
<DESCRIPTION>EXHIBIT 32
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    <TD align=right><B>EXHIBIT 32 </B></TD></TR>
  <TR>
    <TD>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD align=center><B>CERTIFICATION PURSUANT TO </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>18 U.S.C. SECTION 1350, </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>AS ADOPTED PURSUANT TO </B></TD></TR>
  <TR vAlign=top>
    <TD align=center><B>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
  </B></TD></TR></TABLE>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the quarterly
report of American Petro-Hunter Inc. (the &#147;Company&#148;) on Form 10-Q for the period
ended September 30, 2013, as filed with the Securities and Exchange Commission
(the &#147;Report&#148;), each of the undersigned officers, certifies, pursuant to 18
U.S.C. &#167; 1350, as adopted pursuant to &#167; 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of my knowledge:</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Report fully complies
with the requirements of section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and</P>
<P align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the information contained in
the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.</P>
<P align=justify>Date: November 18, 2013</P>
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  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="50%" align=left><I><U>/s/ Robert B. McIntosh </U></I></TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="50%" align=left>Robert B. McIntosh </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="50%" align=left>President, Chief Executive Officer and Chief
      Financial </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="50%" align=left>Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="50%" align=left>(Principal Executive Officer, Principal
      Financial Officer </TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;</TD>
    <TD width="50%" align=left>and Principal Accounting Officer)
</TD></TR></TABLE>
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