FORM
10-KSB
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
S
ANNUAL
REPORT PURSUANT TO SECTION 13 or 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission
File Number:
000-30891
For the
Year ended
December 31,
2007
Turner
Valley Oil & Gas, Inc.
Nevada
|
Optional
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(Jurisdiction
of Incorporation)
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(I.R.S.
Employer Identification No.)
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604-700
West Pender Street Vancouver Canada
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V6G
1G8
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(Address
of principal executive offices)
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(Zip
Code)
|
Registrant's
telephone number, including area code:
(604) 602-1650
Securities
registered pursuant to Section 12(g) of the Act:
Common Voting Equity
Stock
Yes
S
No
£
(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.)
£
(Indicate
by check mark whether if disclosure of delinquent filers (Sec.229.405) is not
and will not to the best of Registrant's knowledge be contained herein, in
definitive proxy or information statements incorporated herein by reference or
any amendment hereto.)
Issuer's
Revenues most recent fiscal year:
None
As of
12/31/07
the number of
shares of common stock outstanding was
58,335,970
.
As of
12/31/07
the number of
shares held by non-affiliates was approximately
54,646,975
shares, with a market
value of
$3,825,288
low
bid of
$0.07
Exhibit
Index is found on page 10
CONTENTS
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11
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INTRODUCTION
This
Registrant (Reporting Company) has elected to refer to itself, whenever
possible, by normal English pronouns, such as "We", "Us" and "Our". This Form
10-KSB may contain forward-looking statements. Such statements include
statements concerning plans, objectives, goals, strategies, future events,
results or performances, and underlying assumptions that are not statements of
historical fact. This document and any other written or oral statements made by
us or on our behalf may include forward-looking statements which reflect our
current views, with respect to future events or results and future financial
performance. Certain words indicate forward-looking statements, words like
"believe", "expect", "anticipate", "intends", "estimates", "forecast",
"projects", and similar expressions.
PART I
ITEM 1
. Description of Business.
(a)
Form and Year
of Organization.
Our Corporate organization and history is described in
our previous annual and quarterly reports. During 2007 we issued share to
Officers, Directors and service providers, pursuant to registration, as provided
in Sections 5 and 6 of the Securities Act of 1933, with filings on Form
S-8.
The
foregoing is illustrated more fully in the table on the following
page.
Table ON
Current Year
Issuances
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Valued
at
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Shares
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Carried
from 12/31/05
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55,535,970
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Issue
4/01/07: Registered for services @0.025
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$
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70,000
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2,800,000
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Total
Issued and Outstanding 12/31/05
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$
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70,000
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58,335,970
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(
c
) Our
Business.
Turner Valley
Oil and Gas Inc.
(“TVOG”) is an emerging oil and gas Company. Since
commencing operations as an Oil and Gas Company, in August of 2003, TVOG has
incorporated a wholly owned Canadian subsidiary, TV Oil and Gas Canada Limited
(Federal Canadian Registry). Our subsidiary has acquired a solid base of oil and
gas properties located in the western basin of Alberta, Canada. These properties
provide
Turner Valley Oil and
Gas Inc.
with a firm foothold in the oil and gas sector. It is
Management’s intent to continue to; add proven producing, development and
exploration properties during 2007. As is the case with all of our properties,
the Company has taken all necessary actions to commence operations on these
properties as quickly as possible and this has been done. The nature of the oil
and gas business requires that the Management and Board remain diligent in
assessing risk and insisting that the Company’s Operators work in strict
compliance with all prevailing legislation. This has been done.
Risk
Tolerance
Our risk
tolerance would best be described as conservative in nature. Although we
recognize that oil and commodity pricing is reaching all time highs we routinely
apply flat pricing at a discount to market, in our risk analysis. We will only
participate in programs that are; extremely well researched, fit within our
financial capacity and have undergone stringent independent reviews. If a
problem should occur at any time in the life of the property, Management has
developed an exit strategy for each property that will allow us to cap our
potential for loss. These exit stratagems are for internal use
only.
Please
see Management's Discussion and Analysis, Item 6 following.
DESCRIPTION
OF OIL & GAS PROPERTIES
ITEM
3.
Description
of Property.
We enjoy
the non-exclusive use of the offices of our Officers, and have no other
miscellaneous property of our own. But please see Management's Discussion and
Analysis, Item 6 following.
ITEM
5.
Legal
Proceedings.
There are
no legal proceedings pending against we, as of the preparation of this
Report.
ITEM
7.
Submission
of Matters to a Vote of Security
Holders.
None.
PART II
ITEM
9. Market for Common
Equity
and Stockholder
Matters.
(a) Market
Information
.
The Common Stock of this Issuer has not
been quoted Over the Counter on the Bulletin Board ("OTCBB") or the NQB Pink
Sheets or otherwise, during the period of this report. Our common stock was
cleared for quotation on the OTCBB on February 20, 2002 and had never before
traded in brokerage transactions.
Table
ON PERIOD
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HIGH
BID
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LOW
BID
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VOLUME
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3rd
2004
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0.18
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0.12
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4,784,580
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4th
2004
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0.34
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0.12
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22,427,460
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1st
2005
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0.38
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0.21
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59,337,300
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2nd
2005
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0.29
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0.12
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15,100,140
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3rd
2005
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0.19
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0.12
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11,437,060
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4th
2005
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0.14
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0.06
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10,552,140
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1st
2006
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0.23
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0.06
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13,434,000
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2nd
2006
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0.22
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0.03
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7,754,000
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3rd
2006
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0.14
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0.07
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6,864,000
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4th
2006
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0.11
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0.07
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9,134,000
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1st
2007
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0.08
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0.04
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10,660,000
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2nd
2007
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0.04
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0.02
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10,110,000
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3rd
2007
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0.02
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0.01
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10,008,000
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4th
2007
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0.03
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0.01
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9,200,000
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Source:
Yahoo Finance
(c)
Holders
.
There are approximately 100 shareholders of the
our common stock, giving effect to shares held in brokerage
accounts.
(e)
Dividends
.
No dividends have been paid by us on the
Common Stock or other Stock and no such payment is anticipated in the
foreseeable future. We have not paid any cash dividends on our Common Stock, and
do not anticipate paying cash dividends on our Common Stock in the next year. We
anticipate that any income generated in the foreseeable future will be retained
for the development and expansion of our business. Future dividend policy is
subject to the discretion of the Board of Directors and will depend upon a
number of factors, including future earnings, debt service, capital
requirements, business conditions, the financial condition of we and other
factors that the Board of Directors may deem relevant.
(g)
Sales
of
Unregistered Common Stock 2007.
We made no unregistered issuances in
2005, 2006 or 2007.
ITEM
11.
Management's
Discussion and Analysis or Plan of
Operation.
(a) Plan of
Operation
.
Our plan of operations is a sole focus on
exploration for, development drilling for, and transmission facilities for, the
production of oil and gas. Our Nevada parent company
Turner Valley Oil & Gas
,
owns a wholly-owned Canadian subsidiary
T.V. Oil & Gas, Limited
,
a Federal Registered Canadian company in full compliance with all Canadian law
and regulations.
Our
financial statements contain the following additional material
notes:
(Note
2-Going Concern) The Company's financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has suffered
recurring operating losses and is dependent upon raising capital to continue
operations. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty. It is management's plan to raise
additional funds to continue the explorations of the leases, and then to begin
producing oil and/or gas/or both to sell under contract and thereby generate the
necessary funds to continue operations.
(Note
3-Development Stage Company) We are a development stage company as defined in
Financial Accounting Standards Board Statement 7. We are concentrating on
raising capital and developing our business operation
(b) Cautionary
Statements
. There can be no assurance that we will be successful in
raising capital through private placements or otherwise. Even if we are
successful in raising capital through the sources specified, there can be no
assurances that any such financing would be available in a timely manner or on
terms acceptable to us and our current shareholders. Additional equity financing
could be dilutive to our then existing shareholders, and any debt financing
could involve restrictive covenants with respect to future capital raising
activities and other financial and operational matters. While Management has
expressed confidence in the attainment of profitability sooner, rather than
later, projects and even reasonable expectations are not outcomes yet. There is
no absolute assurance that even our best laid plans and most diligent operations
will succeed.
(c) Discussion and Analysis of
Financial Condition and Results of Operations.
During the year ended
December 31, 2007, we had royalty revenues of $4,165 from our working interest
in the Strachan property (December 31, 2006 $9,813). The decrease in royalties
was caused by a special assessment initiated by the Operator of the well during
the year ended December 31, 2006. All our properties are geographically and
physically independent of one another. They are located in the Western Canada
Geologic Basin centered in Alberta, Canada.
The Strachan Property
. On
August 20, 2003, we entered into a purchase agreement to acquire 1% interest in
a producing gas well, located at 2-2-38-9W5 Red Deer, Alberta, Canada. The
Strachan Prospect is located 80 miles NW of Calgary, Alberta. The gas production
rate at the time of the acquisition fluctuated between 1.5 and 2 MMCF/Day
(million cubic feet of gas per day). The Company's senior management has set out
a rework program for this well. The rework program calls for an acid wash and
acid stimulation of the producing formation. The Company has agreed to
participate in the program. The program was completed on October 15, 2003 and as
of October 20, 2003, the new production rates have stabilized at approximately
2.66 MMCF/Day, representing a 40% increase over initial production
rates.
In
addition to the preceding acquisition, we entered into a purchase agreement to
acquire 0.5% interest in 10 Sections (6,400 acres) of drilling rights offsetting
Sct. 22-38-9W-5. These offsetting sections have identified seismic anomalies in
multiple cretaceous pay zones. The purchase price of the property was
$45,114. The depletion for the year ended December 31, 2007 was
$10,000. (December 31, 2006 $10,000)
The
Strachan Property – Leduc Formation
On
September 23, 2005 Turner Valley Oil and Gas Inc. through its wholly owned
subsidiary TV Oil and Gas Canada Limited, has entered into a farm-out agreement
with Odin Capital Inc. of Calgary, Alberta.
The terms
of the Farm-Out agreement are as follows:
In
exchange for our paying 3.00% of all costs associated with drilling,
testing and completing the test well (expected drilling cost – approx. $6.3
million Canadian to the 100% interest) on the property that is referred to as
the Leduc Formation test well, we will have earned;
|
1)
|
In
the spacing unit for the Earning Well, a 1.500% interest in the petroleum
and natural gas below the base of the Mannville excluding natural gas in
the Leduc formation, and a 3.00% interest in the natural gas in the Leduc
formation before payout subject to payment of an Overriding Royalty which
is convertible upon payout at the Royalty Owners option to 50% of our
interest.
|
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2)
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A
1.200% interest in the rights below the base line of the Shunda formation
in Section 10,Township 38, Range
9W5M
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3)
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A
0.966% interest in the rights below the base of the Shunda formation in
sections 15 & 16,Township 38,Range 9W5M, down to the base of the
deepest formation penetrated.
|
ON July
6
th
,
2006, the Company purchased an additional 2% from its Chairman & CEO for a
total cost of $190,882. The amount was paid in WIN stock at a value of $2 when
the market value of the stock was $1.90.
Additionally,
the Company incurred $44,405 of further costs associated with the exploration of
the well during the quarter.
The total
costs are to date are $525,544 for our interest, under the terms of our
agreement.
The
Strachan Prospect is located 80 miles NW of Calgary, Alberta. The
Company expects testing of this prospect in the near future, which will enable
the Company to determine whether to continue or abandon this
project. Testing of the first well showed no economic hydrocarbons
and the well was abandoned.
Mississippi
Prospect
On August
23
rd
,
2006, the Company entered into a joint venture agreement with Griffin &
Griffin Exploration, LLC. to acquire an interest in a drilling program
comprising 50 natural gas and/or oil wells. The area in which the proposed
wells are to be drilled is comprised of approximately 300,000 gross acres of
land located between Southwest Mississippi and North East Louisiana. The
proposed wells will be targeting the Frio and Wilcox Geological
formations. The first 20 proposed wells are located within tie-in range of
existing pipeline infrastructures. Turner Valley has agreed to pay 10% of
all prospect fees, mineral leases, surface leases and drilling and completion
costs to earn a net 8% share of all production zones to the base of the Frio
formation and 7.5% of all production to the base of the Wilcox
formation. Total Costs to date are $300,000. The Company
is in the process of re-evaluating this project to determine if it continues to
adhere to the Company’s strategic objectives. During the year the Company
disposed of its interest in this property for the liabilities incurred of
$400,000.
General
and Administrative costs
General
and Administrative costs for the year now ended decreased by 65% to $248,130,
when compared to $713,345, for the previous year. The decrease was caused by a
reduction in costs associated with common stock issued for services
rendered.
The
Company’s total expenses were $783,674 for the year ended December 31, 2007
compared to $$723,345 for the prior year. The increase in total
expenses was caused by the abandonment of the Strachan – Leduc property due to
uneconomic hydrocarbons. The cost associated with this abandonment
was $525,544.
The Net
Loss for the year just ended was $(614,292) as compared to a Net Loss of
$(287,237) for the previous year ended 2006. The increase in loss for the year
was caused by the costs associated with the abandonment of Strachan – Leduc
property and the reduction in gain associated with the disposal of our holding
in WIN Energy, which resulted in other income of $159,872 (December 31, 2006
$426,295). At December 31, 2007, the Company disposed of its investment in WIN
Energy Corporation (“WIN”) at a market price of $0.37 per share.
(1)
Liquidity
.
Our net working capital for
the year ended December 31, 2007 increased to $55,907, compared to a deficit of
$(418,555) for the year ended December 31, 2006. The increase in working capital
was caused the disposal of the Company’s holdings in WIN.
To date
we have not invested in derivative securities or any other financial instruments
which involve a high level of complexity or risk. We expect that in the future,
any excess cash will continue to be invested in credit quality, interest-bearing
securities.
We
believe cash from operating activities, and our existing cash sources may not be
sufficient to meet our working capital requirements for the next 12 months. We
will likely require additional funds to support our business plan. Management
intends to raise additional working capital through debt and equity
financing.
(d) Cautionary Statements
Repeated
. There can be no assurance that we will be successful in raising
capital through private placements or otherwise. Even if we are successful in
raising capital through the sources specified, there can be no assurances that
any such financing would be available in a timely manner or on terms acceptable
to us and our current shareholders. Additional equity financing could be
dilutive to our then existing shareholders, and any debt financing could involve
restrictive covenants with respect to future capital raising activities and
other financial and operational matters. While Management has expressed
confidence in the attainment of profitability sooner, rather than later,
projects and even reasonable expectations are not outcomes yet. There is no
absolute assurance that even our best laid plans and most diligent operations
will succeed.
ITEM
13. Financial
Statements
.
The Audit
Committee of this Corporation for this fiscal year consists of our Board of
Directors. Management is responsible for our internal controls and the financial
reporting process. Our independent auditors are responsible for performing an
independent audit of our financial statements in accordance with generally
accepted accounting standards and to issue a report thereon. It is the
responsibility of our Board of Directors to monitor and oversee these processes.
In this context the Committee has met and held discussions with management and
the independent accountants. Management recommended to the Committee that our
financial statements were prepared in accordance with generally accepted
accounting principles, and the Committee has reviewed and discussed the
financial statements with Management and such independent accountants, matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). Our independent accountants also provided
to the Committee the written disclosures required by Independence Board Standard
No. 1 (Independence Discussions with Audit Committees), and the Committee
discussed with the independent accountants that firm's
independence.
Based
upon the Committee's discussions, and review, of the foregoing, the Committee
recommended that our audited financial statements in our Annual Report on Form
10-KSB for the year ended December 31, 2007 be included and filed with the
Securities and Exchange Commission.
Audited Financial Statements
for the years ended December 31, 2007, 2006, and from inception, April 14, 1999,
are included and provided as Attachment AFK-04. These financial statements
attached hereto and filed herewith are incorporated herein by this reference as
though fully set forth herein.
ITEM
15.
Changes
In and Disagreements With Accountants
on
Accounting and Financial Disclosure.
None.
PART III
ITEM
17.
Directors
and Executive Officers, Promoters and Control
Persons.
The
information required and appropriate for this Item is unchanged and found in our
previous annual report. Officers and Directors serve until their successors
might be elected or appointed. The time of the next meeting of shareholders has
not been determined.
ITEM
19. Executive Compensation.
Summary Compensation, Table A.
the disclosure of Executive compensation is now provided in the tabular form
required by the Securities and Exchange Commission, pursuant to Regulation
228.402. Compensation consisted of registered stock (at bid) for services in
lieu of cash.
The
Remainder of this Page is Intentionally left Blank
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Long
Term Compensation
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Annual
Compensation
|
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Awards
|
|
|
Payouts
|
|
|
|
|
a
|
b
|
|
c
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d
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e
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f
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g
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h
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i
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Name
and
Principal
Position
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Other
Annual
Compen-sation
($)
|
|
|
Restric-ted
Stock
Awards
($)
|
|
|
Securi-ties
Under-
lying
Options
SARs
(#)
|
|
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LTIP
Payouts
($)
|
|
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All
Other
Compen-sation
($)
|
|
|
2007
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
25,000
|
|
Chistopher
Paton-Gay,
Chairman,
CEO
|
2006
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
660,0000
|
|
|
2005
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
180,500
|
|
|
2004
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
277,000
|
|
|
2007
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
12,500
|
|
Kulwant
Sandher
Treasurer,
CFO
|
2006
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
72,000
|
|
|
2005
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
116,000
|
|
|
2004
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
97,500
|
|
|
2007
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
10,000
|
|
Donald
Jackson Wells,
Director
|
2006
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
23,750
|
|
|
2005
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
29,750
|
|
|
2004
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
37,000
|
|
|
2007
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
10,000
|
|
Joseph
A. Kane
Director
|
2006
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
23,750
|
|
|
2005
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
29,750
|
|
|
2004
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
37,000
|
|
The
foregoing “other compensation” was paid in common stock, and not in cash. Each
issuance was vallued at market prices then current.
ITEM
21. Security Ownership of Certain Beneficial Owners and
Management.
To the
best of Registrant's knowledge and belief the following disclosure presents the
total security ownership of all persons, entities and groups, known to or
discoverable by Registrant, to be the beneficial owner or owners of more than
five percent of any voting class of Registrant's stock, along with the total
beneficial security ownership of all Directors and Nominees, naming them, and by
all Officers and Directors as a group, without naming them. Please refer to
explanatory notes if any, for clarification or additional information. The
Registrant has only one class of stock; namely Common Stock.
Common
Stock
Name and Address of Beneficial
Owner
|
|
Share
Ownership
|
|
|
%
|
|
Christopher
Paton-Gay
|
|
|
|
|
|
|
|
6160
Genoa Bay Road
|
Chairman/CEO
|
|
|
|
|
|
|
Duncan
B.C. Canada
|
Director
|
|
|
2,285,000
|
|
|
|
3.92
|
|
Kulwant
Sander
|
|
|
|
|
|
|
|
|
|
6160
Genoa Bay Road
|
Treasurer/CFO
|
|
|
1,252,395
|
|
|
|
2.15
|
|
Duncan
B.C. Canada
|
|
|
|
|
|
|
|
|
|
Donald
Jackson Wells
|
|
|
|
|
|
|
|
|
|
3131
S.W. Freeway #46
|
|
|
|
|
|
|
|
|
|
Houston
TX 77098
|
Director
|
|
|
75,800
|
|
|
|
0.13
|
|
Joseph
Kane
|
|
|
|
|
|
|
|
|
|
3131
S.W. Freeway #46
|
|
|
|
|
|
|
|
|
|
Houston
TX 77098
|
Director
|
|
|
75,800
|
|
|
|
0.13
|
|
All
Officers and Directors as a Group
|
|
|
|
3,688,995
|
|
|
|
6.32
|
|
Total
Issued and Outstanding
|
|
|
|
58,335,970
|
|
|
|
100.00
|
|
All
Affiliates
|
|
|
|
(3,688,995
|
)
|
|
|
(6.32
|
)
|
Indicated
Total Non-Affiliate Ownership
|
|
|
|
54,646,975
|
|
|
|
93.68
|
|
(a) Changes in Control.
There
are no arrangements known to Registrant, including any pledge by any persons, of
securities of Registrant, which may at a subsequent date result in a change of
control of our Corporation. Specifically, we are not a candidate for any direct
or reverse acquisition transactions, but are devoted to bringing our business
plan to actualization and profitability.
Item
23. Controls and Procedures.
Evaluation of Disclosure Controls and
Procedures.
We carried out an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31,
2007. This evaluation was carried out under the supervision and with
the participation of our Chief Executive Officer and Chief Financial Officer,
Mr. Douglas Bolen. Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that, as of December 31, 2007, our
disclosure controls and procedures are effective.
Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Limitations on the
Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within our company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
Management’s Annual Report
on Internal Control Over Financial Reporting
Our
management, including the Chief Executive Officer and the Chief Financial
Officer, is responsible for establishing and maintaining adequate internal
control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Our internal control over financial reporting was designed to provide
reasonable assurance to our management and board of directors regarding the
preparation and fair presentation of published financial
statements.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation.
Management
assessed the effectiveness of our internal control over financial reporting as
of December 31, 2007. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in
Internal Control — Integrated
Framework.
Based on this assessment, our management believes
that, as of December 31, 2007, our internal control over financial
reporting was effective based on those criteria. Management reviewed
the results of its assessment with our board of directors.
Changes in Internal
Accounting.
There were no significant changes in our internal controls or
other factors that could significantly affect these controls subsequent to the
date of their evaluation. There were no significant deficiencies or material
weaknesses, and therefore there were no corrective actions taken. However, the
design of any system of controls is based in part upon the assumptions about the
likelihood of future events, and there is no certainty that any design will
succeed in achieving its stated goal under all potential future considerations,
regardless of how remote.
ITEM 25
. Attachments, Financial Statements, Exhibits, and Reports
on Form 8-K.
(a)
Attachments/
Exhibits
Hereto.
(
31
) Certification pursuant to 18 USC Section
302.
(
32
) Certification pursuant to 18 USC Section
1350.
(AFK-07)
Audited Financial Statements for the years ended December 31, 2007, 2006 and
from Inception.
(b) Exhibits Previously Filed.
Please see our Previous Annual Report on Form 10-KSB, for the year ended
December 31, 2001, for Exhibits: (3.1) Articles of Incorporation; (3.2) By-Laws,
incorporated herein by this reference.
Signatures
Pursuant to the
requirements
of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
individual capacities and on the date indicated.
Turner
Valley Oil & Gas, Inc.
Dated:
March 31, 2008
Table
ON
Christopher
Paton-Gay
|
|
Donald
Jackson Wells
|
|
Joseph
Kane
|
Christopher
Paton-Gay
|
|
Donald
Jackson Wells
|
|
Joseph
Kane
|
Attachment
AFK-07
Audited
Financial Statements
for
the years ended
December
31, 2007, 2006
and
from inception
C
O N T E N T S
Report
of Independent Registered Pubic Accounting Firm
|
3
|
|
|
Consolidated
Balance Sheets
|
4
|
|
|
Consolidated
Statements of Operations and Comprehensive income/(loss)
|
5
|
|
|
Consolidated
Statements of Stockholders’ Equity
|
6
|
|
|
Consolidated
Statements of Cash Flows
|
8
|
|
|
Notes
to the Consolidated Financial statements
|
9
|
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING
FIRM
To the
Stockholders and Board of Directors
Turner
Valley Oil & Gas Corporation
Duncan
B.C. Canada
We have
audited the accompanying consolidated balance sheets of Turner Valley Oil &
Gas Corporation (a Development Stage Company) as of December 31, 2007 and 2006
and the related consolidated statements of operations, comprehensive income
(loss), stockholders’ equity and cash flows for the years then ended and
from inception on April 21, 1999 through December 31, 2007. These
consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We
conducted our audits in accordance with standards of the PCAOB (United
States). Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Turner Valley
Oil & Gas Corporation as of December 31, 2007 and 2006 and the consolidated
results of their operations and their cash flows for the periods then ended and
from inception on April 21, 1999 through December 31, 2007, in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as going concerns. As discussed in Note 2
to the consolidated financial statements, the Company has suffered recurring
operating losses, and is dependent upon financing to continue operations, which
raises substantial doubt about its ability to continue as a going
concern. Management’s plans with regard to these matters are also
described in Note 2. The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
__________________
Chisholm,
Bierwolf & Nilson, LLC
Bountiful,
Utah
March 28,
2008
(A
Development Stage Company)
Consolidated
Balance Sheets
ASSETS
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
75,688
|
|
|
$
|
-
|
|
Accounts
receivable
|
|
|
8,088
|
|
|
|
8,910
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
83,776
|
|
|
|
8,910
|
|
|
|
|
|
|
|
|
|
|
OIL
AND GAS PROPERTIES USING
FULL COST ACCOUNTING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties
subject to amortization
|
|
|
18,175
|
|
|
|
28,177
|
|
Unproved
properties
|
|
|
-
|
|
|
|
925,544
|
|
|
|
|
|
|
|
|
|
|
Net
Oil and Gas Properties
|
|
|
18,175
|
|
|
|
953,721
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
- Marketable Securities available for sale
|
|
|
-
|
|
|
|
604,349
|
|
|
|
|
|
|
|
|
|
|
Total
Other Assets
|
|
|
-
|
|
|
|
604,349
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
101,951
|
|
|
$
|
1,566,980
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank
Overdraft
|
|
|
|
|
|
|
3,397
|
|
Accounts
payable
|
|
|
4,211
|
|
|
$
|
400,410
|
|
Notes
payable, related party
|
|
|
23,658
|
|
|
|
23,658
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
27,869
|
|
|
|
427,465
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
27,869
|
|
|
|
427,465
|
|
|
|
|
|
|
|
|
|
|
Other
Commitments or Contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, 100,000,000 shares authorized of $0.001 par value, 61,335,984 and
58,535,984 shares issued
|
|
|
61,337
|
|
|
|
58,537
|
|
Capital
in excess of par value
|
|
|
4,741,873
|
|
|
|
4,697,173
|
|
Accumulated
other comprehensive income
|
|
|
(3,356
|
)
|
|
|
495,283
|
|
Deficit
accumulated during the development stage
|
|
|
(4,725,772
|
)
|
|
|
(4,111,478
|
)
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
74,082
|
|
|
|
1,139,515
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
101,951
|
|
|
$
|
1,566,980
|
|
(A
Development Stage Company)
Consolidated
Statements of Operations and Comprehensive Income/(Loss)
|
|
|
|
|
From
|
|
|
|
|
|
|
Inception
on
|
|
|
|
For
the
|
|
|
April
21, 1999
|
|
|
|
Year
Ended
|
|
|
Through
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royalties
received
|
|
$
|
4,165
|
|
|
$
|
9,813
|
|
|
$
|
25,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of production
|
|
|
-
|
|
|
|
-
|
|
|
|
51,753
|
|
Depletion
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
30,767
|
|
Abandonment
of natural gas and oil property
|
|
|
525,544
|
|
|
|
-
|
|
|
|
525,544
|
|
General
and administrative
|
|
|
248,130
|
|
|
|
713,345
|
|
|
|
4,943,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
783,674
|
|
|
|
723,345
|
|
|
|
5,551,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
OPERATING LOSS
|
|
|
(779,509
|
)
|
|
|
(713,532
|
)
|
|
|
(5,526,335
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on sale of investments
|
|
|
159,872
|
|
|
|
426,295
|
|
|
|
798,510
|
|
Rent
Received
|
|
|
5,345
|
|
|
|
|
|
|
|
5,345
|
|
Interest
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,292
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expense)
|
|
|
165,217
|
|
|
|
426,295
|
|
|
|
800,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
PROFIT/(LOSS) BEFORE INCOME TAX
|
|
$
|
(614,292
|
)
|
|
$
|
(287,237
|
)
|
|
$
|
(4,725,772
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
PROFIT/(LOSS)
|
|
$
|
(614,292
|
)
|
|
$
|
(287,237
|
)
|
|
$
|
(4,725,772
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
LOSS PER COMMON SHARE
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
|
|
|
58,914,066
|
|
|
|
55,651,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(614,292
|
)
|
|
$
|
(287,237
|
)
|
|
$
|
(4,725,772
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
Gain on Marketable Securities
|
|
|
-
|
|
|
|
499,368
|
|
|
|
(725
|
)
|
Foreign
Currency Translation
|
|
|
(1,453
|
)
|
|
|
(725
|
)
|
|
|
(4,085
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME (LOSS)
|
|
$
|
(615,745
|
)
|
|
$
|
211,406
|
|
|
$
|
(4,730,582
|
)
|
Turner
Valley Oil & Gas Corporation
(A
Development Stage Company)
Statement
of Stockholders' Equity
For the
Year Ended December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Comprehensive
|
|
|
Retained
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in-Capital
|
|
|
Income/(Loss)
|
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at inception April 21, 1999
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services during 1999
|
|
|
41,080
|
|
|
|
41
|
|
|
|
5,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash during 1999
|
|
|
16,000
|
|
|
|
16
|
|
|
|
99,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the period ended December 31, 1999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(96,935
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 1999
|
|
|
57,080
|
|
|
|
57
|
|
|
|
105,078
|
|
|
|
0
|
|
|
|
(96,935
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the period ended December 31, 2000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,242
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2000
|
|
|
57,080
|
|
|
|
57
|
|
|
|
105,078
|
|
|
|
0
|
|
|
|
(124,177
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the period ended December 31, 2001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(65,380
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2001
|
|
|
57,080
|
|
|
|
57
|
|
|
|
105,078
|
|
|
|
0
|
|
|
|
(189,557
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for debt reduction during 2002
|
|
|
8,000
|
|
|
|
8
|
|
|
|
99,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services during 2002
|
|
|
2,190,150
|
|
|
|
2,190
|
|
|
|
1,092,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the period ended December 31, 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,240,008
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2002
|
|
|
2,255,230
|
|
|
|
2,255
|
|
|
|
1,297,955
|
|
|
|
0
|
|
|
|
(1,429,565
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services at $.02 per share
|
|
|
1,500,000
|
|
|
|
1,500
|
|
|
|
298,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rounding
of shares from reverse split
|
|
|
2,000
|
|
|
|
2
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for accounts payable at $.05 Per share
|
|
|
8,000,000
|
|
|
|
8,000
|
|
|
|
392,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services at $.015 per share
|
|
|
31,729,200
|
|
|
|
31,729
|
|
|
|
444,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services at $.015 per share
|
|
|
9,487,504
|
|
|
|
9,488
|
|
|
|
132,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.05 per share
|
|
|
2,000,000
|
|
|
|
2,000
|
|
|
|
98,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.05 per share
|
|
|
650,000
|
|
|
|
650
|
|
|
|
31,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation
of Common Stock
|
|
|
(16,691,520
|
)
|
|
|
(16,692
|
)
|
|
|
(220,459
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash at $.05 per share
|
|
|
3,000,000
|
|
|
|
3,000
|
|
|
|
147,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash at $.30 per share
|
|
|
100,000
|
|
|
|
100
|
|
|
|
29,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash at $.35 per share
|
|
|
528,570
|
|
|
|
529
|
|
|
|
184,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Currency Translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,718
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the period ended December 31, 2003
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
(1,137,760
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2003
|
|
|
42,560,984
|
|
|
|
42,561
|
|
|
|
2,836,249
|
|
|
|
(1,718
|
)
|
|
|
(2,567,325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.20 per share
|
|
|
932,500
|
|
|
|
933
|
|
|
|
185,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.08 per share
|
|
|
1,597,500
|
|
|
|
1,598
|
|
|
|
126,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.08 per share
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
79,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.11 per share
|
|
|
85,000
|
|
|
|
85
|
|
|
|
9,265
|
|
|
|
|
|
|
|
|
|
9/30/2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.20 per share
|
|
|
1,385,000
|
|
|
|
1,385
|
|
|
|
275,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for Cash at $.05 per share
|
|
|
975,000
|
|
|
|
975
|
|
|
|
47,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
Recievable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Currency Translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,367
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the period ended December 31, 2004
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(784,001
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at December 31, 2004
|
|
|
48,535,984
|
|
|
|
48,537
|
|
|
|
3,559,673
|
|
|
|
(4,085
|
)
|
|
|
(3,351,325
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.13 per share
|
|
|
2,850,000
|
|
|
|
2,850
|
|
|
|
367,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.13 per share
|
|
|
2,000,000
|
|
|
|
2,000
|
|
|
|
258,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Currency Translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(725
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
Recievable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the period ended December 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(472,917
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at January 1, 2006
|
|
|
53,385,984
|
|
|
|
53,387
|
|
|
|
4,185,323
|
|
|
|
(4,810
|
)
|
|
|
(3,824,242
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.13 per share
|
|
|
2,000,000
|
|
|
|
2,000
|
|
|
|
258,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.08 per share
|
|
|
1,600,000
|
|
|
|
1,600
|
|
|
|
126400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to S-8 registration at $.08 per share
|
|
|
1,450,000
|
|
|
|
1,450
|
|
|
|
114,550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued under Rule 144 at $0.13 per share
|
|
|
100,000
|
|
|
|
100
|
|
|
|
12,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revaluation
of available for sale investments Unrealized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,093
|
|
|
|
|
|
Net
Income for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(287,238
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at December 31, 2006
|
|
|
58,535,984
|
|
|
|
58,537
|
|
|
|
4,697,173
|
|
|
|
495,283
|
|
|
|
(4,111,480
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realization
of unrealized gains on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(500,093
|
)
|
|
|
|
|
Foreign
currency transalation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,453
|
|
|
|
|
|
Issuance
of S-8 stock for services at $0.01
|
|
|
1,500,000
|
|
|
|
1,500
|
|
|
|
13,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of S-8 stock for services at $0.025
|
|
|
1,300,000
|
|
|
|
1,300
|
|
|
|
31,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(loss) for the year ended December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(614,292
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at December 31, 2007
|
|
|
61,335,984
|
|
|
|
61,337
|
|
|
|
4,741,873
|
|
|
|
(3,357
|
)
|
|
|
(4,725,772
|
)
|
(A
Development Stage Company)
Consolidated
Statements of Cash Flows
|
|
|
|
|
|
|
|
From
|
|
|
|
|
|
|
|
|
|
Inception
on
|
|
|
|
|
|
|
|
|
|
April 21,
1999
|
|
|
|
Year
Ended
|
|
|
Through
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income/(Loss)
|
|
$
|
(614,292
|
)
|
|
$
|
(287,234
|
)
|
|
$
|
(4,725,772
|
)
|
Adjustments
to reconcile net loss to net cash
used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depletion
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
30,767
|
|
Loss
on abandonment of property
|
|
|
525,544
|
|
|
|
-
|
|
|
|
551,025
|
|
Gain
on sale of Investment
|
|
|
(159,872
|
)
|
|
|
(436,388
|
)
|
|
|
(834,085
|
)
|
Common
stock issued for services rendered
|
|
|
47,500
|
|
|
|
517,000
|
|
|
|
4,289,460
|
|
Change
in Comprehensive Income
|
|
|
1,274
|
|
|
|
|
|
|
|
1,274
|
|
Non-cash
Effect from Foreign Currency Translation
|
|
|
(1,453
|
)
|
|
|
725
|
|
|
|
(4,085
|
)
|
Non-cash
effect of revaluing Marketable Securities
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) in bank Overdraft
|
|
|
(3,397
|
)
|
|
|
3,397
|
|
|
|
-
|
|
Increase
(Decrease) in accounts receivable
|
|
|
843
|
|
|
|
(6,364
|
)
|
|
|
(719
|
)
|
Increase
(Decrease) in accounts payable - related Party
|
|
|
-
|
|
|
|
-
|
|
|
|
23,659
|
|
Increase
in accounts payable and accrued expenses
|
|
|
3,981
|
|
|
|
394,450
|
|
|
|
295,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Operating Activities
|
|
|
(189,872
|
)
|
|
|
195,586
|
|
|
|
(372,886
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of investments
|
|
|
265,560
|
|
|
|
487,058
|
|
|
|
1,073,082
|
|
Investing
in new Oil & Gas working interests
|
|
|
-
|
|
|
|
(761,492
|
)
|
|
|
(825,544
|
)
|
Expenditures
for oil and gas property development
|
|
|
-
|
|
|
|
-
|
|
|
|
(312,714
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Investing Activities
|
|
|
265,560
|
|
|
|
(274,434
|
)
|
|
|
(65,176
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock
|
|
|
-
|
|
|
|
-
|
|
|
|
465,000
|
|
Receipt
of subscription receivable
|
|
|
-
|
|
|
|
-
|
|
|
|
48,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
-
|
|
|
|
-
|
|
|
|
513,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH
|
|
|
75,688
|
|
|
|
(78,848
|
)
|
|
|
75,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
-
|
|
|
|
78,848
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
|
$
|
75,688
|
|
|
$
|
-
|
|
|
$
|
75,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
PAID FOR:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Income
taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CASH
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for services rendered
|
|
$
|
47,500
|
|
|
$
|
260,000
|
|
|
$
|
3,756,960
|
|
Common
stock issued for retirement of payables
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
532,500
|
|
Transfer
of working Interest for payment of Debt
|
|
$
|
(400,000
|
)
|
|
$
|
400,000
|
|
|
$
|
-
|
|
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The
Company was incorporated under the laws of Nevada on April 21, 1999 as
NetParts.com. The Company was originally organized to create a series
of 16 specialized auto salvage yards whereby the salvageable components would be
inventoried on a computer and listed on the internet. The
Company, however, changed their operations and their name on July 24, 2003 to
Turner Valley Oil & Gas Corporation. On August 1, 2003, the
Company incorporated T.V. Oil & Gas Canada Limited, a wholly owned
subsidiary, into the financial statements of the Company. The Company
holds a working interest in an oil lease and an investment in an oil and gas
entity.
B. Revenue and Cost
Recognition
Revenue
from sales of crude oil, natural gas and refined petroleum products are recorded
when deliveries have occurred and legal ownership of the commodity transfers to
the customers. Title transfers for crude oil, natural gas and bulk
refined products generally occur at pipeline custody points or when a tanker
lifting has occurred. Revenues from the production of oil and natural
gas properties in which the Company shares an undivided interest with other
producers are recognized based on the actual volumes sold by the Company during
the period. Gas imbalances occur when the Company’s actual sales
differ from its entitlement under existing working interest. The
Company records a liability for gas imbalances when it has sold more than its
working interest of gas production and the estimated remaining reserves make it
doubtful that the partners can recoup their share of production from the
field. At December 31, 2007 and 2006, the Company had no over
produced imbalances.
Oil and Gas
Properties
The full
cost method is used in accounting for oil and gas
properties. Accordingly, all costs associated with acquisition,
exploration, and development of oil and gas reserves, including directly related
overhead costs, are capitalized. In addition, depreciation on
property and equipment used in oil and gas exploration and interest costs
incurred with respect to financing oil and gas acquisition, exploration and
development activities are capitalized in accordance with full cost
accounting. Capitalized interest for the years ended December 31,
2007 and 2006 was $0. All capitalized costs of proved oil and gas
properties subject to amortization are being amortized on the unit-of-production
method using estimates of proved reserves. Investments in unproved
properties and major development projects not subject to amortization are not
amortized until proved reserves associated with the projects can be determined
or until impairment occurs. If the results of an assessment indicate
that the properties are impaired, the amount of the impairment is added to the
capitalized costs to be amortized. During the year ended December 31,
2007 and 2006, the Company recorded depletion of $10,000 and $10,000 on its
property, respectively.
C. Basis of
Consolidation
The
consolidated financial statements include the accounts of Turner Valley Oil
& Gas Corporation and T.V. Oil & Gas Canada Limited. All
significant inter-company accounts and transactions have been eliminated in the
consolidation.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Earnings
(Loss) Per Share
The
computation of earnings per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial
statements. The Company has no stock equivalents outstanding as at
December 31, 2007, and hence the basic and diluted loss per share is the
same.
|
|
Income
(Loss)
|
|
|
Shares
|
|
|
Per-Share
|
|
|
|
(Numerator)
|
|
|
(Denominator)
|
|
|
Amount
|
|
For
the year ended December 31, 2007:
|
|
|
|
|
|
|
|
|
|
Basic
& Diluted EPS
|
|
|
|
|
|
|
|
|
|
Income
(loss) to common stockholders
|
|
$
|
(614,292
|
)
|
|
|
58,914,066
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the year ended December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
& Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) to common stockholders
|
|
$
|
(287,237
|
)
|
|
|
55,651,737
|
|
|
$
|
(0.01
|
)
|
E. Cash and Cash
Equivalents
The
Company considers all highly liquid investments with maturities of three months
or less to be cash equivalents.
F. Income
Taxes
Income
taxes are provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred
taxes. Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary differences and
operating loss, tax credit carry-forwards, and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and
their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax will not be
realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 1
-
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
F. Income Taxes
(continued)
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
Net
operation loss carry-forwards
|
|
$
|
4,725,722
|
|
|
$
|
3,612,110
|
|
Total
Deferred Tax Assets
|
|
|
1,606,745
|
|
|
|
1,228,123
|
|
Valuation
allowance for deferred tax assets
|
|
|
(1,606,745
|
)
|
|
|
(1,228,123
|
)
|
|
|
$
|
-
|
|
|
$
|
-
|
|
At
December 31, 2007, the Company has net operating losses of $4,725,722 which
begin to expire in 2020.
The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal and state income tax rates of 39% to pretax income
from continuing operations for the years ended December 31, 2007 and 2006 due to
the following:
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
Book
loss from operations
|
|
$
|
154,248
|
|
|
$
|
72,125
|
|
Common
stock issued for services
|
|
|
47,500
|
|
|
|
175,780
|
|
Valuation
allowance
|
|
|
(201,748
|
)
|
|
|
(247,905
|
)
|
|
|
$
|
-
|
|
|
$
|
-
|
|
G. Use of
estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles re-quires management to make estimates and assumptions
that affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting period. In these financial statements
assets and liabilities involve extensive reliance on management’s
estimates. Actual results could differ from those
estimates.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. New Technical
Pronouncements
In
February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
159, “The Fair Value Option for Financial Assets and Financial Liabilities”,
which permits an entity to measure certain financial assets and financial
liabilities at fair value. The objective of SFAS No. 159 is to improve financial
reporting by allowing entities to mitigate volatility in reported earnings
caused by the measurement of related assets and liabilities using different
attributes, without having to apply complex hedge accounting provisions. Under
SFAS No. 159, entities that elect the fair value option (by instrument) will
report unrealized gains and losses in earnings at each subsequent reporting
date. The fair value option election is irrevocable, unless a new election date
occurs. SFAS No. 159 establishes presentation and disclosure requirements to
help financial statement users understand the effect of the entity's election on
its earnings, but does not eliminate disclosure requirements of other accounting
standards. Assets and liabilities that are measured at fair value must be
displayed on the face of the balance sheet. This statement is
effective beginning January 1, 2008 and the Company is evaluating this
pronouncement.
On
December 4, 2007 the FASB issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51. SFAS 160
establishes new accounting and reporting standards for the non-controlling
interest in a subsidiary and for the deconsolidation of a subsidiary.
Specifically, this statement requires the recognition of a non-controlling
interest (minority interest) as equity in the consolidated financial statements
and separate from the parent's equity. The amount of net income attributable to
the non-controlling interest will be included in consolidated net income on the
face of the income statement. SFAS 160 clarifies that changes in a parent's
ownership interest in a subsidiary that do not result in deconsolidation are
equity transactions if the parent retains its controlling financial interest. In
addition, this statement requires that a parent recognize a gain or loss in net
income when a subsidiary is deconsolidated. Such gain or loss will be measured
using the fair value of the non-controlling equity investment on the
deconsolidation date. SFAS 160 also includes expanded disclosure requirements
regarding the interests of the parent and its non-controlling interest. SFAS 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Earlier adoption is prohibited. We do
not expect the adoption of SFAS 160 will have an effect on our financial
statements.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In
December 2007, the FASB issued SFAS No. 141 (revised), Business Combinations.
This revision statements objective is to improve the relevance, representational
faithfulness, and comparability of the information that a reporting entity
provides in its effects on recognizing
H. New Technical
Pronouncements
identifiable
assets and measuring goodwill. The adoption of SFAS 141 (revised) did not have
an impact on the Company’s financial statements.
I. Financial
Instruments
The
recorded amounts of financial instruments, including cash equivalents, accounts
receivable, accounts payable and short term notes approximate their market
values as of December 31, 2007 and 2006. The Company has no
investments in derivative financial instruments.
J. Functional Currency &
Foreign Currency Translation
The
Company’s functional currency is the U.S. dollar. In accordance with
the Statement of Financial Accounting Standard No. 52,
Foreign Currency Translation
,
the assets and liabilities denominated in foreign currency are translated into
U.S. dollars at the current rate of exchange existing at period end and revenues
and expenses are translated at average monthly exchange
rates. Related translation adjustments are reported as a separate
component of stockholders’ equity, whereas, gains or losses relating from
foreign currency transactions are included in the results of
operations.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
K. Impairment of Long-Lived
Assets
In
accordance with Financial Accounting Standards Board Statement No. 144, the
Company records impairment of long-lived assets to be held and used or to be
disposed of when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the carrying
amount. At December 31, 2007 the abandonment charge was $525,544, and
at December 31, 2006 the impairment charge was $0.
L. Accounts
Receivable
|
|
2007
|
|
|
2007
|
|
Accounts
Receivable
|
|
$
|
8,088
|
|
|
$
|
8,911
|
|
Less: Allowance
for Doubtful Debts
|
|
|
-
|
|
|
|
-
|
|
Net
Accounts Receivable
|
|
$
|
8,088
|
|
|
$
|
8,891
|
|
Management
reviews its accounts receivable on a regular basis. If an account has a balance
which is six months old, it is the policy of the company to record an allowance
for doubtful accounts. The Company will continue to pursue all collection
efforts. If at a later date, the account is deemed uncollectible, the account
balance will be written off.
NOTE 2 -
GOING CONCERN
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company has suffered recurring
operating losses and is dependent upon raising capital to continue
operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty. It is
management’s plan to raise additional funds to share in the exploration of
leases individually as well as with WIN Energy, and then to begin extracting gas
and oil to sell and generate the necessary funds to continue
operations.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 3 –
OIL & GAS PROPERTIES
Stracha
n
Property
On August
20, 2003, the Company entered into a purchase agreement to acquire 1% interest
in a producing gas well, located at 22-38-9W5 Red Deer, Alberta,
Canada. During the end of 2003, the Company’s senior management set
out a rework program for this well. The rework program called for an
acid wash and acid stimulation of the producing formation. The
Company agreed to participate in the program which increased their interest to
6.67%. The program was completed on October 15, 2003 and extraction
continued in 2004. As of December 31, 2003, $300,672 of costs have
been capitalized under “Properties not subject to amortization”. The Strachen
Property has proved gas reserves of 3.68 MMCF.
During
2004, two of the Companies properties were deemed to be impaired and the Company
abandoned these properties and wrote off $71,072 of capitalized costs. The
Strachen Property began to be extracted and was therefore moved to Properties
being amortized with a capitalized cost of $48,942. Accumulated amortization at
December 31, 2005 and 2004 is $10,767, respectively. During the year ended
December 31, 2005, the Company entered into farm-out agreement with Odin Capital
for the Strachan Leduc formation. The costs recorded for the year
ended December 31, 2005 are $164,054. The remaining properties
recorded at $192,700 was sold for common stock in Win Energy, see Note
5.
During
the year the Company determined that its working interest in the Strachan-Leduc
region had no economic hydrocarbons and hence impaired its
holding. The amount of the impairment for the year ended December 31,
2007 was $525,544.
During
the year the Company disposed of its holding in the Mississippi project for
forgiveness of the amount owing of $400,000.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 4
- STOCK TRANSACTIONS
During
2007, the Company issued 2,800,000 shares pursuant to an S-8 Registration
Statement. These shares were issued for services totaling
$47,500.
During
2006, the Company issued 5,050,000 shares pursuant to an S-8 registration
Statement and 100,000 shares under rule 144. These shares were issued
for services totaling $517,000.
During
2005, the Company issued 4,800,000 shares pursuant to an S-8 Registration
Statement. These shares were issued for services totaling
$630,000.
During
2004, the Company issued 5,000,000 shares pursuant to an S-8 Registration
Statement. These shares were issued for services totaling
$680,650.
During
2004, the Company issued 975,000 shares pursuant to a Private Placement and
received a subscription for the amount of $48,750. The proceeds were
received subsequent to December 31, 2004.
On
January 5, 2003, the Company issued 15,000,000 pre-split shares of common stock
for services rendered on behalf of the Company totaling $298,500, and in
satisfaction of accounts payable totaling $1,500.
On July
1, 2003, the Company enacted a 10 for 1 reverse split of its common
stock. Stock has been retroactively restated to reflect this
split.
During
July 2003, the Company issued 39,729,200 post-split shares of common stock for
settlement of $196,146 of accounts payable and services valued at
$679,792.
In August
2003, the Company issued 9,487,504 post-split shares of common stock in
settlement of $28,971 of accounts payable and services valued at
$113,360.
On
October 21, 2003, the Company issued 2,000,000 post-split shares of common stock
for services rendered on behalf of the Company totaling $100,000.
On
November 21, 2003, the Company issued 650,000 post-split shares of common stock
valued at $32,500 for professional services rendered in behalf of the
Company.
During
2003, the Company issued a total of 3,628,570 post-split shares of common stock
for cash at a total value of $365,000.
In April
2002, the Company purposed a 2 for 1 forward split of its outstanding common
stock. In October of 2002, the Company enacted a 25 for 1 reverse
split of its common stock. During the year, 80,000 shares of common
stock were issued to reduce a payable by $100,000. In October 2002,
21,901,500 shares of common stock were issued for services rendered totaling
$1,095,075.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 5 –
INVESTMENTS AND SALE OF OILS & GAS PROPERTIES
Pursuant
to SFAS 115 “Accounting for Certain Investments in Debt and Equity Securities”
management determines the appropriate classification of investment securities at
the time they are acquired and evaluates the appropriateness of such
classification at each balance sheet date. The classification of those
securities and the related accounting policies are as follows:
Available-for-sale-securities:
Available-for-sale securities consist of marketable equity securities not
classified as trading securities. Available-for-sale securities are stated
at fair value, and unrealized holding gains and losses, net of the related
deferred tax effect, are reported as a separate component of stockholders'
equity.
On May
25, 2004, the Company entered into an Asset Purchase Agreement with Win Energy
Corporation (“WIN”), wherein T.V. Oil & Gas Canada, Ltd. sold all its
interests held in the other ten sections of the Strachan Property, the Karr
Property, the Turner Valley Project and the Triangle Lands. In return
for this conveyance the Company received 1,300,303 shares of common stock in
WIN.
The
Company valued its investment in WIN at the carrying cost of the oil and gas
properties conveyed of $192,700. Subsequent to this transaction the
Company sold 75,000 shares with a basis of $11,115 ($.1482 per share) and
realized proceeds of $56,706 thus crating a gain of $45,591.
During
2005, the Company sold 175,000 shares of its investment in WIN Energy, realizing
a gain of $237,825. The sale agreement includes a half warrant to enable the
purchaser to purchase additional WIN shares at $1.75 per share until March 31,
2006.
During
2006, WIN Energy listed its shares on the Toronto Stock Exchange. The
Company sold 253,029 shares of its investment in WIN Energy realizing a gain of
$436,388 at a various prices. The Company re-valued its investment at
an open market price of $0.87, creating an unrealized gain of $500,093 at
December 31, 2006.
During
2007, the Company sold the remainder of its investment in WIN Energy realizing a
gain of $159,872 after receiving gross proceeds of
$265,560. Following the disposition of shares, the Company removed
its unrealized gain of $500,093 from Comprehensive Income.
WIN
Energy Corporation ("Win"), formed in 2004, is a Calgary based private
corporation. The company is actively engaged in the exploration, development and
production of petroleum, natural gas and natural gas liquids. Win's core area is
in the triangle zone ("Triangle Zone"), which is located along the eastern edge
of the Foothills Belt in southern Alberta, extending from Turner Valley, 25
miles southwest of Calgary, to Pincher Creek, near the Alberta-Montana
border.
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
NOTE 6 –
OTHER COMPREHENSIVE INCOME
The
Company reports other comprehensive income in accordance with Statement of
Financial Accounting Standards No. 130, “Reporting Comprehensive Income” (“SFAS
No. 130"). SFAS No. 130 establishes standards for reporting in the
financial statements all changes in equity during a period, except those
resulting from investments by and distributions to owners. The
cumulative effect of foreign currency translation adjustments to a cash account
held by the Company in Canadian dollars, which is included in other
comprehensive income in the stockholders’ equity section, consisted of the
following:
|
|
December 31,
|
|
|
|
2007
|
|
|
2006
|
|
Balance,
beginning of year
|
|
$
|
495,283
|
|
|
$
|
(4,810
|
)
|
Unrealized
gain on marketable securities
|
|
$
|
(500,093
|
)
|
|
$
|
499,368
|
|
Effect
of currency exchange rate changes
|
|
|
1,453
|
|
|
|
725
|
|
Balance,
end of year
|
|
$
|
3,356
|
|
|
$
|
495,283
|
|
NOTE 7 –
RELATED PARTY TRANSACTION
The
transaction with Win Energy as described in Note 5 was a related party
transaction due to the fact that the Company’s Chairman Christopher Paton-Gay
was the Chairman of Win Energy.
The
Company’s Chairman has advanced funds to the Company as needed to cover
operating costs. The Advances are non-interest bearing and due on demand. The
detail to such advances is as follows:
|
|
December 31,
|
|
Note
payable
|
|
2007
|
|
|
2006
|
|
Balance,
beginning of year
|
|
$
|
23,658
|
|
|
$
|
23,658
|
|
Advances
received
|
|
$
|
0
|
|
|
$
|
0
|
|
Effect
of currency exchange rate changes
|
|
$
|
0
|
|
|
$
|
0
|
|
Balance,
end of year
|
|
$
|
23,658
|
|
|
$
|
23,658
|
|
NOTE 8 –
LEASE COMMITMENTS
The
Company entered into a lease for its premises on February 17
th
,
2006. The term is for 42 months ending September 30,
2009. The lease commitments are as follows;
Year
ended December 31, 2008
|
|
$
|
40,338
|
|
Year
ended December 31, 2009
|
|
$
|
30,254
|
|
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
S.F.A.S.
69 SUPPLEMENTAL DISCLOSURES
(1) Capitalized
Costs Relating to
Oil and
Gas Producing Activities
|
December 31,
2007
|
|
|
December 31,
2006
|
|
Proved
oil and gas producing properties and related lease and well
equipment
|
|
$
|
48,942
|
|
|
$
|
48,942
|
|
Accumulated
depreciation and depletion
|
|
|
(30,767
|
)
|
|
|
(20,767
|
)
|
|
|
|
|
|
|
|
|
|
Net
Capitalized Costs
|
|
$
|
18,175
|
|
|
$
|
28,175
|
|
(2) Costs
Incurred in Oil and Gas Property
Acquisition,
Exploration, and Development Activities
|
December
31,
2007
|
|
|
December 31,
2006
|
|
Acquisition
of Properties
|
|
$
|
-
|
|
|
$
|
-
|
|
Proved
|
|
|
264,054
|
|
|
|
264,054
|
|
Unproved
|
|
|
-
|
|
|
|
-
|
|
Exploration
Costs
|
|
|
661,490
|
|
|
|
661,490
|
|
|
|
|
|
|
|
|
|
|
Total
Costs Incurred
|
|
$
|
925,544
|
|
|
$
|
925,544
|
|
TURNER
VALLEY OIL & GAS CORPORATION
(a
Development Stage Company)
Notes to
the Financial Statements
December
31, 2007 and 2006
S.F.A.S.
69 SUPPLEMENTAL DISCLOSURES (Continued)
The
Company does not have any investments accounted for by the equity
method.
(3) Results
of Operations for
Producing
Activities
|
|
December
31,
2007
|
|
|
December
31,
2006
|
|
Sales
|
|
$
|
4,165
|
|
|
$
|
9,813
|
|
Production
Costs
|
|
|
0
|
|
|
|
0
|
|
Depreciation
and depletion
|
|
|
(10,000
|
)
|
|
|
(10,000
|
)
|
Results
of operations for producing activities (excluding corporate overhead and
interest costs)
|
|
|
(5,835
|
)
|
|
|
(187
|
)
|
Reserve
Quantity Information
|
|
Oil
|
|
|
Gas
|
|
|
|
BBL
|
|
|
MMCF
|
|
Proved
developed and undeveloped reserves:
|
|
|
|
|
|
|
Balance,
December 31, 2006
|
|
|
-
|
|
|
|
3.68
|
|
Change
in estimates
|
|
|
-
|
|
|
|
-
|
|
Production
|
|
|
-
|
|
|
|
.99
|
|
Balance,
December 31, 2007
|
|
|
-
|
|
|
|
2.69
|
|
|
|
|
|
|
|
|
|
|
Proved
developed reserves:
|
|
Oil
|
|
|
Gas
|
|
|
|
BBL
|
|
|
MMCF
|
|
Beginning
of the year ended December 31, 2006
|
|
|
-
|
|
|
|
3.68
|
|
End
of the year ended December 31, 2007
|
|
|
-
|
|
|
|
2.68
|
|
The
Company has reserve studies and estimates prepared on the properties acquired
and developed. The difficulties and uncertainties involved in
estimating proved oil and gas reserves makes comparisons between companies
difficult. Estimation of reserve quantities is subject to wide
fluctuations because it is dependent on judgmental interpretation of geological
and geophysical data.
Grafico Azioni Turner Valley Oil and Gas (CE) (USOTC:TVOG)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Turner Valley Oil and Gas (CE) (USOTC:TVOG)
Storico
Da Giu 2023 a Giu 2024