The Company continues to aggressively enlarge its position respecting the number of projects in which it is participating. All of the projects are located in Alberta.

Virginia Hills - Blue Parrot has negotiated a 50% farm-in interest and 25% after payout in 4 section license in Virginia Hills. Drilling has commenced.

Antelope - The Company has accumulated a significant land base in this area with a working interest of 50%. Of the 9 well joint venture program, 5 gas wells have been drilled and cased. The remaining wells will be drilled by the middle of July. Blue Parrot and FairWest each have a 50% interest in the joint venture and FairWest is the operator. Completion results will be available by mid-August. All successful wells are expected to be tied in by the end of September 2006.

Bonnie Glen - An EUB permit for a pipeline construction to connect wells in the southern portion of the field was approved and pipeline construction was completed in late fall but a number of technical maintenance problems delayed the successful production stream until well into the first quarter of 2006.  A lease site for a new well at 2-34-46-28 W4 has been approved by the Four Nations. The drilling of this well is expected this year.

Pincher Creek - A deep horizontal well at Pincher Creek was successfully drilled with Choice Resources Corp. as the operator of the well. Blue Parrot farmed in for 5% before payout and a 2.5% after payout interest. Blue Parrot has exercised the option to purchase a 2.5% interest for $75,000 in an existing producing well on the same section. The Company expects that further development in this area will move forward during the coming year.

Campbell - Blue Parrot farmed-in for a 25% interest to earn a 12.5% after payout. The well was drilled and was successful and tested 1.7 mmcf/d of gas and 144 barrels per day of oil. EUB approval for new pool status has been attained and the well is currently being tied in. The Company also earned a 12.5% interest in an adjoining four sections. Blue Parrot has entered into purchase agreements with two of the other partners in this project to acquire a further 17.5% after payout.

Acadia - The Company has acquired an 80% working interest in a section of land with a shut-in gas well which it has successfully re-entered and has put on production at a rate of 120 mcf/d with pressures holding steady. There is the possibility of another zone to be added to production in this well.

Sunken Lake - The Company participated in a new well with a 30% farm-in interest and a 16.5% working interest after payout. The first two zones tested were not successful however a third zone will be tested this year.

Cadotte Lake - Blue Parrot has a 40% working interest in four sections of land and it has farmed out this interest to a private company with drilling expected during winter months as weather allows.

Chigwell - The Company participated in the drilling of this well earlier this year with a 20% before payout farm-in interest and a 12.5% after payout interest. The operation of this property still is unsettled by the major operators.

Oliver - Two sections have been acquired with Blue Parrot participating for a 50% working interest. A farm-out drilling program is being developed for this area with an expected fall drill program.