Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes
o
No x
State
issuer’s revenues for its most recent fiscal year: $0
The
aggregate market value of the voting and non-voting shares of common equity
held
by non-affiliates of the Registrant as of June 30, 2008 was $81,405,000
(40,500,000 shares X $2.01 per share).
As
of
June 30, 2008, the number of outstanding shares of the registrant’s Common
Stock, $0.001 par value, was 55,000,000.
Transitional
Small Business Disclosure Format: Yes o
No x
ii
TABLE
OF CONTENTS
|
Part
I
|
1
|
|||
|
Item
1. Description of Business
|
|
|||
|
Incorporation
and Organization
|
|
|||
|
General
|
|
|||
|
History
|
|
|||
|
Our
Property
|
|
|||
|
Government
Regulation
|
|
|||
|
Competition
|
|
|||
|
Employees
|
|
|||
|
Item
2. Description of Properties
|
|
|||
|
Reserves
Reported to Other Agencies
|
|
|||
|
Production
|
|
|||
|
Productive
Wells and Acreage
|
|
|||
|
Undeveloped
Acreage
|
|
|||
|
Drilling
Activity
|
|
|||
|
Present
Activities
|
|
|||
|
Delivery
Commitments
|
|
|||
|
Office
Properties
|
|
|||
|
RISK
FACTORS
|
|
|||
|
Item
3 Legal Proceedings
|
|
|||
|
Item
4. Submission of Matters to a Vote of Security Holders
|
|
|||
|
Part
II
|
13
|
|||
|
Item
5. Market for Common Equity and Related Stockholder
Matters
|
|
|||
|
Market
Information
|
|
|||
|
Holders
of Record
|
|
|||
|
Dividends
|
|
|||
|
Equity
Compensation Plan Information
|
|
|||
|
Recent
Sales of Unregistered Securities
|
|
|||
|
Purchases
of Equity Securities by the Issuer and Affiliated
Purchasers
|
|
|||
|
Item
6. Management’s Discussion and Analysis or Plan of
Operation
|
|
|||
|
Overview
|
|
|||
|
Plan
of Operations
|
|
|||
|
Net
Loss
|
|
|||
|
Revenues
|
|
|||
|
Expenses
|
|
|||
|
Liquidity
and Capital Resources
|
|
|||
|
Off-Balance
Sheet Arrangements
|
|
|||
|
Item
7. Financial Statements
|
|
|||
|
Item
8. Changes In And Disagreements With Accountants On Accounting And
Financial Disclosure
|
|
|||
|
Item
8A(T) Controls and Procedures
|
|
|||
|
Evaluation
of Disclosure Controls and Procedures
|
|
|||
|
Changes
in Internal Control over Financial Reporting
|
|
|||
|
Management
Report on Assessment of Internal Control over Financial
Reporting
|
|
iii
|
Changes
in Internal Control over Financial Reporting
|
|
|||
|
Item
8B. Other
Information
|
|
|||
|
Part
III
|
22
|
|||
|
Item
9. Directors, Executive Officers, Promoters, Control Persons And
Corporate
Governance; Compliance With Section 16(A) Of The Exchange
Act
|
|
|||
|
Directors
and Executive Officers
|
|
|||
|
Significant
Employees
|
|
|||
|
Family
Relationships
|
|
|||
|
Involvement
in Certain Legal Proceedings
|
|
|||
|
Section
16(a) Beneficial Ownership Reporting Compliance
|
|
|||
|
Code
of Ethics
|
|
|||
|
Corporate
Governance
|
|
|||
|
Item
10. Executive Compensation
|
|
|||
|
Summary
Compensation Table
|
|
|||
|
Equity
Compensation Plans
|
|
|||
|
Outstanding
Equity Awards at Fiscal Year End
|
|
|||
|
Item
11. Security Ownership Of Certain Beneficial Owners And Management
And
Related Stockholder Matters
|
|
|||
|
Securities
Authorized for Issuance under Equity Compensation Plans
|
|
|||
|
Security
Ownership of Certain Beneficial Owners and Management
|
|
|||
|
Change
in Control
|
|
|||
|
Item
12. Certain Relationships and Related Transactions, and Director
Independence
|
|
|||
|
Transactions
with Related Persons
|
|
|||
|
Parents
|
|
|||
|
Director
Independence
|
|
|||
|
Item
13. Exhibits
|
|
|||
|
Item
14. Principal Accountant Fees And Services
|
|
|||
|
Audit
Fees
|
|
|||
|
Audit
– Related Fees
|
|
|||
|
Tax
Fees
|
|
|||
|
All
Other Fees
|
|
|||
|
29
|
||||
|
Exhibit
Index
|
30
|
iv
USE
OF
NAMES
In
this
annual report, the terms “Nexgen Petroleum”, “Company”, “we”, or “our”, unless
the context otherwise requires, mean Nexgen Petroleum Corp. and its
subsidiaries.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
annual report on Form 10-KSB and other reports that we file with the SEC contain
statements that are considered forward-looking statements. Forward-looking
statements give the Company’s current expectations, plans, objectives,
assumptions or forecasts of future events. All statements other than statements
of current or historical fact contained in this annual report, including
statements regarding the Company’s future financial position, business strategy,
budgets, projected costs and plans and objectives of management for future
operations, are forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “anticipate,” “estimate,”
“plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,”
“we believe,” “we intend,” and similar expressions. These statements are based
on the Company’s current plans and are subject to risks and uncertainties, and
as such the Company’s actual future activities and results of operations may be
materially different from those set forth in the forward looking statements.
Any
or all of the forward-looking statements in this annual report may turn out
to
be inaccurate and as such, you should not place undue reliance on these
forward-looking statements. The Company has based these forward-looking
statements largely on its current expectations and projections about future
events and financial trends that it believes may affect its financial condition,
results of operations, business strategy and financial needs. The
forward-looking statements can be affected by inaccurate assumptions or by
known
or unknown risks, uncertainties and assumptions due to a number of factors,
including:
·
dependence
on key personnel;
·
competitive
factors;
·
degree
of
success of exploration and development programs
·
the
operation of our business; and
·
general
economic conditions in the United States
These
forward-looking statements speak only as of the date on which they are made,
and
except to the extent required by federal securities laws, we undertake no
obligation to update any forward-looking statements to reflect events or
circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events. In addition, we cannot assess the impact
of
each factor on our business or the extent to which any factor, or combination
of
factors, may cause actual results to differ materially from those contained
in
any forward-looking statements. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the cautionary statements contained
in
this annual report.
v
Part
I
Item
1. Description of Business
Incorporation
and Organization
Nexgen
Petroleum Corp., was incorporated in the State of Nevada on April 17, 2006,
under the name DGT Corp. Our common shares were quoted for trading on the
Over-the-Counter Bulletin Board (“OTCBB”) on December 22, 2006 under the symbol
“DGTR”. On September 20, 2007 DGT Corp and its wholly owned subsidiary,
Blackrock Petroleum Corp. merged and our name changed to Blackrock Petroleum
Corp. Our trading symbol on the OTCBB was changed to “BRPC”. On May 21, 2008 we
underwent another merger with our wholly owned subsidiary Nexgen Petroleum
Corp.
At that time our name was changed to Nexgen Petroleum Corp. and our trading
symbol on the OTCBB was changed to “NXPE” effective June 9, 2008.
On
September 20, 2007, a forward stock split of our authorized, issued and
outstanding common stock was undertaken on a fifteen for one basis. As a result,
our authorized capital increased from 90,000,000 shares of common stock with
a
par value of $0.001 and 10,000,000 shares of preferred stock with a par value
of
$0.001 to 1,350,000,000 shares of common stock with a par value of $0.001 and
10,000,000 shares of preferred stock with a par value of $0.001. Our issued
and
outstanding share capital increased from 9,000,000 shares of common stock to
135,000,000 shares of common stock.
Effective
April 18, 2008, Mr. Hsien Loong Wong, President, CEO and a director of the
Company, who held in aggregate 94,500,000 post forward stock split shares of
common stock of the Company, voluntarily agreed to surrendered for cancellation
in aggregate 80,000,000 shares of common stock in order to encourage equity
investment into the Company. The cancellation of these 80,000,000 shares took
place on April 18, 2008, resulting in Mr. Wong reducing his share holdings
to
only 14,500,000 shares registered in his name.
The
Company maintains its statutory registered agent’s office at Nevada Agency &
Trust Company, 50 West Liberty Street, Suite 880, Reno, Nevada, 89501 and our
business office is located at 2820 W. Charleston Blvd., Suite 22, Las Vegas,
NV
89102. Our telephone number is (866) 446-1869.
General
When
Nexgen Petroleum operated as DGT Corp. we were in the business of providing
professional digital photo editing services for photo studios, however, we
changed our business plan from the professional digital photo editing services
and have now focused our activities on the oil and gas industry as an
exploration stage corporation. We intend to acquire interests in leases for
oil
and gas prospects either through farmout arrangements, participation
arrangements or straight acquisition of oil and gas interests, and then drill
exploratory and development wells with the help of other industry participants.
We do not intend to operate any properties. We intend to focus our oil and
gas
activities in North America as well as other regions.
It
is our
intention that in the projects in which we hold interests, another party will
typically act as the operator of the project. With respect to the projects
that
we will participate in, we will provide to the operator timely funding for
our
proportionate share of costs as well as technical input on how best to develop
the property. As a way to keep our overhead down, we will engage the services
of
consultants who have technical expertise to best represent the Company’s
interests. The Company currently has an interest in an oil and gas property
in
Morgan County, Tennessee. Our principal capital expenditures to date have been
$2,044,800 to acquire the interest in the oil and gas property in Morgan County,
Tennessee. We continue to work on identifying new properties for
acquisition.
History
Our
principal business prior to becoming a resource company was one of providing
professional digital photo editing services for photo studios. However, we
changed our business plan and have now focused our activities on the oil and
gas
industry as an exploration stage company. See our Annual Report on Form 10-KSB
filed on June 20, 2007 for more information relating to our business prior
to
becoming an exploration stage company.
Our
Property
Morgan
Highpoint Property, Tennessee, USA
On
March
10, 2008 the Company entered into a Farmout and Participation Agreement (the
“Farmout Agreement”), which is effective as of February 26, 2008, with Montello
Resources (USA) Ltd., a subsidiary of Montello Resources Ltd. (TSX-V: MEO),
Park
Place Energy Corp. (OTCBB: PRPL), an Alberta corporation, and Austin
Developments Corp. (TSX-V: AUL), an Alberta corporation, with respect to two
test wells on the oil and gas lease dated December 22, 2007 between Southeast
Ventures, Inc., as lessor, and Montello Resources (USA) Ltd., as lessee, located
in Morgan County, Tennessee. Under the Farmout Agreement the participating
interests are as follows: Montello Resources (USA) Ltd., as operator, is paying
15% of all costs associated with the test wells to earn a 35% interest in the
associated production spacing units; Austin Developments Corp. is paying 20%
of
the costs to earn a 30% interest; Park Place Energy Corp. is paying 5% of the
costs to earn a 5% interest; and the Company is paying 60% of the costs to
earn
a 30% interest. As of March 31, 2008, the Company has incurred $2,044,800 in
capital expenditures on this property. Subsequent to April 1, 2008, the Company
has incurred Nil in costs by participating in the drilling and completing of
the
Morgan Highpoint #3 and the Morgan Highpoint #4 test wells. Both of these wells
have been cased and shut in.
On
or
about April 11, 2008, the Company entered into a letter agreement (the “Letter
Agreement”) with Montello Resources (USA) Ltd., Park Place Energy Corp., and
Austin Developments Corp., dated effective April 11, 2008, whereby the parties
agreed to amend the March 10, 2008 Farmout Agreement as follows: (i) Article
8
(Area of Mutual Interest) of the Farmout & Royalty Procedure attached as
Schedule “C” to the Farmout Agreement shall apply; (ii) the Mutual Interest
Lands shall comprise all PNG rights 50% or more of which are located within
the
boundaries of that area of lands located within Morgan County, State of
Tennessee, USA as outlined on the map attached to the Letter Agreement; (iii)
the Area of Mutual Interest shall be in effect until 11:50 pm on April 10,
2010;
and (iv) the participating interests of the parties hereto in the Area of Mutual
Interest during the term thereof shall be Montello – 35%, Park Place – 5%,
Austin – 30% and the Company – 30%.
In
addition, on or about April 11, 2008, the Company entered into a Farmout and
Participation Agreement (the “Farmout Agreement”), which is effective as of
April 11, 2008, with Montello Resources (USA) Ltd., a subsidiary of Montello
Resources Ltd., Park Place Energy Corp., an Alberta corporation, and Austin
Developments Corp., an Alberta corporation, with respect to two test wells
on
the oil and gas lease dated March 25, 2008 between Robert and Kathy Lavender,
as
lessors, and Montello Resources (USA) Ltd., as lessee, located in Morgan County,
Tennessee. Under the Farmout Agreement the participating interests are as
follows: Montello Resources (USA) Ltd., as operator, is paying 15% of all costs
associated with the test well to earn a 35% interest in the associated
production spacing units; Austin Developments Corp. is paying 20% of the costs
to earn a 30% interest; Park Place Energy Corp. is paying 5% of the costs to
earn a 5% interest; and the Company is paying 60% of the costs to earn a 30%
interest. As of June 30, 2008, the Company has incurred $132,000 in capital
expenditures on this property, which funds were from the excess funds remaining
from the Morgan Highpoint #3 and #4 drilling operations, by participating in
the
drilling and completion of the Morgan Highpoint #5 test well, which has been
cased and shut in.
Government
Regulation
General
Our
oil
and gas operations are subject to various federal, state and local governmental
regulations in the United States. Matters subject to regulation include
exploration permits, discharge permits for drilling operations, drilling and
abandonment bonds, operating practices, reports concerning operations, the
spacing of wells, pooling of properties, taxation and environmental protection.
These laws and regulations are under constant review for amendment or expansion.
From time to time, regulatory agencies have imposed price controls and
limitations on production by restricting the rate of flow of oil and gas wells
below actual production capacity in order to conserve supplies of oil and gas.
The production, handling, storage, transportation and disposal of oil and gas,
by-products thereof, and other substances and materials produced or used in
connection with oil and gas operations are also subject to regulation under
state and local laws and regulations relating primarily to the protection of
human health and the environment. To date, expenditures related to complying
with these laws, and for remediation of existing environmental contamination,
have not been significant in relation to the results of operations of our
Company. The requirements imposed by such laws and regulations are frequently
changed and subject to interpretation, and we are unable to predict the ultimate
cost of compliance with these requirements or their effect on our operations.
Changes in these regulations could require us to expend significant resources
to
comply with new laws or regulations or changes to current requirements and
could
have a material adverse effect on us.
Oil
and Gas Regulation
Each
state has legislation and regulations which govern land tenure, royalties,
production rates, environmental protection and other matters. The royalty regime
is a significant factor in the profitability of oil and natural gas production.
Royalties payable on production from lands other than government lands are
determined by negotiations between the mineral owner and the lessee. Royalties
on government land are determined by government regulation and are generally
calculated as a percentage of the value of gross production, and the rate of
royalties payable generally depends upon prescribed reference prices, well
productivity, geographical location, field discovery date and the type or
quality of the petroleum product produced.
Management
believes that we are in substantial compliance with current applicable
environmental laws and regulations.
Competition
The
Company operates in a highly competitive industry, competing with other oil
and
gas exploration companies, independent producers and institutional and
individual investors, which are actively seeking oil and gas properties
throughout the world together with the equipment, labor and materials required
to operate such properties. Most of the Company’s competitors have financial
resources, staffs and facilities substantially greater than the Company’s. The
principal area of competition is encountered in the financial ability for the
Company to acquire acreage positions and drill wells to explore for oil and
gas,
then, if warranted install production equipment. Competition for the acquisition
of oil and gas wells is intense with many oil and gas properties and or leases
or concessions available in a competitive bidding process in which the Company
may lack technological information or expertise available to other bidders.
Therefore, we may not be successful in acquiring and developing profitable
properties in the face of this competition. No assurance can be given that
the
Company will be successful in its efforts to secure additional properties and
or
develop its existing oil and gas property.
Employees
As
of
March 31, 2008 we have no employees. The Company relies on consultants to carry
out its corporate activities. Consultants are engaged to look out for the
Company’s best interests in its non-operated oil and gas property.
Item
2. Description of Properties
See
“Description of Business” for information relating to our properties.
Reserves
Reported to Other Agencies
We
have
filed no estimates of total, proved net oil or gas reserves with any other
federal authority or agency.
Production
As
of
March 31, 2008, we do not own any producing properties.
Productive
Wells and Acreage
The
following table sets forth our leasehold interest in productive oil wells,
as of
March 31, 2008:
|
AREA
|
GROSS(1)
|
NET(2)
|
|||||
|
Tennessee,
USA(3)
|
|
|
|||||
| (1) |
A
gross well is a well in which a working interest is owned. The number
of
gross wells is the total number of wells in which a working interest
is
owned.
|
| (2) |
A
net well is deemed to exist when the sum of fractional ownership
working
interest in gross wells equals one. The number of net wells is the
sum of
the fractional working interests owned in gross wells expressed as
whole
numbers and fractions thereof.
|
| (3) |
At
March 31, 2008, the Company had a 30% interest in two wells that
were
cased and shut in, in Tennessee,
USA.
|
The
following table sets forth the amount of our net and gross productive wells
and
acreage(1)
as of
March 31, 2008:
|
AREA
|