We were originally incorporated in Colorado in April 1991 under the name Snow Runner (USA), Inc. We were the general partners of Snow Runner (USA) Ltd., a Colorado limited partnership which sold proprietary snow skates under the name "Sled Dogs" which was dissolved in August 1992. In late 1993, we relocated our operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On November 5, 1997, we filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In September 1998, we emerged from protection of Chapter 11 of the U.S. Bankruptcy Code. In May 1999, we changed our state of domicile to Nevada and our name to XDOGS.COM, Inc. In August 2000, we made a decision to re-focus from a traditional wholesale to a retail distributor, and obtained the exclusive North American rights to distribute high-end European outdoor apparel and equipment. We first intended to exploit these rights over the Internet under the name XDOGS.COM, Inc. However, due to the general economic conditions and the ensuing general downturn in e-commerce and internet-based businesses, we decided that to best preserve our core assets we would need to adopt a more traditional strategy. Thus, we abandoned this approach and to better reflect our new focus, we changed our name to XDOGS, Inc. On July 22, 2005, the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation to change the Company's name to Avalon Oil & Gas, Inc., and to increase the authorized number of shares of our common stock from 200,000,000 shares to 1,000,000,000 shares, par value of $0.001, and engage in the acquisition of producing oil and gas properties.

Acquisition Strategy

We plan to acquire oil and gas producing properties with a combination of cash, debt, and equity. We believe all of these properties will have proven reserves, generate immediate cash flow, provide low risk, in-field drilling locations and expand production within a proven oil and gas field. We will aggressively develop these low cost/low risk properties and rapidly enhance shareholder value. In furtherance of the foregoing strategy, we have recently engaged in the following transactions:

On May 23, 2005, we signed a Letter of Intent to acquire an eighty percent (80%) Net Revenue Interest in certain oil and gas leasehold interests located primarily in the Montgomery County, Kansas and certain oil field equipment, (the "Assets") from Mid-Continent Investments, Inc. ("MCI"). On July 22, 2005, we closed the transaction and delivered 85,000,000 shares of our common stock to MCI in anticipation of receipt of an assignment transferring ownership of the Assets. As of January 25, 2006, the Company had not received an assignment of the Assets, and we sent a letter to our transfer agent canceling the 85,000,000 shares that were issued and delivered to MCI, for failure of consideration. Further, the Company has notified MCI that we no longer intend to acquire the Assets.

On August 29, 2005 we acquired a one hundred percent (100%) working interest, seventy-eight percent (78%) net revenue interest, in 2,400 acres located in Canadian County, Oklahoma (the "Oklahoma Properties"), from Sooner Trend Leasing LLC, payable by delivering 48,000,000 authorized, previously un-issued, shares of the Company's common stock. On February 13, 2006, we returned the Oklahoma Properties to Sooner Trend Leasing LLC, and sent a letter to our transfer agent canceling the 48,000,000 shares of stock which were issued to Sooner Trend Leasing LLC.

On April 20, 2006, we acquired a fifty (50%) percent working interest in a 266.73 acre oil and gas lease in Starr County, Texas, from Canyon Creek Oil and Gas, Inc., located in the Boyle Field. The 266.73 acre property consists of four (4) shut-in oil and gas wells, and ten (10) additional potential drilling locations.

On May 17, 2006, we signed a strategic alliance agreement with UTEK Corporation, a technology transfer company to develop a portfolio of new technologies for the oil and gas industry.

On June 15, 2006, we acquired a fifty (50%) percent working interest in the J.C. Kelly wellbore, a 121.9 acre lease in Wood County, Texas, in addition to the E.A. Chance #1 and #2 wellbores, we also acquired a 40 acre lease in Camp County, Texas and all of the surface equipment for the properties from KROG Partners LLC.

On July 5, 2006, we acquired an interest in the Lacey Leasehold from C & M Exploration, LLC ("C & M"). The acquisition included a twenty five (25%) percent working interest in the East Half of Section Twenty-Four (24), Township Nineteen North (19N), Range Nine West (9 W), Kingfisher County, Oklahoma (the "Leasehold"). The Leasehold consists of four (4) potential re-entry well bores and two (2) potential drilling locations which cover in excess of three hundred twenty (320) acres.

We plan to raise additional capital during the coming fiscal year, but currently have not identified additional funding sources. Our ability to continue operations is highly dependent upon our ability to obtain additional financing, or generate revenues from our acquired oil and gas leasehold interests, none of which can be guaranteed.

Ultimately, our success is dependent upon our ability to generate revenues from our acquired oil and gas leasehold interests, and to achieve profitability, which is dependent upon a number of factors, including general economic conditions and the sustained profitability resulting from the operation of the acquired oil and gas leaseholds. There is no assurance that even with adequate financing or combined operations, we will generate revenues and be profitable.

PATENTS, TRADEMARKS, AND PROPRIETARY RIGHTS

We currently do not have any patents, registered trademarks or proprietary rights. We have signed a strategic alliance agreement with UTEK Corporation, a technology transfer company, to develop a portfolio of proprietary new technologies for the oil and gas industry.

ENVIRONMENTAL MATTERS

During the last three fiscal years, compliance with environmental laws and regulations did not have a specific impact on the Company's operations. The Company does not anticipate that it will incur any material capital expenditures for environmental control facilities for environmental facilities during the next fiscal year.

EMPLOYEES

Since March 2005, we have had one full time employee, our President, Kent Rodriguez. The Board of Directors has retained as advisors to the Board William Anderson, Glen Harrod, Charles Crawford, and Thomas Bugbee. We do not have any part time employees at this time.

RESEARCH AND DEVELOPMENT

During the last three fiscal years, we did not incur research and development expenses.

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