Edgar Filing: TURNER VALLEY OIL & GAS INC

form10ksba.htm

FORM 10-KSB/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x 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
(Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

604 - 700 West Pender Street Vancouver Canada	V6C 1G8
(Address of principal executive offices)	(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 ('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 13

CONTENTS

INTRODUCTION			3

ABOUT THIS AMENDMENT			3

PART I			4

ITEM 1.		Description of Business	4
	(a)	Form and Year of Organization	4
	(b)	Our Business	4

ITEM 2.		Description of Property	4

ITEM 3.		Legal Proceedings	5

ITEM 4.		Submission of Matters to a Vote of Security Holders	5

PART II			6

ITEM 5.		Market for Common Equity and Stockholder Matters	6
	(a)	Market Information	6
	(b)	Holders	6
	(c)	Dividends	6
	(d)	Sales of Unregistered Common Stock 2007	7

ITEM 6.		Management's Discussion and Analysis or Plan of Operation	7

ITEM 7.		Financial Statements	9

ITEM 8.		Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	11

PART III			12

ITEM 9.		Directors and Executive Officers, Promoters and Control Persons	12

ITEM 10.		Executive Compensation	12

ITEM 11.		Security Ownership of Certain Beneficial Owners and Management	13

Item 12.		Controls and Procedures	14

ITEM 13.		Attachments, Financial Statements, Exhibits, and Reports on Form 8-K	14

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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.

ABOUT THIS AMENDMENT

The body of this Amended Annual report contains some formal rephrasing of our description of The Strachan Property B Leduc Formation and the Mississippi Project, at the end of Management's Discussion and Analysis. Executive Compensation Tables have been given technical revision with no substantial impact or change of the essential information provided. Technical and formal revisions have been made to Item 12, Controls and Procedures.

For discussion of amendments of our Financial Statements, please see Item 7.

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PART I

ITEM a). Description of Business.

(i)) 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.

Current Year Issuances	Valued at		Shares
Carried from 12/31/05				55,535,970
Issue 4/01/07: Registered for services @0.025	$	70,000		2,800,000
Total Issued and Outstanding 12/31/05	$	70,000		58,335,970

(ii)) Our Business. Turner Valley Oil and Gas Inc. (ATVOG@) 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 Managements 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.

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DESCRIPTION OF OIL & GAS PROPERTIES

ITEM b). 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 c). Legal Proceedings.

There are no legal proceedings pending against us, as of the preparation of this Report.

ITEM d). Submission of Matters to a Vote of Security Holders.

None.

The Remainder of this Page is Intentionally left Blank

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PART II

ITEM e). Market for Common Equity and Stockholder Matters.

(i)) 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.

PERIOD	HIGH BID	LOW BID	VOLUME
3rd 2004	0.18	0.12	4,784,580
4th 2004	0.34	0.12	22,427,460
1st 2005	0.38	0.21	59,337,300
2nd 2005	0.29	0.12	15,100,140
3rd 2005	0.19	0.12	11,437,060
4th 2005	0.14	0.06	10,552,140
1st 2006	0.23	0.06	13,434,000
2nd 2006	0.22	0.03	7,754,000
3rd 2006	0.14	0.07	6,864,000
4th 2006	0.11	0.07	9,134,000
1st 2007	0.08	0.04	10,660,000
2nd 2007	0.04	0.02	10,110,000
3rd 2007	0.02	0.01	10,008,000
4th 2007	0.03	0.01	9,200,000

Source: Yahoo Finance

(ii)) Holders. There are approximately 100 shareholders of our common stock, giving effect to shares held in brokerage accounts.

(iii)) 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.

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(iv)) Sales of Unregistered Common Stock 2007. We made no unregistered issuances in 2005, 2006 or 2007.

ITEM f). Management's Discussion and Analysis or Plan of Operation.

(i)) 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)

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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: 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.

A 1.200% interest in the rights below the base line of the Shunda formation in Section 10,Township 38, Range 9W5M

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 6th, 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 ended September 30, 2006.

By the end of the fiscal year, we determined that our working interest in the LeDuc had no economic hydrocarbons and hence impaired our holding. The amount was moved to the proved property pool for amortization. Subject to the full-cost-ceiling test, we had an impairment charge of $525,544 for the year ended December 31, 2007.

Looking forward. The Strachan Prospect is still of interest, notwithstanding the abandonment of the LeDuc formation.. The Strachan is located 80 miles NW of Calgary, Alberta. We expect testing of this prospect in the near future, which will enable us to determine whether to continue or abandon this project. Testing of this first well showed no economic hydrocarbons and the well was abandoned.

Mississippi Prospect. On August 23rd, 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. The first 20 proposed wells are located within tie-in range of existing pipeline infrastructure. We have agreed to pay 10% of all prospect fees, mineral 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.

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General and Administrative costs General and Administrative costs for the year 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 StrachanBLeduc 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 StrachanBLeduc 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 (AWIN@) at a market price of $0.37 per share.

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 g). 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.

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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-07 Amended. These financial statements attached hereto and filed herewith are incorporated herein by this reference as though fully set forth herein.

Amended Financial Statements reflect changes of technical but important clarifications, and the correction of certain minor mistakes.

1. Amounts of comprehensive income/(loss) presented in Statement of Operations and Comprehensive Income(Loss) for the years ended December 31, 2007 and 2006 did not agree with the corresponding amounts in Statement of Stockholders' Equity and Note 6. These inconsistencies have been resolved and corrected.

2. Estimated future expenditures to be incurred in developing proved reserves, and estimated dismantlement and abandonment costs when discussing full cost amortization policy, have been included in the costs subject to amortization under Rule 4-10(c)(3)(i) of Regulation S-X. Fact is, that we do not currently anticipate any material capital expenditures in the development of our proved reserves.

3. Some important revisions to Note-3, Oil & Gas Properties, Strachan Property: "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 was moved to the proved property pool for amortization. Subsequent to the full cost ceiling test, the Company had an impairment charge of $525,544 for the year ended December 31, 2007.@

4. he accounting policy for asset retirement obligations has been inserted.

5. Amounts disclosed under Capitalized Costs Relating to Oil and Gas Activities, for December 31, 2007 and 2006 did not agree with the corresponding information reported in the Balance Sheet. Corrections have been made, as would ordinarily be required by paragraphs 18, 19 and 20 of SFAS 69.

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6. Inconsistencies have been removed and corrected in Costs incurred in Oil and Gas Property Acquisition, Exploration, and Development Activities, in accordance with paragraphs 21, 22 and 23 of SFAS 69.

7. Disclosure has been added (to Standardized Measure of Discount Future Net Cash Flows Relating to Proved Oil & Gas Reserve Quantities) relating to our interests in proved oil and gas reserves, at the end of the each period, and reconciliations showing changes in this measure occurring during these periods to comply with paragraphs 30, 31 and 33 of SFAS 69.

8. Please note changes to Consolidated Statements of Cash Flow, for 2006: (a) Increase in accounts payable and accrued expenses; (b) Investing in new Oil & Gas working interests.

It is the opinion of Management that these corrections, however important to achieve proper financial reporting, do materially alter our essential disclosure of our condition and operations.

ITEM h). Changes In and Disagreements With Accountants

on Accounting and Financial Disclosure.

None.

The Remainder of this Page is Intentionally left Blank

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PART III

ITEM i). 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 j). 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.

Executive Officers
	Annual Compensation
	b	c	e		j
Name and Principal Position	Year	Salary ($)	Other Annual Compensation ($)		Totals $
Christopher	2007			71,028		71,028
Paton-Gay,	2006			254,105		254,105
Chairman, CEO Director	2005			331,340		331,340
Kulwant	2007			52,168		52,168
Sandher,	2006			178,226		178,226
Treasurer, CFO	2005			6,515		6,515

Directors
	Annual Compensation
	b	c	e		g
Name and Principal Position	Year	Salary ($)	Other Annual Compensation ($)		Totals $
Joseph A. Kane	2007			10,000		10,000
Director	2006			23,750		23,750
	2005			29,750		29,750
Donald	2007			10,000		10,000
Jackson Wells	2006			23,750		23,750
Director	2005			29,750		29,750

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The foregoing Aother compensation@ was paid in common stock, and not in cash. Each issuance was valued at market prices then current. Our Executive Officers and Directors have no fixed employment agreements for compensation, but receive compensation from time to time in the discretion of the Board of Directors. Our Chief Executive Officer and Chief Financial officers have received modest salary during the reporting periods. All other compensation has been made in stock of our company, issued from time to time at the then current market value. Compensation of services in stock has been made pursuant to that certain Stock for Compensation Services Plan, which provides in relevant part: A(a) If this Corporation be a reporting company, the Board of Directors may elect to offer shares pursuant to Registration under the Securities Act of 1933, or pursuant to Section 4(2) of the 1933 Act, or other applicable exemption from registration, with such restriction on resale as required by law or rule of the Commission, or such greater restriction as may be agreed to by the parties.@

ITEM k). 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 Sandher
604 – 700 West Pender St.	Treasurer/CFO		1,252,395			2.15
Vancouver 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

(i)) 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.

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Item 12. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. Based upon an evaluation under supervision and with the participation of our management, as of the end of the period represented by this Annual Report on form 10-KSB, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934, are effective to ensure that information required to be disclosed (in reports that we file or submit under that Exchange Act) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Changes in Internal Accounting. There were no changes in our internal controls over financial reporting affecting these controls that occurred during the last financial quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting. 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 13. Attachments, Financial Statements, Exhibits, and Reports on Form 8-K

(ii)) Attachments/Exhibits Hereto.

(31) Certification pursuant to 18 USC Section 302.

(32) Certification pursuant to 18 USC Section 1350.

(AC-99.1) Audit Committee Report

(AFK-07) Audited Financial Statements for the years ended December 31, 2007, 2006 and from Inception.

(iii)) 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 25, 2009

Christopher Paton-Gay		Donald Jackson Wells		Joseph Kane
Christopher Paton-Gay		Donald Jackson Wells		Joseph Kane

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Attachment AFK-07 Amended

Audited Financial Statements

for the years ended

December 31, 2007, 2006

and from inception

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TURNER VALLEY OIL & GAS CORPORATION

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2007 and 2006

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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

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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 and 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 audits 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

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TURNER VALLEY OIL & GAS, INC.
(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 and outstanding, respectively		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

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TURNER VALLEY OIL & GAS, INC.
(A Development Stage Company)
Consolidated Statements of Operations and Comprehensive Income/(Loss)


	For the Year Ended December 31,						From Inception on April 21, 1999 Through 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		(500,093	)		500,093			(725	)
Foreign Currency Translation		(1,452	)		-			(4,085	)

COMPREHENSIVE INCOME (LOSS)	$	(1,115,837	)	$	212,856		$	(4,730,582	)

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Turner Valley Oil & Gas Corporation
(A Development Stage Company)
Statements of Stockholders' Equity
For the Year Ended December 31, 2007


	Shares			Amount			Additional Paid-in-Capital			Comprehensive Income/(Loss)			Retained Earnings			Subscription Receivable			Total

Balance at inception April 21, 1999		0			0			0												0

Shares issued for services during 1999		41,080			41			5,094												5,135

Shares issued for cash during 1999		16,000			16			99,984												100,000

Net Loss for the period ended December 31, 1999														(96,935	)					(96,935	)

Balance at December 31, 1999		57,080			57			105,078			0			(96,935	)		0			8,200

Net Loss for the period ended December 31, 2000														(27,242	)					(27,242	)

Balance at December 31, 2000		57,080			57			105,078			0			(124,177	)		0			(19,041	)

Net Loss for the period ended December 31, 2001														(65,380	)					(65,380	)

Balance at December 31, 2001		57,080			57			105,078			0			(189,557	)		0			(84,420	)

Shares issued for debt reduction during 2002		8,000			8			99,992												100,000

Shares issued for services during 2002		2,190,150			2,190			1,092,885												1,095,075

Net Loss for the period ended December 31, 2002														(1,240,008	)					(1,240,008	)

Balance at December 31, 2002		2,255,230			2,255			1,297,955			0			(1,429,565	)		0			(129,352	)

Shares issued for services at $.02 per share		1,500,000			1,500			298,500												300,000

Rounding of shares from reverse split		2,000			2			(2	)											0

Shares issued for accounts payable at $.05 Per share		8,000,000			8,000			392,000												400,000

Shares issued for services at $.015 per share		31,729,200			31,729			444,209												475,938

Shares issued for services at $.015 per share		9,487,504			9,488			132,825												142,313

Shares issued pursuant to S-8 registration at $.05 per share		2,000,000			2,000			98,000												100,000

Shares issued pursuant to S-8 registration at $.05 per share		650,000			650			31,850												32,500

Cancellation of Common Stock		(16,691,520	)		(16,692	)		(220,459	)											(237,150	)

Shares issued for cash at $.05 per share		3,000,000			3,000			147,000												150,000

Shares issued for cash at $.30 per share		100,000			100			29,900												30,000

Shares issued for cash at $.35 per share		528,570			529			184,471												185,000

Foreign Currency Translation											(1,718	)								(1,718	)

Net Loss for the period ended December 31, 2003		0			0			0						(1,137,760	)					(1,137,760	)

Balance at December 31, 2003		42,560,984			42,561			2,836,249			(1,718	)		(2,567,325	)		0			309,771

Shares issued pursuant to S-8 registration at $.20 per share		932,500			933			185,567												186,500

Shares issued pursuant to S-8 registration at $.08 per share		1,597,500			1,598			126,202												127,800

Shares issued pursuant to S-8 registration at $.08 per share		1,000,000			1,000			79,000												80,000

Shares issued pursuant to S-8 registration at $.11 per share		85,000			85			9,265												9,350
9/30/2004
Shares issued pursuant to S-8 registration at $.20 per share		1,385,000			1,385			275,615												277,000

Shares issued for Cash at $.05 per share		975,000			975			47,775												48,750

Subscription Recievable																	(48,750	)		(48,750	)

Foreign Currency Translation											(2,367	)								(2,367	)

Net Loss for the period ended December 31, 2004		0			0			0			0			(784,001	)					(784,001	)

Balance at December 31, 2004		48,535,984			48,537			3,559,673			(4,085	)		(3,351,325	)		(48,750	)		204,052

Shares issued pursuant to S-8 registration at $.13 per share		2,850,000			2,850			367,650												370,500

Shares issued pursuant to S-8 registration at $.13 per share		2,000,000			2,000			258,000												260,000

Foreign Currency Translation											(725	)								(725	)

Subscription Recievable																	48,750			48,750

Net Loss for the period ended December 31, 2005														(472,917	)					(472,917	)

Balance at January 1, 2006		53,385,984			53,387			4,185,323			(4,810	)		(3,824,242	)		0			409,660

Shares issued pursuant to S-8 registration at $.13 per share		2,000,000			2,000			258,000												260,000

Shares issued pursuant to S-8 registration at $.08 per share		1,600,000			1,600			126400												128,000

Shares issued pursuant to S-8 registration at $.08 per share		1,450,000			1,450			114,550												116,000

Shares issued under Rule 144 at $0.13 per share		100,000			100			12,900												13,000

Revaluation of available for sale investments Unrealized gain											500,093									500,093

Net Income for the year ended December 31, 2006														(287,238	)					(287,238	)

Balance as at December 31, 2006		58,535,984			58,537			4,697,173			495,283			(4,111,480	)		0			1,139,515

Realization of unrealized gains on investments											(500,093	)								(500,093	)
Foreign currency transalation											1,452									1,452
Issuance of S-8 stock for services at $0.01		1,500,000			1,500			13,500												15,000

Issuance of S-8 stock for services at $0.025		1,300,000			1,300			31,200												32,500

Net Income/(loss) for the year ended December 31, 2007														(614,292	)					(614,292	)

Balance as at December 31, 2007		61,335,984			61,337			4,741,873			(3,358	)		(4,725,772	)		0			74,082

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TURNER VALLEY OIL & GAS, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows


	Year Ended December 31,						From Inception on April 21, 1999 Through 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			(5,550	)		295,590

Net Cash Used in Operating Activities		(189,872	)		(204,414	)		(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		-			(361,492	)		(825,544	)
Expenditures for oil and gas property development		-			-			(312,714	)

Net Cash Used in Investing Activities		265,560			125,566			(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		$	-

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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 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 interests. 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 overproduced 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. The Company does not currently antipate any material capital expenditures in the development of its proved reserves. During the year ended December 31, 2007 and 2006, the Company recorded depletion of $10,000 and $10,000 on its property, respectively.

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Environmental Protection and Reclamation Costs

The operations of the Company have been, and may be in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restorations costs. Both the likelihood of new regulations and their overall effect upon the Company may vary from region to region and are not predictable.

The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures. Environmental expenditures that relate to ongoing environmental and reclamation programs will be charged against statements of operations as incurred or capitalized and amortized depending upon their future economic benefits. The Company does not currently anticipate any material capital expenditures for environmental control facilities because all property holdings are at early stages of exploration. Therefore, estimated future removal and site restoration costs are presently considered minimal.

Asset Retirement Obligations

The Company has adopted Statement of Financial Accounting Standards No. 143 (“SFAS 143”), “Accounting for Asset Retirement Obligations”, which requires that asset retirement obligations (“ARO”) associated with the retirement of a tangible long-lived asset, including natural gas and oil properties, be recognized as liabilities in the period in which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated assets. The cost of tangible long-lived assets, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the assets. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted cash flows are accreted to the expected settlement value. The fair value of the ARO is measured using expected future cash flow, discounted at the Company’s credit-adjusted risk-free interest rate.

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.

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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.

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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.

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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.

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 identifiable assets and measuring goodwill. The adoption of SFAS 141 (revised) did not have an impact on the Company’s financial statements.

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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)

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.

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.

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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)

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.

NOTE 3 - OIL & GAS PROPERTIES

Strachen 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.

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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 was moved to the proved property pool for amortization. Subsequent to the full cost ceiling test, the Company recorded an impairment charge of $525,544 for the year ended December 31, 2007.

During the year the Company disposed of its holding in the Mississippi project for forgiveness of the amount owing of $400,000.

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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.

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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.

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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	)	$	500,093
Effect of currency exchange rate changes		1,453
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 17th, 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

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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			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

	For the Years Ended
	December 31,
	2007		2006
Acquisition of Properties
Proved	$	-	$	-
Unproved		-		264,054
Exploration Costs		-		-
Development Costs		-		661,490

Total Costs Incurred	$	-	$	925,544

The Company does not have any investments accounted for by the equity method.

(3)

Results of Operations for Producing Activities

	For the Years Ended
	December 31,
	2007			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	)

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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)

(4)

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		-		2.69

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.

The following information has been developed utilizing procedures prescribed by SFAS 69 "Disclosures About Oil and Gas Producing Activities" and based on crude oil and natural gas reserves and production volumes estimated by the Company. It may be useful for certain comparison purposes, but should not be solely relied upon in evaluating the Company or its performance. Further, information contained in the following table should not be considered as representative or realistic assessments of future cash flows, nor should the Standardized Measure of Discounted Future Net Cash Flows be viewed as representative of the current value of the Company.

Future cash inflows were computed by applying year-end prices of oil and gas to the estimated future production of proved oil and gas reserves. The future production and development costs represent the estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves, assuming continuation of existing economic conditions. Future income tax expenses were computed by applying statutory income tax rates to the difference between pre-tax net cash flows relating to our proved oil and gas reserves and the tax basis of proved oil and gas properties and available net operating loss carry forwards. Discounting the future net cash inflows at 10% is a method to measure the impact of the time value of money.

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	December 31, 2008			December 31, 2007
Future Cash inflows		6,851			7,207
Future production costs		(2,740	)		(2,883	)
Future development costs		-			-
Future income tax expense		-			-
Future cash flows		4,111			4,324
10% annual discount for estimated timing of cash flows		(412	)		(432	)
Standardized measure of discounted future next cash	$	3,699		$	3,892