Blaine Exploration Ltd.

Balance Sheets

(Unaudited)

March 31,

March 31,

2008

2007

Assets

Current Assets

Cash

$

1,212

$

534

Accounts Receivable

0

1,908

Prepaid Expenses

0

0

1,212

2,442

Property and Equipment (Note 2)

127

163

Investments (Note 3)

59,774

58,234

Total Assets:

$

61,113

$

60,839

Liabilities and Shareholders Equity

Current Liabilities

Bank Indebtedness (Note 4)

$

0

0

Accounts Payable and accruals

71

0

Income Taxes

0

0

71

0

Shareholders' Equity

Opening retained earnings

46,679

46,694

Share capital (Note 5)

14,160

14,160

Profit/(loss)

203

(15)

61,042

60,839

Total Liabilities:

$

61,113

60,839

Approved by the Directors

See accompanying notes

_______________________

Statements of Income and Retained Earnings

(Unaudited)

Year ended

Year ended

March 31,

March 31,

2008

2007

Revenues

Management Consulting

$

1,800

$

1,800

Financial Consulting

0

0

Geophysical Consulting

0

0

Geological Consulting

0

0

Engineering Consulting

0

0

1,800

1,800

Operational Services

0

0

Seismic Acquisition

0

0

Technical Services

0

0

Total Services Income:

0

0

Interest and other

0

26

Total Income:

1,800

1,826

Expenses

General Operations

Contract labor

$

0

$

0

Insurance

0

0

Travel Expense

0

0

Repairs and maint.

0

0

Communications

0

0

Expenses/supplies

0

0

$

0

$

0

Office and Administrative

Contract labor

$

1,200

$

1,200

Rent

0

0

Expenses/supplies

45

49

Training

0

0

Legal/accounting

285

285

Communications

0

0

Gain on sale of asset

0

0

Current income tax

31

259

Foreign exchange

0

0

Depreciation and amortization

36

48

$

1,597

$

1,841

Total expenses:

$

1,597

$

1,841

Net (loss)/gain:

$

203

$

(15)

Retained Earnings

Beginning of year

46,679

46,694

Retained earnings at end of year

46,882

46,679

Note 1 - Accounting Policies

Blaine Exploration Ltd. was incorporated under the Business Corporations Act of Alberta September 6, 1988. The Corporation has current activities in Canada. On March 31, 1998 the assets of the U.S. division were sold at book value to A. Blaine and Cindy A. Hanks for proceeds of $5123 Canadian. The Corporation is engaged in exploration consulting and technical services. Significant accounting policies of the Corporation are summarized below:

(a) Basis of Presentation

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles.

(b) Oil and Gas Property

An interest in a non-producing oil and gas property is recorded at cost and is being amortized over ten years. Straight line method.

(c) Property and Equipment

Equipment is recorded at cost and depreciated over the estimated useful lives of the various classes of assets. Assets in their respective country are depreciated according to the normally accepted tax methods used. Some of which are presented below:

Computer equipment

30%

Seismic equipment

30%

Automotive equipment

30%

Furniture & equipment

20%

(d) Goods and Service Tax

Revenues are recorded net of the Goods and Service Tax ("GST") collected. Purchases of goods or services are recorded net of the GST that is recoverable. GST that is not recoverable is included in the cost of the goods or services to which it relates. The net amount due to, or from, the taxation authorities with respect to GST is included in accounts payable, or accounts receivable, as appropriate.

Note 2 - Property and Equipment

2008

2007

Computer equipment

$

27,171

$

27,171

Seismic equipment

11,252

11,252

Automotive property

5,197

5,197

Furniture and equipment

2,914

2,914

Oil and gas property

338

338

Incorporation costs

250

250

$

47,122

$

47,122

Less depreciation & depletion & Amortization

(46,995)

(46,959)

$

127

$

163

Note 3 - Investments

2008

2007

Loans to Gateway Resources Ltd.

0

0

US Subsidiary Blaine Development, Inc.

23,697

22,157

Shares of Gateway Resources Ltd.

36,077

36,077

(A private corporation)

59,774

58,234

Note 4 - Bank Indebtedness

2008

2007

Checks issued in excess of cash

$

0

$

0

Note 5 - Share Capital

2008

2007

Common shares, no par value

$

14,160

$

14,160

Authorized - unlimited number

Issued - 120,600