Hanks Oil Field Services, Inc.

Balance Sheets

(Unaudited)

Dec 31,

Dec 31,

2010

2009

Assets

Current Assets

Cash

$

793

$

4,292

Accounts Receivable

384

200

1,177

4,492

Property and Equipment (Note 2)

4

102

Investments (Note 3)

4,282

0

Total Assets:

$

5,463

$

4,594

Liabilities and Shareholders Equity

Current Liabilities

Operating Loans

$

Accounts Payable and accruals

84

0

84

0

Long Term Debt

0

0

0

Shareholders' Equity

Opening retained earnings

3,994

1,560

Distribution to Shareholders

0

0

Share capital (Note 5)

200

200

Paid in Capital Surplus

400

400

Profit/(loss)

785

2,434

5,379

4,594

Total Liabilities:

$

5,463

4,594

Approved by the Directors

See accompanying notes

______________________________

Statements of Income and Retained Earnings

(Unaudited)

Year ended

Year ended

March 31,

March 31,

2010

2009

Revenues

Management Consulting

$

$

Engineering Consulting

0

0

Operational Services

1,134

2,900

Technical Services

Total Services Income:

1,134

2,900

Interest and other

482

12

Total Investment Income:

482

12

Total Income:

1,616

2,912

Expenses

Operations and Field

DOT Expenses

493

140

Repairs and maint.

493

140

2010

2009

Office and Administrative

Office Payroll

$

$

Expenses/supplies

240

120

DOT Expenses

0

0

Interest Expenses

0

37

Depreciation and amortization

98

181

$

338

$

338

Total expenses:

$

831

$

478

Net (loss)/gain:

$

785

$

2,434

Retained Earnings

Beginning of year

3,994

1,560

Distributions to Shareholders

0

0

Retained earnings at end of year

4,779

3,994

Note 1 - Accounting Policies

Hanks Oil Field Services, Inc. was incorporated under the laws of the State of Oklahoma October 20, 2005. The Corporation has current activities in Oklahoma. The Corporation is engaged in oil and gas field 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) Property and Equipment

Equipment is recorded at cost and depreciated over the estimated useful lives of the various classes of assets.

Note 2 - Property and Equipment

2010

2009

Automobile Equipment

$

526

$

526

5 Year Tools & Equipment

990

990

Pre-Production & Misc Cost

32

32

$

1,548

$

1,548

Less depreciation & depletion & Amortization

(1,544)

(1,446)

$

4

$

102

Note 3 - Investments

2010

2009

Loan to Gateway Resources U.S.A., Inc.

4,282

4,282

0

Note 4 - Indebtedness

2010

2009

Checks issued in excess of cash

$

0

$

0

Blaine Exploration Ltd. Loan

0

0

0

0

Note 5 - Share Capital

2010

2009

Common shares, no par value

$

200

$

200

Authorized - 2,000

Issued - 2,000

Shareholders A. Blaine Hanks 500 Shares

Heidi B. Hanks 500 Shares

Gateway Resources U.S.A., Inc. 1000 Shares