PATERSON RESOURCES LTD - Annual Report 2007

ABN: 45 115 593 005

for the year ended 30 June 2007

Corporate Directory

==> picture [60 x 100] intentionally omitted <==

Directors

David Alan Zohar John Karajas Zhukov Pervan William Edwin Bannister

AuDitors

BDO Kendalls Audit & Assurance (WA) 128 Hay Street Subiaco Western Australia 6008

LegAL ADvisors

Lawton Gillon Level 11, 16 St Georges Terrace Perth Western Australia 6000

compAny secretAries

David Alan Zohar Susanne Gweneth Waters

registereD office

Level 8, 256 St Georges Terrace Perth WA 6000

HeAD office

Level 7, 231 Adelaide Terrace Perth WA 6000 Telephone Number: (08) 9225 4873 Fax number: (08) 9225 6474 Website uog.com.au

country of incorporAtion

Uranium Oil and Gas Limited is domiciled and incorporated in Australia

AsX coDe UOG

2 UOG ANNUAL REPORT

1.	Corporate GovernanCe	1-4
2.	DireCtors’ report	5-13
3.	auDitors inDepenDenCe DeClaration	14
4.	inCome statement	15
5.	BalanCe sheet	16
6.	statement of ChanGes in equity	17
7.	Cash flow statement	18
8.	notes to the finanCial statements	19-37
9.	DireCtor’s DeClaration	38
10.	auDit report	39-40
11.	asX information	41-43

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Corporate Governance

Corporate GovernanCe report uranium oil anD Gas limiteD (“the Company”)

statement

As an integral part of its preparations to list on the Australian Stock Exchange, the Company considered and set up a framework for embracing the ASX Principles of Good Corporate Governance and best Practice Recommendations (“ASX Guidelines”). Commensurate with the spirit of the ASX Guidelines, the Company has followed each Recommendation where the Board has considered the Recommendation to be an appropriate benchmark for corporate governance practices, taking in to account factors such as the size of the Company and the Board, resources available, activities of the Company. Where, after due consideration, the Company’s corporate governance practices depart from the Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice.

The Company’s website (www.uog.com.au) is currently being updated to include further information about the Company’s corporate governance practices. It is intended that in accordance with the recommendation of the ASX, information published on the Company’s website includes charters, codes of conduct, securities trading policy and other policies and procedures relating to the board and its responsibilities.

Board Composition

The skills, experience and expertise relevant to the position of each Director who is in office at the date of the financial report and their term of office are detailed in the Directors’ report.

The independent Directors of the Company are Zhukov Pervan and John Karajas.

When determining whether a Non-Executive Director is independent the Director must not fail any of the following materiality thresholds:

less than 10% of the Company shares are held by the Director and any entity or individual directly or indirectly associated with the director;

no sales are made to or purchases made from any entity or individual directly or indirectly associated with the Director; and none of the Directors’ income or the income of an individual or entity directly or indirectly associates with the Director is derived from a contract with any member of the economic entity other than income derived as a Director of the entity.

Independent Directors have the right to seek independent professional advice in the furtherance of their duties as Directors at the Company’s expense. Written approval must be obtained from the Chairman prior to incurring expenses on behalf of the Company.

trading policy

The company’s policy regarding directors and employees trading in its securities, is set by the board of directors. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security’s prices.

remuneration policy

The company’s remuneration policy was developed by and approved by the Board. All executives receive a salary and statutory superannuation.

The Company does not participate in share based remuneration for its executives but can issue share options to Directors, employees and consultants. The terms of the share options to Directors, employees and consultants are based on what similar sized companies in the mining industry are offering. All share options to be issued to Directors require shareholder approval before being issued.

The amounts of remuneration for all Directors, including monetary and non-monetary components, are detailed in the Directors Report under the key management personnel remuneration heading. All remuneration paid to Executives is valued at the cost to the Company and expenses. Shares given to Executives are valued as the difference in the market value of those shares and the amount paid by the Executive. Options given to Executives are valued using the Black-Scholes methodology.

2 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Corporate Governance

eXplanations for Departures from Best praCtiCe reCommenDations

principle 4 recommendation 4.2, 4.3, 4.4

notification of Departure:

After due consideration, the Company intends to conduct its operations as a listed entity in accordance with the ASX Corporate Governance Best Practice Recommendations, other than in relation to the matters specified below.

principle 2 recommendation 2.1

notification of Departure

In reviewing the independence of Directors, the Board considered the criteria of Independence as set out by the ASX in its “Principles of Good Corporate Governance and Best Practice Recommendations”. The Board considers that the Board’s structure and other corporate governance mechanisms ensure the efficient discharge of duties and maximal value to shareholders. The Board notes that Mr Zohar and Mr Bannister are the only executive members of the Board. In this regard, the Board considers that it is well positioned to effectively review and challenge the performance of management, one of the key objectives of Principle 1. The Board is committed to achieving best practice in corporate governance and moreover, structures which deliver best value to the Company and its shareholders.

principle 2 recommendation 2.4

notification of Departure:

At this stage the full board considers remuneration issues and there is no nomination committee.

explanation for Departure:

The Board is undecided whether efficiencies or other benefits would be gained by establishing a separate nomination committee. In any event, the Board has adopted a Nomination Committee Charter which is equally suited to use by the full Board or a subcommittee.

There is no separate Audit Committee.

explanation for Departure:

The company’s financial statements are prepared by external consultants and reviewed in detail by the Board. The Board also relies on the functions and capabilities of its external auditors to ensure proper audit of financial statements. Whilst the Board considers this process sufficient to ensure integrity in financial reporting in the current circumstances, it will continue to monitor whether any further safeguards are required and make changes accordingly.

principle 7 recommendation 7.1

notification of Departure:

The Company has well developed internal financial control systems, governing areas of procurement, capital expenditure, expenditure authorities and all other financial aspects of the Company’s business. The Company has not yet implemented a formal framework for general enterprise risk management.

explanation for Departure:

The Company will establish a more formal system for identifying, assessing and monitoring risks when time and resources permit. As part of its requirements for listing on the ASX, the Company included a detailed report identifying and describing the major risk factors facing the Company in its prospectus. This constitutes the Company’s current risk profile, which risks will be monitored and reported upon on an on-going basis.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Corporate Governance

principle 8 recommendation 8.1

notification of Departure:

The Company has not yet established a formal process for evaluation of the board, its directors and management.

explanation of Departure:

The Board considers the performance of the two executive directors (there are no other key management personnel) on an on-going basis. The size of the Board does not warrant a formal process.

principle 9 recommendation 9.2

notification of Departure:

The Company does not have a remuneration committee.

explanation of Departure:

The Board is not of a size currently to allow for the formation of a Remuneration Committee. All decisions regarding remuneration of Directors, executives and key employees are made by the full Board.

The Board will periodically review the company’s circumstances and a remuneration Committee will be discussed and formed if deemed necessary by the Directors should the company experience a change in structure and board membership. The Board has adopted a Charter which is suitable for use by the full Board or a committee.

4 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Directors Report

The Directors of Uranium Oil and Gas Limited submit their report for the year ended 30 June 2007.

the BoarD of DireCtors

The names and details of the Company’s Directors in office during the financial year until the date of this report are as follows.

DaviD alan Zohar (appointed 3 august 2005) Bsc Diped

executive Director, Company secretary and Commercial manager

Mr Zohar has undertaken undergraduate studies in Geology and post graduate studies in Accountancy and Commercial Law. He has been active in the exploration industry for over 20 years. He has been a director and/or CEO of a number of exploration companies and has also negotiated numerous agreements with various companies and other participants within the mining industry. He has been involved in the formation and/or listing on the ASX of several public mining companies. Directorships of other listed public companies over the past three years are Red River Resources Limited and Iron Mountain Mining Ltd.

John KaraJas (appointed 24 may 2006) Bsc (hons) maiG mpesa non executive Director

Mr Karajas is an exploration geologist with over 30 years of experience in both the mining and oil industries. After graduating from the University of Western Australia with a BSc (Hons) in 1970, he gained his grounding in the mining industry by working for mining companies, Falconbridge, Anaconda and Hanna Mining. This period extended through to 1982 and was predominantly spent in Western Australia but included three years in Mt Isa. Commodities explored for include nickel, copper/lead/ zinc, gold, phosphate, taconitic iron ore, tin/tantalite and lignite/oil shale. Between 1982 and 1985 he gained his initial experience in oil exploration by working for Eagle Corporation and IEDC (Australia). This period was spent in working on sedimentary basins in Western Australia and included basin studies, well-site geology, and other duties related to oil and gas exploration. From 1986 onwards, he has worked predominantly as a consultant/ contract geologist for a wide range of mining and oil industry clients, both within Australia and abroad.

Periods of a more managerial nature have included:

1989 – 1991 Technical Director of King Mining Ltd 1992 – 1995 Technical Director of Omega Oil NL 1996 – 1997 Exploration Vice President of Icelandic Gold Corporation

He is currently a Member of the Australian Institute of Geoscientists.

Directorships of listed public companies over the past three years is Red River Resources Limited.

Zhukov (Zeke) pervan (appointed 24 may 2006) mB, Bs(wa), fraCGp, faiCD non-executive Director and Chairman

Dr Pervan is a Doctor of Medicine with over 35 years experience in various capacities in Western Australia. He has consulted to several university and government bodies in many areas. He has conducted original research in collaboration with the University of Western Australia Departments of Microbiology and Human Movement. This research has been published in international journals. In the past Dr Pervan has served as a Director of several public companies involved in exploration and in the general commercial world, including Agforce Limited, Gold Lake Mining Pty Ltd, Innovative Coatings Limited and Visionglow Global Limited. Directorships of listed public companies over the past three years are nil.

william edwin Bannister (appointed 24 may 2006) msc awasm

managing Director

Mr Bannister has over 40 years experience in exploration and mining geology. He has extensive experience with uranium exploration in Western Australia as well as experience in precious metals. Mr Bannister worked in Western Mining Corporation in a number of locations and positions, including senior geologist, and then joined the Tenneco group of companies to rise to the position of Australian Exploration Manager – Minerals. For the past 20 years he has been an independent geologist and consultant. Companies consulted to include WMC, Outokompu Mining (Australia) Pty Ltd and numerous participants in the mining industry. Mr Bannister has had no other Directorships of public companies in the past three years.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

2 Directors Report

Company seCretaries

susanne Gweneth waters (appointed 14 august 2007)

Ms Waters has significant experience in the administration and management of mining companies and has been involved in on-site and head office administration for over 12 years. Ms Waters also has experience in Human Resources management and has a Diploma in Occupational Safety Management. Ms Waters is also joint company secretary of Iron Mountain Mining Ltd.

David alan Zohar (refer details above).

John van Dieren (fCa) (resigned 25 June 2007)

Mr Van Dieren is a chartered accountant and an audit and corporate services partner with the accounting firm Stanton Partners and is a director of Stantons International Pty Ltd and Stanton Partners Corporate Pty Ltd. He was appointed a joint company secretary on 16 November 2006. He is also joint company secretary of Red River Resources Limited.

principal activities

The principal activity of the Company during the course of the financial year was mineral exploration.

review of operations

exploration activities

Field evaluations were undertaken in the following projects during the year. minerals

western australia

Three projects have yet to be granted, these are Bungalow Well ELA36/549 in a joint venture with Red River Resources Ltd (“Red River”), Four Corners Bore ELA57/607 and Miss Fairbairn Hills ELA69/2336- in the Eraheady Basin. The first two are to be explored for uranium and the latter is to be explored for iron ore.

Alara Uranium Ltd. is earning a 70% interest in Rubberoid Well E09/1245. Alara, in the prospectus, tells that AGIP Nucleare (AGIP) explored the area in the early seventies and discovered 45 uranium occurrences. The exploration program culminated in the drilling of several diamond drill holes, two of which were situated on EL09/1245-Rubberoid Well. The best results were from MJD2 that intersected 1200ppmU between 108.6m and 108.9m plus MJD3 also intersected 1450ppmU between 69.45m and 69.65m. Primary uranium mineralization occurs on the Licence. Alara are about to fly the project to gather radiometric information and will follow this up with ground checking with the aid of a helicopter due to the rugged terrain.

operating results

The Company made a loss after tax of $490,718 ($523,960 for the period ended 30 June 2006). No dividends were paid and the directors have not recommended the payment of a dividend.

Dividends

No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made.

Mt Vernon E52/1863 and Collier E52/1864 are precious and base metal prospects. Collier has had some soil sampling but because of the nature of the terrain the program was cut short. The results to date are not definitive and more work needs to be done. Both are in the same area and a soil sampling program is planned for the near future.

The Wooroloo E70/2727 prospect has been stream sediment sampled. One sample returned a value of 181 ppb gold and this needs to be resampled plus the stream needs to be sampled in detail.

The Nabberu Basin E52/2016 tenement has recently been granted. Research into past exploration is taking place and should lead to a good data base for the area. The prospect is in close proximity to the defunct Horseshoe Lights copper- gold open pit and a repeat of that deposit is sought.

6 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Directors Report

The Galah Rock E30/312 and Walling Rock E29/589 prospect has been explored previously. Esso and Uranerz both explored the ground to the west and south of Lake Ballard. Only minor uranium mineralization was located and this was associated with lake sediments and not calcrete. Ground reconnaissance of the channel failed to locate any major development of calcrete and as these types of deposits are hosted in calcrete the opportunity for there to be a large deposit of carnotite (uranium) mineralization is minimal. The Exploration Licenses are to be relinquished.

The Wannamal Prospect E70/2444, E702693, E70/2692 has, in the past been explored for bauxite-the ore of aluminum. However the joint venture with Swancove Enterprises Pty Ltd precluded exploration for bauxite but the drilling information was used to assess the area for molybdenum and tin content. Over 5000 holes, drilled mainly by Pacminex and some by Rio Tinto, have been researched for metals other than aluminum. Nothing of any significance was found; even the ultramafic at Yarrawinda Brook where Washington Resources has intersected nickel mineralization does not appear to continue into the Wannamal tenements. Further expenditure is not required and this part of the joint venture has been terminated.

northern territory

Work has commenced on four of the six prospects. Exploration will commence on the other two prospects, Charming U EL25368 and Alroy ELA25723 in due coarse.

The Lucky U prospect consists of EL 25329 where UOG is earning 70% interest from Bralich Holdings Pty Ltd and ELA 25894 where UOG is earning 50% interest from the same company. This is uranium – rare earth prospect that has been previously explored. In the early seventies a Japanese group took rock chip samples that assayed up to 46.4% uranium but no drilling. A contract has been signed with GPX Airborne to complete a detailed helicopter radiometric and magnetic survey. The survey was to be completed by July but has been delayed.

Ethel Creek Gold EL25382 prospect occurs within metamorphosed sediments of the Proterozoic Lander Beds Formation. These are thought to be the lateral equivalent of the Mt Charles Beds, hosts to the Granites

and Callie gold deposits to the north. Previous work has defined an extensive soil and lag anomaly approximately 3km long and 400m wide which has not been percussion drill tested. Infill and check soil sampling has shown the original work to be very good and this now gives UOG a drill target for gold mineralization. Contracts are being negotiated to have a rig in the area as soon as possible.

The Treasure Tungsten EL25346 prospect has been soil sampled and some of the results are available. These are disappointing. A full appraisal will be completed when all the results are in.

The Sandover ELA25505 uranium prospect has been ground checked. The concept of a calcrete channel with ground waters anomalous in uranium and granitoids with high background radiation in the catchment area is very good. The 100m spaced airborne radiometrics over the channel did not indicate any anomalous activity and ground checking also failed to locate surface radiation. Calcrete, although present, covers a large area but is patchy. The lack of surface radiation and the poor development of calcrete indicate little chance of the presence of a major uranium deposit.

south australia

Exploration Licenses 207/06 – NE Lake Torrens, 203/06 – South Moonta and 206/06 East Moonta are prospective for copper-uranium deposits. They are situated on the eastern margin of the Gwaler Craton where several copper-uranium deposits have been discovered.

The Olary Exploration Licence 208/06 is located on the Olary Block and this is the western Block of the Willyama Inliers; the eastern portion is the Broken Hill Block. The area is prospective for lead-zinc mineralization and uranium for within the Olary Block lies the old Radium Hill mine.

Data research into the above licenses has commenced but more needs to be done before exploration programs can be formulated.

The Streaky Bay Exploration Licence 204/06 has been well researched. Heavy mineral deposits as delineated by BHP are very large but too low grade and difficult to exploit to be of any economic value at this time. Interestingly Stockdale located and drilled several

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Directors Report

kimberlite pipes in the area but did not recover any diamonds. Not all magnetic features were drilled and there may be untested kimberlite pipes on the licensed area. A joint venture partner will be sought.

The two uranium prospects, Lucky U in the NT and the joint ventured Rubberoid Well in WA are both awaiting the arrival of aircraft to fly the properties for detailed radiometric information. Ground checking the results ought to lead to drill programs.

victoria

finanCial position

There are six applications or granted Exploration Licenses for heavy mineral sands within the Murray Basin in close proximity to the towns of Dimboola and Horsham. UOG has been collecting licenses that lie in close proximity to known deposits. Data research is ongoing to determine if these deposits could extend into UOG’s ground. If this is possible then drilling will be required to prove the extensions.

During the year ended 30 June 2007 issued a total of 35,720,350 shares to raise $6,151,899 (net of share issue costs).

The company achieved an ASX listing on 16 October 2006.

significant Change in state of affairs

oil anD Gas

western australia

EP 448, in which UOG had a 10% interest, is in a joint venture with Arc Energy Limited (‘ARC’). ARC is conducting a major exploration effort in the Canning Basin for oil and gas and this permit is part of that effort.

Arc have now acquired a 5% interest in EP 448 by completing the West Anketell aeromagnetic survey and has advised the permit holders that it now wishes to exercise its option to acquire an additional 35% in the permit in accordance with the terms of the farm-in as set out in the HOA dated 5 December 2006. ARC has also notified the permit holders that it agrees to accept and assume the role of operator of the joint venture subject to a resolution giving effect to the change in operator.

northern territory

Exploration Licence Applications EP (A) 113-Burdo and EP (A) 114-Kilgour has yet to be granted. Joint Venture partners are being sought to expedite exploration when granted.

Conclusions

Ethel Creek Gold Prospect in the Northern Territory has reached the drilling phase. Contracts are being negotiated so that drilling can commence as soon as possible. The results will be announced as they become available.

The following significant change in the state of affairs of the company occurred during the financial year:

i. The company acquired office premises at 113 Mackie Street Victoria Park Western Australia $684,246 net of GST and including acquisition costs.
ii. The company issued 35,568,000 shares on 16 October 2006 to raise $6,121,449 (net of costs) upon listing of the company of the Australian Stock exchange.
iii. A total of $992,171 (net of GST refundable) was incurred in fees and charges to raise capital during the year.

after Balance Date events

On 24 July 2007 1,000,000 listed options with an exercise price of 20 cents per option and expiring on 4 October 2010 were issued to Bralich Holdings Pty Ltd pursuant to an agreement to acquire an interest in Northern Territory tenements.

On 15 August 2007 12,500 options were exercised by shareholders of the company and 12,500 ordinary shares were issued, raising $2,500.

Other than the matters referred to above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the company, the results of those operations, or the state of affairs of the company in future financial years.

8 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Directors Report

future Developments, prospects and Business strategies

Likely developments, future prospects and business strategies of the operations of the company and the expected results of those operations have not been included in this report as the directors believe, on reasonable grounds, that the inclusion of such information would likely to result in unreasonable prejudice to the company.

environmental issues

So far as the Directors’ are aware there have been no significant breaches of environmental conditions of the Company’s exploration licenses.

remuneration report (auDiteD)

non- executive remuneration

Shareholders approve the maximum aggregate remuneration for Non-Executive Directors. The Board recommends the actual payments to Directors. The maximum aggregate remuneration approved for NonExecutive Directors is currently $100,000. All Directors are entitled to have any indemnity insurance paid by the Company (currently nil). Currently each Non-Executive Director is entitled to receive $30,000 per annum.

Refer below for details of Non-Executive Directors’ remuneration.

The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract the highest calibre of Executives and reward them for performance that results in long-term growth in shareholder wealth.

remuneration policy

The Company’s policy for determining the nature and amount of emoluments of board members and senior executives are as follows:

executive remuneration

The Company’s remuneration policy for executive directors is designed to promote superior performance and long term commitment to the Company. Executives receive a base salary which is market related. Overall remuneration policies are subject to the discretion of the Board and can be changed to reflect competitive market and business conditions where it is in the best interests of the Company and its shareholders to do so. The Board’s reward policy reflects its obligation to align executive’s remuneration with shareholders’ interests and retain appropriately qualified executive talent for the benefit of the Company. The main principles of the policy are:

Reward reflects the competitive market in which the Company operates
Individual reward should be linked to performance criteria; and
Executives should be rewarded for both financial and non-financial performance.

Refer below for details of Executive Directors’ remuneration.

Executives are also entitled to participate in the employee share and option arrangements. Refer to Note 14 to financial report for details of all Directors’ share and option holdings.

The Executive Directors and Executives receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits.

All remuneration paid to directors and executives is valued at the cost to the company and expensed. Options are valued using either the Black-Scholes or binomial methodologies.

The board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at the Annual General Meeting (currently $100,000). Fees for Non-Executive Directors are not linked to the performance of the Company. However, to align Directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Directors Report

and are able to participate in an employee option plan (none adopted to date).

performance based remuneration

The Company currently has no performance based remuneration component built into Director and executive remuneration packages.

Company performance, shareholder wealth and directors’ and executives’ remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders and Directors and Executives. Currently, this is facilitated through the issue of options to the majority of Directors and Executives to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth. At commencement of mine production, performance based bonuses based on key performance indicators are expected to be introduced. For details of Directors and Executives interests in options at year end, refer note 14 of the financial statements.

Directors and executive officers emoluments (Key management personnel)

Details of remuneration (audited)

Details of the remuneration of the directors and key management personnel of Uranium Oil and Gas Limited are set out below.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Directors Report

Key management personnel remuneration:

2007

name David Alan Zohar John Karajas Zhukov Pervan William Edwin Bannister total	short term post- employment equity Cash salary and fees $ Cash bonus $ super $ options $ shares $ total $ 227,595 - 5,748 - 20,000 253,343 - - 21,290 - 5,000 26,290 21,290 - - - 5,000 26,290 106,451 - 9,581 - 5,000 121,032
	355,336 - 36,619 - 35,000 426,955

2006

name David Alan Zohar John Karajas Zhukov Pervan William Edwin Bannister Julie Zohar Shoshanna Zohar total	short term post- employment equity Cash salary and fees $ Cash bonus $ super $ options $ shares $ total $ 189,546 - - - - 189,546 - - - - - - 20,000 - - - - 20,000 - - - - - - 30,000 - - - - 30,000 - - - - - -
	239,546 - - - - 239,549

Short-term Post employment Other long-term Termination benefts Share-based payment	the Company the Company 2007 2006 $ $ 355,336 239,546 36,619 - - - - - 35,000 -
	426,955 239,546

service agreements and remuneration commitments (audited)

The Company has two executive service agreements that came into affect from the date the Company was granted a listing on the ASX on 16 October 2006. Mr Bannister has a two year contact at the rate of $150,000 per annum plus statutory superannuation and Mr Zohar has a two year contact at the rate of $90,000 per annum plus statutory superannuation. Mr Zohar is required to work at least 20 hours per week for at least 40 weeks per annum. Payment of a termination benefit on early termination by the company other than for gross misconduct, equal to the base salary for the remaining term of the agreement.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

2 Directors Report

As at 30 June 2007, the outstanding commitments under the two agreements to the key management personnel are as follows:

ollows:
Due within 1 year Due 1 to 2 years Total	$ 261,600 75,948
	337,548

Shares Under Option

Unissued ordinary shares of Uranium Oil and Gas Limited under option at the date of this report are as follows:

Date options granted	expiry Date	issue price of shares	number under option
4 August 2005	4 August 2010	20 cents	19,500,000
16 October 2006	4 August 2010	20 cents	17,869,300
24 July 2007	4 August 2010	20 cents	1,000,000

Directors’ meetings

The following table sets out the number of meetings of the Company’s Directors held while each Director was in office and the number of meetings attended by each Director:

	Board	meetings
	number of	number of
Director	meetings held	meetings attended
David Alan Zohar	5	5
John Karajas	5	5
Zhukov Pervan	5	5
William Edward Bannister	5	5

indemnifying officers or auditor

During or since the year ended 30 June 2007 the company has not given any indemnity or entered into an agreement to indemnify, or paid or agreed to pay any insurance premiums on behalf of the Directors or auditors of the company.

proceedings on behalf of the company

No person has applied for leave of Court to begin proceedings on behalf of the company or intervene in any proceedings to which the company is party for the purpose of taking responsibility on behalf of the company for all or part of these proceedings.

The company was not a party to any such proceedings during the year.

12 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Directors Report

non-audit services

The board of Directors is satisfied that the provision of non-audit related services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

All non-audit services are reviewed and approved by the Directors prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
The nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES:110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2007:

$ Investigating Accountants Report 12,870

auditor’s independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2007 has been received and is set out on page 13.

Signed in accordance with a resolution of Directors dated this 26th day of September 2007

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William Bannister managing Director

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Auditors Independence Declaration

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BDO Kendalls Audit & Assurance (WA) 128 Hay Street SUBIACO WA 6008 PO Box 700 WEST PERTH WA 6872 Phone 61 8 9380 8400 Fax 61 8 9380 8499 [email protected] www.bdo.com.au

ABN 79 112 284 787

26 September 2007

The Directors Uranium Oil and Gas Limited Level 7, Adelaide Terrace PERTH WA 6000

Dear Sirs

D E C L A R A T I O N OF I N D E P ENDEN C E BY B D O K E N D A LLS A U D I T A ND A S S U R A N C E ( W A ) T O T H E D I R E C T O R S O F U R A N I U M O I L A N D G A S L I M I T E D

To the best of my knowledge and belief, there have been:

no contraventions of the auditor independence requirements of this Act in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to this audit.

Yours faithfully

BDO Kendalls Audit & Assurance (WA)

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S Andrawes Partner

BDO Kendalls is a national association of separate partnerships and entities.

14 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Income Statement for the year ended 30 June 2007

note	2007 $ 2006 $
revenues Interest Income Other Income Total Revenue 2 expenditure Administration Acquisition Costs Exploration costs Occupancy costs Consulting and management Depreciation Technical costs Employment costs(including directors) (Loss) Before Income Tax Income tax expense 3 net (loss) attriButaBle to memBers Basic earnings/(loss) per share (cents) 24 Diluted earnings/(loss) per share (cents) 24	255,569 492 215,532 77,333
	471,101 77,825
	130,026 51,304 - 205,000 216,019 11,604 18,251 - 301,144 239,545 679 - - 94,332 295,700 -
	961,819 601,785
	(490,718) (523,960) - -
	(490,718) (523,960)
	(0.91) (1.84) (0.91) (1.84)

The accompanying notes form part of these financial statements.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Balance Sheet As at 30 June 2007

Balance Sheet As at 30 June 2007 5
note	2007 $ 2006 $
Current assets Cash and cash equivalents 4 Trade and other receivables 5 Other current assets 6 total Current assets non-Current assets Property, plant and equipment 7 Other fnancial assets 8 Available for sale fnancial assets 9 total non-Current assets total assets Current liaBilities Trade and other payables 10 Provisions 11 total Current liaBilities total liaBilities net assets equity Issued capital 12 Reserves 13 Accumulated losses total equity	4,590,451 9,337 86,065 41,899 9,944 7,001
	4,686,460 58,237
	684,649 - - 72,333 420,000 -
	1,104,649 72,333
	5,791,109 130,570
	56,429 117,177 21,026 -
	77,455 117,177
	77,455 117,177
	5,713,654 13,393
	6,689,252 537,353 39,080 - (1,014,678) (523,960)
	5,713,654 13,393

The accompanying notes form part of these financial statements.

16 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Statement of changes in Equity for the year ended 30 June 2007

2006 Balance on incorporation (Loss) for the year Shares issued during the year Balance as at 30 June 2006 2007 Balance as at 30 June 2006 (Loss) for the year Shares issued during the year Capital raising costs Options issued for services Revaluation Balance as at 30 June 2007	issued share Capital $ accumulated (losses) $ - - - (523,960) 537,353 -	option reserve $ available for sale investments revaluation reserve total $ - - - - - (523,960) - - 537,353
	557,353 (523,960)	- - 13,393
	issued share Capital $ accumulated (losses) $ 537,353 (523,960) - (490,718) 7,144,070 - (992,171) - - - - -	option reserve $ available for sale investments revaluation reserve total $ - - 13,393 - - (490,718) - - 7,144,070 - - (992,171) 19,080 - 19,080 - 20,000 20,000
	6,689,252 (1,014,678)	19,080 20,000 5,713,654

The accompanying notes form part of these financial statements.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

For the year ended 30 June 2007

7 Cash Flow Statement

note Cash flows from operatinG aCtivities Sale of tenements/farm out Other Income Payments for exploration, evaluation and acquisition costs Payments to suppliers and employees Interest received Withholding tax Goods and services tax (paid)/received NET CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES 20 Cash flows from investinG aCtivities Payment for plant and equipment Payments for acquisition of shares Proceeds from sale of shares NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES Cash flows from finanCinG aCtivities Proceeds from issues of shares Payment of share issue costs Loans from director related entities Loans to director related entities NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES NET INCREASE / (DECREASE) IN AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the fnancial year Cash anD Cash equivalents at the enD of the finanCial year 4	2007 $ 2006 $ - 5,000 20,000 - (216,019) (97,187) (769,474) (361,028) 237,402 429 - (238) (35,720) (30,641)
	(763,811) (483,665)
	(685,328) - (400,000) - 267,865 -
	(817,463) -
	6,829,070 500,003 (966,090) (7,001) 401,606 - (102,198) -
	6,162,388 493,002
	4,581,114 9,337 9,337 -
	4,590,451 9,337

The accompanying notes form part of these financial statements.

18 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

1. summary of siGnifiCant aCCountinG poliCies

The financial report is a general purpose financial report which has been prepared in accordance with Accounting Standards, including the Australian equivalents of International Financial Reporting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

development costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. Any costs of site restoration are provided for during the relevant production stages, (where the liabilities exist) and included in the costs of that stage.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

historical cost convention

(b) impairment of assets

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property.

Compliance with ifrss

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (IFRSs). Compliance with AIFRSs ensures that the financial report comprising the company’s financial statements and notes, comply with IFRSs.

The financial statements have been prepared on an accruals basis and on the basis of historical costs and do not take into account changing money values or, except where stated, current valuations of non-current assets.

The following is a summary of the significant accounting policies adopted by the Company in the preparation of the financial statements.

The accounting policies have been consistently applied, unless otherwise stated.

(a) exploration and evaluation expenditure

Acquisition, exploration and evaluation expenditure incurred is written off as incurred.

When production commences, the accumulated

At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cashgenerating unit to which the asset belongs.

(c) property, plant & equipment

Each asset of property, plant and equipment is carried at cost less where applicable, any accumulated depreciation and impairment losses.

Property

Freehold land and buildings are shown at cost less subsequent depreciation for buildings.

Plant & equipment

Plant and equipment are measured on the cost basis less depreciation and impairment losses.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

Depreciation

Items of property, plant and equipment are depreciated using the diminishing value method over their estimated useful lives to the Company. The depreciation rates used for each class of asset for the current period are as follows:

Land & Buildings 2.5%
◼ Computer Equipment 50%

Assets are depreciated from the date the asset is ready for use.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The recoverable amount is assessed on the basis of expected net cash flows that will be received from the assets continual use or subsequent disposal.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(a) income tax

The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(e) employee Benefits

i. Wages and salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within12 months of the reporting date are recognised in other creditors in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
ii. Long service leave
The liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits and is in accordance with (i) above. The liability for long service leave expected to be settled more than 12 months from the reporting date is recognised in the provision for employee benefits and is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.

20 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award.

(f) financial instruments

Recognition

share-based payments

The Company provides benefits to employees (including directors) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Available-for-sale financial assets

The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an internal valuation using a BlackScholes option pricing model.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’).

The cumulative expense recognised for equitysettled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if

Available-for-sale financial assets, comprising principally marketable equity securities, are nonderivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Financial assets at fair value through profit and loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in fair value of these assets are included in the income statement in the period in which they arise.

Loans and receivables

Loans and receivables are non-derivate financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

(g) Cash and Cash equivalents

For the purpose of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within three months, net of outstanding bank overdrafts.

(l) leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Operating leases

(h) revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised.

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight line basis.

(m) Goods and services tax (Gst)

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

(i) issued Capital

Ordinary issued share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction in share proceeds received.

(j) trade and other payables

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Company. Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accrual basis.

(k) Joint ventures

Interest in the joint venture operation is brought to account by including in the respective classifications, the share of individual assets employed and share of liabilities and expenses incurred.

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(n) earnings per share

i. Basic earnings per share Basic earnings per share is determined by dividing net profit after income tax attributable to members of the Company, excluding any costs of service equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
ii. Diluted earnings per share Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financial costs associated with dilutive potential ordinary shares and the

22 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(o) Critical accounting estimates and Judgments

The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key estimates-impairment

The Company assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

the standards early. Application of the standards will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to the Company’s financial instruments.

ii. AASB-I 10 Interim Financial Reporting and Impairment

AASB-I 10 is applicable to reporting periods commencing on or after 1 November 2006. The Company has not recognised an impairment loss in relation to goodwill, investments in equity instruments or financial assets carried at cost in an interim reporting period but subsequently reversed the impairment loss in the annual report. Application of the interpretation will therefore have no impact on the Company’s financial statements.

(p) Comparatives

The comparative figures this year are for the period of incorporation, being 4 August 2005 to 30 June 2006, as the Company was incorporated on 4 August 2005 and has been in operation since. Comparatives in the income statement, cash flow statement and statement of changes in equity is for the period from incorporation to 30 June 2006.

(q) new accounting standards and interpretations

Certain new accounting standards and

interpretations have been published that are not mandatory for 30 June 2007 reporting periods. The Company’s assessment of the impact of these new standards and interpretations is set out below.

i. AASB 7 Financial Instruments: Disclosures and AASB 2005-10 Amendments to Australian Accounting Standards [AASB 132, AASB 101, AASB 114, AASB117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 & AASB 1038] AASB 7 and AASB 2005-10 are applicable to annual reporting periods beginning on of after 1 January 2007. The Company has not adopted

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

2. revenue from Continuing activities Interest received Other income Option fee income Gain on disposal of investment Sale of tenements/farm outs Fair value gain on short term investment 3. income tax Net (Loss) before tax Prima facie tax beneft at 30% Tax effect of: Non-deductible acquisition costs Disposal of investments Other non-deductible expenses Provisions & accruals Capital raising costs Future income tax beneft not brought to account Income Tax income tax loss Deferred tax asset arising from tax losses and temporary differences of the Company not brought to account at balance date as realisation of the beneft is not regarded as highly probable.	2007 $ 2006 $ 255,569 492 20,000 - 195,532 - - 33,000 - 44,333
	471,101 77,825
	(490,718) (523,960)
	(147,215) (157,188) - 61,500 13,300 - 139 385 3,858 (420) (58,883) - 188,801 95,723
	- -
	595,437 97,402

3.

The benefit for tax losses will only be obtained if:

(i) the company derives future assessable income of a nature and amount sufficient to enable the benefit from the tax losses to be realised;

(ii) the company continues to comply with the conditions for deductibility imposed by tax legislation; and

(iii) no changes in tax legislation adversely affect the company realising the benefit from the deductions for the losses.

Deferred tax Assets (at 30%) not bought to account as at 30 June 2007 are made up of: Tax losses ◼ Provisions and accruals ◼ Capital raising costs ◼	354,137 7,758 233,542 91,822 3,900 1,680
	595,437 97,402

24 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

4. Cash and Cash equivalents Cash at bank Cash funds on short term deposit The effective interest rate on short-term bank deposits was 6.1% these deposits have an average maturity of 30 days. 5. trade and other receivables Owing by related party (see note 17 (a)) Goods and services tax refund Interest receivable Other receivables 6. other current assets Prepayments 7. property, plant and equipment Computer and sundry plant and equipment, at cost Accumulated depreciation Land and buildings, at cost Accumulated amortisation total property, plant and equipment Movements during the year	2007 $ 2006 $ 211,946 9,337 4,378,505 -
	4,590,451 9,337
	1,298 11,020 66,362 30,641 18,167 - 238 238
	86,065 41,899
	9,944 7,001
	4,082 - (679) -
	3,403 -
	681,246 - - -
	681,246 -

	684,649 -

Movement in the carrying amounts for each class of property, plant & equipment between the beginning and the end of the financial year.

2007 Balance at 1 July 2006 Additions Disposals Depreciation Balance at 30 June 2007	land & Buildings $ plant & equipment $ total $ - - - 681,246 4,082 685,328 - - - - (679) (679)
	681,246 3,403 684,649

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

8. other fnancial assets Shares in listed corporation at fair value 9. available for sale financial assets Shares in listed corporation at fair value Shares in unlisted corporation at cost At beginning of period Acquisitions At end of period	2007 $ 2006 $ - 72,333
	- 72,333
	220,000 - 200,000 -
	420,000 -
	- - 420,000 -
	420,000 -

The fair value of unlisted financial assets cannot be reliably measured as variability in the range of reasonable fair value estimates is significant. As a result, all unlisted investments are reflected at cost.

10. trade and other payables Trade creditors and accruals Other creditors owing to director/director related entities Owing on tenement acquisitions 11. provisions Employee entitlements – annual leave 12. issued Capital (a) issued and paid up Capital 64,720,353 (2006: 29,000,003) fully paid ordinary shares Capital raising costs	46,742 13,000 9,687 - - 104,177
	56,429 117,177
	21,026 -
	7,681,423 537,353 (992,171 )-
	6,689,252 537,353

26 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

(b) movement of fully paid ordinary shares during the period were as follows:

at the beginning of the year Opening balance of shares Shares to seed investors Shares for services rendered (printing) Shares for consulting fees Shares issued for cash pursuant to a prospectus Shares issued to extinguish liabilities Share options exercised Less: Share Issue expenses At Reporting Date	2007 2006 number of shares $ number of shares $ 29,000,003 537,353 3 3 - - 5,000,000 500,000 - - 200,000 5,000 1,575,000 315,000 100,000 10,000 33,993,100 6,798,620 - - - - 23,700,000 22,350 152,250 30,450 - - - (992,171) - -
	64,720,353 6,689,252 29,000,003 537,353

(c) share options

The Company has on issue as at 30 June 2007, 37,369,300 options excercisable at 20 cents at year end over unissued shares. The Options are exercisable at 20 cents each, on or before 4 August 2010.

(d) terms and Conditions of issued Capital

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has a vote on a show of hands.

13. reserves

The Option Reserve is used to recognise fair value of options issued. The available-for-sale investment revaluation reserve recognises the change in value of available for sale assets.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

14. Key management personnel Disclosures

(a) the Directors of uranium oil and Gas limited during the financial year were:

David Alan Zohar John Karajas Zhukov Pervan William Edwin Bannister

There are no other key management personnel.

2007

2007
name	short term Cash salary and fees$ Cash bonus $		post- employment super $	equity options $ shares $	total $
David Alan Zohar John Karajas Zhukov Pervan William Edwin Bannister	227,595 - 21,290 106,451	- - - -	5,748 21,290 - 9,581	- 20,000 - 5,000 - 5,000 - 5,000	253,343 26,290 26,290 121,032
total	355,336	-	36,619	- 35,000	426,955

2006

2006
name	short term Cash salary and fees$ Cash bonus $	post- employment super $	equity options $ shares $	total $
David Alan Zohar John Karajas Zhukov Pervan William Edwin Bannister Julie Zohar Shoshanna Zohar	189,546 - - - 20,000 - - - 30,000 - - -	- - - - - -	- - - - - - - - - - - -	189,546 - 20,000 - 30,000 -
total	239,546 -	-	- -	239,549

Short-term Post employment Other long-term Termination benefts Share-based payment	the Company the Company 2007 2006 $ $ 355,336 239,546 36,619 - - - - - 35,000 -
	426,955 239,546

28 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

(c) equity instalments Disclosure

at balance date the relevant interest of each Director in ordinary fully paid shares and options of the Company were:

2007		fully paid ordinary shares	fully paid ordinary shares
	Balance at beginning	shares issued as	transfers/ Ceasing to	Balance at
Director	of the year	compensation	be a director	30 June 2007
David Alan Zohar	15,000,003	320,000	(55,600)	15,264,403
John Karajas	5,500,000	25,000	-	5,525,000
Zhukov Pervan	200,000	25,000	-	225,000
William Edwin Bannister	-	25,000	-	25,000
		share options
	Balance at beginning	options issued as	transfers/ Ceasing to	Balance at
Director	of the year	compensation	be a director	30 June 2007
David Alan Zohar	12,000,000	160,000	-	12,160,000
John Karajas	2,000,000	12,500	-	2,012,500
Zhukov Pervan	2,200,000	12,500	-	2,212,500
William Edwin Bannister	2,000,000	12,500	-	2,012,500

The shares and options held by Mr Zohar includes shares and options held by family members and Swancove Enterprises Pty Ltd, a related entity to Mr Zohar.

The options held by Mr Bannister includes options held by Meekal Pty Ltd, a related entity to Mr Bannister.

2006		fully paid ordinary shares	fully paid ordinary shares
	Balance at beginning	shares issued -	transfers/ Ceasing to	Balance at
Director	of the year	Direct	be a director	30 June 2006
David Alan Zohar	-	15,000,003	-	15,000,003
John Karajas	-	5,500,000	-	5,5000,000
Zhukov Pervan	-	200,000	-	200,000
William Bannister	-	-	-	-
		share options
	Balance at beginning	shares issued -	transfers/ Ceasing to	Balance at
Director	of the year	Direct	be a director	30 June 2006
David Alan Zohar	-	12,000,000	-	12,000,000
John Karajas	-	2,000,000	-	2,000,000
Zhukov Pervan	-	2,000,000	-	2,000,000
William Bannister	-	2,000,000	-	2,000,000

Uranium Oil and Gas Limited FINANCIAL REPORT 2007 29

8 Notes to the Financial Statements

The options issued as compensation during the year ended 30 June 2007 were issued under the following terms and conditions:

	options issued		value per option
	as compensation		at grant date	exercise price
Director	during the year	issue Date	(cents)	(cents)	expiry Date
David Alan Zohar	160,000	16/10/2006	Nil	20	4/10/2010
John Karajas	12,500	16/10/2006	Nil	20	4/10/2010
Zhukov Pervan	12,500	16/10/2006	Nil	20	4/10/2010
William Edwin Bannister	12,500	16/10/2006	Nil	20	4/10/2010

(d) Other transactions and balances with key management personnel are disclosed in Note 17.

15.

		2007	2006
auditors’ remuneration		$	$
Amounts received or due and receivable by the auditors of Uranium Oil & Gas
Limited	for:
-	an audit or review of the fnancial statements of the entity	18,520	8,000
-	Preparation of Investigating Accountants Report	12,870	-
		31,390	8,000

16. segment information

The Company operates in the mineral exploration industry in Australia only.

17. related party transactions

The directors of Uranium Oil and Gas Limited during the financial period were:-

David Alan Zohar

John Karajas

Zhukov Pervan

William Edwin Bannister

(a) the following related party transactions occurred during the financial year with director-related entities:-

Consulting fees of $ 20,000 were paid to Swancove Enterprises Pty Ltd a director related entity of Mr Zohar by the issue of 100,000 shares at 20 cents each.

Mr Zohar and Swancove Enterprises Pty Ltd advanced the Company or paid costs on behalf of the Company of $398,306 with no fixed term for repayment and interest free. As at 30 June 2007, an amount of $4,456 is owed to Swancove Enterprises Pty Ltd and an amount owing to Mr Zohar of $2,830.

The company advanced or paid costs on behalf of Rosella Creek Ltd, and entity that Mr Zohar is a Director and significant shareholder of totalling $1,298. As at 30 June 2007 an amount of $1,298 is owed by Rosella Creek Ltd to the company. This loan was with no fixed terms of repayment and interest free.

The company advanced or paid costs on behalf of Iron Mountain Mining Ltd, an entity that Mr Zohar is a Director and significant shareholder of totalling $900. Iron Mountain Mining Ltd advanced or paid costs on behalf of the company an amount of $3,300. As at 30 June 2007 an amount of $2,400 is owed by the company to Iron Mountain Mining Ltd.

30 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

Dr Pervan was paid consulting fees of $26,290 during the year (of which $5,000 was paid by the issue of 25,000 shares at 20 cents each)

Mr Karajas was paid consulting fees of $5,000 during the year by the issue of 25,000 at 20 cents each.

Mr Bannister was paid consulting fees of $5,000 during the year by the issue of 25,000 at 20 cents each.

The Company entered into a farm-in arrangement on a uranium property with Red River Resources Ltd (“Red River”, a company in which Messrs Zohar and Karajas are significant shareholders in and directors of (refer Note 23).

The Company has entered into an agreement with Swancove Enterprises Pty Ltd (“Swancove”) (associated with Mr Zohar) whereby the Company has the option to purchase Swancove’s interest in EL’s 52/1863 and 52/1864. The Company reimbursed all expenditure to Swancove to 1 May 2006. The option is for a two year period from achieving an ASX listing and commenced on 1 May 2006. The Company is required to spend $250,000 on the tenements in the option period and may after spending $250,000 exercise the option for $1 plus a 2% net smelter return royalty.

The Company has entered into an agreement with Swancove whereby the Company has the option to purchase all of Swancove’s interest in EL’s 70/2444, 70/2692, E70/2693 and EL70/2727 except for the right to explore for bauxite. The option commenced on 1 May 2006 and expires two years after achieving an ASX listing. The Company is required to spend $200,000 on the mining tenements and the exercise price is $1 plus the right to receive a 2% net smelter return royalty from product containing minerals from the tenements except bauxite. The option is subject to the Right of Red River to acquire the rights to tin and tantalum on EL70/2692 (the Wannamal Central Tenement).

The Company has entered into an agreement with “Kjirt” Exploration Services Pty Ltd (associated with Mr Karajas) and Swancove for Kjirt and Swancove to transfer all of their interests in EPA113 and EPA114 once the applications for those exploration permits have been granted and Kjirt has agreed to transfer its 10% interest in EP448 to the Company. The Company has reimbursed Kjirt and Swancove for all payments and expenditure made by each of them in respect of the exploration permits.

The Company entered into an agreement with Mr Zohar to employ Mr Zohar to seek and source investment opportunities for the Company, manage the operations of the Company’s Perth office and perform the normal duties of an executive director (minimum 20 hours per week for at least 40 weeks per annum). The annual payment is to be $90,000 plus statutory superannuation and this commenced on the Company achieving an ASX listing. The term is for a two year period from an ASX listing.

The Company entered into an agreement with WE Bannister to act as Managing Director (Exploration) of the company effective from achieving an ASX listing at the rate of $150,000 per annum plus statutory superannuation.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007 31

8 Notes to the Financial Statements

18. Commitments

tenement Commitments

The following expenditure is required to maintain the exploration tenements over which the Company has an interest in:

tenement name	holders	area Blocks	Grant Date	expiry Date	rent ($)	minimum expenditure ($)
ELA36/549	H Ansell	34	Pending	Pending	3,366	-
ELA57/607	H Ansell	20	Pending	Pending	2,028	-
E09/1245	H Ansell	35	23/3/2006	22/3/2011	3,550	35,000
E52/1863	Swancove Enterprises PtyLtd	70	21/10/2005	20/10/2010	6,930	63,000
E52/1864	Swancove Enterprises PtyLtd	37	21/10/2005	20/10/2010	3,663	33,300
E70/2727	Swancove Enterprises PtyLtd	28	27/7/2005	26/7/2010	2,772	25,200
EL25329	Uranium Oil & Gas Ltd / Bralich PtyLtd	17	2/5/2007	2/4/2013	187	8,000
EL25346	Uranium Oil & Gas Ltd / Bralich PtyLtd	32	2/5/2007	2/4/2013	352	12,000
EL25382	Uranium Oil & Gas Ltd / Bralich PtyLtd	77	2/5/2007	2/4/2013	847	16,500
EL25368	Uranium Oil & Gas Ltd / Bralich PtyLtd	26	2/5/2007	2/9/2013	286	9,000
EL25505	Uranium Oil & Gas Ltd / Bralich PtyLtd	246	2/9/2007	16/7/2013	246	2,706
3725	Swancove Enterprises PtyLtd	975	15/3/2007	14/3/2008	-	125,000
3738	Swancove Enterprises PtyLtd	652	12/4/2007	11/4/2008	-	90,000
3726	Swancove Enterprises PtyLtd	102	15/3/2007	14/3/2008	-	40,000
3719	Swancove Enterprises PtyLtd	82	7/3/2007	6/3/2008	-	40,000
3718	Swancove Enterprises PtyLtd	256	7/3/2007	6/3/2008	-	55,000
EL5017	Uranium Oil & Gas Ltd	130	Pending	Pending	-	24,750
EL5018	Uranium Oil & Gas Ltd	409	14/3/2007	13/3/2012	-	45,675
EL5019	Uranium Oil & Gas Ltd	480	14/3/2007	13/3/2012	-	51,000
EL5032	Uranium Oil & Gas Ltd	62	Pending	Pending	-	19,650
EL5036	Uranium Oil & Gas Ltd	70	24/5/2007	23/5/2012	-	20,250
EL5037	Uranium Oil & Gas Ltd	60	24/5/2007	23/5/2012	-	19,500
EL5038	Uranium Oil & Gas Ltd	48	24/5/2007	23/5/2012	-	24,750

Refer note 23 for commitments under Joint Ventures.

remuneration Commitments

32 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

As at 30 June 2007, the outstanding commitments under the two agreements to the key management personnel are as follows:

Due within 1 year Due 1 to 2 years Total	$ 261,600 75,948
	337,548

19. financial instruments, risk management and policies

interest rate risk

The Company’s exposure to interest rate risk, which is the risk that the financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rate for classes of financial assets and financial liabilities is set out below:

iabilities is set out below:
30 June 2006 weighted average interest rate Financial Assets Cash at bank 5.5% Receivables Total Financial Assets Financial Liabilities Trade and other payables Total Financial Liabilities Net Financial Assets/ (Liabilities)	floating interest $ fixed interest maturing in less than 1 period $ non-interest bearing $ totals $ 9,337 - - 9,337 - - 41,899 41,899
	9,337 - 41,899 51,236
	- - (117,177) (117,177)
	- - (117,177) (117,177)
	9,337 - (75,278) (65,941)

			fixed interest
			maturing in less	non-interest
	weighted average	floating interest	than 1 period	bearing	totals
30 June 2007	interest rate	$	$	$	$
financial assets
Cash at bank	6.1%	211,946	4,378,505	-	4,590,451
Receivables		-	-	86,065	86,065
Investments				420,000	420,000
Total Financial Assets		211,946	4,378,505	506,065	5,096,516
financial liabilities
Trade and other
payables		-	-	56,429	56,429
Total Financial Liabilities		-	-	56,429	56,429
net financial assets		211,946	4,378,505	449,636	5,040,087

Uranium Oil and Gas Limited FINANCIAL REPORT 2007 33

8 Notes to the Financial Statements

reconciliation of net financial assets (liabilities) to net assets

Net Financial Assets (Liabilities) Prepayments Investments Provisions Property, plant and equipment Net Assets	2007 2006 5,040,087 (65,941) 9,944 7,001 - 72,333 (21,026) - 684,649 -
	5,713,654 13,393

Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance sheet date to recognised financial assets is the carrying amount, net of any provisions for doubtful debts of those assets, as disclosed in the statement of financial position and the notes to the financial statements. The Company does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments it has entered into. As the Company does not have material debtors, inventories, or any other credit risk, a formal credit risk management policy is not maintained.

liquidity risk

The company manages liquidity risk by monitoring forecast cash flows in ensuring that adequate unutilised borrowing facilities are sustained.

net fair values

For all assets and liabilities, their net fair value approximates their carrying values.

No financial assets and financial liabilities are traded on organised markets in standardised form.

34 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

	2007	2006
	$	$
20. Cash flow information
Reconciliation of the operating (loss) after tax to the net cash fows from opera-
tions.
operating loss after income tax	(490,718)	(523,960)
non cash items-Depreciation	679	-
Proft on sale of shares	(195,532)	-
Issue of shares for expenses	35,000	27,350
Fair value gain on investments	-	(44,333)
Sale of contract	-	(28,000)
Changes in assets and liabilities
Increase/(Decrease) in payables	(70,435)	117,177
Increase/(Decrease) in provisions	21,026	-
(Increase)/Decrease in receivables	(63,831)	(31,899)
net cash fow from/(used in) operating activities	(763,811)	(483,665)
reconciliation of Cash
Cash balance comprises;
Cash at bank	211,946	9,337
Cash on short term deposit	4,378,505	-
	4,590,451	9,337

financing facilities available

As at 30 June 2007 the Company had no financing facilities available.

non Cash financing and investing activities

There were no non-cash financing and investing activities in 2006/07, other than shares issued for consultancy services and other services totalling $35,000.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

8 Notes to the Financial Statements

21. share – Based payments

The following share based payments existed at 30 June 2007.

175,000 shares were issued to Directors and Director related entities at 20 cents per share as consideration for consultancy services provide as described at note 14.

On 16 October 2006 250,000 options were issued to Cameron Stockbrokers Limited the sponsoring broker to the capital raising undertaken by the company during the year ended 30 June 2007. These options were deemed to have a fair value of $19,080.

On 4 August 2005 19.5 million options were issued to Directors and Director related entities. As these options were issued shortly after incorporation the deemed value of the options is Nil.

Outstanding at the beginning of the year Granted Forfeited Exercised Expired Outstanding at year end Exercisable at year end	2007 2006 number of options weighted average exercise price number of options weighted average exercise price 19,500,000 20 cents - - 250,000 20 cents 19,500,000 20 cents - - - 19,750,000 20 cents 19,500,000 20 cents
	19,750,000 20 cents 19,500,000 20 cents

The weighted average fair value of the options issued to Cameron Stockbrokers Ltd on 16 October 2006 was 7.632	The weighted average fair value of the options issued to Cameron Stockbrokers Ltd on 16 October 2006 was 7.632
cents. The price was calculated using a Black Scholes option pricing model applying the following inputs:
Weighted average exercise price	20 cents
Weighted average life of the options	3.8 years
Underlying share prices	20 cents
Expected volatility	75%
Risk free interest rate	5.75%

22. Contingent liabilities

The Directors are not aware of any contingent liabilities as at 30 June 2007. Refer joint ventures in note 23.

23. Joint ventures

Bungalow well - western australia

Red River Resources Limited (a company in which Mr Karajas and Mr Zohar are substantial share holders and Directors of) has entered enter into a Joint Venture with Uranium Oil & Gas Limited on the Bungalow Well Uranium Project (Exploration Licence Application E36/549) in the North Eastern Goldfields, Western Australia. The Red River shareholders approved the entering into the joint venture on 23 June 2006. The terms of the heads of Agreement are as follows:

Red River may earn a 40% interest in the tenement by expending $500,000 on exploration over a period of 3 years, and Red River paying to Uranium Oil and Gas $20,000 (paid in July 2006). Following expenditure of $100,000 Red River shall earn a 10% interest in the tenement. Upon expenditure of a further $200,000 Red River shall earn a further 10% interest in the tenement. Upon the expenditure of a further $200,000 Red River shall earn a further 20% interest in the tenement. Red River may withdraw from the joint venture at any time after expending $100,000 on exploration on the tenement. The company has entered into an agreement with Swancove Enterprises Pty Ltd whereby the Company has the option

36 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Notes to the Financial Statements

to purchase all of Swancove’s interest in EL70/2727. The option commenced on 1 May 2006 and expires two years after achieving an ASX listing. The company is required to spend $200,000 on the tenement and the excise price is $1 plus the right to receive a 2% net smelter royalty.

The terms of the Farm In Agreement are as follows:

UOG will reimburse Swancove costs incurred in acquiring the tenements not exceeding $10,000.
UOG must maintain the tenements in good standing for a period of 2 years following the grant of the tenements to acquire a 50 per cent interest in the tenements.
UOG will have the right to acquire a further 40 per cent in the tenements upon expending $1,000,000 after it has acquired its 50 per cent interest.
If UOG withdraws from the agreement prior to earning its 50 per cent interest, it will withhold no interest in the tenement.
UOG will be the operator of the Farm In.
The Agreement is subject to the completion of formal documentation and the approval of shareholders of UOG.

Bralich Holdings Pty Ltd (Bralich) and the company has entered into a Joint Venture on 5 tenements in the Northern Territory whereby the company keeps the tenements in good standing for two years to earn 70% interest in those leases. Good standing means meeting minimum Mines Department commitments plus other ongoing commitments of the Northern Territory Government and Local Governments. On 24 July 2007 the company issued Bralich one million options for the right to enter into the Joint Venture.

In addition, Bralich and the company has entered into a Joint Venture on another Prospect but in this instance the company earns 50% interest in the tenement for keeping the lease in good standing.

The Joint Ventures commenced on 23 January 2007.

24.	earnings per share
		2007	2006
		$	$
Basic	loss per share (cents)	(0.91)	(1.84)

The options are not considered dilutive and therefore no diluted earnings per share is disclosed.

Weighted average number of ordinary shares	54,128,882	28,528,353
Net loss used in calculating EPS	(490,718)	(523,960)

25. significant events after Balance date

On 15 August 2007 12,500 options were exercised by shareholders of the company and 12,500 ordinary shares were issued, raising $2,500.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007 37

Directors Declaration

The directors of the company declare that:

The financial statements, comprising the income statement, balance sheet, cash flow statement, statement of changes in equity, and accompanying notes, are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the company’s financial position as at 30 June 2007 and of its performance for the year ended on that date.
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

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William Bannister managing Director

Perth, Western Australia 26th September 2007

38 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Audit Report

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BDO Kendalls Audit & Assurance (WA) 128 Hay Street SUBIACO WA 6008 PO Box 700 WEST PERTH WA 6872 Phone 61 8 9380 8400 Fax 61 8 9380 8499 [email protected] www.bdo.com.au

ABN 79 112 284 787

INDEPENDENT AUDITOR�S REPORT TO THE MEMBERS OF URANIUM OIL AND GAS LIMITED

We have audited the accompanying financial report of Uranium Oil and Gas Limited, which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors� declaration.

We have also audited the remuneration disclosures contained in the directors� report. As permitted by the Corporations Regulations 2001, the consolidated entity has disclosed information about the remuneration of directors and executives (“remuneration disclosures”), required by Accounting Standard AASB 124 Related Party Disclosures, under the heading “Remuneration Report” in pages 8 to 11 of the directors� report and not in the financial report.

Directors� Responsibility for the Financial Report and the AASB 124 Remuneration Disclosures Contained in the Directors� Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

The directors of the company are also responsible for the remuneration disclosures contained in the directors� report.

Auditor�s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Our responsibility is to also express an opinion on the remuneration disclosures contained in the directors� report based on our audit.

BDO Kendalls is a national association of separate partnerships and entities.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

Audit Report

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report and the remuneration disclosures contained in the directors� report. The procedures selected depend on the auditor�s judgement, including the assessment of the risks of material misstatement of the financial report and the remuneration disclosures contained in the directors� report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity�s preparation and fair presentation of the financial report and the remuneration disclosures contained in the directors� report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity�s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report and the remuneration disclosures contained in the directors� report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Uranium Oil and Gas Limited on 26 September 2007, would be in the same terms if provided to the directors as at the date of this auditor�s report.

Auditor�s Opinion

In our opinion the financial report of Uranium Oil and Gas Limited is in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the company�s financial position as at 30 June 2007 and of its performance for the year ended on that date; and
(b) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(c) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Auditor�s Opinion on the AASB 124 Remuneration Disclosures Contained in the Directors� Report

In our opinion the remuneration disclosures that are contained in pages 8 to 11 of the directors� report comply with Accounting Standard AASB 124.

BDO Kendalls Audit & Assurance (WA)

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Sherif Andrawes

Partner

Perth, Western Australia Dated this 26[th] day of September 2007

40 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

ASX Information

substantial shareholders

The substantial shareholders as at 31 August 2007 were:

Mr Karajas	5,525,000
David Alan Zohar	5,000,001
Julie Zohar/Julie Mendelson	5,000,001
Swancove Enterprises Pty Ltd	5,000,000

Distribution of shareholders as at 31 August 2007

range of holding 1-1,000 1,001-5,000 5,001-10,000 10,001 - 100,000 100,001 - over Share holders with less than a marketable parcel. Distribution of Listed Option Holders as at 31 August 2007 range of holding 1-1,000 1,001-5,000 5,001-10,000 10,001 - 100,000 100,000 - over Option holders with less than a marketable parcel.	holders shares 6 3,077 108 426,339 825 8,037,537 925 26,255,423 34 30,010,477 1,898 64,732,853 115 holders options - - 746 3,720,000 253 2,119,543 533 9,650,071 19 22,879,686 1,551 38,369,300 1,381

voting rights

Each fully paid ordinary share carries voting rights of one vote per share.

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

ASX Information

twenty largest shareholders as at 31 august 2007 – 43.11%

	number of
	shares
John Karajas	5,525,000
David Alan Zohar	5,000,001
Julie Zohar	5,000,001
Swancove Enterprises Pty Ltd	5,000,000
Nicholas Charles Richards	924,568
Helen Ansell	650,000
J & F James Bros Holdings Pty Ltd	625,000
Paul Askins	605,000
Clint Conley	600,000
Cosimo Coniglio	550,000
Janice M Roll	550,000
Miro Lendich (The Lendich Superannuation Fund)	500,000
Shellgrove Pty Ltd (RJM Superannuation Fund)	500,000
Fonomes Pty Ltd	318,900
Callum Baxter	300,000
Branko Rudez	300,000
William Murray David & Sandra Margaret Small	300,000
Shoshanna Zohar	264,401
Siv Huy Ung	209,809
Cape Equity Pty Ltd	200,000

twenty largest option holders as at 31 august 2007 – 59.90%

twenty largest option holders as at 31 august 2007 – 59.90%
	number of
	options
Swancove Enterprises Pty Ltd	12,000,000
Zukov Pervan	2,150,000
John Karajas	2,012,500
Meekal Pty Ltd	2,000,000
Bralich Holdings Pty Ltd	1,000,000
Janice Roll	1,000,000
Julie Zohar	609,500
Vincenzo & Rita Lucia Brizzi (Brizzi Family Superannuation Fund)	287,500
Cameron Stockbrokers Pty Ltd	250,000
Shellgrove Pty Ltd (RJM Superannuation Fund)	250,000
Keith & Anne Lamport (Kalfund Superannuation Fund)	212,500
Shoshanna Zohar	160,000
Neil Harris	150,000
Lawrence Crowe Consulting Pty Ltd	150,000
Nonda Pty Ltd	150,000
Lyall & Carol Bonser	142,000
Elliott See Mun Ho	125,686
Jasvir Singh Thiara	117,500
F P & R J Wetters (Peter Wetters Superannuation Fund)	112,500
Beverly Gale Bessen	100,000

42 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

ASX Information

shares and options escrowed

no. of shares escrow period

125,000 12 months from date of quotation on ASX being 18 October 2006 21,650,000 24 months from date of quotation on ASX being 18 October 2006

no. of options escrow period 19,400,000 24 months from date of quotation on ASX being 18 October 2006

asX rule 4.10.19

The Company has used its cash and assets in a form readily convertible to cash that it had at time of admission that is consistent with its business objectives.

tenement schedule

The company has an interest in the following tenements

		Company’s
tenement		Benefcial
name	holders	interest	area Blocks	Grant Date	expiry Date
ELA36/549	H Ansell	60%	34	Pending	Pending
ELA57/607	H Ansell	100%	20	Pending	Pending
E09/1245	H Ansell	30%	35	23/3/2006	22/3/2011
E52/1863	Swancove Enterprises Pty Ltd	100%	70	21/10/2005	20/10/2010
E52/1864	Swancove Enterprises Pty Ltd	100%	37	21/10/2005	20/10/2010
E70/2727	Swancove Enterprises Pty Ltd	100%	28	27/7/2005	26/7/2010
E52/2016	Uranium Oil & Gas Ltd	100%	31	19/2/2007	18/2/2012
EL69/2336	Uranium Oil & Gas Ltd	100%	96	Pending	Pending
EL25329	Uranium Oil & Gas Ltd / Bralich Pty Ltd	70%	17	2/5/2007	2/4/2013
EL25346	Uranium Oil & Gas Ltd / Bralich Pty Ltd	70%	32	2/5/2007	2/4/2013
EL25382	Uranium Oil & Gas Ltd / Bralich Pty Ltd	70%	77	2/5/2007	2/4/2013
EL25368	Uranium Oil & Gas Ltd / Bralich Pty Ltd	70%	26	2/5/2007	2/9/2013
EL25505	Uranium Oil & Gas Ltd / Bralich Pty Ltd	70%	246	2/9/2007	16/7/2013
EL25723	Uranium Oil & Gas Ltd / Bralich Pty Ltd	70%	91	Pending	Pending
3725	Swancove Enterprises Pty Ltd	100%	975	15/3/2007	14/3/2008
3738	Swancove Enterprises Pty Ltd	100%	652	12/4/2007	11/4/2008
3726	Swancove Enterprises Pty Ltd	100%	102	15/3/2007	14/3/2008
371	Swancove Enterprises Pty Ltd	100%	82	7/3/2007	6/3/2008
3718	Swancove Enterprises Pty Ltd	100%	256	7/3/2007	6/3/2008
EL5017	Uranium Oil & Gas Ltd	100%	130	Pending	Pending
EL5018	Uranium Oil & Gas Ltd	100%	409	14/3/2007	13/3/2012
EL5019	Uranium Oil & Gas Ltd	100%	480	14/3/2007	13/3/2012
EL5032	Uranium Oil & Gas Ltd	100%	62	Pending	Pending
EL5036	Uranium Oil & Gas Ltd	100%	70	24/5/2007	23/5/2012
EL5037	Uranium Oil & Gas Ltd	100%	60	24/5/2007	23/5/2012
EL5038	Uranium Oil & Gas Ltd	100%	48	24/5/2007	23/5/2012

Uranium Oil and Gas Limited FINANCIAL REPORT 2007

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44 Uranium Oil and Gas Limited FINANCIAL REPORT 2007

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UOG ANNUAL REPORT 3

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Level 7, 231 Adelaide Terrace Perth WA 6000

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Telephone Number: (08) 9225 4873 Fax number: (08) 9225 6474 Email: [email protected] Website uog.com.au

AI assistant

PATERSON RESOURCES LTD — Annual Report 2007

65618_rns_2007-10-24_2b643619-ba85-422f-a8c2-1cf12fafe802.pdf

Directors

AuDitors

LegAL ADvisors

compAny secretAries

registereD office

HeAD office

country of incorporAtion

AsX coDe UOG

Contents

Corporate GovernanCe report uranium oil anD Gas limiteD (“the Company”)

statement

Board Composition

trading policy

remuneration policy

eXplanations for Departures from Best praCtiCe reCommenDations

principle 4 recommendation 4.2, 4.3, 4.4

notification of Departure:

principle 2 recommendation 2.1

notification of Departure

principle 2 recommendation 2.4

notification of Departure:

explanation for Departure:

explanation for Departure:

principle 7 recommendation 7.1

notification of Departure:

explanation for Departure:

principle 8 recommendation 8.1

notification of Departure:

explanation of Departure:

principle 9 recommendation 9.2

notification of Departure:

explanation of Departure:

the BoarD of DireCtors

DaviD alan Zohar (appointed 3 august 2005) Bsc Diped

executive Director, Company secretary and Commercial manager

John KaraJas (appointed 24 may 2006) Bsc (hons) maiG mpesa non executive Director

Zhukov (Zeke) pervan (appointed 24 may 2006) mB, Bs(wa), fraCGp, faiCD non-executive Director and Chairman

william edwin Bannister (appointed 24 may 2006) msc awasm

managing Director

Company seCretaries

susanne Gweneth waters (appointed 14 august 2007)

David alan Zohar (refer details above).

John van Dieren (fCa) (resigned 25 June 2007)

principal activities

review of operations

exploration activities

western australia

operating results

Dividends

northern territory

south australia

victoria

finanCial position

significant Change in state of affairs

oil anD Gas

western australia

northern territory

Conclusions

after Balance Date events

future Developments, prospects and Business strategies

environmental issues

remuneration report (auDiteD)

non- executive remuneration

remuneration policy

executive remuneration

performance based remuneration

Company performance, shareholder wealth and directors’ and executives’ remuneration

Directors and executive officers emoluments (Key management personnel)

Details of remuneration (audited)

Key management personnel remuneration:

2007

service agreements and remuneration commitments (audited)

Directors’ meetings

indemnifying officers or auditor

proceedings on behalf of the company

non-audit services

auditor’s independence Declaration

PATERSON RESOURCES LTD Annual Report 2007