RYPE Royalite Petroleum Company Inc (CE)

OPERATIONS

Description of Business

Royalite Petroleum Company Inc., referred to as the “Company”, is considered an exploration stage company. The Company's primary objective is to identify, acquire and develop oil and gas projects, and has not yet realized any revenues from this primary objective.

The Company has acquired interests in properties through leases on which it will drill oil or gas wells in efforts to discover and/or to produce oil and gas. The Company has a 100% working interest and a 87.5% net revenue interest in undeveloped properties in Utah and has a working interest from 26.25% to 100% and a net revenue interest from 18.375% to 70% in undeveloped properties in Texas and Louisiana respectively. The Company is exploring various oil and gas properties at this time.

The Company holds the exclusive rights to use all information relating to minerals and hydrocarbons in the State of Utah derived from a proprietary electromagnetic sensing technology.

History

Royalite Petroleum Company Inc. (the “Company”), formerly Worldbid Corporation, was incorporated on August 10, 1998 in the State of Nevada as Tethercam Systems, Inc (Tethercam). On January 15, 1999, Tethercam changed it’s name to Worldbid Corporation (Worldbid).

Effective February 28, 2007, Worldbid completed the acquisition of Royalite Petroleum Corporation (“RPC”), an exploration stage company since its formation in the State of Nevada on December 2, 2005.

The acquisition of RPC was completed by way of a "triangular merger" pursuant to the provisions of the Amended and Restated Agreement and Plan of Merger (“First Merger Agreement”) among RPC, Worldbid and Worldbid’s wholly owned subsidiary, Royalite Acquisition Corp. (“Worldbid Sub”). Under the terms of the First Merger Agreement, RPC was merged with and into Worldbid Sub, with Worldbid Sub continuing as the surviving corporation (“First Merger”). Immediately following the completion of the First Merger, Worldbid completed a second merger whereby Worldbid Sub was merged with and into Worldbid, with Worldbid continuing as the surviving corporation (“Second Merger”).

OPERATIONS (Continued)

History – (Continued)

Under the terms and conditions of the First Merger Agreement each share of RPC’s issued and outstanding common stock, immediately prior to the completion of the First Merger, was converted into one share of Worldbid’s common stock. As a result, Worldbid issued a total of 24,960,667 shares or approximately 67% of its issued and outstanding common stock to the former shareholders of RPC. Following the transaction, Worldbid had 35,875,270 shares of common stock issued and outstanding.

As a result of the completion of the First Merger and the Second Merger (together known as the “Royalite Transaction”), Worldbid acquired all the property and assets of RPC, including the rights to oil and gas leases on approximately 69,000 net acres of land along the Utah Hingeline Trend of south-central Utah and a 2.5% royalty interest in all of the oil and gas produced, sold or used off of 285 acres of land, also located along the Utah Hingeline Trend. In addition to acquiring all of RPC’s property and assets, Worldbid assumed all of RPC’s debts and liabilities.

As part of the Second Merger, Worldbid changed its name to Royalite Petroleum Company Inc. (the “Company”). Effective March 5, 2007, the Company changed it’s trading symbol on the OTC Bulletin Board from “WBDC” to “RYPE.”

For accounting purposes, the Royalite Transaction is considered to be a capital transaction in substance, rather than a business combination. The Royalite Transaction is treated, in the accompanying financial statements as equivalent to the issuance of shares by RPC (the private company) for the assets of Worldbid (the public company). The accounting for the Royalite Transaction is similar to that resulting from a reverse acquisition. Accordingly, the historical financial information of the accompanying financial statements is that of RPC.

The 10,914,603 shares of Worldbid at February 28, 2007 are presented in the Company’s Statement of Stockholders’ Equity as if RPC acquired Worldbid.

On July 7, 2008, Royalite Petroleum Company Inc. (the “Company”) completed the disposition of Worldbid International Inc. (“Worldbid”), its internet business, to Marktech Acquisition Corp. (“Marktech”). The disposition was completed pursuant to the terms and conditions of the Share Purchase Agreement dated June 5, 2008 (the “Share Purchase Agreement”) among the Company, Marktech and Worldbid. The Company disposed of the subsidiary in order to concentrate its efforts on its core oil and gas business. (Note 3)

OPERATIONS (Continued)

Going Concern

As of January 31, 2009, the Company incurred cumulative net losses of approximately $7,467,889 from operations and has a negative working capital of $3,566,370. The Company is still in the exploration stage, raising substantial doubt about its ability to continue as a going concern. The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.

The ability of the Company to continue as a going concern is dependent on additional sources of capital and the successful execution of the Company’s strategic plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements include the operations of the Company and its wholly-owned subsidiary, Worldbid International Inc., a Company domiciled in the state of Nevada for the period from its acquisition on February 28, 2007 to the time of disposal on July 7, 2008.

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all investments with an original maturity of three months or less to be a cash equivalent.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Oil and Gas Exploration Activity

The Company follows the full cost method of accounting for oil and gas operations whereby all costs associated with the exploration for and development of oil and gas reserves, whether productive or unproductive, are capitalized.

Such expenditures include land acquisition costs, drilling, exploratory dry holes, geological and geophysical costs not associated with a specific unevaluated property, completion and costs of well equipment. Internal costs are capitalized only if they can be directly identified with acquisition, exploration, or development activities.

Expenditures that are considered unlikely to be recovered are written off. On a quarterly basis the Board of Directors assesses whether or not there is an asset impairment. The current oil and gas exploration and development activities are considered to be in the exploration stage.

The costs of unproved leases, which become productive, are reclassified to proved properties when proved reserves are discovered in the property. To date no properties have been classified as proved properties. Unproved oil and gas interests are carried at original acquisition costs including filing and title fees. Depreciation and depletion of the capitalized costs for producing oil and gas properties will be provided by the unit-of- production method based on proved oil and gas reserves.

Abandonment of properties are recognized as an expense in the period of abandonment and accounted for as adjustments of capitalized costs.

Ceiling Test .

Under the full-cost accounting rules, capitalized costs included in the full-cost pool, net of accumulated depreciation, depletion and amortization (DD&A), cost of unevaluated properties and deferred income taxes, may not exceed the present value of our estimated future net cash flows from proved oil and gas reserves, discounted at 10%, plus the lower of cost or fair value of unproved properties included in the costs being amortized, net of related tax effects. These rules generally require that, in estimating future net cash flow, we assume that future oil and gas production will be sold at the unescalated market price for oil and gas received at the end of each fiscal quarter and that future costs to produce oil and gas will remain constant at the prices in effect at the end of the fiscal quarter.

We are required to write-down and charge to earnings the amount, if any, by which these costs exceed the discounted future net cash flows, unless prices recover sufficiently before the date of our financial statements. Given the volatility of oil and gas prices, it is likely that our estimates of discounted future net cash flows from proved oil and gas reserves will change in the near term. If oil and gas prices decline significantly, even if only for a short period of time, it is possible that writedowns of oil and gas properties could occur in the future

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment of Properties

Unproved leasehold costs are reviewed periodically and a loss is recognized to the extent, if any, that the cost of the property has been impaired.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

Long-Lived Assets

Long-lived assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets will be written down to fair value.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards (SFAS) No. 107, “Disclosure About Fair Value of Financial Instruments,” requires the Company to disclose, when reasonably attainable, the fair market value of its assets and liabilities which are deemed to be financial instruments. The carrying amounts and estimated fair value of the Company’s financial instruments approximate their fair value due to their short-term nature.

Foreign Currency

These financial statements have been presented in U.S. dollars. The functional currency of the operations of the Company’s wholly-owned operating subsidiary, Worldbid International Inc. which undertakes the Worldbid Operations is the Canadian dollar. Assets and liabilities measured in Canadian dollars are translated into United States dollars using exchange rates in effect at the consolidated balance sheets date with revenue and expense transactions translated using average exchange rates prevailing during the period.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign Currency (Continued)

Exchange gains and losses arising on this translation are excluded from the determination of operating income and reported as foreign currency translation adjustment (which is included in the other comprehensive loss) in stockholders’ equity.

Revenue Recognition

Oil and Gas Revenues

The Company recognizes oil and gas revenues from its interests in producing wells as oil and gas is produced and sold from these wells. The Company has no gas balancing arrangements in place. Since inception no oil and gas revenues have been recorded.

Worldbid Operations

The Company earned revenue by selling subscriptions to its service, advertising on email communications to businesses using the Company’s website services, direct advertising by businesses on its website and from data sales to consumer oriented companies. Revenue is recognized once the service or product is delivered.

Subscriptions received in advance for access to the Company’s website services were recognized as income over the period of the subscriptions.

Comprehensive Income (Loss)

The Company’s accumulated other comprehensive loss consists of the accumulated foreign currency translation adjustments.

Earnings (Loss) Per Share

The Company follows SFAS No. 128, “Earnings Per Share” and SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establish standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share for entities with publicly-held common shares and potential common stock issuances. Basic earnings (loss) per share are computed by dividing net income by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as stock options and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

Research and Development

All research and development expenditures during the period have been charged to operations.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

The Company accounts for its income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Stock-Based Compensation

The Company accounts for stock based employee and director compensation arrangements in accordance with provisions of Financial Accounting Standard (SFAS) No. 123R, “Share Based Payment”. SFAS No. 123(R) requires companies to measure all employee stock based compensation awards using a fair value method and record such expense in their consolidated financial statements. The Company adopted SFAS No. 123(R) on a prospective basis on December 2, 2005

Stock based compensation arrangements for non-employees are recorded at fair value as the services are provided and the compensation earned.

Segmented Information

The Company discloses segmented information in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” which uses a management approach to determine reportable segments. The Company operated its business in the USA and Canada.

Expenses of Offering

The Company accounts for specific incremental costs directly to a proposed or actual offering of securities as a direct charge against the gross proceeds of the offering.

Reclassification

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Newly Adopted Financial Pronouncements

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 permits an entity to irrevocably elect fair value on a contract-by-contract basis as the initial and subsequent measurement attribute for many financial assets and liabilities and certain other items including insurance contracts. Entities electing the fair value option would be required to recognize changes in fair value in earnings and to expense upfront cost and fees associated with the item for which the fair value option is elected. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of SFAS No. 157, Fair Value Measurements. The Company adopted the standard on May 1. 2008.

In June 2007, the FASB issued EITF Issue No.07-03, “Accounting for Non-Refundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities” ( "EITF 07-03"). EITF 07-03 provides guidance on whether non- refundable advance payments for goods that will be used or services that will be performed in future research and development activities should be accounted for as research and development costs or deferred and capitalized until the goods have been delivered or the related services have been rendered. EITF 07-03 is effective for fiscal years beginning after December 15, 2007. The Company adopted the standard on May 1, 2008 and does not expect the standard to have a significant impact on the Company's financial position and results of operations.

New Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (Revised) “Business Combinations”. SFAS 141 (Revised) establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective for the fiscal year commencing May 1, 2009. The management is in the process of evaluating the impact SFAS 141 (Revised) will have on the Company’s financial statements upon adoption.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in consolidated Financial Statements - an Amendment of ARB No. 51." This statement requires that noncontrolling or minority interests in subsidiaries be presented in the consolidated statement of financial position within equity, but separate from the parents' equity, and that the amount of the consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

New Accounting Pronouncements (Continued)

SFAS No. 160 is effective for the fiscal years beginning on or after December 15, 2008. Currently the Company does not anticipate that this statement will have an impact on its financial statements.

In March 2008, the FASB issued SFAS No.161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No.133”, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No.133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No.161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, We are currently assessing the potential impact that adoption of SFAS No.161 may have on our financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS No. 162”). SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles for nongovernmental entities. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company does not expect there to be any significant impact of adopting SFAS 162 on its financial position, cash flows and results of operations.

In May 2008, the FASB issued SFAS No.163 “Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60”, which requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. This Statement requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163. is effective for financial statements issued for fiscal years beginning after December 15, 2008. Currently the Company does not anticipate that this statement will have an impact on its financial statements.

In June 2008, the FASB ratified EITF Issue No. 07-5, Determining Whether an Instrument (or an Embedded Feature) is Indexed to an Entity’s Own Stock (“EITF 07-5”). EITF 07-5 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market- based employee stock option valuation instruments on the evaluation.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

New Accounting Pronouncements (Continued)

EITF 07-5 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact, if any, on its consolidated financial position and results of operations.

In December 2008, the FASB issued FSP FAS140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise’s involvement with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. We do not expect the adoption of the FSP will have any impact on our results of operations.

DISPOSAL OF BUSINESS SEGMENT

On July 7, 2008, the Company completed the disposition of Worldbid International Inc. (“Worldbid”), its internet business, to Marktech Acquisition Corp. (“Marktech”).

The disposition was completed pursuant to the terms and conditions of the Share Purchase Agreement dated June 5, 2008 (the “Share Purchase Agreement”) among the Company, Marktech and Worldbid. Under the terms of the Share Purchase Agreement, the Company sold all of the shares of Worldbid and all Worldbid related business assets to Marktech in consideration of $50,000 and the assumption of approximately $94,000 in liabilities. The purchase price consisted of $25,000 in cash and a non-interest bearing promissory note in the amount of $25,000 in favor of the Company due on August 6, 2008. As additional consideration, the Company assigned to Marktech its right and interest in the intercompany loan between the Company and Worldbid. In addition, Marktech will indemnify the Company from any liabilities or damages arising out of the liabilities of Worldbid and the liabilities assumed by Marktech. The Company disposed of the subsidiary in order to concentrate its efforts on its core oil and gas business.

The following table summarizes the consideration received and the book value of assets and liabilities disposed of:

DISPOSAL OF BUSINESS SEGMENT (Continued)

LICENSE RIGHTS

License rights consist of the following:

DEPOSIT ON UNPROVEN OIL AND GAS PROPERTIES – RELATED PARTY

DEPOSIT ON UNPROVEN OIL AND GAS PROPERTIES – RELATED PARTY (Continued)

On April 2, 2008, the Company issued 50,000,000 common shares and advanced $340,000 to May Petroleum Inc. (“May”) pursuant to an oil and gas property agreement whereby the Company would acquire May Petroleum, Inc’s interest in an oil and gas prospect in Matagorda County, Texas. The fair value of the stock issuance was $12,000,000. As at April 30, 2008 title to the interest in the property had not been transferred to the Company. Transfer of title was completed on June 2, 2008.

As a result of the share issuance, May Petroleum Inc. became the Company’s majority shareholder, and the President of May Petroleum was appointed as an officer and director of the Company.

The Company also issued 1,000,000 common shares as finders fees in relation to the above transaction. The fair value of the stock issuance was $360,000.

During the period ended January 31, 2009, the Company advanced $215,000 to May Petroleum Inc. pursuant to an oil and gas property agreement whereby the Company will acquire a 100% working interest in 895 acres of an oil and gas prospect in Matagorda County, Texas.

DEPOSIT ON UNPROVEN OIL AND GAS PROPERTIES

On July 2, 2008, the Company advanced $100,000 pursuant to an oil and gas property agreement whereby the Company will acquire a 26.25% working interest in 935 acres of an oil and gas prospect in Fort Bend County, Texas.

On July 3, 2008 the Company advanced $62,000 pursuant to an oil and gas property agreement whereby the Company will acquire a 100 % working interest in 895 acres of an oil and gas prospect in Matagorda County, Texas.

UNPROVEN OIL AND GAS PROPERTIES

Unproven oil and gas properties consist of the following:

UNPROVEN OIL AND GAS PROPERTIES (Continued)

On February 7, 2007 the Company acquired oil and gas leases from the BLM representing a 100% working interest in 5 parcels totaling 9,300 acres situated in Piute County, Utah. The Company paid the BLM a total of $13,952 for the lease acquisition costs.

On February 19, 2007 the Company acquired an undivided 2.5% mineral royalty interest to all oil and gas produced and sold off land under the existing oil and gas lease agreement dated May 23, 2005 between Crazy R Ranch, Inc and Silver Summit, L.C., and all extensions thereafter. Aforementioned lease from the Crazy R Ranch represents a 100% working interest in 9 parcels totaling 298 acres situated in Sevier County, Utah. The Company paid Crazy R. Ranch $200,000 for the mineral royalty interest.

On February 20, 2007 the Company acquired oil and gas leases from the BLM representing a 100% working interest in 11 parcels totaling 18,631 acres situated in Piute County, Utah. The Company paid the BLM a total of $301,943 for the lease acquisition costs.

From October 1, 2006 to April 30, 2007, the Company executed 34 oil and gas leases with private land owners, representing a 100% working interest in approximately 11,836 gross acres situated in the Piute, Garfield and Iron Counties of Utah. The Company paid the private land owners $158,134 for the lease acquisition costs. Lease terms are for 5 years, with an option to extend for an additional 5 years. There are no future payment obligations on the leases.

On September 28, 2007, the Company renewed oil and gas leases with the BLM representing a 100% working interest in 17 parcels totaling 19,913 acres situated in the Piute, Sanpete and Wayne Counties of Utah. The Company paid the BLM a total of $29,876 for the annual lease costs.

On October 1, 2007, the Company renewed oil and gas leases with the State of Utah representing a 100% working interest in 8 parcels totaling 2,815 acres situated in Piute County, Utah. The Company paid the State of Utah a total of $4,551 for the annual lease costs.

On October 1, 2007, Royal Petroleum Company Inc. (the “Company”) entered into a Letter Agreement (the “Letter Agreement”) with Central Utah Lease Acquisition, L.P., a Utah Limited Partnership (“CULA”), whereby CULA granted the Company an option to purchase 62.5% of CULA’s interest in an oil and gas project known as the Keystone Project.

The Keystone Project is located in Sanpete, Juab, and Severe Counties, Utah and consists of 66,700 net leasehold acres, with a combined net revenue interest of 80%. If the Company exercises the option, of which there is no assurance, the Company will have an opportunity to earn approximately 41,688 net leasehold acres. In consideration for this option, the Company issued to CULA 200,000 shares of common stock with a fair value of $92,000. In order to exercise this option, the Company must provide CULA with a written notice of exercise on or before November 21, 2007.

UNPROVEN OIL AND GAS PROPERTIES (Continued)

Upon exercise of the option, the parties will enter into a formal agreement for the purchase of 62.5% of CULA’s interest in the Keystone Project with the following principal terms and conditions:

To purchase the interest in the Keystone Project, the Company will pay and issue the following consideration to CULA:

$1,500,000 in cash on or before November 26, 2007 (the “Keystone Closing Date”);

7,300,000 shares of the Company’s common stock on or before the Keystone Closing Date. The Company will grant CULA piggyback registration rights in respect of the shares issued. If the Company has not filed a registration statement to register the shares on or before May 1, 2008, the Company, at its own expense, will file a registration statement to register the shares;

$2,260,000 in cash on or before December 31, 2007;

$2,500,000 in cash on or before June 15, 2008;

$2,500,000 in cash on or before December 15, 2008; and

$2,500,000 in cash on or before June 15, 2009.

The Company will also be required to drill two oil and/or gas wells within a specified area of the Keystone Project and to carry CULA as a 25% working interest owner through the completion or plugging of those wells (the “Carried Wells”).

Upon exercise of the option, the Company and CULA will also enter into an operating agreement to further develop the Keystone Project. Under the terms of the proposed operating agreement, the Company will be the operator and CULA will be a non-operator of the Keystone Project. A condition of the proposed operating agreement is that Clayton Williams Energy Inc. (“CWEI”) must agree to be a party to the operating agreement. CWEI owns an undivided 50% working interest in an area covering approximately 30,000 gross acres located on the southern portion of the Keystone Project.

UNPROVEN OIL AND GAS PROPERTIES (Continued)

On January 1, 2008, the Company renewed oil and gas leases with the BLM representing a 100% working interest in 4 parcels totaling 3,379 acres situated in Piute County, Utah. The Company paid the BLM a total of $5,070 for the annual lease costs.

On April 3, 2008, the Company renewed oil and gas leases with the BLM representing a 100% working interest in 5 parcels totaling 9,300 acres situated in Piute County, Utah. The Company paid the BLM a total of $13,952 for the annual lease costs.

On April 14, 2008, the Company renewed oil and gas leases with the State of Utah representing a 100% working interest in 5 parcels totaling 3,501 acres situated in Piute, Iron and Garfield Counties of Utah. The Company paid the State of Utah a total of $5,568 for the annual lease costs.

From May 1, 2007 to April 30, 2008, the Company capitalized $47,712 in engineering costs related to regulatory reporting and filing, and the mapping, surveying, permitting and site release of future planned well drilling locations.

From May 1, 2008 to July 31, 2008, the Company capitalized $16,086,099 in lease acquisition costs to acquire interests in oil and gas properties in Matagorda County, Texas and in Terrebonne Parish, Louisiana.

From May 1, 2008 to January 31, 2009, the Company capitalized $147,050 in legal fees, consulting fees, engineering fees, lease renewal costs and environmental service costs related to acquiring oil and gas properties in Matagorda County, Texas and in Terrebonne Parish, Louisiana.

LEASES PAYABLE - RELATED PARTY

During the three month period ended July 31, 2008, the Company advanced $500,000 to May pursuant to an oil and gas property agreement whereby the Company acquired May’s interest in 1,744 acres of an oil and gas prospect in Matagorda County, Texas. Transfer of title was completed on June 2, 2008, and the Company recorded a payable of $500,000 for the remaining balance due to May. On August 8, 2008, the Company paid May $150,000. As at January 31, 2009, the balance remaining was $350,000.

During the three month period ended July 31, 2008, the Company entered into an Assignment of Oil, Gas and Mineral Leases on 910 acres in Matagorda County, Texas. The Company paid $159,023 to a non-related party, $250,000 to May and recorded a payable of $7,445 due to May.

LEASES PAYABLE

On May 1, 2008, the Company entered into a Participation Agreement on a lease of 699 acres of oil and gas property located in Terrebonne Parish, Louisiana. The Company paid $163,625 in cash and recorded a payable of $1,716,000.

On June 2, 2008, the Company entered into an Assignment of Oil, Gas and Mineral Leases on 110 acres in Matagorda County, Texas. The Company paid $22,114 in cash and recorded a payable due of $34,028.

LOANS PAYABLE – RELATED PARTIES

Loans payable comprise the following:

SHARE SUBSCRIPTIONS RECEIVED

At January 31, 2009, the Company had received share subscriptions amounting to $nil pursuant to private placement offerings. (April 30, 2008 – $364,985, pursuant to a private placement of 8,660,000 common shares at $0.25 per share.).

NOTES PAYABLE

Notes payable of $20,000 (April 30, 2008 - $20,000) are due upon demand, bear interest at 15% per annum, payable annually, and are secured by a general security agreement over the assets of Royalite Petroleum Company Inc. and by a subordination of intercompany debt between Royalite Petroleum Company Inc and Worldbid International Inc.

CAPITAL STOCK

Common and Preferred Stock:

As of January 31, 2009, there were 100,667,270 shares of common stock outstanding and zero shares of preferred stock outstanding. Outstanding shares of common stock consist of the following:

On February 8, 2006, the Company issued 18,000,000 shares of common stock to five individuals for cash at $0.001 per share.

On February 8, 2006, the Company issued 3,000,000 shares of common stock for licensing rights at $0.001 per share.

On March 2, 2006, the Company issued 2,000,000 shares of common stock to seven individuals for cash at $0.10 per share.

On March 3, 2006, the Company issued 100,000 shares of common stock to an individual for cash at $0.10 per share.

On April 30, 2006, the Company issued 1,860,667 shares of common stock to 24 individuals for cash at $0.30 per share.

On February 28, 2007, the Company issued 10,914,603 shares of common stock pursuant to the completion of the merger with Worldbid.

On March 23. 2007, the Company issued 1,032,000 units at a price of $1.50 per unit, each unit consisting of one share of common stock and one half of one share purchase warrant. Each whole warrant entitles the holder to purchase on additional share of common stock at a price of $1.75 per share, for a one year period from the date of issuance of the units. The Company recorded a discount of $763,800 to reflect the difference between the offering price and the market price on the date the offering was entered into.

xiii

On October 12, 2007, the Company issued 200,000 common shares pursuant to an oil and gas property agreement. The fair value of the issuance was $92,000

On November 30, 2007, the Company issued 100,000 common shares pursuant to on investor relations agreement. The fair value of the issuance was $57,000.

On April 2, 2008, the Company issued 50,000,000 common shares to May Petroleum Inc. (“May”) pursuant to an oil and gas property agreement. The fair value of the issuance was $12,000,000. (Note 6)

On April 2, 2008, the Company issued 1,000,000 common shares as commission in connection with the oil and gas property acquired on April 2, 2008 from May Petroleum Inc. The fair value of the issuance was $360,000. (Note 6)

CAPITAL STOCK (Continued)

Common and Preferred Stock (Continued)

On August 6, 2008, the Company completed a private placement of 8,660,000 shares of common stock at a price of $0.25 per share for gross proceeds of $2,165,000.

On September 8, 2008, the Company issued 1,000,000 common shares pursuant to an investor relations contract.

On October 14, 2008, the Company completed a private placement of 1,600,000 units at a price of $0.10 per unit for aggregate proceeds of $160,000. Each unit comprises one common share and one share purchase warrant. Each warrant entitles the holder to acquire one common share at $0.12 until October 13, 2010.

The fair value of the warrant is $78,600 based on the Black-Scholes pricing model. The fair value of the warrant is estimated on the date of closing using the Black- Scholes option pricing model with the following weighted average assumptions:

On January 14, 2009 the Company completed a private placement of 1,200,000 common shares at a preice of $0.25, fof gross proceeds of $300,000.