UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

(Mark One)

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THESECURITIES EXCHANGE ACT OF 1934

OR

[   ]X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended ____________________________
September 30, 2009

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

OR

[X]   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER:______________

ADIRA ENERGY LTD.
(Formerly AMG OIL LTD.Oil Ltd.)
(Exact name of Registrant as specified in its charter)

Not applicable
(Translation of Registrant’s name into English)

Canada
(Jurisdiction of incorporation or organization)

Suite 901, 30 St. Clair Avenue West
Toronto, Ontario, Canada, M4V 3A1

(Address of principal executive offices)

Alan Friedman
Suite 901, 30 St. Clair Avenue West
Toronto, Ontario, Canada, M4V 3A1
Telephone: +1 416 250 1955
Facsimile: +1 416 250 6330

E-mail: afriedman@adiraenergy.com
(Name, Telephone, Email and/or Facsimile number and Address of
Company Contact Person)

Securities registered or to be registered pursuant to section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Common Shares
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

- 1 -

N/A
(Title of Class)

- 1 -

The number of outstanding shares of each of the issuer’s classes of capital or common stock as of September 1,30, 2009
was 62,240,00162,640,001 common shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [   ]    No [X]

If this report is an annual or a transition report, indicate by check mark if the registrant is not required to file reports pursuant
pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934.

Yes [   ]       [X]No [   ]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]    No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [   ]        Accelerated filer [   ]        Non-accelerated filer [X]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow.

Item 17 [X]    Item 18 [   ]

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

Yes [   ]    No [   ]  N/A[X]

__________

2

TABLE OF CONTENTS

__________

3

GENERAL

This Form 20-F is filed as a “Form 20-F Shell Company Report”an annual report by AMG Oil Ltd. following the completion of the acquisition of Adira Energy Corp. on August 31, 2009, as a result of which AMG Oil ceased to be a “shell company”, as defined in Rule 12b-2 ofunder the Exchange Act.

In this Form 20-F, references to:

• “AMG” Adira” means AMG Oil Ltd.,Adira Energy Ltd, a Canadian federal corporation (formerly AMG Oil Ltd)

• “Adira”Adira Group” means Adira Energy Ltd (formerly AMG Oil Ltd) together with its wholly owned subsidiaries Adira Energy Holdings Corp., Adira Israel Ltd and Adira ServiceEnergy Services Ltd.

• “Adira EnergyEnergy” means Adira Energy Holdings Corp., an Ontario corporation (formerly Adira Energy Corp.)

• “Adira IsraelIsrael” means Adira Energy Israel Ltd., an Israel corporation

• “Adira ServiceServices” means Adira Israel Energy ServiceServices Ltd., an Israel corporation

• “We”, “us”, “our”, and the “Company” meanmeans Adira Group

• “AMG” refers to AMG together withOil Ltd. which was the name of the Company prior to its change of name to Adira Energy Ltd on December 17, 2009

AMGAdira has historically used U.S. dollar as its reporting currency. Adira Energy has historically used Canadian dollars as its reporting currency. All references in this document to “dollars” or “$” are to United States dollars and all references to “CDN$” are to Canadian dollars, unless otherwise indicated.

Except as noted, the information set forth in this Form 20-F is as of September 1,December 31, 2009 and all information included in this document should only be considered correct as of such date.

NOTE REGARDING FORWARD LOOKING STATEMENTS

Much of the information included in this Form 20-F includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. These statements relate to future events or our future financial performance. In some cases you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue or the negative of those terms or other comparable terminology. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Such estimates, projections or other forward looking statements involve various risks and uncertainties and other factors, including the risks in the section titled “Risk Factors” below, that may cause our actual results, levels of activities, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform those statements to actual results.

- 4 -

The statements contained in Item 4.B. – the “Business Overview”, Item 5 – “Operating and Financial Review and Prospects” and Item 11 – “Quantitative and Qualitative Disclosures About Market Risk” are inherently subject to a variety of risks and uncertainties that could cause actual results, performance or achievements to differ significantly.

- 5 -

PART IITEM 1

Not applicable

ITEM 1           IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

A.           Directors and Senior Management

The names, business addresses and functions of our directors and senior management are:

- 6 -

B.           Advisers2

Not applicable.

C.           Auditor

The names and addresses of our auditors for each of the three preceding years and their governing professional body memberships are:

- 7 -

ITEM 2           OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.applicable

ITEM 3               KEY INFORMATION

A.        Selected Financial Data

AMG OilAdira Energy Ltd.

On August 31, 2009, Adira acquired Adira Energy by issuing 39,040,001 common shares of Adira to Adira Energy’s shareholders on a one for one basis. As the shareholders of Adira Energy obtained control of Adira, the share exchange is considered to be a reverse takeover transaction. Accordingly, for accounting purposes Adira Energy is the acquirer.

The selected historical financial information presented in the table below for the 175-day period ended September 30, 2009, comprises the operating data of Adira Energy and its subsidiary companies from April 8, 2009 (date of incorporation of Adira Energy) and that of Adira (formerly AMG Oil Ltd) from September 1, 2009. The selected historical information for each of the fiscal years ended September 30, 2008, 2007, 2006 2005 and 20042005 is derived from the audited consolidated financial statements of the Company.Adira (formerly AMG Oil Ltd) for those periods. The audited consolidated financial statements of Adira (formerly AMG Oil Ltd) for the fiscal years ended September 30, 2008, 2007 and 2006 are included in AMG’sits annual report on Form 20-F for the year ended September 30, 2008. The audited consolidated financial statements of Adira (formerly AMG Oil Ltd) for the fiscal yearsyear ended September 30, 2005 and 2004 areis included in previous filings. The selected financial information presented below should be read in conjunction with AMG’sthe audited consolidated financial statements and the notes thereto of Adira Group, and with the information appearing under the headings, “Information on the Company” and “Operating and Financial Review and Prospects”.

Under US GAAP (in US$)

- 6 -

We have never declared or paid any cash or other dividends.

- 8 -

Adira Energy Corp.

The selected historical financial information presented in the table below for the period ended April 30, 2009 is derived from the audited consolidated financial statements of Adira Energy included herein. The selected financial information presented below should be read in conjunction with the Adira Energy’s audited consolidated financial statements and the notes thereto, and with the information appearing under the headings, “Information on the Company” and “Operating and Financial Review and Prospects”.

Under US GAAP (in CDN $)

Adira Energy has never declared or paid any cash or other dividends.

Exchange Rate

The exchange rate between the Canadian dollar and the U.S. dollar was CDN$1.10481.0466 per US$1.00 (or US$0.90510.9555 per CDN$1.00) as of September 2,December 31, 2009.

The average exchange rates for the financial years of the Company listed above (based on the average exchange rate for each period using the average of the exchange rates on the last day of each month during the period in accordance with the exchange rates provided by the Bank of Canada are as follows:

The high and low exchange rates between the Canadian dollar and the U.S. dollar for the past six months (provided by the Bank of Canada) are as follows:

- 97 -

B.        Capitalization and Indebtedness

Information regarding the capitalization and indebtedness will be provided by an amendment to this Form 20-F.Not Applicable

C.        Reasons for the Offer and Use of Proceeds

Not applicable.

D.        Risk Factors

An investment in our Securities is highly speculative and involves a high degree of risk. Our Company may face a variety of risks that may affect our operations or financial results and many of those risks are driven by factors that we cannot control or predict. Before investing in our Company's Securities Investors should carefully consider the following risks. If any of the following risks actually occurs, our Company's business, prospects, financial condition and results of operations could be materially adversely affected. In that case, investors may lose all or a part of their investment.

Risks Associated with the Company

Our independent auditors have referred to circumstances which might result in doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Adira Energy incurred a net loss of CDN $807,385$1,368,627 for the 175-day period ended AprilSeptember 30, 2009. At AprilSeptember 30, 2009, Adira Energy had an accumulated deficit of CDN $807,385.$1,368,627. These circumstances raise doubt about our ability to continue as a going concern, as described in the Note 1 to our consolidated financial statements for the period ended AprilSeptember 30, 2009, which are included herein. Although our consolidated financial statements refer to circumstances which might raise doubt about our ability to continue as a going concern, they do not reflect any adjustments that might result if we are unable to continue our business.

We are an early-stage oil and gas exploration company without revenues. Our ability to continue in business depends upon our continued ability to obtain significant financing from external sources and the success of our exploration efforts and any production efforts resulting therefrom, none of which can be assured.

We are an early-stage oil and gas exploration company without any revenues, and there can be no assurance of our ability to develop and operate our projects profitably. We have historically depended entirely upon capital infusion from the issuance of equity securities to provide the cash needed to fund our operations, but we cannot assure you that we will be able to continue to do so. Our ability to continue in

- 10 -

business depends upon our continued ability to obtain significant financing from external sources and the success of our exploration efforts and any production efforts resulting therefrom. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and could have a significant negative effect on our business plans and operations, including our ability to continue our current exploration activities.

While we may in the future generate additional working capital through the development, operation, sale or possible syndication of our current property or any future properties, there is no assurance that our Company will be successful in generating positive cash flow, or if successful, that any such funds

- 8 -

will be available for distribution to shareholders or to fund further exploration and development programs.

We have had negative cash flows from operations, and our current resources are not sufficient to fund our operations on an ongoing basis. Our business operations may fail if our actual cash requirements exceed our estimates and we are not able to obtain further financing.

We will require significant capital to complete our seismic surveys, drill test wells, and to build the necessary infrastructure to commence operations if our exploration activities result in the discovery of sufficient oil and gas reserves to justify their exploitation and development.

Our Company has had negative cash flows from operations. Since inception, we have not earned any revenues from operations, and due to the length of time between the discovery of oil and gas reserves and their exploitation and development, we do not anticipate earning revenues from operation in the near future. To date, we have incurred significant expenses. As at September 1,30, 2009, we had cash and equivalents on hand of US$2.6 million.$2,354,628. We have sufficient funds to complete preliminary exploration on our Hula property in Israel, as outline in the plan of operations described herein. However, we anticipate that we will have to seek additional financing to fund the advanced exploration on our property, if warranted. Further, we cannot assure you that our actual cash requirements will not exceed our estimates, and in any case we will require additional financing to bring our interests into commercial operation, finance working capital, meet our contractual minimum expenditures and pay for operating expenses and capital requirements until we achieve a positive cash flow. Additional capital also may be required in the event we incur any significant unanticipated expenses.

In light of our operating history, and under the current capital and credit market conditions, we may not be able to obtain additional equity or debt financing on acceptable terms if and when we need it. Even if financing is available, it may not be available on terms that are favorable to us or in sufficient amounts to satisfy our requirements.

If we require, but are unable to obtain, additional financing in the future, we may be unable to implement our business plan and our growth strategies, respond to changing business or economic conditions, withstand adverse operating results, and compete effectively. More importantly, if we are unable to raise further financing when required, our planned exploration activities may have to be scaled down or even ceased, and our ability to generate revenues in the future would be negatively affected.

Our lack of diversification increases the risk of an investment in us, and our financial condition and results of operations may deteriorate if we fail to diversify.

Our business focus is on oil and gas exploration on a single propertylimited number of properties in Israel. As a result, we lack diversification, in terms of both the nature and geographic scope of our business. We will likely be impacted more acutely by factors affecting our industry or the regions in which we operate than we would if our business were more diversified. If we cannot diversify our operations, our financial condition and results of operations could deteriorate.

- 11 -

We may not effectively manage the growth necessary to execute our business plan.

Our business plan anticipates a significant increase in the number of our contractors, strategic partners and equipment suppliers. This growth will place significant strain on our current personnel, systems and resources. We expect that we will be required to hire qualified consultants and employees to help us manage our growth effectively. We believe that we will also be required to improve our management, technical, information and accounting systems, controls and procedures. We may not be able to maintain the quality of our operations, control our costs, continue complying with all applicable regulations and

- 9 -

expand our internal management, technical information and accounting systems to support our desired growth. If we fail to manage our anticipated growth effectively, our business could be adversely affected.

All of our assets and the majority of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or some of our directors or officers.

All of our assets are located outside the United States. In addition, the majoritysome of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under United States federal securities laws against them.

As a holding company, our ability to make payments depends on the cash flows of our subsidiary.

The Company is a holding company that conducts substantially all of its operations through Adira Israel, a subsidiaryits subsidiaries incorporated outside North America. We have no direct operations and no significant assets other than the shares of Adira Israel.our subsidiaries. Therefore, we are dependent on the cash flows of Adira Israelsuch subsidiaries to meet our obligations, including payment of principal and interest on any debt we incur. The ability of Adira Israelour subsidiaries to provide us with payments may be constrained by the following factors:

• the cash flows generated by operations, investment activities and financing activities;

• the level of taxation, particularly corporate profits and withholding taxes, in Israel; and

• the introduction of exchange controls and repatriation restrictions or the availability of hard currency to be repatriated.

If we are unable to receive sufficient cash from Adira Israel,our subsidiaries, we may be required to refinance any indebtedness we incur, raise funds in a public or private equity or debt offering or sell some or all of our assets. We can provide no assurances that an offering of our debt or equity or a refinancing of our debt can or will be completed on satisfactory terms or that it would be sufficient to enable us to make payment with respect to our debt. The foregoing events could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

We have agreed to indemnify our directors against liabilities incurred by them as directors.

We have agreed to indemnify our directors from and against all costs, charges and expenses reasonably incurred by them in respect of any civil, criminal or administrative action or proceeding to which they are made a party or with which they are threatened by reason of being or having been a director of the Company, provided that (i) they have acted honestly and in good faith with a view to the best interests of the Company; and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a

- 12 -

monetary penalty, they had reasonable grounds for believing that their conduct was lawful. This indemnity may reduce the likelihood of derivative litigation against our directors and may discourage or deter our shareholders from suing our directors.

The loss of certain key management employees could have a material adverse effect on our business.

Our ability to continue the development of our assets and business and to compete with other energy companies depends, in large part, on our ability to attract and maintain qualified key personnel.

- 10 -

Competition for such personnel is intense, and we cannot assure you that we will be able to attract and retain them. Our development now and in the future will depend on the efforts of key management figures. The loss of any of these key people could have a material adverse effect on our business. We do not currently maintain key-man life insurance on any of our key employees.

We may be adversely affected by current global financial conditions.

Current global financial conditions have been characterized by increased volatility and several financial institutions have either gone into bankruptcy or have had to be rescued by governmental authorities. Access to public financing and bank credit has been negatively impacted by both the rapid decline in value of sub-prime mortgages and the liquidity crisis affecting the asset-backed commercial paper market. These and other factors may affect our ability to obtain equity or debt financing in the future on favourable terms. Additionally, these factors, as well as other related factors, may cause decreases in our asset values that may be other than temporary, which may result in impairment losses. If such increased levels of volatility and market turmoil continue, or if more extensive disruptions of the global financial markets occur, our operations could be adversely impacted and the market value of our Common Shares may be adversely affected.

Currency fluctuations could have an adverse effect on our business.

Our earnings and cash flow may also be affected by fluctuations in the exchange rate between the U.S. dollar and other currencies, such as the Israel shekel,New Israeli Shekel, the Canadian dollar and the Euro. Our consolidated financial statements are expressed in Canadian dollars.U.S.dollars. Our sales of oil and gas, if any, will be denominated in U.S. dollars, while production costs and corporate administration costs are, in part, denominated in Israel shekels and Canadian dollars.

Fluctuations in exchange rates between the U.S. dollar and other currencies may give rise to foreign exchange currency exposures, both favourable and unfavourable, which have materially impacted and in the future may materially impact our future financial results. We do not utilize a hedging program to limit the adverse effects of foreign exchange rate fluctuations.

Our financial reporting may be subject to weaknesses in internal controls.

Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. As an early-stage company, our internal controls may be weakerless formal and easier to bypass than those of more established corporations.

The Company cannot be certain that current expected expenditures and completion/testing programs will be realized.

- 13 -

The Company believes that the costs used to prepare internal budgets are reasonable, however, there are assumptions, uncertainties, and risk that may cause the Company’s allocated funds on a per well basis to change as a result of having to alter certain activities from those originally proposed or programmed to reduce and mitigate uncertainties and risks. These assumptions, uncertainties, and risks are inherent in the completion and testing of wells and can include but are not limited to: pipe failure, casing collapse, unusual or unexpected formation pressure, environmental hazards, and other operating or production risk intrinsic in oil and or gas activities. Any of the above may cause a delay in the Company’s completion program and its ability to determine reserve potential.

- 11 -

Risks Associated with Our Business

We have not discovered any oil and gas reserves, and we cannot assure you that that we or our venture ever will.

We are in the business of exploring for oil and natural gas, and the development and exploitation of any significant reserves that are found. Oil and gas exploration involves a high degree of risk that the exploration will not yield positive results. These risks are more acute in the early stages of exploration. We have not discovered any reserves, and we cannot guarantee you that we ever will. Even if we succeed in discovering oil or gas reserves, these reserves may not be in commercially viable quantities or locations. Until we discover such reserves, we will not be able to generate any revenues from their exploitation and development. If we are unable to generate revenues from the development and exploitation of oil and gas reserves, we will be forced to change our business or cease operations.

The Company might incur additional debt in order to fund its exploration and development activities, which would continue to reduce its financial flexibility and could have a material adverse effect on the Company’s business, financial condition or results of operation.

It is possible that the Company might incur debt in order to fund its exploration and development activities, which would continue to reduce its financial flexibility and could have a material adverse effect on the Company’s business, operations and results of operations and financial condition. General economic conditions, oil and gas prices and financial, , business and other factors affect the Company’s operations and future performance. Many of these factors are beyond the Company’s control. No assurances can be made that the Company will be able to generate sufficient cash flow to pay the interest on its debt or that future working capital, borrowings or equity financing will be available to pay or refinance such debt. Factors that will affect its ability to raise cash through an offering of Common Shares or other types of equity securities, or a refinancing of debt include financial market conditions, the value of its assets and performance at the time the Company needs capital. No assurances can be made that the Company will have sufficient funds to make such payments. If the Company does not have sufficient funds and is otherwise unable to negotiate renewals of its borrowings or arrange new financing, it might be required to sell significant assets. Any such sale could have a material adverse effect on the Company’s business, financial condition and results of operations.

Our assets and operations are subject to government regulation in Israel.

Our interests and operations in Israel may be affected in varying degrees by government regulations relating to the oil and gas industry. Any changes in regulations or shifts in political conditions are beyond the control of the Company may adversely affect our business. Our operations may be affected in varying degrees by new government regulations and changes to existing regulations, including those with respect to restrictions on exploration and production, price controls, export controls, income taxes, employment, land use, water use, environmental legislation and safety regulations.

- 14 -

Our future success depends upon our ability to find, develop and acquire additional oil and natural gas reserves that are economically recoverable.

In the event that we are able to find and develop oil and natural gas reserves which are economically recoverable, the rate of production from those reservoirs will decline as reserves are depleted. As a result, we must locate and develop or acquire new oil and natural gas reserves to replace those being depleted by production. We must do this even during periods of low oil and natural gas prices when it is difficult to raise the capital necessary to finance activities. Without successful exploration or acquisition activities, our reserves and revenues will decline. We may not be able to find and develop or acquire additional reserves at an acceptable cost or have necessary financing for these activities.

- 12 -

Oil and natural gas drilling is a high-risk activity.

Our future success will depend on the success of our exploration and drilling programs. In addition to the numerous operating risks described in more detail below, these activities involve the risk that no commercially productive oil or natural gas reservoirs will be discovered. In addition, we are uncertain as to the future cost or timing of drilling, completing and producing wells. Furthermore, our drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including, but not limited to, the following:

• unexpected drilling conditions;

• pressure or irregularities in formations;

• equipment failures or accidents;

• adverse weather conditions;

• inability to comply with governmental requirements; and

• shortages or delays in the availability of drilling rigs and the delivery of equipment.

If we experience any of these problems, our ability to conduct operations could be adversely affected.

The Company might not be able to determine reserve potential, identify liabilities associated with the properties or obtain protection from sellers against them, which could cause the Company to incur losses.

Although the Company believes it has reviewed and evaluated the Israel Project in a manner consistent with industry practices, such review and evaluation might not necessarily reveal all existing or potential problems. This is also true for any future acquisitions made by the Company. Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, a seller may be unwilling or unable to provide effective contractual protection against all or part of those problems, and the Company often assumes environmental and other risks and liabilities in connection with the acquired properties.

- 15 -

You should not place undue reliance on reserve information because reserve information represents estimates, and our seismic surveying is still in the preliminary stages.

There are numerous uncertainties inherent in estimating quantities of proved reserves and cash flows from such reserves, including factors beyond our control and the control of engineers. Reserve engineering is a subjective process of estimating underground accumulations of oil and natural gas that can not be measured in an exact manner. The accuracy of an estimate of quantities of reserves, or of cash flows attributable to these reserves, is a function of many factors, including, but not limited to, the following:

• available data;

• assumptions regarding future oil and natural gas prices;

• estimates of future production rates;

- 13 -

• expenditures for future development and exploitation activities; and

• engineering and geological interpretation and judgment.

Reserves and future cash flows may also be subject to material downward or upward revisions based upon production history, development and exploitation activities and oil and natural gas prices. Actual future production, revenue, taxes, development expenditures, operating expenses, quantities of recoverable reserves and value of cash flows from those reserves may vary significantly from the estimates. In addition, reserve engineers may make different estimates of reserves and cash flows based on the same available data.

The nature of oil and gas exploration makes the estimates of costs uncertain, and our operations may be adversely affected if we underestimate such costs.

It is difficult to project the costs of implementing an exploratory drilling program. Complicating factors include the inherent uncertainties of drilling in unknown formations, the costs associated with encountering various drilling conditions, such as over-pressured zones and tools lost in the hole, and changes in drilling plans and locations as a result of prior exploratory wells or additional seismic data and interpretations thereof. If we underestimate the costs of such programs, we may be required to seek additional funding, shift resources from other operations or abandon such programs.

Factors beyond our control affect our ability to market oil and gas.

Our ability to market oil and natural gas from our wells depends upon numerous factors beyond our control. These factors include, but are not limited to, the following:

• the level of domestic production and imports of oil and gas;

• the volatility of both oil and natural gas pricing;

• the proximity of natural gas production to natural gas facilities, pipelines and other means of transportation;

• the availability of pipeline capacity or other means of transportation;

• the demand for oil and natural gas by utilities and other end users;

- 16 -

• the availability of alternate fuel sources;

• the effect of inclement weather; and

• government regulation of oil and natural gas marketing.

If these factors were to change dramatically, our ability to market oil and natural gas or obtain favorable prices for our oil and natural gas could be adversely affected.

Prices and markets for oil are unpredictable and tend to fluctuate significantly, which could reduce profitability, growth and the value of our business if we or our venture ever begin exploitation of reserves.

Our future financial condition, results of operations and the carrying value of our oil and natural gas properties depend primarily upon the prices we receive for our oil and natural gas production, if any. Oil

- 14 -

and natural gas prices historically have been volatile and likely will continue to be volatile in the future, especially given current world economic conditions. Significant changes in long-term price outlooks for crude oil could by the time that we start exploiting oil and gas reserves, if we ever discover and exploit such reserves, could have a material adverse effect on revenues as well as the value of licenses or other assets.

Our future cash flow from operations, if any, will be highly dependent on the prices that we receive for oil and natural gas. This price volatility also affects the amount of our cash flow available for capital expenditures and our ability to borrow money or raise additional capital. The prices for oil and natural gas are subject to a variety of additional factors that are beyond our control. These factors include:

• the level of consumer demand for oil and natural gas;

• the domestic and foreign supply of oil and natural gas;

• the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;

• the price of foreign oil and natural gas;

• the price and availability of alternative fuel sources;

• governmental regulations;

• weather conditions;

• market uncertainty;

• political conditions in oil and natural gas producing regions, including Israel and the Middle East;

• war, or the threat of war, in oil producing regions; and

• worldwide economic conditions.

These factors and the volatility of the energy markets generally make it extremely difficult to predict future oil and natural gas price movements with any certainty. Also, oil and natural gas prices do not necessarily move in tandem. Declines in oil and natural gas prices would not only reduce revenue, but

- 17 -

could reduce the amount of oil and natural gas that we can produce economically and, as a result, could have a material adverse effect upon our financial condition, cash flows, results of operations, oil and natural gas reserves, the carrying values of our oil and natural gas properties and the amounts we can borrow under any bank credit facilities we may obtain in the future.

Even if we discover and then develop oil and gas reserves, we may have difficulty distributing our production.

If our exploration activities result in the discovery of oil and gas reserves, and if we are able to successfully develop and exploit such reserves, we will have to make arrangements for storage and distribution of oil and gas. We would have to rely on local infrastructure and the availability of transportation for storage and shipment of oil and gas products, but any readily available infrastructure and storage and transportation facilities may be insufficient or not available at commercially acceptable terms. The marketability of our production depends in part upon the availability, proximity, and capacity of oil and natural gas pipelines, crude oil trucking, natural gas gathering systems and processing facilities.

- 15 -

This could be particularly problematic to the extent that operations are conducted in remote areas that are difficult to access, such as areas that are distant from shipping or pipeline facilities. Furthermore, weather conditions or natural disasters, actions by companies doing business in one or more of the areas in which we or our venture will operate, or labor disputes may impair the distribution of oil and gas. These factors may affect the ability to explore and develop properties and to store and transport oil and gas and may increase our expenses to a degree that has a material adverse effect on operations.

Our inability to obtain necessary facilities could hamper our operations.

Oil and gas exploration activities depend on the availability of equipment, transportation, power and technical support in the particular areas where these activities will be conducted, and our access to these facilities may be limited. Demand for such limited equipment and other facilities or access restrictions may affect the availability of such equipment to us and may delay exploration and development activities. The quality and reliability of necessary facilities may also be unpredictable and we may be required to make efforts to standardize our facilities, which may entail unanticipated costs and delays. Shortages or the unavailability of necessary equipment or other facilities will impair our activities, either by delaying our activities, increasing our costs or otherwise.

Our success depends on our ability to attract and retain qualified personnel

Recruiting and retaining qualified personnel is critical to our success. The number of persons skilled in the acquisition, exploration and development of oil and gas properties is limited and competition for such persons is intense. As our business activity grows, it will require additional key financial, administrative and mining personnel as well as additional operations staff. Although we believe that we will be successful in attracting, training and retaining qualified personnel, there can be no assurance of such success. If we are not successful in attracting and training qualified personnel, the efficiency of our operations could be affected, which could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

We face strong competition from other energy companies that may negatively affect our ability to carry on operations.

We operate in the highly competitive areas of oil and natural gas exploration, development and production. Factors which affect our ability to successfully compete in the marketplace include, but are not limited to, the following:

• the availability of funds and information relating to a property;

- 18 -

• the standards established by us for the minimum projected return on investment;

• the availability of alternate fuel sources; and

• the intermediate transportation of gas.

Our competitors include major integrated oil companies, substantial independent energy companies, affiliates of major interstate and intrastate pipelines, and national and local natural gas gatherers. Many of these competitors possess greater financial and other resources than we do.

Operating hazards may adversely affect our ability to conduct business.

Our future operations, if any, will be subject to risks inherent in the oil and natural gas industry, including, but not limited to, the following:

- 16 -

• blowouts;

• cratering;

• explosions;

• uncontrollable flows of oil, natural gas or well fluids;

• fires;

• pollution; and

• other environmental risks.

These risks could result in substantial losses to us from injury and loss of life, damage to and destruction of property and equipment, pollution and other environmental damage and suspension of operations. Governmental regulations may impose liability for pollution damage or result in the interruption or termination of operations.

Losses and liabilities arising from uninsured or under-insured hazards could have a material adverse effect on our business.

If we develop and exploit oil and gas reserves, those operations will be subject to the customary hazards of recovering, transporting and processing hydrocarbons, such as fires, explosions, gaseous leaks, migration of harmful substances, blowouts and oil spills. An accident or error arising from these hazards might result in the loss of equipment or life, as well as injury, property damage or other liability. We cannot assure you that we will obtain insurance on reasonable terms or that any insurance we may obtain will be sufficient to cover any such accident or error. Our operations could be interrupted by natural disasters or other events beyond our control. Losses and liabilities arising from uninsured or underinsured events could have a material adverse effect on our business, financial condition and results of operations.

Compliance with environmental and other government regulations could be costly and could negatively impact production.

All phases of the oil and gas business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of laws and regulations. Our operations are subject to laws

- 19 -

and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. The recent trend toward stricter standards in environmental legislation and regulation is likely to continue. The enactment of stricter legislation or the adoption of stricter regulation could have a significant impact on our operating costs, as well as on the oil and natural gas industry in general.

Our existing property, and any future properties that we may acquire, may be subject to pre-existing environmental liabilities.

Pre-existing environmental liabilities may exist on the property in which we currently hold an interest or on properties that may be subsequently acquired by us which are unknown to the Company and which have been caused by previous or existing owners or operators of the properties. In such event, we may be required to remediate these properties and the costs of remediation could be substantial. Further, in such circumstances, we may not be able to claim indemnification or contribution from other parties. In the

- 17 -

event we were required to undertake and fund significant remediation work, such event could have a material adverse effect upon the Company and the value of our common shares.

Our business will suffer if we cannot obtain or maintain necessary licenses.

Our operations require licenses, permits and in some cases renewals of licenses and permits from various governmental authorities. Specifically, the licenses awarded to us by the Government of Israel have terms of three years and must renewed in order to extend the license beyond this initial term. Among other factors, our ability to obtain, sustain or renew such licenses and permits on acceptable terms is subject to change in regulations and policies and to the discretion of the applicable governments. Our inability to obtain, maintain or acquire extensions for these licenses or permits could hamper our ability to produce revenues from operations. Other oil and gas companies may seek to acquire property leases and licenses that we will need to operate our business. This competition has become increasingly intense as the price of oil on the commodities markets has risen in recent years. This competition may prevent us from obtaining licenses we deem necessary for our business, or it may substantially increase the cost of obtaining these licenses.

Penalties we may incur could impair our business.

Failure to comply with government regulations could subject us to civil and criminal penalties, could require us or our venture to forfeit property rights or licenses, and may affect the value of our assets. We may also be required to take corrective actions, such as installing additional equipment, which could require substantial capital expenditures. We could also be required to indemnify our employees in connection with any expenses or liabilities that they may incur individually in connection with regulatory action against them. As a result, our future business prospects could deteriorate due to regulatory constraints, and our profitability could be impaired by our obligation to provide such indemnification to our employees.

Strategic relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations.

Our ability to successfully acquire additional licenses, to discover reserves, to participate in drilling opportunities and to identify and enter into commercial arrangements depends on developing and maintaining close working relationships with industry participants and government officials and on our ability to select and evaluate suitable properties and to consummate transactions in a highly competitive environment. We may not be able to establish these strategic relationships, or if established, we may not be able to maintain them. In addition, the dynamics of our relationships with strategic partners may require us to incur expenses or undertake activities we would not otherwise be inclined to undertake in order to fulfill our obligations to these partners or maintain our relationships. If our strategic relationships

- 20 -

are not established or maintained, our business prospects may be limited, which could diminish our ability to conduct our operations.

Political instability or fundamental changes in the leadership or in the structure of the governments in the jurisdictions in which the Company operates could have a material negative impact on the Company.

The Company’s interests may be affected by political and economic upheavals. Although the Company currently operates in jurisdictions that welcome foreign investment and are generally stable, there is no assurance that the current economic and political situation in these jurisdictions will not change drastically in coming years. Local, regional and world events could cause the jurisdictions in which the Company operates to change the mining laws, tax laws, foreign investment laws, or to revise their policies in a manner that renders the Company’s current and future projects non-economic. Further, there

- 18 -

is always the possibility of the governments in the jurisdictions in which the Company operates deciding to nationalize the oil and gas industry, or imposing such restrictions and penalties on foreign-owned entities that the Company’s current and future projects would become uneconomic, or the Company would be prevented from selling its assets or operating its business. The occurrence of any such fundamental change could have a materially adverse effect on the Company’s business, financial condition and results of operations.

AMG Oil Ltd.We may enter into hedging agreements but may not be able to hedge against all such risks.

If the Company is able to discover commercially exploitable quantities of oil or gas and is able to enter into commercial production, tromfrom time to time the Company may enter into agreements to receive fixed or a range of prices on its oil and natural gas production to offset the risk of revenue losses if commodity prices decline; however, if commodity prices increase beyond the levels set in such agreements, the Company will not benefit from such increases. Similarly, from time to time the Company may enter into agreements to fix the exchange rate of certain currencies to US dollars in order to offset the risk of revenue losses if the other currencies increase in value compared to the US dollar; however, if other currencies decline in value compared to the US dollar, the Company will not benefit from the fluctuating exchange rate. In addition to the potential of experiencing an opportunity cost, other potential costs or losses associated with hedging include the risk that the other party to a hedge transaction does not perform its obligations under a hedge agreement, the hedge is imperfect or our hedging policies and procedures are not followed.

AMG Oil Ltd.The Company is incorporated in Canada.

The Company is a company incorporated federallyCanadian corporation governed under the Canada Business Corporations Act and as such, its corporate structure, the rights and obligations of shareholders and its corporate bodies may be different from those of the home countries of international investors. Furthermore, non-Canadian residents may find it more difficult and costly to exercise shareholder rights. International investors may also find it costly and difficult to effect service of process and enforce their civil liabilities against the Company or some of its directors, controlling persons and officers.

To the extent that the Company establishes natural gas and oil reserves, it will be required to replace, maintain or expand its natural gas and oil reserves in order to prevent its reserves and production from declining, which could adversely affect cash flows and income.

In general, production from natural gas and oil properties declines over time as reserves are depleted, with the rate of decline depending on reservoir characteristics. If the Company establishes reserves, of which there is no assurance, and is not successful in its subsequent exploration and development activities or in subsequently acquiring properties containing proved reserves, its proved reserves will decline as reserves

- 21 -

are produced. The Company’s future natural gas and oil production is highly dependent upon its ability to economically find, develop or acquire reserves in commercial quantities.

To the extent cash flow from operations is reduced, either by a decrease in prevailing production volume prices for natural gas and oil or an increase in finding and development costs, and external sources of capital become limited or unavailable, the Company’s ability to make the necessary capital investment to maintain or expand its asset base of natural gas and oil reserves would be impaired. Even with sufficient available capital, its future exploration and development activities may not result in additional proved reserves, and the Company might not be able to drill productive wells at acceptable costs.

- 19 -

Risks Associated with our Common Shares

We expect to be classed as a passive foreign investment company for United States tax purposes, which will have adverse tax consequences for all United States holders of our shares.

Due to our ownership of a currently non-operating business in Israel asAs we do not generate revenues from our sole material asset, we expect to be classified for United States income tax purposes as a passive foreign investment company. This means that any dividends we pay you will be taxed as ordinary income and not at preferential qualifying dividend tax rates, and upon any sale of our Common Shares, any capital gain will be taxed as ordinary income and not at preferential capital gains rates. This will continue to be true even after we commence active operations.

The exercise of all or any number of outstanding warrants or stock options, the issuance of any annual bonus shares, the award of any additional options, bonus shares or other stock-based awards or any issuance of shares to raise funds or acquire a business may dilute your Common Shares.

We may in the future grant to some or all of our directors, officers, insiders, and key employees options to purchase our Common Shares, bonus shares and other stock based awards as non-cash incentives to those persons. We may grant these options and other stock based awards at exercise prices equal to or less than market prices, and we may grant them when the market for our securities is depressed. The issuance of any equity securities could, and the issuance of any additional shares will, cause our existing shareholders to experience dilution of their ownership interests.

Any additional issuance of shares or decision to enter into joint ventures with other parties to raise financing or acquire other businesses through the sale of equity securities, may dilute our investors' interests in the Company, and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. Such issuance may cause a reduction in the proportionate ownership and voting power of all other shareholders. The dilution may result in a decline in the price of our Common Shares or a change in the control of the Company.

We do not expect to pay dividends for the foreseeable future.

We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their Common Shares, and shareholders may be unable to sell their shares on favorable terms or at all. We cannot assure you of a positive return on investment or that you will not lose the entire amount of your investment in our Common Shares. Prospective investors seeking or needing dividend income or liquidity should not purchase our Common Shares.

An investment in AMG Oilour Company will likely be diluted.

- 22 -

We may issue a substantial number of our common shares without investor approval to raise additional financing and we may consolidate the current outstanding common shares. Any such issuance or consolidation of our securities in the future could reduce an investor’s ownership percentage and voting rights in the Company and further dilute the value of your investment.

The value of securities issued by the Company might be affected by matters not related to the Company’s own operating performance for reasons that include the following:

• general economic conditions in Canada, the US, Israel and globally;
• industry conditions, including fluctuations in the price of oil and natural gas;
• governmental regulation of the oil and gas industry, including environmental regulation;
• fluctuation in foreign exchange or interest rates;

- 20 -

• liabilities inherent in oil and natural gas operations;
• geological, technical, drilling and processing problems;
• unanticipated operating events which can reduce production or cause production to be shut-in or delayed;
• failure to obtain industry partner and other third party consents and approvals, when required;
• stock market volatility and market valuations;
• competition for, among other things, capital, acquisition of reserves, undeveloped land and skilled personnel;
• the need to obtain required approvals from regulatory authorities;
• worldwide supplies and prices of and demand for natural gas and oil;
• political conditions and developments in Israel, Canada, the US, and globally;
• political conditions in natural gas and oil producing regions;
• revenue and operating results failing to meet expectations in any particular period;
• investor perception of the oil and gas industry;
• limited trading volume of the Common Shares;
• change in environmental and other governmental regulations;
• announcements relating to the Company’s business or the business of its competitors;
• the Company’s liquidity; and
• the Company’s ability to raise additional funds.

In the past, companies that have experienced volatility in their value have been the subject of securities class action litigation. The Company might become involved in securities class action litigation in the future. Such litigation often results in substantial costs and diversion of management’s attention and resources and could have a material adverse effect on the Company’s business, financial condition and results of operation.

- 2321 -

ITEM 4               INFORMATION ON THE COMPANY

We are Canadian corporation governed under the Canada Business Corporations Act (the “CBCA”) which conducts business as an oil and gas exploration company andwith operations in the State of Israel. We have been granted the following petroleum licenses from the State of Israel, through our wholly owned subsidiary and own petroleumIsrael:

• Eitan License No.356/”EITAN”- covering 31,060 acres (125.7 sq.km.) in the Hula Valley. We have also recently acquiredValley located in Northern Israel. The license was issued in December, 2008 for an initial three year period and may be renewed upon fulfillment of certain conditions for a further four year period;

• Gabriella License No. 378/ "Gabriella"- covering 97,000 acres (392 sq. km.) approx. 10km offshore Israel although this property is presently not materialbetween Netanya and Ashdod. The license was issued in July, 2009 for an initial three year period and may be renewed upon fulfillment of certain conditions for a further four year period; and

• Yitzhak License- covering 31,555 acres (127.7 sq.km) approx. 17km offshore Israel between Hadera and Netanya, directly to the North of and contiguous to Gabriella. The license was issued in October, 2009 for an initial three year period and may be renewed upon fulfillment of certain conditions for a further four year period

Our Gabriella License and Yitzhak License are collectively referred to as our operations. “Offshore Licenses”.

All of the licenses are subject to 12.5% royalty payable to the government of Israel.

Our business plan is to carry out exploration activities on our Eitan License in order to assess whether the property contains anyexistence of commercially exploitable quantities of oil andnatural gas. In addition, we also plan to conduct minor evaluation work on each of the Offshore Licenses to establish whether exploration is justified. We presently do not produce any oil or gas and do not earn any revenues. The Eitan License is our sole material license at present. Neither of the Offshore Licenses are presently material to the Company’s operations.

A.        History and Development of the Company

Name

Our legal and commercial name is AMG OilAdira Energy Ltd.

Principal Office

Our principal office is located at Suite 901, 30 St. Clair Avenue West, Toronto, Ontario, Canada, M4V 3A1. Our telephone number is (416) 250-6500.

Incorporation and Continuation

We are a Canadian corporation governed under the Canada Business Corporations Act (the “CBCA”).

We were incorporated on February 20, 1997 under the name “Trans New Zealand Oil Company” by filing our Articles of Incorporation with the Secretary of State of Nevada. We changed our name to “AMG Oil Ltd.” on July 27, 1998. On December 17, 2009, we changed our name to “Adira Energy Ltd.” Our fiscal year end is September 30.

- 22 -

On November 25, 2008, the Company’s shareholders approved the change of our jurisdiction of incorporation from the State of Nevada to the Canadian federal jurisdiction under the CBCA by way of continuation. The Company completed the filing of its Articles of Conversion with the Nevada Secretary of State on November 25, 2008, and the Company’s Articles of Continuance were accepted for filing by Industry Canada effective November 27, 2008. The effect of these filings was to transfer the jurisdiction of incorporation of the Company from the State of Nevada to the Canadian federal jurisdiction under the CBCA. Copies of the Articles of Conversion, Articles of Continuance, Certificate of Continuance and By-Laws, are incorporated by reference to this Form 20-F as exhibits.

The Company’s common shares remain registered under Section 12(g) of the Exchange Act after completion of the continuation as a result of the operation of Rule 12g-3 of the Exchange Act. The Company’s current trading symbol on the OTCBB is “AMGOF”.

Acquisition of Adira Energy

We completed the acquisition of Adira Energy, Corp. (“Adira Energy”), a company incorporated in the Province of Ontario, on August 31, 2009. As a result of the completion of this acquisition, we are now the owner of all the issued and outstanding shares of Adira Energy and we have ceased to be a “shell company”, as defined in Rule 12b-2 of the Exchange Act. The acquisition was completed pursuant to a securities exchange agreement dated August 4, 2009 among the Company,Adira, Adira Energy and Dennis Bennie, Ilan Diamond and Alan Friedman, as principal shareholders, and concurrent securities exchange agreements among the Company,Adira and each of the minority shareholders of Adira Energy. We issued an aggregate of 39,040,001 common shares to the shareholders of Adira Energy as consideration for the acquisition of Adira Energy.

- 24 -

Immediately prior the acquisition, Adira Energy completed a private placement (“Private Placement”Placement”) of 7,600,000 units (“Units”Units”) at a price of U.S. $0.25 per Unit. Sandfire Securities Inc. acted as lead agent to Adira Energy in connection with the Private Placement. Each Unit was comprised of one common share of Adira Energy and one-half of one share purchase warrant. The common shares and share purchase warrants issued by Adira Energy were exchanged concurrently with the closing of the Acquisition. Each resulting share purchase warrant entitles the holder to purchase one additional common share of the Company at the exercise price of U.S.$0.50$0.50 per share for a two year period following closing, expiring on August 31, 2011. In connection with the Private Placement, 455,770500,770 compensation warrants were issued to agents which will entitle the holders thereof to purchase an equal amount of common shares of the Company at the exercise price of U.S. $0.25 per common share for a two year period following closing expiring on August 31, 2011.

As consideration for the outstanding common of Adira Energy, the Company has issued an aggregate of 39,040,001 common shares and now has an aggregate of 62,240,001 issued and outstanding common shares. Additionally, 3,334,000 options and 3,845,000 warrants of Adira were exchanged for options (the “Options”) and warrants of the Company on an equivalent basis.

Concurrent with the completion of the Acquisition, Michael Hart, Michael Murphy and John Campbell, resigned from the board of the CompanyAdira and Dennis Bennie (Chair), Glen Perry, Alan Friedman and Ilan Diamond (CEO) were appointed as the new directors of the Company. It is contemplated that at the next shareholder’s meeting, subject to and upon receipt of shareholder approval, the Company will change its name to “Adira Energy Corp.”, will ratify ourAdira.

In September 2009, Adira Option Plancompleted a private placement of an additional 400,000 Units on a non-brokered basis (the “September Private Placement”) at a price of $0.25 per Unit. Each Unit comprised of one common share of Adira Energy and ratify the previously granted Options.

one-half of one share purchase warrant. Together with pre-existing cash on hand and after deducting commissions payable in connection with the Private Placement, AMG haswe had a cash and cash equivalents balance as of August 31,September 30, 2009 of approximately U.S.$2.6 million. The Company intends to use cash proceeds to immediately complete the purchase$2,354,628. Our plan of a drill rig andoperations is to commence drilling operations on its Eitan License in Northern Israel.

Adira Energy is a natural resource gas exploration and development company which has been granted a Petroleum License covering approximately 31,000 acres (125,700 dunam) in the Hula Valley located in Northern Israel. Adira Energy aims to explore and, if warranted, develop the natural gas and coal bed methane (CBM) gas field, generate gas-powered electricity, and acquire additional exploration/development licenses in the region.

Prior Operations of AMGAdira

We were previously engaged in the acquisition and, formerly, exploration of resource properties.

- 23 -

We had been inactive for approximately the last four years up until our acquisition of Adira Energy and were considered a “shell” company within the meaning assigned to that term in Rule 12b-2 of the Exchange Act prior to the acquisition of Adira Energy because we had no operations and our assets consisted solely of cash. In previous years, we had conducted oil and gas exploration activities in New Zealand but withdrew from the permit and assigned our interest to other participants in the permit during the 2003 fiscal year.

We do not receive any revenue from our discontinued oil and gas operations in New Zealand and had no significant assets, tangible or intangible except for cash on hand. We have no history of earnings and there is no assurance that our business will be profitable. As at September 30, 2008, AMG had an accumulated deficit of $3,169,899. We expect to continue incurring operating losses and accumulating deficits in future periods.

- 25 -

Reporting Issuer Status under Canadian Securities Laws

On February 1, 2006, the British Columbia Securities Commission granted our application to be designated as a reporting issuer under the Securities Act (British Columbia). Accordingly, we and our insiders became subject to the continuous disclosure requirements under the securities laws of the Province of British Columbia, Canada.

Capital Expenditures and Divestitures

During the last three fiscal years ended September 30, 2009, AMGAdira did not undertake any capital expenditures.

During the 175-day period ended AprilSeptember 30, 2009, AdiraThe Company put a deposit of $29,000$372,600 down on the purchase of drilling equipment.

Our planned capital expenditures for the next twelve months are summarized below under “Plan of Operations.Operations”. These anticipated expenditures relate to our drilling exploration program in connection with our Hula Valley property in Israel and the related purchase of drilling equipment.Israel.

Other than described above, we do not expect any significant purchases of plant and equipment or the hiring of employees within the next twelve months, unless acquired in connection with the acquisition of a business opportunity which may be identified.

Takeover Offers

We are not aware of any indication of any public takeover offers by third parties in respect of our common shares during our last and current financial years.

B.        Business Overview

PetroleumEitan License

Through our wholly owned subsidiary, Adira Energy Israel Ltd., we received a petroleum license No.356/”EITAN”its subsidiaries, the Company was granted the Eitan License from the State of Israel in the Hula Valley for a period of three years fromon December 15, 2008 to December 14, 2011.2008. The original term of the Eitan License is three years; however, the term is may be extended for an additional four years under Israeli Petroleum Law, 5712 – 1952 (the “Petroleum Law”). The area of thisthe permit is approximately 125.7 square kilometres.kilometers. The permit area is subject to a 12.5% royalty payable to the Israeli government. During this period, AdiraThe Company has a 100% working interest in the Eitan License and all wells.

The Eitan License area is situated in the Hula Valley in the upper Galilee in Israel and is committedland owned by the State of Israel. The Hula Valley is located in Northern Israel near the head of the Jordan River Valley. The valley is bordered on the west by the Naftali Mountains, to a work program as follows:the east by the Golan Heights, to the north

The Hula Valley area in which the Eitan License is located has experienced some minor shallow gas exploration but with no commercial discovery of any gas field. There is noare 142 line kilometers of seismic data available for this review. In

According to the Petroleum Law, where state land is reasonably required by the holder of a petroleum right for a petroleum purpose, such holder may make a demand from the Israel Lands Authority that the land or any right therein be leased to such holder on the conditions prescribed by the Petroleum Law and the regulations under the Petroleum Law.

The Eitan License area forms part of the lands on which Kibbutz Neot Mordechai is situated (in terms of conventional gas, therea long term lease agreement between the Kibbutz Neot Mordechai and the Israel Lands Authority). This is no well-defined prospect in the area aton which the Company anticipates focusing its work program for the next 18 months. The result of this time.

- 26 -

Through our wholly owned subsidiary,situation is that Adira Energy Israel Ltd., we received a petroleum License No. 378/ "Gabriella" offshore Israel app. – 390 square kilometres). This property is presently not materialwill have to our operations. We are presently evaluating whether to conduct preliminary exploration on this property.

Recommended Exploration Program

The target of our exploration activities will be the Esther field which is located within the area covered by our petroleum license. The Esther field has identified shallow gas and coal-bed methane (CBM) from the prior drilling of a total of 14 wells. We have determined based on the recommendations of a technical report that we have received to pursue a re-entry program to work-over and test the shallow gas in two to three shallow gas wells. If the testing of the shallow gas is successful, we plan to then design a development program based on the local market demands for the gas. For the coal-bed methane, it is recommended to test the selected shallow coal seams from 445 to 489 metres in the Esther #2 wellreach an agreement with a stimulation program (hydraulic fracture treatment using foam or water). If the testing of the coal bed methane (“CBM”) is successful, a development program can be designed in conjunction with the seismic data acquisition programKibbutz Neot Mordechai in order to determinesecure access to the areal extent ofland in question. Negotiations in connection with securing this agreement are underway and the coal-bed depositsCompany believes an agreement will be signed in the area. We plan to undertake the plan of operations provided below in order to carry out these recommendations.

Plan of Operations

Over the next 12 months, our objective is to undertake a plan of operations that will include the commencement of drilling operations on the Eitan license in the Hula valley of Northern Israel, as described in further detail in the table below. We will complete the purchase of a drill rig which will be moved to location and refurbished. Following refurbishment a drilling program encompassing re-entry into 3 existing wells and the drilling of 2 new wells (1 cored deep well down to 1090m) will commence. We estimate that the program will start in November 2009 and run 2½ to 3 months. Processing of technical data, de-watering and monitoring of well progress is likely to take around 6 months. Once results start coming forth a plan of action will be set up and designed for a follow-on program, if further exploration is warranted.

In addition to the drilling program, and budget permitting, we intend to acquire an additional 7-11km of additional 2D seismic information. This seismic will be acquired on the western side of the license and will allow us to assess possible closure to various geologic structures.

We are also presently evaluating whether to commence initial exploration work on the Gabriella license. We anticipate that this initial work, if undertaken, would mostly related to re-processing and interpretation of data on the license area. In the event that limited exploration work justifies additional spend, we will seek to engage funding joint venture partners.

Our plan of operations for the next twelve months is summarized as follows:

- 27 -

Our plan of operations, including the projected timeframe and budgeted expenditures, are subject to change. Our board of directors may determine based on the results of exploration activities or other identified opportunities `1to change our plan of operations. In addition, the risks identified above under “Risk Factors” may result in delays and costs overruns, each of which could adversely impact on our ability to complete our plan of operations within the projected timeframes and within the projected budgets.

We plan to continue future exploration based on the results of our preliminary exploration efforts. Our future exploration plans will be designed based on the results of our preliminary exploration programs. We plan to obtain geological reports on our preliminary exploration programs, which we will review in the process of determining whether to conduct advanced exploration and the nature of any advanced exploration programs. We will conduct our business activities largely through external consultants that we will retain in order to carry out our plan of operations. These consultants will include geologists and engineers with expertise in oil and gas exploration. We will also engage drilling companies and other oil and gas service provides to enable us to carry out our plan of operations.

C.           Organizational Structure

We operate:

D.           Property, Plant and Equipment

Corporate Offices

Our executives offices are comprised of approximately 400 square feet at Suite 901, 30 St. Clair Avenue West, Toronto, Ontario, Canada, M4V 3A1. The lease cost is $400 per month.

- 28 -

The following sets forth information relating to our Eitan petroleum license, which is presently our only material exploration property:

Eitan Petroleum License

Adira Israel received a petroleum license petroleum license No.356/”EITAN” from the State of Israel in the Hula Valley on December 15^th2008 (the “License”). The original term of the License is three years; however, the term is may be extended for a further four years according to Israeli Petroleum Law, 5712 – 1952 (the “Petroleum Law”).near future.

Eitan License Rights

Subject to the provisions of the Petroleum Law, the Eitan License confers upon Adira Israelthe Company the right:

• to explore for petroleum in the licensed area;

• the right to do exploration work outside the licensed area bearing on the petroleum prospects of the licensed area, to such extent and subject to such conditions as the Israeli Petroleum and Mining Commissioner (the “Commissioner”) may prescribe;

• the exclusive right to conduct tests or development drilling in the licensed area and to produce petroleum there from; and

• the right to obtain a lease after having made a discovery in the licensed area.

Under the Petroleum Law, Adira Israel,the Company, as the holder of a petroleum right, is entitled, subject to any other relevant law, to drill and search for water in the area of its petroleum right and to use the water discovered by it either by drilling for water or in any of its other operations and/or to use any other water situated in the area of its petroleum right to the extent required for its operations, provided that it does not thereby prejudice any person’s right in such water or having the benefit thereof.

Eitan License Requirements

The Eitan License is subject to the following requirements:

• Adira Israel shall commence petroleum exploration within four months from the day on which the License is granted and shall continue the same with due diligence as long as the License is in force.

• Adira Israel shall commence test drilling on the date prescribed therefore in the conditions of the license and not later than two years following the grant of the license and shall continue such drilling with due diligence until he makes a discovery. The interval between the completion of the drilling of one well and the commencement of the drilling of another well shall not exceed four months.

• Adira Israel shall submit to the Commissioner reports on the petroleum exploration carried out by him. Adira Energy may require that the information supplied in the report shall be kept secret to the extent that it relates to prospects of discovering petroleum. Furthermore, Adira Energy shall at the time of drilling, carry out tests and measurements and take samples and retain samples and forward them to the Commissioner as the Commissioner may demand, having regard to the other tests and measurements carried out by Adira Energy and to the damages which may be caused by complying with the demand.

- 2925 -

- 26 -

The report shall be accompanied by samples taken of strata penetrated and analyses of such samples and samples of all fluids entering the well with the depths and geological horizons at which they were found and analyses of all such fluids.

Recommended Exploration Program

The target of the Company’s exploration activities will be the Esther field which is located within the area covered by the Eitan License (the “Esther Field”). The Esther Field has identified shallow gas and CBM from the prior drilling of a total of 145 wellsRights(see below).The Company has determined, based on the recommendations of a technical report that it has received, to pursue a re-entry program to work-over and test the shallow gas in Landtwo to three of the previously drilled shallow gas wells. If the testing of the shallow gas is successful, the Company plans to then design a development program based on the local market demands for the gas. For the CBM, it is recommended to test the selected shallow coal seams from 445 to 489 metres in the Esther #2 well with a stimulation program (hydraulic fracture treatment using foam or water). If the testing of the CBM is successful, a development program can be designed in conjunction with the seismic data acquisition program in order to determine the areal extent of the CBM in the area. The Company plans to undertake the plan of operations provided below in order to carry out these recommendations.

Plan of Operations for the Eitan License

The plan of operations and associated cost estimate of the work program on the Eitan License is as follows:

The current cost estimate includes mobilization and de-mobilization of a drilling/completion rig to the field in the Hula Valley.

- 3027 -

The licensed area is situated inCompany’s plan of operations, including the Hula valley in the upper Galilee in Israelprojected timeframe and is land owned by the Statebudget, are subject to change. The Company’s board of Israel. According to the Petroleum Law, where state land is reasonably required by the holder of a petroleum right for a petroleum purpose, hedirectors may make a demand from the Israel Lands Authority that the land or any right therein be leased to himdetermine, based on the conditions prescribed byresults of exploration activities or other identified opportunities, to change its plan of operations. In addition, the Petroleum Lawrisks identified hereinafter (see “Risk Factors”) may result in delays and costs overruns, each of which could adversely impact on the regulations underCompany’s ability to complete its plan of operations within the Petroleum Law.projected timeframes and within the budget.

Seismic Data

The licensed area forms part of the lands on which kibbutz Naot Mordechai is situated (in terms of a long term lease agreement between the Kibbutz and the Israel Lands Authority). This is the area on which the Company anticipates focussing its work program for the next 18 months. The result of this situation is that Adira Israel will have to reach an agreement with Kibbutz in order to secure the access to the land in question. Negotiations have commenced in connection with securing this agreement.

Location of Hula Valley in Israel

The Hula Valley basin is located in Northern Israel near the head of the Jordan River Valley. The valley is bordered on the west by the Naftali Mountains, to the east by the Golan Heights, to the north by the Metulla High, and to the south by the Korazim High. The Hula Valley is some 25 km long and 6 km wide providing an area of 150 km2 (37,065 acres) at an elevation of approximately 60 meters to 70 meters above sea level. The subject permit area is 125.7 km2 and it covers roughly half of the valley.

Seismic Data

Adira Israel has reprocessed 142.9 km of seismic data. The seismic surveys were acquired over the potential hydrocarbon traps in the central and southern part of the Hula Valley Basin. The areas include the central valley in the Neot Mordechai (“NMB”) area where the Esther wells were drilled and the southern Agamon Natural Preserve (“ANB”) area where the Notera, Gonen, and Suzie wells were drilled.

Exploration History

The presence of gas was first reported in 1950 while exploringduring exploration of the valley for peat to be used for fuel. Early exploration focused on the lignite stringers. Twenty shallow boreholes were drilled ranging in depths from 72 metres (236 feet) to 175 metresmeters (574 feet). The early exploration also defined three zones or levels: Shallow (surface to 200 metresmeters (656 feet)), Medium (200 metres to 600 metres (656 to 1,968 feet)), and Deep (600 metres to 2,800 metres (1,968 feet to 9,186 feet)). These different levels were explored in four projects as follows:

- 31 -

- 28 -

Exploration Summary

Most of the wells drilled in this area encountered gas. These wells varied in depth from 146 metres (479 feet) in Esther-4 well to the deepest at 2,786 metres (9,140 feet) in Notera-3 well. During the Notera project, all drilled wells were electrically logged with also conducted composite logs. A total of 42 gas exploration wells have been drilled in the Hula Valley. In addition, 20 unlisted lignite test boreholes were drilled to an average depth of 150 metres (~500 feet) and Naphtha drilled three structural boreholes. There were no absolute open flow tests or any extended tests to indicate or support a commercial discovery. However, coal seams have been identified in some of the wells to provide some data for potential coal-bed methane potentials.

Geology Description and Resource Estimate

The Hula Valley is a small segment of what is tectonically called the Great Rift Valley. This long complex geological feature extends from Mozambique through central Africa, the Red Sea, Israel, Lebanon, into northern Syria and terminates in the East Anatolian Fault in Turkey. Comprised of rifts, transform faults and in some places, accompanied by volcanism, this tectonic element is called the Jordan Valley System (JVS) within Israel. It is comprised of south to north; the Arava Valley, Dead Sea Rift, Jordan Valley, Sea of Galilee (Kinneret), Hula Valley and the Metulla High. At present, tectonic activity in the Jordan Valley System resulted in about 105 km of left-lateral motion along the Dead Sea Fault.

Esther Field Gas Prospect

Adira IsraelThe Company has received a technical report which has identified the Esther fieldField as a gas prospect. A total of 14 wells (1, 2, 3, 3A, 4, 4A, 5, 6, 6A, 7, 8, 8A, 11, 12 and 13) were drilled in the field with no commercial gas discovery in all depths.depths due to completion and production problems. The gas potentials in the Esther fieldField can be divided into three segments according to depths. The shallow depth is around 200 metres (650 feet) between the surface and the top of the Yarda Basalt. The middle depth is the coal beds between 400 and 1,000 metres (1,300 and 3,280 feet). The deep depth is the limestone and fracture basalts from 1,000 to 4,000 metres (3,280 and 13,000 feet). The most prospective is the gas from the coal beds between the 400 and 1,000 metres and will be discussed in the section later. Coal-bed methane (CBM) wells get more expensive, generally, with depth and the gas contents generally also increase with depth, thus the economics tend to get tighter as CBM wells get deeper. The economics of the Estimated Ultimate Recovery (EUR) of a well become problematic with low EUR and production numbers from deeper wells and often deeper CBM fields cannot be economically developed without significant production and reserves.

The electric logs of Esther 1 well has identified coal seams. To better understand CBM, tests were performed on coal samples from the continuously cored Esther 2, drilled as a twin to the Esther 1 that found coal in the Neot Mordechai area. The results were as follows:

• Interval 339 - 354 metres (1,112 – 1,161 feet) had lignite or lignitic coals. Five distinct coal beds, separated by clayey marls and carbonaceous and fossiliferous silty clays, were recognized. Minor amounts of gas were observed bubbling from the coal when the core was removed from the core barrel. There is seldom commercial below 1,0008 – 17 metres of coal in this section.

• Interval 390 - 407 metres (1,280 – 1,335 feet) was lignite. Seven distinct coal beds are within this unit. These coal beds, similar to the Unit A above are interbedded with clay and carbonaceous, fossiliferous marls. The coals have a high dirty ash with only one thin (0.05 m) clean coal seam. The coals are dull black and exhibit a minor amount of faulting. There was a noticeable increase in gas evolving from the coal upon removal from the core barrel when compared to Unit A. This section has 6 – 8 metres of coal.

- 29 -

• Interval 445 - 490 metres (1,460 - 1,608 feet) showed an increase in rank and quality over the units above. This unit has eleven different coal seams, all sub-bituminous. A dramatic increase of evolving gas over the above units was observed when the core was removed from the core barrel. This section has by far the most coal with 16 – 26 metres.

Desorption tests revealed the cores had gas contents of over 200 cuft/ton in the sub-bituminous section from 445-489 metres while the shallower, less mature coals had somewhat less gas contents. The coals from 850-1,000 metres have not been cored and tested yet.

For the CBM, the Company plans to test the 500 metre coal section in both the Esther 1 and 2 with a stimulation program. Also, drill a CBM well to the 1000 metre coal section. A production test will be completed on the 500 metre coals and all the coals will cored. Analytical testing will include gas content, coal descriptions, desorption isotherms and relative permeability. Field testing will include reservoir pressure and permeability, water saturation, desorption and gas production. If the testing of the CBM is successful, a development program can be designed in conjunction with the seismic data acquisition program in order to determine the areal extent of the CBM in the area.

To determine whether there is any potential of the shallow gas and as part of the committed work program, the technical report recommended the re-entry of the two to three shallow wells in the Esther fieldField to test for commercial gas. The re-entry would require cleaning up the formation, stimulation if required and flow test the well for an extended period of time. We planThe Company plans to undertake this exploration work as part of ourits plan of operations, as described above under “Plan“Plan of Operations”Operations for the Eitan License”.

Equipment

TheAs at the date of this report, the Company intends to completehas completed the purchase and taken possession of a drill rig and associated equipment in order to commence drilling operations on itsthe Eitan LicenseLicense.

Offshore Licenses

With respect to our Offshore Licenses, the Company is required to conduct the following work prior to October 2010:

The Company is currently formulating a work program in Northernorder to complete the above required milestones within the required timeline.

Additional Information on the Eitan License

Current well status is as follows:

- 30 -

TS-temporarily suspended
PA-plug and abandoned
GW-gas well (producing or has produced)
GW-TS-gas well then temporarily suspended
DH-TS-downhole temporarily suspended

Figure 1 (below) is a map showing the location of the wells and seismic lines.

- 31 -

- 32 -

- 33 -

C.        Organizational Structure

We operate:

• in Canada through our wholly owned subsidiary Adira Energy, an Ontario corporation incorporated on April 8, 2009; and

• in Israel, as soon as possible.through Adira Energy’s wholly owned subsidiaries, namely:

• Adira Israel, an Israel corporation; and

• Adira Services, an Israel corporation.

D.        Property, Plant and Equipment

Corporate Offices

Our executives offices are comprised of approximately 400 square feet at Suite 901, 30 St. Clair Avenue West, Toronto, Ontario, Canada, M4V 3A1. The lease cost is CDN$800 per month.

Our only material exploration property is our Eitan license which is described above.

ITEM 4A           UNRESOLVED STAFF COMMENTS

Not applicable.

- 32 -

ITEM 5               OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of the Company’s plan of operations and historical financial and operating results should be read in conjunction with:

• the audited consolidated financial statements of the CompanyAdira (formerly AMG Oil Ltd.) for the years ended September 30, 2008, 2007, and 2006, together with the notes related thereto, as filed with the Company’sAdira’s (formerly AMG Oil Ltd’s) Form 20-F for the year ended September 30, 2008 on December 22, 2008,

• the interim financial statements of the CompanyAdira (formerly AMG Oil Ltd.) for the three and nine month periods ended June 30, 2009 and 2008, as furnished with the Company’s Form 6-K filed with the SEC on September 3,8, 2009,

• the audited financial statements of Adira Energy for the 22-day period ended April 30, 2009, as filed with Adira’s Form 20-F report on September 4, 2009,

• the audited consolidated financial statements of the Company for the 175-day period ended September 30, 2009, as filed herewith, and

• Item 4 - “Information on the Company”.

- 34 -

A.        Operating Results

Summary

We completed the acquisition ofAdira acquired Adira Energy on August 31, 2009. 2009 by issuing 39,040,001 common shares of Adira to Adira Energy’s shareholders on a one for one basis. As the shareholders of Adira Energy obtained control of Adira, the share exchange is considered to be a reverse takeover transaction. Accordingly, for accounting purposes Adira Energy is deemed to be the acquirer.

Our plan of operations is to carry out the exploration business of Adira Energy and to complete the plan of operations described above in Item 4.B under “Plan of Operations”.

Results of Operations

Adira EnergyConsolidated results of operations for the 175 day period ended September 30, 2009.

Period ended April 30, 2009

Adira EnergyThe Company has not earned any revenues from operations to date.

Operating expensesThe major categories of expense are detailed as follows:

Consulting fees

Consulting fees during the 175 day period from the incorporation of Adira Energy on April 8, 2009 to Aprilended September 30, 2009 included amounts paid for corporate management services. Consulting fees included $148,152 in consulting fees paid to individuals that are directors and officers of the following:Company or to private companies that are controlled by directors and officers of the Company. Consulting fees of $32,809 were paid to former officers of the Company for the period they held office.

• AccountingStock-based compensation

  Stock based compensation during the 175 day period ended September 30, 2009 was attributable to stock options granted to our directors, officers, employees and consultants during this period.

  - 35 -

  ---

  The Company has 4 categories of stock options that have different vesting periods.

  1)	Type A Stock options vest over 2 years, with 12.5% vesting each quarter.
  2)	Type B Stock options vest 8.5% at the end of each quarter for the first two years and 8% at the end of each quarter thereafter.
  3)	Type C Stock options vest over 4 years, with 6.25% vesting at the end of each quarter
  4)	Type D Stock options vest at 12.5% each quarter and the initial amount vests on the business day immediately on which each of the optionees is elected or appointed as a director of the Corporation. In event they are not elected as a director, all options granted shall expire immediately.

  Type A, B and C stock options all begin to vest at their respective percentages three months after their grant date.

  Professional fees

  Our professional fees during the 175 day period ended September 30, 2009 included audit and tax advisory fees and legal expensesfees in connection with our corporate organization and the business combination of CDN$27,586,Adira Energy Corp (and its subsidiary companies) and AMG Oil Ltd.

• ConsultingTechnical consulting
  

  Technical consulting charges during the 175 day period ended September 30, 2009 included $75,000 in technical consulting fees of CDN $82,000, including CDN$32,000 paid to a company of which a former director under a consulting contract,

• was the president and chief operating officer and CDN$598,80020,000 in share based compensation expense attributable to the purchase of 12,000,000 common shares of Adira Energy at a price of CDN$0.0001 per share by certain directors, and

• Technicaltechnical consulting fees in connection withpaid to a private corporation controlled by an officer of the Company. These expenses relate to the Company’s exploration property totalling CDN$82,706.

AMG Oilactivities.

AMG has not earned any revenues from operations to date.Net Loss

Nine Months ended June 30, 2009 to Nine Months ended June 30, 2008

- 33 -

AMG incurredWe reported a net loss for the second quarter of the 2009 fiscal year of $39,174 (0.00 per share) compared to aand comprehensive loss of $46,389 (0.00 per share) from the third quarter of last year. For the nine month period ended June 30, 2009, AMG recorded a net loss of $130,999 (0.00 per share) compared to a net loss of $172,921 for the same period last year.

AMG’s net loss for the third quarter of the 2009 fiscal year of $39,174 (nine months: $130,999) consisted solely of General and Administrative (“G&A”) as detailed below. G&A decreased when compared to the same period last year as a result of AMG’s efforts to change AMG Oil’s jurisdiction of incorporation from the State of Nevada to the Canadian federal jurisdiction under theCanada Business Corporations Act by way of continuation during the 2008 fiscal year. G&A costs were partially offset by interest income of $404 (nine months: $9,640) compared to $7,574 (nine months: $33,164) from the same175 day period last year. Interest income decreased when compared to the same period last year as a result of the Company’s lower cash balances as well as a decrease in interest rates on the Company’s investments.

2008 Compared to 2007 and 2006

Total losses incurred by AMG since incorporation to the period ending September 30, 2008 were $3,169,899.

AMG had a net use of cash of $213,768 from operating activities for the year ending September 30, 2008 compared to a net use of cash of $30,150 for the comparable year ending September 30, 2007 (2006: $25,201), which is an increase resulting primarily from general and administrative (“G&A”) expenses. AMG’s increased G&A expenses were primarily the results of increased consulting and professional fee expenses. These costs were partially offset by interest income being received by us as detailed below.

AMG incurred a net loss for the 2008 fiscal year of $282,659 ($0.01 per share) compared to a loss of $25,330 ($0.00 per share) for the year ended September 30, 2007 (2006: $36,173, $0.00 per share),2009 of $1,368,627 which was attributable entirely to our expenses incurred during this period and a difference resulting primarily from $285,180 in G&Aforeign exchange gain of $14,708.

Office and general expenses relating to AMG’s operations, compared to $90,640

Includes expenses incurred for the year ended September 30, 2007 (2006: $68,046). AMG also recorded interest income of $40,061 in the 2008 fiscal year compared to $65,310 for the year ended September 30, 2007 (2006: $31,873).stationary, entertainment and office supplies.

B.        Liquidity and Capital Resources

Liquidity

As at JuneSeptember 30, 2009, AMGthe Companyhad $946,128$2,354,628in cash and cash equivalents and $931,474$2,250,066 in working capital. This compares to $1,104,364 in cash and cash equivalents and $1,062,473 in working capital as at September 30, 2008.

We acquired approximately $1.7 million in cash upon completion of the acquisition of Adira Energy, providing us with total cash of approximately $2.6 million as at September 1, 2009. The cash acquired was primarily attributable to the Private Placement completed by Adira Energy, as described in Item 4.A of this Form 20-F.

We presently believe that we have sufficient capital resources to fund our plan of operations for the next twelve months, as described in Item 4.B of this Form 20-F. However, we will require additional funds to continue advanced exploration of our existing exploration property or to acquire and undertake exploration of new properties that we may acquire.

- 36 -

Cash on hand is currently our only source of liquidity. We do not have any lending arrangements in place with banking or financial institutions and we do not anticipate that we will be able to secure these funding arrangements in the near future.

- 34 -

The Company has historically maintained its liquidity and has funded its operations primarily from the sale of its common shares. The Company relies on its ability to raise additional capital through the issuance of common shares, which may have a dilutive effect on the Company’s shareholders, to fund its operations. If the Company chooses to raise additional funding, the Company cannot give assurance that it will be able to secure outside sources of capital in an amount that is sufficient for it to undertake its plan of operations. In the event that future equity financing cannot be raised or negotiations for joint venture funding are not successful, our activities may be curtailed and this may adversely affect our ability to carry out exploration of our existing property and to acquire any new exploration properties. There can be no assurance that additional financing, if required, will be available to the Company on acceptable terms or at all.

Cash Flows

Adira Energy

Adira completedAs detailed in Item 4A above, the following share issuances during the period ended April 30, 2009:

• 12,000,000 common shares were issued at a priceCompany received net proceeds of CDN$0.0001 per share, and

• 10,500,000 common shares were issued at a price of CDN$0.05 per share.

Subsequent to April 30, 2009, Adira Energy completed$2,195,771 from the issuance of 7,600,000 units at a price of $0.25 per unit pursuantcommon shares during the 175 day period ended September 30, 2009.

During the 175 day period ended September 30, 2009, $372,600 was issued as deposits on equipment and $6,662 on oil and gas licenses. Equipment deposits relate to the Private Placement describedpurchase of a drilling rig in Item 4.1Israel.

Cash of this Form 20-F.

Adira Energy$359,229 was used CDN$29,000 in investingfor operating activities during the 175-day period ended April 30, 2009 in connection with a deposit on drilling equipment.

Adira Energy used cash in operating activities of CDN$73,033 during the period ended AprilSeptember 30, 2009.

Adira

The following discussion of cash flows for the years ended 2008, 2007 and 2006 relate to the cash flows of AMG Oil Ltd., the accounting acquiree, prior to the acquisition of Adira Energy.

The Company did not conduct any financing activities for the years ended September 30, 2008 and September 30, 2007. During the 2006 fiscal year, financing activities provided cash of approximately $1,500,000$1,358,957 from the issuance of common shares.

AMGAdira did not conduct any investing activities for the 2008, 2007 or 2006 fiscal years.

The net impact of all cash activities during the twelve months ended September 30, 2008 resulted in a net decrease in cash of $213,768, a net decrease in cash of $30,150 for the year ended September 30, 2007 and a net increase in cash of $1,333,756 for the year ended September 30, 2006.

Material Commitments for Capital Expenditures

As at the date of this Form 20-F, we plan to spend approximately $300,000 over the next twelve months ondo not have any material commitments for capital expenditures relating to the exploration of our Eitan petroleum license. We plan to fund this capital expenditure using our existing cash resources.expenditures.

Inflation

Inflation has not had a material impact on our operations.

- 3537 -

Foreign Currency Fluctuations

Fluctuations in foreign currency have not had a material impact on our operations.

Government Regulation

There is no governmental regulation that the Company is aware of or that would affect us, other.us.

Critical Accounting Policies of Adira Energy

Foreign Currency Translation

The financial statements of Adira EnergyCompany’s functional and reporting currency is the United States (“US”) dollar.

All transactions in currencies other than the US dollar are presented in Canadian dollars. Foreign denominated monetarytranslated as follows:

• Monetary assets and liabilities are translated to their Canadian dollar equivalent using foreignat the rate of exchange ratesin effect as at the balance sheet dates. date;

• Non-monetary items are translatedassets and liabilities, at historicalthe exchange rates. Revenuesrates prevailing on the date of the acquisition of the asset or assumption of the liabilities; and expenses are translated using average rates

• Expenses, at the rate in effect on the date of exchange during the year. transaction.

Exchange gains or losses arising from currency translation are included in operations in the determination of net income.period in which they occur.

Share-based Compensation

Compensation expense has been recordedThe Company accounts for share-based compensation using a fair value based method with respect to all stock-based payments measured and recognized, to directors, employees and non-employees. For payments of services through the issueissuance of common shares, where an intrinsicthe fair value in excessis the market price of cash consideration paid was determined at the dateshares issued by the Company or the value of issuance.the services received, depending on which is the more reliable measure.

OilFor directors and Gas Property

Adira Energy follows the full cost method of accounting for oil and gas properties whereby all costs relating to the acquisition, exploration, and development of oil and gas properties and equipment are capitalized and accumulated in cost centres by country. Such costs include lease acquisition costs, geological and geophysical expenditures, lease rentals, seismic and costs of drilling productive and non-productive wells, together with overhead expenses related to acquisition, exploration, development activities. The costs in cost centres from which there has been no commercial production are not subject to depletion until commercial production commences. Depletion is calculated using costs of acquisition, exploration, development, estimated future development as well as dismantlement and abandonment costs, net of salvage values using the unit-of production method. An assessment is performed at every reporting date to determine whether the aggregate net costs in each pre-development stage cost centre are recoverable. Costs which are unlikely to be recovered are written-off. Oil and gas properties for which there has been commercial production, are subject to a ceiling test in each reporting period to determine that the costs are recoverable and do not exceedemployees, the fair value of the properties. The costs are assessed to be recoverable ifoptions is measured at the sumdate of grant. For non-employees, the fair value of the undiscounted cash flows expected fromoptions or warrants are measured on the productionearlier of the date at which the counterparty performance is completed or the date the performance commitment is reached or the date at which the equity instruments are granted if they are fully vested and non-forfeitable. The fair value of the options or warrants are accrued and charged either to operations, oil and gas interests, or share issue costs with the offset credit to contributed surplus. For directors and employees the options are recognized over the vesting period, and for non-employees the options are recognized over the related service period. If and when the stock options are ultimately exercised, the applicable amounts of contributed surplus are transferred to share capital.

Oil and Gas Property

The Company follows the successful efforts method of accounting for its exploration activities. Under the successful efforts method, acquisition costs of proved reserves and the lower of cost and marketunproved properties are capitalized. Costs of unproved properties exceedare transferred to proved properties when proved reserves are confirmed. Exploration costs, including geological and geophysical costs, are expensed as incurred. Exploratory drilling costs are initially capitalized. If it is determined that a specific well does not contain proved reserves, the carrying valuesrelated capitalized exploratory drilling costs are charged to expense. To date all exploration costs have been charged to operations.

- 38 -

Development costs, which include the costs of wellhead equipment, development drilling costs and handling facilities, applicable geological and geophysical costs, and the costs of acquiring or constructing support facilities and equipment, are capitalized. Costs incurred to operate and maintain wells and equipment and to lift oil and gas properties.to the surface will be expensed as operating costs. If and when the Company achieves production, acquisition costs of proved properties will be depleted using the unit-of-production method based on proved reserves. Capitalized exploratory drilling costs and development costs will be depleted on the basis of proved developed reserves by area. Support facilities and equipment will be depreciated on a straight-line basis over their useful lives.

Property costs by area are reviewed for impairment at least annually to consider whether there are conditions that may indicate impairment. The carrying value of each property is compared to its net recoverable amount as estimated by quantifiable evidence of the market value of similar land or geological resources. If the carrying value ofis found to exceed the oil and gas properties is not assessed toestimated net recoverable amount, a write down will be recoverable, an impairment loss is recognized to the extent that the carrying value exceeds an estimated fair value. The fair value estimate is normally based on the sum of the discounted cash flows expected from production of proved and probable reserves at a discount rate of 10% and the lower of cost and market of unproved properties. The cash flows are estimated using forecast product prices and costs with the forecast product pricing being a constant price utilizing the actual oil price posted at April 30, 2009 and discounted using a risk-free interest rate of 10%.

Sales of oil and gas properties, whether or not being amortized currently, shall be accounted for as adjustments of capitalized costs, with no gain or loss recognized unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost centre. Abandonments of oil and gas properties shall be accounted for as adjustments of capital cost with the costs of abandoned properties being charged to the cost centre and amortized.
recorded.

C.        Research and Development, Patents and Licences

Not applicable.

- 36 -

D.        Trend Information

The Company is not aware of any trends that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. For information on risks associated to the Company refer to Item 3.D – “Risk Factors”.

E.        Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

F.        Tabular Disclosure of Contractual Obligations

AMG Oil

The following table sets forth AMG’sthe Company’s contractual obligations as at September 30, 2008:

Adira Energy

The following table sets forth Adira Energy’s contractual obligations as at April 30, 2009:2009.

- 3739 -

G.        Safe Harbor

The safe harbor provided in s. 27A of the Securities Act and s. 21E of the Exchange Act shall apply to forward-looking information provided pursuant to Item 5.E and F where applicable.

ITEM 6               DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.        Directors and Senior Management

The size of our board of directors is currently set at 4.6. All of our directors are elected annually by the shareholders and hold office until our next annual general meeting or until their successors are duly elected and qualified, unless their office is earlier vacated in accordance with the CBCA and our articles of incorporation. All of our directors are residents of Canada.incorporation

The following table sets forth information relating to our directors and senior management as at the date of this Form 20-F:

- 38 -

The following is biographical information on each of the persons listed above:

Mr. Alan Friedmanman, Executive Vice-President, and Director. Mr. Friedman became a director of the Company on August 31, 2009 prior to assuming his current post at AMG Oil Ltd. Mr. Friedman is a South African attorney and a Director of the Canada-South Africa Chamber of Business. He is the founder, President and CEO of Rivonia Capital Inc., a firm that identifies opportunities in emerging markets, and enhances value through combining quality assets, management and financial and marketing support for early stage companies in the resource sector. He was formerly the Executive Vice-President for a Canadian finance firm, through which he facilitated significant capital raising for a number of public companies.

Mr. Ilan Diamond, Chief Executive Officer and Director.Mr. Diamond became CEO and a director of the Company on August 31, 2009. Prior to becoming CEO and Director at AMG Oil Ltd., Mr. Diamond was a director at Stratus Capital LLP. Stratus Capital focused on trading of physical commodities (primarily copper and cobalt), mainly from Africa to the East. Mr. Diamond is also the former Chief Operating Officer of a large investment group with interests in resources, financial services, technology, media and consulting, and private equity specialist Buffet Investments.

Mr. Dennis Bennie, Director (Chairman). Mr. Bennie became a director of the Company on August 31, 2009. Mr. Bennie is a pioneer, entrepreneur and innovator in the Canadian technology industry. Over the past 20 years, Mr. Bennie’s entrepreneurial management has powered Mission Electronics, Ingram Canada and Delrina. Mr. Bennie entered the world of technology in 1979, when he co-founded Mission Electronics. He drove the expansion of this leading British audio equipment manufacturer to become a dominant force in the high-end stereo market. In 1997, he founded the XDL Venture Capital Fund, focusing on information technology opportunities. Mr. Bennie currently manages an experienced team investing in private equity opportunities as the XDL Capital Group. From 1988 to 1996, Mr. Bennie was CEO of Delrina Corporation, an independent software developer and publisher, which he founded, which forged the new software categories of electronic forms and PC fax communications.

Mr. Glen Perry, Chairman Technical Advisory Board,Ilan Diamond, Chief Executive Officer and Director.Mr. Diamond became CEO and a director of the Company on August 31, 2009. Prior to becoming CEO and Director at the Company, Mr. Diamond was a director at Stratus Capital LLP. Stratus Capital focused on trading of physical commodities (primarily copper and cobalt), mainly from Africa to the East. Mr. Diamond is also the

- 40 -

former Chief Operating Officer of a large investment group with interests in resources, financial services, technology, media and consulting, and private equity specialist Buffet Investments.

Mr. Alan Friedman, Executive Vice-President and Director.. Mr. PerryFriedman became a director of the Company on August 31, 2009.2009 prior to assuming his current role at the Company. Mr. Perry hasFriedman is a Masters in Petroleum Engineering fromSouth African attorney and a Director of the UniversityCanada-South Africa Chamber of Texas.Business. He is currently the Director, COOfounder, President and PresidentCEO of Zion Oil and GasRivonia Capital Inc., an oila firm that identifies opportunities in emerging markets, and gas company incorporatedenhances value through combining quality assets, management and financial and marketing support for early stage companies in Israel and listed on the NASDAQ, and formerly; consultant to Delek Drilling Ltd. (Manager), National Petroleum Limited (Officer and Director), Prairie Producing Company, Exxon Company USA (now ExxonMobil Corporation) and Energy Reserves Group (now BHP).resource sector. He was formerly the Executive Vice-President for a Canadian finance firm, through which he facilitated significant capital raising for a number of public companies.

Mr. Brook Cole,Alan Rootenberg, Chief Financial Officer. Mr. Cole becameRootenberg is a directorchartered accountant with experience in the mineral exploration and technology industries. He has served as a senior executive in a number of the Company on August 31, 2009.publicly traded companies including serving as Chief Financial Officer and consultant to OTCBB and TSXV listed mineral exploration companies. Mr. Cole isRootenberg was President and has beenChief Executive Officer of a controller of XDL Capital Corp. sincepublicly traded (TSXV) technology company from 1999 to 2007. Prior to that, Mr. Cole was the president of The Gateshead Group Inc. consulting firm for eight years.

Mr. Denny Johnson, Senior Vice-President, Exploration and Development, and Officer.Mr. Johnson became a director of the Company on August 31, 2009. Mr. Johnson has been the President of Highlands Consulting group since 2008. Prior to that, he was a drilling engineerfounding partner in a company that pioneered the development of multimedia and new media applications for Range Resources,the advertising industry. He has a natural gas producer, and a petroleum field engineer for Schlumberger, an oilfield service provider, for 3 and 4 years respectively.

Mr. Colin Kinley, Senior VP, Operations and Officer. Mr. Kinley became a directorBachelor of Commerce degree from the University of the Company on August 31, 2009. Mr. Kinley is responsible for the leadershipWitwatersrand in Johannesburg, South Africa and overall management of Kinley

- 39 -

Exploration. Prior to Kinley Exploration, Mr. Kinley worked for Saber Energy as Presidentreceived his Chartered Accountant designation in both South Africa and provided the project management skills necessary to prove up an unconventional gas field in the central Kalahari Desert in sub Saharan Africa. Prior to his employment with Saber, Mr. Kinley spent 26 years as an executive for Layne Christensen Company and its predecessor companies. He was responsible for the management of specialized engineered drilling and development projects, executive oversight of multiple service companies and exploration and production operations, both domestically and internationally.Ontario, Canada.

Mr. Daniel Bloch, Corporate Secretary.Mr. Bloch became a directorcorporate secretary of the Company on August 31, 2009. Mr. Bloch is a partner at Aird & Berlis LLP in Toronto, and member of the firm's Corporate Finance Group and the Natural Resources Team. Mr. Bloch’s practice focuses on all areas of corporate finance, mergers and acquisitions and securities law. Mr. Bloch regularly represents and provides general corporate and securities law advice to publicly and privately held corporations in a wide variety of industries. He has developed a particular expertise in advising issuers and underwriters in connection with public and private financings.

Mr. Denny Johnson, Senior Vice-President, Exploration and Development and Officer.Mr. Johnson became a director of the Company on August 31, 2009. Mr. Johnson has been the President of Highlands Consulting group since 2008. Prior to that, he was a drilling engineer for Range Resources, a natural gas producer, and a petroleum field engineer for Schlumberger, an oilfield service provider, for 3 and 4 years respectively.

Mr. Colin Kinley, Senior VP, Operations and Officer and Director. Mr. Kinley became a director of the Company on August 31, 2009. Mr. Kinley is responsible for the leadership and overall management of Kinley Exploration. Prior to Kinley Exploration, Mr. Kinley worked for Saber Energy as President and provided the project management skills necessary to prove up an unconventional gas field in the central Kalahari Desert in sub Saharan Africa. Prior to his employment with Saber, Mr. Kinley spent 26 years as an executive for Layne Christensen Company and its predecessor companies. He was responsible for the management of specialized engineered drilling and development projects, executive oversight of multiple service companies and exploration and production operations, both domestically and internationally.

Mr. Ohad Marani, Director.Mr. Marani is currently Chairman of the Board, Israel Natural Gas Lines Ltd., a company that builds and operates the natural gas pipelines and infrastructure in Israel. Since November 2008, Mr. Marani has also acted as Chairman of the Board of Alumot Investment House, a financial institution that manages provident funds, trust funds, and private investments. From March 2004 to July 2007, Mr. Marani served as Executive Chairman of the Board, Oil Refineries Ltd., the second largest industrial conglomerate in Israel whose holdings include oil refineries and petrochemical assets. The conglomerate has $4 billion annual sales volume and Mr. Marani was responsible for its privatization. Prior to March 2004, Mr. Marani served in various Israeli government ministries, including the Israel Finance Ministry, initially as head of the Budget Department and subsequently as Director General of the Israel Finance Ministry. Mr. Marani has a Masters Degree in Public Administration (major in economics and finance) from Harvard University, an MBA (majoring in finance) from Hebrew University of Jerusalem and a BA in Economics (majoring in accounting and statistics) from Hebrew University of Jerusalem.

- 41 -

No director or any member of senior management has any family relationships with any other director or manager. There is no arrangement with any major shareholder, customer, supplier or other party pursuant to which any person was selected as a director or member of senior management.

B.        Compensation

AMGExecutive Compensation

The following table sets forth the aggregate compensation paid by AMG for services rendered during the last full fiscal year ended September 30, 2008:

Adira Energy

- 40 -

The following table sets forth the aggregate compensation paid by Adira Energy for services rendered during the period ended AprilSeptember 30, 2009:

⁽¹⁾Paid to Rivonia Capital Inc.- 42 -

Compensation of DirectorsNamed Executive Officers

AMG“Named Executive Officer” means each Chief Executive Officer, each Chief Financial Officer and each of the three most highly compensated executive officers, other than each Chief Executive Officer and Chief Financial Officer, who were serving as executive officers at the end of the most recently completed fiscal year and whose total salary and bonus exceeds $150,000. Mr. Ilan Diamond acted as our Chief Executive Officer and Mr. Alan Rootenberg acted as our Chief Financial Officer during the financial period ended September 30, 2009. None of our executive officers received total compensation exceeding $150,000 during 2009.

The following table sets forth the compensation paid or awarded to the Named Executive Officers for the period ended September 30, 2009:

- 43 -

Notes:

Incentive Plan Awards

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth all awards outstanding for each of the Named Executive Officers as at September 30, 2009:

- 44 -

Note:

(1) The “value of unexercised in-the-money options” is calculated based on the difference between the closing price of US$0.30 for the Common Shares on September 30, 2009 and the exercise price of the options, multiplied by the number of unexercised options.

Incentive Plan Awards - Value Vested or Earned During the Year

No incentive plan awards are considered vested for any Named Executive Officer for the financial period ended September 30, 2009.

Director Compensation

The Company has no arrangements, standard or otherwise, pursuant to which Directors are compensated by AMGthe Company for their services in their capacity as Directors, or for committee participation, involvement in special assignments or for services as consultant or expert during the most recently completed financial year or

- 41 -

subsequently, up to and including the date of this Form 20-F, except the Rivonia Agreement described as Section 7.A Related Party Transactions.

Stock OptionsOutstanding Share-Based Awards and Option-Based Awards

AMGThe following table sets forth the value of all incentive plan awards vested or earned for each of the Directors, other than Directors who are also Named Executive Officers, for the financial period ended September 30, 2009:

- 45 -

Note:

(1) The “value of unexercised in-the-money options” is calculated based on the difference between the closing price of US$0.30 for the Common Shares on September 30, 2009 and the exercise price of the options, multiplied by the number of unexercised options.

Incentive Plan Awards - Value Vested or Earned During the Year

The following table sets forth the value of all incentive plan awards vested or earned for each of the Directors, other than Directors who are also Named Executive Officers, for the financial year ended September 30, 2009:

Note:

(1) No amounts calculated as no options had vested as at September 30, 2009.

Securities Authorized For Issuance Under Equity Compensation Plans

The Company has a stock option plan for the granting of incentive stock options to the officers, employees, consultants and directors. See Item 6E “Share Ownership – Equity Compensation Plans” for more information.

No stock options were granted by AMGthe Company during the fiscal year ended September 30, 2008. No stock options were exercised by any of the directors or executive officers of AMGthe Company during the fiscal year ended September 30, 2008. AMGThe Company granted options to purchase 3,334,000 common shares on August 31, 2009 at an exercise price of $0.25 per share, subject to various vesting provisions, to the holders of the Adira Energy options and in exchange for the cancellation of their Adira Energy option agreements.

No stockOn September 23, 2009, the Company granted options were granted by Adira Energy during the period ended April 30, 2009. to purchase 650,000 common shares at an exercise price of $0.25 per share, subject to various vesting provisions.

No stock options were exercised by any of the directors or executive officers of Adira Energy during the period ended AprilSeptember 30, 2009. Adira Energy granted options to purchase 3,334,000 common shares in August 2009 at an exercise price of $0.25 per share, subject to various vesting provisions.

- 46 -

Long-Term Incentive Plan Awards

AMG did not make any long-term incentive plan awards during the fiscal year ended September 30, 2008.

AdiraThe Company did not make any long-term incentive plan awards during the period ended AprilSeptember 30, 2009.2009 and the year ended September 30, 2008.

Pension, Retirement or Similar Benefits

We do not have any amounts set aside or accrued to provide for pension, retirement or similar benefits.

C.        Board Practices

Our Directors have served in their respective capacities since their election or appointment and will serve until our next annual general meeting or until a successor is duly elected and qualified, unless their office is earlier vacated in accordance with the CBCA and our articles of incorporation. Our officers serve at the discretion of the board.

Term of Office

All directors have a term of office expiring at our next annual general meeting, unless a director’s office is earlier vacated in accordance with our Articles or the provisions of the CBCA. All officers serve at the discretion of the Board.

As of September 1, 2009:at the date hereof:

- 42 -

Benefits on Termination of Employment

We do not have anyThe Company has an employment contractsagreement with any of our executiveits President and CEO, namely Ilan Diamond. It has verbal agreements with its other officers other than verbal agreements.and consultants. Written employment and consulting agreements are currently under negotiation.

- 47 -

We have no compensatory plan, contract or arrangement where an executive officer is entitled to receive more than $100,000 to compensate such executive officers in the event of resignation, retirement or other termination, a change of control of the Company or a change in responsibilities following a change in control, other than as described in this Form 20-F.

Audit and Compensation Committees

The Company has an audit committee and audit committee charter. A copy of the Company’s audit committee charter was filed as an exhibit to the Company’s Form 10-KSB filed for the Company’s 2003 fiscal year. The function of the audit committee is to monitor the veracity of the financial and regulatory reports produced by the Company, and the controls that are in place to ensure the opportunities for fraud or material error in the financial statements of the Company are minimized. The current audit committee is comprised of Dennis Bennie. We anticipate appointing additional members to our audit committee as we increase the size of our board of directors.

The Board has determined that Mr. Bennie meets the SEC’s definition of an “audit committee financial expert”, as defined in Item 401(e)(2) of Regulation S-B. The Board has also determined that Mr. Bennie meets the definition of an “independent director”, as defined in Rule 121A of the American Stock Exchange Company Guide.

The Company does not have a compensation committee. Currently, any material commitments, inclusive of remuneration, are required to be pre-approved by the Board.

The Company has a disclosure committee and a disclosure committee charter. Our disclosure committee is comprised of all of our officers and directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us, and the accuracy, completeness and timeliness of our financial reports.

- 43 -

D.        Employees

As at September 1, 2009 theThe Company has one employee, and receives various consulting and advisory services from consultants.

In additionWe are party to the following employment and consulting agreements:

• a contract of employment with Ilan Diamond,

• a verbal consulting agreement with Rivonia Capital Inc., a company controlled by Alan Friedman,, we have verbal contracts of employment with Ilan Diamond, and

• a verbal consulting arrangementsagreement with The M&S Group Inc., a company controlled by Alan Rootenberg,

• a verbal consulting arrangement with Highlands Consulting Group, Inc., a company controlled by Denny Johnson and

• a verbal consulting arrangement with Kinley Exploration LLC, and Brook Cole. a company controlled by Colin Kinley.

The other consulting agreements are through theour Israeli subsidiary disclosed above.subsidiary.

E.        Share Ownership

- 48 -

Shares

The shareholdings of our officers and directors are set forth below as of the date hereof.

- 44 -

(1)      Based on 62,240,001 common shares issued and outstanding as of September 1,

	(1)	Based on 62,640,001 common shares issued and outstanding as of September 30, 2009. (2)      Includes 88,667 held by spouce.
	(2)	Includes 884,667 held by spouse.

Options

Details of the stock options held by our officers and directors are set forth below as of the date hereof.

- 4549 -

Notes:

Each option may be exercised to purchase one of our common shares at the exercise price.

- 50 -

Warrants

Details of the share purchase warrants held by our officers and directors are set forth below as of the date hereof.

- 46 -

Each warrant may be exercised to purchase one of our common shares at the exercise price.

- 51 -

Equity Compensation Plans

The following table summarizes our compensation plans under which equity securities are authorized for issuance as at September 1,30, 2009.