NXT Energy Solutions (NSFDF) 10-Q 2004 Q3 Quarterly report

As filed with the Securities and Exchange Commission on August 12, 2004

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

FORM 10-Q

(Mark One)

[√]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 2004; OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _______

Commission File No. 0-24027

ENERGY EXPLORATION TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

Alberta, Canada
(State or other jurisdiction of
incorporation or organization) N/A
(I.R.S. Employer
Identification No.)

840 7^th Avenue S.W., Suite 700, Calgary, Alberta, Canada T2P 3G2
(Address of principal executive offices) (Zip Code)

(403) 264–7020
(Registrant's telephone number, including area code)

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 registration was required to file such Reports), and (2) has been subject to such filing requirements for the past 90 days:   YES  [√]   NO  [  ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  YES [  ]  NO  [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

20,295,209 common shares, no par value, as of July 31, 2004

ENERGY EXPLORATION TECHNOLOGIES INC.

INDEX TO THE FORM 10-Q

For the six month period ended June 30, 2004

			PAGE
PART I	FINANCIAL INFORMATION
	ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	3
		Consolidated Balance Sheets	3
		Consolidated Statements of Loss and Comprehensive Loss	4
		Consolidated Statements of Shareholders' Equity (Deficit)	5
		Consolidated Statements of Cash Flow	6
		Notes to the Consolidated Financial Statements	7
	ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18
	ITEM 4.	CONTROLS AND PROCEDURES	18
PART II	OTHER INFORMATION
	ITEM 1.	LEGAL PROCEEDINGS	19
	ITEM 2.	CHANGES IN SECURITIES AND USE OF PROCEEDS	20
	ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	20
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	20
	ITEM 5.	OTHER INFORMATION	21
	ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K	21
		SIGNATURE	24

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PART I
ITEM 1. FINANCIAL INFORMATION     ENERGY EXPLORATION TECHNOLOGIES INC.
Consolidated Balance Sheets
(Unaudited) (expressed in U.S. dollars except share data)
	June 30, 2004		December 31, 2003
Assets
Current assets
Cash	$	526,213	$	1,024,201
Accounts receivable		95,053		76,133
Due from officers and employees		13,808		-
Note receivable from former officer  [note 3]		43,894		43,952
Prepaid expenses		81,551		106,622
		760,519		1,250,908
Oil and natural gas properties, on the basis of full cost accounting,
net of depletion and impairments [note 4]		1,210,150		1,194,406
Other property and equipment, net of accumulated depreciation,
amortization and impairment [note 5]		182,611		190,810
	$	2,153,280	$	2,636,124
Liabilities And Shareholders' Equity
Current liabilities
Trade payables	$	464,799	$	136,098
Other accrued liabilities		67,480		78,452
Subscriptions payable [note 6]		514,921		472,501
		1,047,200		687,051
Contingencies, continuing operations and commitments [notes 1 and 10]
Shareholders' equity
Preferred shares [note 7]
Authorized: unlimited
Issued : Nil		-		-
Common shares
Authorized: unlimited
Issued : 20,039,709 and 19,306,852 at June 30, 2004 and
December 31, 2003, respectively  [note 6]		25,811,440		24,527,066
Warrants [notes 6 and 8]		-		-
Deficit		(24,865,061)		(22,855,739)
Accumulated other comprehensive income		159,701		277,746
		1,106,080		1,949,073
	$	2,153,280	$	2,636,124

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ENERGY EXPLORATION TECHNOLOGIES INC.
Consolidated Statements Of Loss And Comprehensive Loss
(Unaudited) (expressed in U.S. dollars except share data)
		Three months ended					Six months ended
		June 30					June 30
		2004			2003		2004		2003
Revenues
Net oil and natural gas revenue	$		4,813	$	-	$	21,642	$	-
Gain (loss) on sale of properties			(469)		-		27,301		-
			4,344		-		48,943		-
Operating expenses
Oil and natural gas operating expenses			1,733		-		2,389		-
Administrative [notes 6 and 11]		849,562			319,584		1,381,738		624,400
Depletion and impairment of oil and
natural gas properties [notes 4 and 12]			338		-		338		59,974
Amortization and depreciation [notes 5 and 12]			12,667		14,107		24,626		28,205
Survey operations and support		152,000			27,699		681,115		44,823
		1,016,300			361,390		2,090,206		757,402
Operating loss from continuing operations		(1,011,956)			(361,390)		(2,041,263)		(757,402)
Other income
Interest			575		530		1,168		1,017
Other			-		863		-		863
			575		1,393		1,168		1,880
Net loss for the period from continuing operations		(1,011,381)			(359,997)		(2,040,095)		(755,522)
Income (loss) from discontinued
operations [note 12]			41,805		(5,618)		30,773		192,981
Net loss for the period		(969,576)			(365,615)		(2,009,322)		(562,541)
Other comprehensive income (loss):
Foreign currency translation adjustment		(53,403)			179,713		(118,045)		323,246
Comprehensive loss for the period	$	(1,022,979)		$	(185,902)	$	(2,127,367)	$	(239,295)
Basic and diluted net loss per share from
continuing operations [note 6]	$		(0.05)	$	(0.02)	$	(0.10)	$	(0.04)
Basic and diluted loss per share [note 6]	$		(0.05)	$	(0.01)	$	(0.11)	$	(0.01)
Weighted average shares outstanding		20,008,760			16,971,153		19,823,575		16,971,153

 The accompanying notes to consolidated financial statements are an integral part of these consolidated statements of loss and comprehensive loss.

ENERGY EXPLORATION TECHNOLOGIES INC.  Consolidated Statements Of Shareholders' Equity (Deficit)  (Unaudited) (expressed in U.S. dollars except share data)			Common Shares			Preferred Shares			Warrants
		Accumulated Other Comprehensive Income (loss)	Shares		Amount	Shares		Amount	Number	Amount		Deficit
Beginning balance - December 31, 2002	$	(183,769)	16,971,153	$	23,365,426	800,000	$	730,000	-	-	$	20,041,865
Grant and vesting of options to investor      relations consultant [note 11]		-	-		17,048	-		-	-	-		-
Redemption of preferred shares		-	-		-	(800,000)		(730,000)	-	-		-
Net loss for the six months ended      June 30, 2003 on continuing operations		-	-		-	-		-	-	-		(755,522)
Gain on discontinued operations for the      six months ended June 30, 2003		-	-		-	-		-	-	-		192,981
Net other comprehensive income for the      six months ended June 30, 2004		323,246	-		-	-		-	-	-		-
Balance - June 30,2003	$	139,477	16,971,153	$	23,382,474	-	$	-	-	-	$	(20,604,406)
Beginning balance - December 31, 2003	$	277,746	19,306,852	$	24,527,066	-	$	-	7,496	-	$	(22,855,739)
Options exercised for cash at prices between       $0.38 and $2.00 per share		-	129,588		167,097	-		-	-	-		-
Issued for cash at $2.00 per share on     February 12, 2004 net of insurance costs		-	573,269		1,063,277	-		-	573,269	-		-
Issued for services at $1.80 per share on      April 18, 2004		-	30,000		54,000	-		-	-	-		-
Net loss for the six months ended       June 30, 2004 on continuing operations		-	-		-	-		-	-	-		(2,040,095)
Loss from discontinued operations for the      six months ended June 30, 2003		-	-		-	-		-	-	-		30,773
Net other comprehensive loss for the       six months ended June 30, 2004		(118,045)	-		-	-		-	-	-		-
Balance - June 30,2004	$	159,701	20,039,709	$	25,811,440	-	$	-	580,765	-	$	(24,865,061)

ENERGY EXPLORATION TECHNOLOGIES INC. 

Consolidated Statements Of Cash flow 

(Unaudited) (expressed in U.S. dollars)

		Three months ended				Six months ended
		June 30				June 30
		2004		2003		2004		2003
Operating activities
Net loss for the period from continuing operations	$	(1,011,381)	$	(359,995)	$	(2,040,095)	$	(755,522)
Amortization and depreciation of other property
and equipment		12,667		14,107		24,626		28,205
Depletion and impairment of oil and natural gas properties		338		-		338		59,973
Consulting costs settled by issuance of common stock
and options		54,000		8,519		54,000		17,048
Gain on sale of oil and natural gas properties		469		(986)		(27,301)		(12,024)
Changes in non-cash working capital
Accounts receivable		9,119		167,765		30,005		243,672
Interest accrued on loan to former employee		157		(3,876)		58		(6,935)
Due from officers and employees		6,616		(2,728)		(13,808)		77
Prepaid expenses and other		85,809		4,329		25,071		28,912
Trade payables		163,567		21,519		328,701		80,094
Other accrued liabilities		(125,685)		(18,624)		(10,972)		(31,471)
Subscriptions payable		10,001		-		42,420		-
Net cash used by operating activities		(794,323)		(169,970)		(1,586,957)		(347,971)
Financing activities
Funds raised through the sale of common shares,
net of issuance costs		(14,789)		-		1,063,277		-
Funds raised through the exercise of options		85,991		-		167,097		-
Net cash generated by financing activities		71,202		-		1,230,374		-
Investing activities
Funds invested in other property and equipment		(16,855)		(18,844)		(16,428)		(41,663)
Proceeds on sale of other property and equipment		-		-		-		1,916
Funds received (invested) in oil and natural gas properties		17,958		(241,556)		(17,305)		(380,465)
Proceeds on sale of oil and natural gas properties		(490)		69,243		28,525		86,275
Net cash generated (used ) by investing activities		613		(191,157)		(5,208)		(333,937)
Net cash generated (used) by discontinued operations		(7,120)		714,382		(18,152)		736,479
Effect of net other comprehensive income (loss)		(53,403)		179,713		(118,045)		323,246
Net cash inflow (outflow)		(783,031)		532,968		(497,988)		377,817
Cash, beginning of period		1,309,244		429,919		1,024,201		585,070
Cash, end of period	$	526,213	$	962,887	$	526,213	$	962,887
Non cash discontinued operations
Aircraft parts sold for credit with airplane
leasing company	$	48,925$		-	$	48,925$		-

The accompanying notes to consolidated financial statements are an integral part of these consolidated statements of cash flows

6

ENERGY EXPLORATION TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(expressed in U.S. dollars)
(unaudited)

1.

ORGANIZATION AND ABILITY TO CONTINUE OPERATIONS

Energy Exploration Technologies Inc. ("we","our company" or "NXT") was incorporated under the laws of the State of Nevada on September 27, 1994.

In March 2003 we divested all our U.S. properties. For reporting purposes, the results of operations and the cash flows of the U.S. properties have been presented as discontinued operations.  Accordingly, prior period financial statements have been reclassified to reflect this change.

NXT was continued from the State of Nevada to the Province of Alberta, Canada on October 24, 2003. The shareholders voted on and approved this change which moved the jurisdiction of incorporation from the U.S. to Canada. The tax effects are disclosed in the proxy statement circulated to shareholders for the Special Meeting on October 24, 2003. As a result of the continuance into Canada, our common and preferred shares no longer have a par value assigned, as is the practice in the United States. Therefore the amount that was disclosed as "Additional paid-in Capital" in prior years on the consolidated balance sheets and consolidated statements of shareholders' equity (deficit) has been added to the share issued amount. This is a legal jurisdiction reporting difference only.

We are a technology-based reconnaissance exploration company and we utilize our proprietary stress field detection (SFD) remote-sensing airborne survey technology to quickly and inexpensively identify and high-grade oil and natural gas prospects.  

We conduct our reconnaissance exploration activities, as well as land acquisition, drilling, completion and production activities through our wholly-owned subsidiary, NXT Energy Canada Inc. and we conduct the aerial surveys through our wholly owned subsidiary, NXT Aero Canada Inc.

NXT Energy USA Inc. and NXT Aero USA Inc. are two wholly owned subsidiaries through which we previously conducted our U.S. operations but these companies have been inactive since the sale of the U.S. properties in early 2003.

For the six months ended June 30, 2004, we incurred a loss of $2,127,367 and our ability to continue as a going concern will be dependent upon successfully identifying hydrocarbon bearing prospects, and financing, developing and monetizing these assets for a profit. We anticipate that we will continue to incur further losses until such time as we receive revenues from production or sale of properties with respect to currently held prospects or through prospects we identify and exploit for our own account.

We have capital commitments of $243,000 related to flow-through share obligations. We are in the midst of additional fund raising in 2004 and we believe we will be able to pursue and exploit our goals and opportunities throughout 2004 and 2005.

We can give no assurance that any or all pending projects will generate sufficient revenues to cover our operating or other costs.  Should this be the case, we would be forced, unless we can raise sufficient additional working capital, to suspend our operations, and possibly even liquidate our assets and wind-up and dissolve our company.

These consolidated financial statements are prepared using generally accepted accounting principles that are applicable to a going concern, which assumes the realization of assets and the settlement of liabilities in the normal course of operations. Should this assumption not be appropriate, adjustments in the carrying amounts of the assets and liabilities to their realizable amounts and the classification thereof will be required and these adjustments and reclassifications may be material.

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2.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We have prepared these consolidated financial statements for our three month and six month interim periods as at June 30, 2004 and ended June 30, 2004 and 2003 in accordance with accounting principles generally accepted in the United States of America for interim financial reporting.  While these financial statements for these interim periods reflect all normal recurring adjustments which, in the opinion of our management, are necessary for fair presentation of the results of the interim period, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements.  Refer to our consolidated financial statements included in our annual report on Form 10-K for our fiscal year ended December 31, 2003.

Estimates and Assumptions

The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amount of revenues and expenses during the reporting periods.  Actual results may differ from these estimates.

Stock-Based Compensation for Employees and Directors

In accounting for the grant of our employee and director stock options, we have elected to follow Accounting Principles Board Opinion No. 25,"Accounting for Stock Issued to Employees" ("APB 25"), and related interpretations. Under APB 25, companies are not required to record any compensation expense relating to the grant of options to employees or directors where the awards are granted upon fixed terms with an exercise price equal to fair value at the date of grant and the only condition of exercise is continued employment.

3.

NOTE RECEIVABLE FROM OFFICER

In September 1998, we loaned the sum of CDN $54,756 (US $35,760 as of that date) to one of our officers in connection with his relocation to Calgary, Alberta.  The interest rate averaged 5%. Pursuant to the terms of an underlying promissory note, the officer was required to repay the loan on a monthly basis, with a balloon payment due on October 3, 2003. The officer left our company in 2002 and we are pursuing repayment of the note.

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4.

OIL AND NATURAL GAS PROPERTIES

Summarized below are the oil and natural gas property costs we capitalized for the six months ended June 30, 2004 and 2003 and as of June 30, 2004 and December 31, 2003:

		Six Months				As of
		Ended June 30				June 30	December 31
		2004		2003		2004		2003
Acquisition costs	$	17,305	$	117,089	$	1,675,651	$	1,658,346
Exploration costs		-		590,286		8,257,804		8,257,804
Development Costs		-		-		83,234		83,234
Oil and natural gas properties		17,305		707,375		10,016,689		9,999,384
Less impairment		-		(354,992)		(6,977,395)		(6,977,395)
Less dispositions		(1,223)		(1,363,219)		(1,671,393)		(1,670,170)
Less depletion		(338)		(16,424)		(157,751)		(157,413)
Net oil and natural gas properties	$	15,744	$	(1,027,260)	$	1,210,150	$	1,194,406

Net oil and natural gas property costs at June 30, 2004 and December 31, 2003 are all Canadian unproved properties.  At June 30, 2004 there were no impairments of our Canadian full cost center.

The impairment amounts in the table above of oil and natural gas properties also include the write-down of the cost of drilling and completing wells which are either non-commercial or which we are unable to complete for technical reasons. While, as noted below, our management believes in the prospective commercial viability and non-impairment of the overall prospects of which each of these wells are a part and is continuing active exploration and development activities with respect to each of these prospects, we have nevertheless written-off these individual well costs as an impairment cost since this determination was made prior to the establishment of proved reserves.

At the end of each quarter, our management performs an overall assessment of each of our unproved oil and natural gas properties to determine if any of these properties has been subject to any impairment in value.  Based upon these evaluations, our management has determined that each of our oil and natural gas properties continued to have prospective commercial viability as of these dates.    While we are currently conducting active exploration and development programs with respect to each of these unproved oil and natural gas properties, we anticipate that all of these properties will be evaluated and the associated costs transferred into the amortization base or be impaired over the next five years.

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5.

OTHER PROPERTY AND EQUIPMENT

Summarized below are our capitalized costs for other property and equipment as of June 30, 2004 and December 31, 2003:

		June 30	December 31
		2004	2003
Computer and SFD equipment	$	324,119	$	330,596
Computer and SFD software		139,573		142,238
Equipment		85,677		86,046
Furniture and fixtures		200,606		187,588
Leasehold improvements		231,806		238,475
SFD survey system (including software)		127,845		127,845
Tools		1,844		1,897
Vehicle		18,828		18,828
Flight Equipment		1,342		1,380
Other property and equipment		1,131,640		1,134,893
Less accumulated depreciation, amortization and impairment		(949,029)		(944,083)
Net other property and equipment	$	182,611	$	190,810

6.

COMMON SHARES

We calculate basic earnings per common share from continuing operations using net income from continuing operations, net of income taxes, divided by the weighted average number of common shares outstanding. We calculate basic earnings per common share using net income attributable to the common shareholders and the weighted average number of common shares outstanding. We calculate diluted earnings per common share from continuing operations and diluted earnings per common share in the same manner as basic, except we use the weighted-average number of diluted common shares outstanding in the denominator.

In calculating diluted earnings per common share for the six month periods ended June 30, 2004 and 2003, we excluded all options and warrants, either because the exercise price was greater than the average market price of our common shares in those quarters or the exercise of the options or warrants would have been anti-dilutive. During these periods, outstanding stock options and warrants were the only potentially dilutive instruments.

On February 12, 2004, we raised $1,143,633 in gross proceeds through a private placement of 573,269 units. Each unit consisted of a common share at $2.00 ($2.60 CDN) per share and a warrant with a strike price of $2.75 and a one year life.  Net proceeds to our company were $1,063,277 after deducting $80,356 in offering expenses and finders' fees. In addition, we had also received $514,921 in gross proceeds at June 30, 2004 for which shares had not been issued at June 30, 2004 and this amount is shown as subscriptions payable on the balance sheet.

On April 18, 2004 we issued 30,000 common shares in full payment of an invoice for $54,000 for services provided by a consultant to NXT to assist us with corporate strategy and planning.

7.

PREFERRED SHARES

The preferred shares are not entitled to payment of any dividends, although they are entitled under certain circumstances to participate in dividends on the same basis as if converted into common shares.  Preferred shares carry liquidation preferences should our company wind-up and dissolve.  

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The preferred shares were all returned to treasury effective May 9, 2003 as part of the compensation received for the sale of the U.S. properties.

8.

PERFORMANCE WARRANTS

On August 1, 1996, we granted a performance-based contractual right to acquire NXT warrants to the licensor of our SFD technology, Momentum Resources Corporation ("Momentum Resources"), in connection with the amendment of our exclusive SFD technology license with Momentum Resources to use the SFD technology for hydrocarbon exploration.  The initial term of the Agreement expires on December 31, 2005. However, it renews automatically for additional one year terms unless we give written notice to Momentum Resources no later than 60 days prior to the expiration of the pending term of our election not to automatically renew the Agreement.   Pursuant to this contractual right, Momentum Resources is entitled to a separate grant of warrants entitling it to purchase 16,000 common shares at the then current trading price for each month after December 31, 2000 in which production from SFD-identified prospects during that month exceeds 20,000 barrels of hydrocarbons.  Momentum Resources has not earned any warrants under the SFD technology license as of June 30, 2004.

9.

EMPLOYEE AND DIRECTOR OPTIONS

We have summarized below all outstanding options under our various stock option plans and arrangements as of June 30, 2004:

		As of June 30, 2004
Stock Option Plan	Grant Date	Exercise Price		Outstanding	Vested
Independent Grants
	January 4, 2001	$	2.00	15,000	15,000
	June 24, 2003	$	0.38	75,000	75,000
1997 Employee Stock Option Plan
	December 27, 2000	$	4.13	10,000	6,000
	January 4, 2001	$	2.00	180,750	154,750
	May 15, 2001	$	2.50	120,000	120,000
	July 5, 2001	$	2.00	25,000	10,000
	August 13, 2002	$	0.38	70,002	3,332
	September 20, 2002	$	0.29	7,000	1,666
	March 27, 2003	$	0.14	60,000	20,000
	September 8, 2003	$	0.43	270,000	-
2000 Directors Stock Option Plan
	February 15, 2000	$	2.00	15,000	15,000
	April 17, 2000	$	2.00	30,000	30,000
	August 13, 2002	$	0.38	120,000	39,999
	September 20, 2002	$	0.29	10,000	3,333
	September 8, 2003	$	0.43	160,000	-
				1,167,752	494,080

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The employee options outstanding as of June 30, 2004 will vest over the next three years, based upon the continued provision of services as an employee or consultant. The options vest one-third each on the first through third anniversaries of the grant date, respectively, based upon the continued provision of services. The options generally lapse, if unexercised, five years from the date of vesting.

10.

COMMITMENTS AND CONTINGENCIES

We have a sub-lease which ends January 31, 2005.  The space is approximately 6,600 square feet and our monthly cost is about $13,100 CDN. We are currently considering office alternatives.

On November 27, 2002, we were served a Statement of Claim which had been filed on November 25, 2002, in the Court of Queen's Bench of Alberta, Judicial District of Calgary (Action No. 0201-19820), naming Energy Exploration Technologies Inc. and George Liszicasz as defendants.  Mr. Dirk Stinson, the plaintiff, alleges that NXT failed to pay him compensation under a consulting agreement and further alleges that NXT, without lawful justification, obstructed Mr. Stinson from trading his shares of NXT.  At the time of the filing of this suit, Mr. Stinson was a major shareholder of our common stock.  He is a past President and director of NXT and is currently a director and shareholder of Momentum Resources.  Mr. Stinson was seeking, among other things, damages in the amount of $1,614,750 and an injunction directing NXT to instruct our transfer agent to immediately remove the legend from Mr. Stinson's shares.  On December 10, 2002, we filed our Statement of Defence.  On July 14, 2003, we received notice that the plaintiff had dropped all claims except for a claim for $74,750 plus interest for compensation under a consulting agreement.  

We believe the claim against us is without merit and intend to vigorously defend ourselves against the claim and are seeking an expeditious dismissal of the claim.

On March 18, 2003, we were served a Statement of Claim which had been filed on March 14, 2003, in the Court of Queen's Bench of Alberta, Judicial District of Calgary (Action No. 0301-04309), naming Glen Coffey, Murray's Aviation Repairs (1980) Ltd., Energy Exploration Technologies, its wholly-owned subsidiary, NXT Energy Canada, Inc., Dennis Wolsky, as Administrator of the Estate of Jerry Wolsky, deceased and Embassy Aero Group Ltd. as defendants.  Tops Aviation Ltd., Spartan Aviation Inc. and John Haskakis (the "Plaintiffs") allege that the defendants were negligent and in breach of a Ferry Flight Contract between one or some of the defendants and one or some of the Plaintiffs under which Mr. Jerry Wolsky was to deliver a Piper Twin Comanche aircraft to Athens, Greece.  The aircraft crashed in Newfoundland enroute to Athens killing Mr. Wolsky. The Plaintiffs are seeking, among other things, damages in the amount of $450,000 CDN or loss and damages to the aircraft and cargo; and damages in respect to search and rescue expenses, salvage, storage, transportation expenses and pollution and contamination expenses.

Neither we nor our subsidiary, NXT Energy Canada Inc., were parties to the Ferry Flight Contract.  We believe the claim against us and our subsidiary is without merit and intend to vigorously defend ourselves against the claim and are seeking an expeditious dismissal of the claim.

11.

INVESTOR RELATIONS OPTIONS

On May 15, 2001, as additional compensation to our investor relations consultant pursuant to an investor and public relations services agreement, we granted that consultant options to purchase 155,000 common shares at $2.50 per share.  The underlying agreement provided that 50,000 options would vest immediately, and an additional 35,000 options would vest upon each of the first, second and third anniversary dates of the agreement, respectively, even if the agreement was not subsequently renewed so long as the agreement has not been terminated by either party prior to the end of the termination of the prior term or NXT has not terminated this agreement for "good cause" as defined in the agreement.  These options lapse, to the extent vested and unexercised, five years after the date of vesting.  

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12.

DISCONTINUED OPERATIONS

In January 2003, we adopted a formal plan to divest our U.S. oil and gas properties. On May 9, 2003 we closed a sale transaction with our U.S. joint venture partner to sell the properties for total consideration of $1,450,000 with proceeds of $720,000 in cash and the return to treasury of all the outstanding preferred shares.  The effective date of the transaction was March 1, 2003 and was recorded at market value.  For reporting purposes, the results of operations and the financial position of the properties have been presented as discontinued operations.

The gain in 2004 from discontinued operations amounted to $30,773 and was a gain on the sale of aircraft equipment which had previously been written off.

13.

SEGMENT INFORMATION

We operate in only one business segment, oil and natural gas exploration.  We intend to develop all oil and natural gas exploration prospects identified using our proprietary SFD airborne survey technology either directly or with joint venture partners.

Summarized below with respect to our three month and six month periods ended June 30, 2004 and 2003 is geographic information relating to:

• revenues we have received during the period from our external customers, allocated amongst the geographic areas in which the revenue was generated;

• our net income (loss) from continuing operations for the period, allocated amongst the geographic areas in which the revenue and associated expenses were generated; and

• our net income (loss) from discontinued operations for the period, allocated amongst the geographic areas in which the revenue and associated expenses were generated.
  

	United States			Canada		Total
Three Months Ended
June 30, 2004:
Revenues from oil and natural gas production	$	-	$	4,813	$	4,813
Net loss from continuing operations	$	-	$	(1,011,381)	$	(1,011,381)
Net income from discontinued operations	$	41,805	$	-	$	41,805
June 30, 2003:
Revenues from oil and natural gas production	$	-	$	-	$	-
Net loss from continuing operations	$	(100,982)	$	(259,013)	$	(359,995)
Net loss from discontinued operations	$	(5,618)	$	-	$	(5,618)

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	United States			Canada		Total
Six Months Ended
June 30, 2004:
Revenues from oil and natural gas production	$	-	$	21,642	$	21,642
Net loss from continuing operations	$	-	$	(2,040,095)	$	(2,040,095)
Net income from discontinued operations	$	30,773	$	-	$	30,773
June 30, 2003:
Revenues from oil and natural gas production	$	-	$	-	$	-
Net loss from continuing operations	$	(161,595)	$	(593,927)	$	(755,522)
Net income from discontinued operations	$	192,982	$	-	$	192,982

Assets As Of	United States		Canada		Total
June 30, 2004	$ -	$	2,153,280	$	2,153,280
December 31, 2003	$ -	$	2,636,124	$	2,636,124

In preparing the above tables, we have eliminated all inter-segment revenues, expenses and assets.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

OVERVIEW

Energy Exploration Technologies Inc. is an oil and gas exploration company that utilizes the Stress Field Detector (SFD) technology invented by George Liszicasz, our CEO, President and largest shareholder. The SFD technology is a remote-sensing airborne survey technology comprised of SFD sensors, integrated electronic data acquisition, processing and interpretation subsystems and software. Our principal executive offices are located at 700, 840 - 7 Avenue SW, Calgary, Alberta, Canada and our telephone number is (403) 264-7020.

We use the airborne SFD technology to survey large exploration areas from leased aircraft at speeds of approximately 200 mph to identify and prioritize oil and gas prospects for further evaluation and potential drilling.  The Company utilizes leased aircraft for the purpose of conducting the SFD surveys. Our survey equipment racks have been aircraft type certified by the Canadian Ministry of Transport for both the Piper Cheyenne and Piaggio aircraft models. SFD has been successfully field tested for independent geologists and joint venture partners. Our SFD provides us with the ability to identify the location of potential hydrocarbon prospects in a matter of days or weeks, as compared to months or years using conventional seismic methods employed in wide-area exploration activities.  Once the location of potential hydrocarbon deposits are identified through the analysis and interpretation

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 of the SFD data, the Company uses conventional geophysical technologies to further confirm and qualify the prospects prior to selection of drilling sites.

We now conduct our activities primarily through our wholly owned subsidiary, NXT Energy Canada Inc., which focuses on Canadian and Middle East exploration. We have a division office in the United Arab Emirates. Prior to the sale of our U.S. properties in March of 2003, we also operated through NXT Energy USA Inc. which focused on United States based exploration.  Survey flight activities are conducted through our subsidiary, NXT Aero Canada Inc. The parent company concentrates on improving our SFD survey system and oversees the operations of and provides management, financial and administrative services to our subsidiaries.

Our rights to use our SFD technology arises from the technology agreement that we entered into with Momentum Resources Corporation whereby we have been granted the exclusive worldwide right to use, possess and control the SFD data for hydrocarbon identification and exploration purposes.

Unless otherwise stated, all dollar references in this report are in U.S. dollars.

RESULTS OF OPERATIONS

Operating revenues

On February 4, 2004, a well at Entice, Alberta, in which we have a 22.5% working interest, commenced production. Our share of production averaged 28 thousand cubic feet (mcf) per day during the quarter ended June 30, 2004.  Revenues, net of royalty expense, for the period were $4,813. The average price received was $4.63 per mcf and the operating cost was $0.57 per mcf.

Operating loss from continuing operations

We incurred an operating loss of $1,011,956 for our quarter ended June 30, 2004, as compared to a loss of $361,389 for the corresponding period in 2003, representing a $650,567 (180%) overall increase.  This increase was attributable to the following changes:  

• Administrative costs increased $529,979 (166%) in 2004 compared to the same period in 2003 due to increased costs related to establishing contacts and business relationships in the Middle East;

• Survey operations and support increased by $124,301 (449%) in 2004 compared to 2003. In 2003 there was very little activity but in 2004 we were in the final stages of an extensive series of survey flights in Syria.

Interest income

Interest income is virtually unchanged from the comparable period in 2003.

Income (loss) from discontinued operations

The income from discontinued operations for the quarter ended June 30, 2004 was $41,805 compared to the 2003 loss of $5,618. In 2004 the income is due to the sale of aircraft equipment which had previously been written off. The small loss in 2003 was downward adjustments to revenue estimates for the prior period.

Other comprehensive income

The foreign currency exchange loss of $53,403 for the quarter ended June 30, 2004 was caused by the change in the United States – Canadian currency rates from $1.3113 at March 31, 2004 to $1.3338 at June 30, 2004. The foreign currency exchange income of $179,713 for the same period in 2003 was due to the change in rates from $1.4678 at March 31, 2003 to $1.3475 at June 30, 2003.  Comprehensive gains or losses arise in consolidating our accounting records for financial reporting purposes as a result of the fluctuations in during the period.

Relationships and Transactions on Terms That Would Not Be Available From Clearly Independent Third Parties

We have not entered into any transactions during the quarter ended June 30, 2004 with any parties that are not clearly independent on terms that might not be available from other clearly independent third parties.

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LIQUIDITY AND CAPITAL RESOURCES

Sources of Cash

In the quarter ended June 30, 2004 we had a net cash outflow of $783,031 compared to the second quarter of 2003 when we had a cash inflow of $532,968. The 2004 results were entirely due to the operating activities use of cash of $794,323 and exchange losses of $53,403 partially offset by funds received from options exercised of $85,991. The 2003 results were due to the net cash from sale of discontinued operations of $714,382 partially offset by funds used in oil and gas expenditures of $241,556 and operating activities of $169,970.

Current Cash Position and Changes in Cash Position

Our cash position as of June 30, 2004 was $526,213 as compared to $1,024,201 as of December 31, 2003. Our cash position as of June 30, 2003 was $962,887 as compared to $585,070 as of December 31, 2002.

Our working capital deficiency of $281,681 as of June 30, 2004 was a decrease of $845,538 compared to working capital of $563,857 as of December 31, 2003. The subscriptions payable of $514,921, which is the main cause of the deficiency, will be extinguished by the issue of shares in the third quarter.

Cash used in operating activities in the quarter ended June 30, 2004 increased by $624,353 (367%) to $794,323 for 2004 as compared to the same period in 2003. The increased cash draws were needed to fund the Syrian survey tests, which continued from the first quarter, as well as the increased administrative costs related to establishing contacts and a business presence in the Middle East.

Financing activities in 2004 generated $71,202 from the exercise of stock options ($85,991), less costs ($14,789) related to the earlier issue of common shares. There was no cash provided by or used in financing activities in 2003.

Investing activities generated cash of $613 for the quarter ended June 30, 2004 as compared to $191,157 used in the quarter ended June 30, 2003. The reason for the decrease was that there was virtually no investing activity in 2004 as we focused our efforts on the Syrian survey test. In 2003 we had invested in oil and gas properties, primarily the Tanaka prospect in British Columbia.

Discontinued operations used  cash of  $7,120 in the quarter for small on-going administrative expenses. The quarter ended June 30, 2003 generated $714,382 of cash from discontinued operations from the sale of the U.S. properties.

Other comprehensive income, specifically currency exchange, was a loss of $53,403 in the quarter ended June 30, 2004 as compared to the gain $179,713 in the quarter ended June 30, 2003. The reasons for the change are explained above.

Plan of Operation and Prospective Capital Requirements

We have approximately $450,000 in cash on hand as of August 10, 2004 to fund our plans and to contribute toward our administration, operational and research and development requirements for the next twelve months.  We will be required to raise additional financing through equity issues, borrowings or property dispositions.

With the completion of the private placement, which is in process, we believe we can maintain a minimal level of operations for approximately twelve months.  At this time, we have capital commitments of $243,000 related to flow-through share obligations. However, if we ramp-up operations, we will be required to raise additional capital to support increased operations.

We can give no assurance that any or all projects in our pending programs will be commercial, or if commercial will generate sufficient revenues in time to cover our operating or other costs. Should this be the case, we would be forced, unless we can raise sufficient additional working capital, to suspend our operations, and possibly even liquidate our assets and wind-up and dissolve our company.  

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OTHER MATTERS

Foreign Exchange

Foreign currency translation gains or losses are included as a comprehensive income (loss) item on our statements of loss and comprehensive loss and shareholders' equity (deficit) in consolidating our accounting records for financial reporting purposes as a result of the fluctuation in United States-Canadian currency exchange rates during that period.  We cannot give you any assurance that our future operating results will not be adversely affected by currency exchange rate fluctuations.  

Effect of Inflation

We do not believe that our operating results were unduly affected during the second quarter of 2004 or 2003 by inflation or changing prices.

Critical Accounting Policies

We follow the full cost method of accounting for oil and natural gas properties and equipment whereby we capitalize all costs relating to our acquisition of, exploration for and development of oil and natural gas reserves.  Our consolidated financial condition and results of operations are sensitive to, and may be adversely affected by, a number of subjective or complex judgments relating to methods, assumptions or estimates required under the full cost method of accounting concerning the effect of matters that are inherently uncertain.  For example:

• Capitalized costs under the full cost method of accounting are generally depleted and depreciated on a country-by-country cost center basis using the unit-of-production method, based on estimated proved oil and gas reserves as determined by independent engineers where significant.  In addition, capital costs in each cost center are also restricted from exceeding the sum of the present value of the estimated discounted future net revenues of those properties, plus the cost or estimated fair value of unproved properties (the "ceiling test").  Should this comparison indicate an excess carrying value, a write-down would be recorded.  In making these accounting determinations, we rely in part upon a reserve report prepared by independent engineers specifically engaged for this purpose.  To economically evaluate our proved oil and natural gas reserves, these independent engineers must necessarily make a numbe r of assumptions, estimates and judgments that they believe to be reasonable based upon their expertise and professional and U.S. Securities and Exchange Commission guidelines.  Were the independent engineers to use differing assumptions, estimates and judgments, then our consolidated financial condition and results of operations would be affected.  For example, we would have lower revenues and net profits (or higher net losses) in the event the revised assumptions, estimates and judgments resulted in lower reserve estimates, since our depletion and depreciation rate would then be higher and it might also result in a write down under the ceiling test.  Similarly, we would have higher revenues and net profits (or lower net losses) in the event the revised assumptions, estimates and judgments resulted in higher reserve estimates.

• Our management also periodically assesses the carrying values of unproved properties to ascertain whether any impairment in value has occurred.  This assessment typically includes a determination of the anticipated future net cash flows based upon reserve potential and independent appraisal where warranted.  Impairment is recorded if this assessment indicates the future potential net cash flows are less than the capitalized costs. Were our management to use differing assumptions, estimates and judgments, then our consolidated financial condition and results of operations would be affected.  For example, we would have lower net profits (or higher net losses) in the event the revised assumptions, estimates and judgments resulted in increased impairment expense.

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Management

Our success is dependent upon the continuing efforts of Mr. George Liszicasz, the inventor of the SFD technology and our Chief Executive Officer/Chief Financial Officer, who is responsible for the SFD technology and SFD interpretation activities.  The loss of Mr. Liszicasz would likely have a material adverse effect on our business, consolidated financial condition and results of operations.  While we have entered into an employment and non-competition agreement with Mr. Liszicasz, he nevertheless cannot be prevented from leaving NXT so long as he does not employ SFD technology for oil and natural gas exploration purposes.  

Our success will depend to a significant extent on our ability to engage one or more qualified oil and gas professionals. Our inability to fill these positions could have a material adverse effect on our business, consolidated financial condition and results of operations.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

OIL AND GAS PRICE FLUCTUATIONS

Our primary market risk is market changes in oil and natural gas prices.  Prospective revenues from the sale of products or properties will be impacted by oil and natural gas prices.  Similarly, our ability to acquire petroleum and natural gas rights and to drill the lands is also directly affected since competition for and the cost to acquire petroleum and natural gas rights is generally a function of oil and natural gas prices.  Specifically, increases in oil and natural gas prices are generally accompanied by increases in industry competition and costs to acquire drilling rights, while decreases in oil and natural gas prices are generally accompanied by a similar decline in competition and costs to acquire drilling rights.  

CURRENCY FLUCTUATIONS

We currently hold the bulk of our cash in Canadian currency. This does expose us to exchange rate fluctuations between the Canadian and United States currencies. Until early 2003 we operated primarily in U.S. dollars but the sale of the U.S. properties means that our transactions are mainly in Canadian dollars. This can result in gains or losses in our reported consolidated financial condition and results of operations. However, we are planning to expand our operations in the international markets and the U.S. dollar is the standard functional currency for international transactions in the oil and gas industry. Therefore, we intend to continue using the U.S. dollar as our reporting currency for the foreseeable future. As we become more active in international markets we will transfer cash into U.S. currency based upon expected needs at that time.  We have not previously engaged in activities to mitigate the effects of foreign currency. At our current levels of activity, a U.S. $0.01 change in the U.S. / Canadian exchange rate will impact our net income by $63,000.

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INTEREST RATE FLUCTUATIONS

We currently maintain the bulk of our available cash in Canadian dollars and our reported interest income from these short-term investments could be adversely affected by any material changes in interest rates within Canada.

ITEM 4.   CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer/Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.   

As of June 30, 2004, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  Based upon the foregoing, our Chief Executive Officer /Chief Financial Officer concluded that our internal control over financial reporting are effective in the timely alerting of management to material information relating to us which is required to be included in our periodic SEC filings.  

There were no significant changes in our internal control over financial reporting or in other factors that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During our most recently completed fiscal quarter ended June 30, 2004, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

The term "internal control over financial reporting" is defined as a process designed by, or under the supervision of, the registrant's principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant;and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant's assets that could have a material effect on the financial statements.

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PART II

ITEM 1.   LEGAL PROCEEDINGS

On November 27, 2002, we were served a Statement of Claim which had been filed on November 25, 2002, in the Court of Queen's Bench of Alberta, Judicial District of Calgary (Action No. 0201-19820), naming Energy Exploration Technologies Inc. and George Liszicasz as defendants.  Mr. Dirk Stinson, the plaintiff, alleges that NXT failed to pay him compensation under a consulting agreement and further alleges that NXT, without lawful justification, obstructed Mr. Stinson from trading his shares of NXT.  At the time of the filing of this suit, Mr. Stinson was a major shareholder of our common stock.  He is a past President and director of NXT and is currently a director and shareholder of Momentum Resources.  Mr. Stinson was seeking, among other things, damages in the amount of $1,614,750 and an injunction directing NXT to instruct our transfer agent to immediately remove the legend from Mr. Stinson's shar es.  On December 10, 2002, we filed our Statement of Defence.  On July 14, 2003, we received notice that the plaintiff had dropped all claims except for a claim for $74,750 plus interest for compensation under a consulting agreement.  

We believe the claim against us is without merit and intend to vigorously defend ourselves against the claim and are seeking an expeditious dismissal of the claim.

On March 18, 2003, we were served a Statement of Claim which had been filed on March 14, 2003, in the Court of Queen's Bench of Alberta, Judicial District of Calgary (Action No. 0301-04309), naming Glen Coffey, Murray's Aviation Repairs (1980) Ltd., Energy Exploration Technologies, its wholly-owned subsidiary, NXT Energy Canada, Inc., Dennis Wolsky, as Administrator of the Estate of Jerry Wolsky, deceased and Embassy Aero Group Ltd. as defendants.  Tops Aviation Ltd., Spartan Aviation Inc. and John Haskakis (the "Plaintiffs") allege that the defendants were negligent and in breach of a Ferry Flight Contract between one or some of the defendants and one or some of the Plaintiffs under which Mr. Jerry Wolsky was to deliver a Piper Twin Comanche aircraft to Athens, Greece.  The aircraft crashed in Newfoundland enroute to Athens killing Mr. Wolsky. The Plaintiffs are seeking, among other things, damages in the amount of $450,000 CDN or loss and damages to the aircraft and cargo; and damages in respect to search and rescue expenses, salvage, storage, transportation expenses and pollution and contamination expenses.

Neither we nor our subsidiary, NXT Energy Canada, Inc., were parties to the Ferry Flight Contract.  We believe the claim against us and our subsidiary is without merit and intend to vigorously defend ourselves against the claim and are seeking an expeditious dismissal of the claim.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

On February 12, 2004, NXT completed a private placement of 573,269 units at $2.00 per unit for gross proceeds of $1,143,633. Each unit consisted of one (1) common share and a warrant to purchase an additional share for $2.75, with a term of one (1) year. No underwriters were utilized in this offering. NXT paid finders fees of $80,356 in connection with this offering. The offering was sold to a total of 56 investors, who are employees, former employees and consultants of NXT as well as certain accredited investors introduced to NXT by its management and employees.

Of the 573,269 units sold, 340,269 were exempt from registration due to the exemption found in Regulation S promulgated by the Securities and Exchange Commission under the Securities Act of 1933. These sales were offshore transactions since all of the offerees were not in the United States and the purchasers were outside the United States at the time of the purchase. Moreover, there were no directed selling efforts of any kind made in the Untied States neither by us nor by any affiliate or any person acting on our behalf in connection with any of these offerings. All offering materials and documents used in connection with the offers and sales of the securities included statements to the effect that the securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States or to U.S. persons unless the securities are registered under the Act or an exemption there from is available and that no h edging transactions involving those securities may not be conducted

20

unless in compliance with the Act. Each purchaser under Regulation S certified that it is not a U.S. person and is not acquiring the securities for the account or benefit of any U.S. person and agreed to resell such securities only in accordance with the provisions of Regulation S, pursuant to registration under the Act or pursuant to an available exemption from registration. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption there from and we are required to refuse to register any transfer that does not comply with such requirements.

Of the remaining 233,000 units, such units were exempt from registration pursuant to Rule 506 of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act of 1933. Neither we nor any person acting on our behalf offered or sold these securities by any form of general solicitation or general advertising. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption there from. Each purchaser represented to us that he was purchasing the securities for his own account and not for the account of any other persons. Each purchaser was provided with written disclosure that the securities have not been registered under the Securities Act of 1933 and therefore cannot be sold without registration under the Securities Act of 1933 or an exemption therefrom.

During the quarter ended June 30, 2004, NXT issued a total of 48,416 common shares in connection with the exercise of outstanding options held by its employees, former employees and consultants. Also during the quarter NXT issued 30,000 common shares for payment of consulting services.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NXT's Annual Meeting of Shareholders was held on June 24, 2004, at which the following items were voted upon:

1. The following directors were elected to the board of directors to hold such position until the next annual meeting of the shareholders or until their successor is duly elected and qualified:

Voting Results	For	Against	Abstain
Sheikh Al Hassan	13,464,016	-	6,608
Donald Foulkes	13,465,516	-	5,108
Dennis R. Hunter	13,465,516	-	5,108
George Liszicasz	13,465,516	-	5,108
Douglas Rowe	13,465,516	-	5,108
Robert Van Caneghan	13,465,516	-	5,108

2. The shareholders ratified the appointment of Deloitte & Touche LLP as our auditors, who have been our auditors since July 9, 2002.

Voting Results	For	Against	Abstain
	13,470,424	-	200

ITEM 5.   OTHER INFORMATION

Not Applicable.

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ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

2.1(1)	Reorganization Plan dated September 28, 1994 between Mega-Mart, Inc. and Auric Mining Corporation
2.2(1)	Reorganization Plan dated December 31, 1995 between Auric Mining Corporation and Fiero Mining Corporation
2.3(1)	Reorganization Plan dated January 20, 1996 between Auric Mining Corporation and Pinnacle Oil Inc.
2.4(1)	Articles of Incorporation of Auric Mining Corporation as filed with the Nevada Secretary of State on September 27, 1994
3.2(1)	Amendment to Articles of Incorporation of Auric Mining Corporation as filed with the Nevada Secretary of State on February 23, 1996
3.3(1)	Certificate of Amendment to Articles of Incorporation of Pinnacle Oil International, Inc. as filed with the Nevada Secretary of State on April 1, 1998
3.4(6)	Certificate of Amendment to Articles of Incorporation of Pinnacle Oil International, Inc. as filed with the Nevada Secretary of State on June 13, 2000
3.5(1)	Amended Bylaws for Energy Exploration Technologies
3.6(1)	Pinnacle Oil International, Inc. specimen common stock certificate
3.7(1)	Pinnacle Oil International, Inc. specimen series 'A' preferred stock certificate
3.8(1)	Energy Exploration Technologies specimen common stock certificate
3.9(1)	Form of Non-Qualified Stock Option Agreement for grants to directors
3.10(1)	1997 Pinnacle Oil International, Inc. Stock Plan
3.11(3)	Form of Stock Option Certificate for grants to employees under the 1997 Pinnacle Oil International, Inc. Stock Plan
3.12(1)	Warrant certificate for 200,000 Common Shares issued to SFD Investment LLC
3.13(4)	1999 Pinnacle Oil International, Inc. Executive Stock Option Plan
3.14(4)	Form of Stock Option Certificate for grants to directors under the 2000 Pinnacle Oil International, Inc. Executive Stock Option Plan
3.15(7)	2000 Pinnacle Oil International, Inc. Directors' Stock Plan
3.16(7)	Form of Stock Option Certificate for grants to directors under the 2000 Pinnacle Oil International, Inc. Directors' Stock Plan
3.17(1)	Stockholder Agreement dated April 3, 1998 among Pinnacle Oil International, Inc., R. Dirk Stinson, George Liszicasz and SFD Investment LLC
3.18  (10)	Amended By-laws of Energy Exploration Technologies, Inc. - Amended September 20, 2002
3.19(12)	Articles of Continuance for the continuance of the Registrant in the Province of Alberta, filed with the Alberta Registrar of Corporations on October 24, 2003 under the name "Energy Exploration Technologies Inc."
3.20(12)	Bylaws of Energy Exploration Technologies Inc. dated October24, 2003
10.1(1)	Partnership Agreement of Messrs. Liszicasz and Stinson dated September 1, 1995
10.2(1)	Agreement between Pinnacle Oil Inc. and Mr. Liszicasz dated January 1, 1996
10.3(1)	Transfer Agreement by Momentum Resources Corporation dated June 18, 1996
10.4(1)	Restated Technology Agreement dated August 1, 1996
10.5(1)	Amendment to Restated Technology Agreement with Momentum Resources Corporation dated April 3, 1998
10.6(8)	SFD Technology License Agreement with Momentum Resources Corporation dated December 31, 2000
10.7(1)	Letter Agreement with Encal Energy Ltd. dated December 13, 1996

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10.8(1)	Exploration Joint Venture Agreement with Encal Energy Ltd. dated February 19, 1997
10.9(1)	Exploration Joint Venture Agreement with Encal Energy Ltd. dated September 15, 1997
10.10(8)	Letter Amending Joint Venture Agreement with Encal Energy Ltd. dated April 1, 2000
10.11(1)	Letter Agreement with Renaissance Energy Ltd. dated April 16, 1997
10.12(1)	SFD Survey Agreement with Renaissance Energy Ltd. dated November 1, 1997
10.13(1)	SFD Survey Agreement with Renaissance Energy Ltd. dated February 1, 1998 (Prospect Lands #1)
10.14(1)	SFD Survey Agreement with Renaissance Energy Ltd. dated February 1, 1998 (Prospect Lands #2)
10.15(1)	Joint Exploration and Development Agreement with CamWest Limited Partnership dated April 3, 1998
10.16(1)	Assignment of Joint Exploration and Development Agreement with CamWest Exploration LLC dated January 29, 1999
10.17(1)	Canadian Data License Agreement with Pinnacle Oil Canada Inc. dated April 1, 1997
10.18(1)	American Data License Agreement with Pinnacle Oil Inc. dated April 1, 1997
10.19(1)	Cost Recovery Agreement with Pinnacle Oil Canada Inc. dated April 1, 1997
10.20(1)	Assignment Agreement with Pinnacle Oil Canada Inc. dated September 15, 1997
10.21(1)	Assignment Agreement with Pinnacle Oil Canada Inc. dated April 1, 1997
10.22(1)	Assignment Agreement with Pinnacle Oil Canada Inc. dated November 1, 1997
10.23(1)	Employment Agreement dated April 1, 1997 with Mr. Dirk Stinson
10.24(1)	Employment Agreement dated April 1, 1997 with Mr. George Liszicasz
10.25(1)	Unsecured Convertible Promissory Note ($500,000) in favor of Mr. Liszicasz
10.26(1)	Unsecured Convertible Promissory Note ($500,000) in favor of Mr. Stinson
10.27(1)	Promissory Notes of Pinnacle Oil Inc. in favor of Messrs. Liszicasz and Stinson dated October 21, 1995
10.28(1)	Registration and Participation Rights Agreement dated April 3, 1998 between Pinnacle Oil International, Inc. and SFD Investment LLC
10.29(1)	Form of Indemnification Agreement between Pinnacle Oil International, Inc. and each Director and Executive Officer
10.30(1)	Lease Agreement between Phoenix Place Ltd. and Pinnacle Oil International, Inc. dated November 25, 1997
10.31(2)	Employment Agreement dated July 9, 1998 with John M. Woodbury, Jr.
10.32(5)	Assignment Of Joint Exploration and Development Agreement between CamWest Limited Partnership and CamWest Exploration LLC dated January 29, 1999
10.33(5)	Settlement Agreement dated April 27, 1999
10.34(5)	Employment Agreement dated May 1, 1999 with Daniel C. Topolinsky
10.35(5)	Employment Agreement dated May 1, 1999 with James R. Ehrets
10.36(9)	Promissory Note by NXT Aero USA Inc. dated November 6, 2000 to Aviation Finance Group LLC
10.37(9)	Aircraft Loan Agreement by NXT Aero USA Inc. dated November 6, 2000 with Aviation Finance Group LLC
10.38(9)	Aircraft Security Agreement by NXT Aero USA Inc. dated November 6, 2000 with Aviation Finance Group LLC
10.39(9)	Commercial Guaranty by Energy Exploration Technologies dated November 6, 2000 to Aviation Finance Group LLC
10.40(9)	Terminating Events Addendum dated November 6, 2000 with Aviation Finance Group LLC
10.41(11)	Employment Agreement dated December 1, 2002 with George Liszicasz

23

14(12)	Code of Ethics
21(8)	List of significant subsidiaries
31(13)	Rule 13a-14(a)/15d-14(a) Certification
32(13)	Section 1350 Certification
99.1(1)	Report captioned "Evaluation of Stress Field Detector Technology-Implications for Oil and Gas Exploration in Western Canada" dated September 30, 1996 prepared by Rod Morris, P. geologist, A.P.E.G.G.A.
99.2(1)	Report regarding "Stress Field Detector Technology" dated May 22, 1998 prepared by Encal Energy Ltd.
99.3(2)	Report captioned "SFD Data Summary" dated August 26, 1998 prepared by CamWest, Inc.
99.4(1)	Report captioned "Pinnacle Oil International Inc.-Stress Field Detector Documentation of Certain Exploration and Evaluation Activities" dated February 27, 1998 prepared by Gilbert Laustsen Jung Associates Ltd.
	(1)	Previously filed by our company as part of our Registration Statement on Form 10 filed on June 29, 1998 (SEC File No. 0-24027)
	(2)	Previously filed by our company as part of our Amendment No. 1 to Registration Statement on Form 10 filed on August 31, 1998
	(3)	Previously filed by our company as part of our Annual Report on Form 10-K for our year ended December 31, 1998 as filed on March 31, 1999
	(4)	Previously filed by our company as part of our Registration Statement on Form S-8 (SEC File No. 333-89251) as filed on March 31, 1999
	(5)	Previously filed by our company as part of our Annual Report on Form 10-K for our year ended December 31, 1999 as filed on April 17, 2000
	(6)	Previously filed by our company as part of Amendment No. 1 to our Annual Report on Form 10-K for our year ended December 31, 1999 as filed on July 28, 2000
	(7)	Previously filed by our company as part of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 as filed on May 15, 2000.
	(8)	Previously filed by our company as part of our Annual Report on Form 10-K for the year ended December 31, 2000 as filed on April 2, 2001.
	(9)	Previously filed by our company as part of our Annual Report on Form 10-K for the year ended December 31, 2001 as filed on April 1, 2002.
	(10)	Previously filed by our company as part of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 as filed on November 14, 2002
	(11)	Previously filed by our company as part of our Annual Report on Form 10-K for the year ended December 31, 2002 as filed on March 31, 2003.
	(12)	Previously filed by our company as part of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 as filed on November 14, 2004
	(13)	Previously filed by our company as part of our Annual Report on Form 10-K for the year ended December 31, 2003 as filed on April 14, 2004.

b) Reports on Form 8-K filed subsequent to December 31, 2003

1) Form 8-K filed February 17, 2004 reporting the appointment of His Highness Sheikh Al Hassan Bin Ali Bin Rashid Al Nuaimi, a member of the Royal Family and a resident of the Emirate of Ajman, United Arab Emirates (UAE), to the Board of Directors.

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this quarterly report on form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated at Calgary, Alberta, this 12^th day of August, 2004.

24

ENERGY EXPLORATION TECHNOLOGIES INC.
By:         /s/ George Liszicasz
	George Liszicasz Chief Executive Officer (principal executive officer and principal accounting officer)

EXHIBIT 31

RULE 13A-14(A)/15D-14(A) CERTIFICATION

I, George Liszicasz, certify that:

1. I have reviewed this quarterly report of Energy Exploration Technologies Inc. (the "Registrant")

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report;

4. As the Registrant's sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant I have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which the quarterly report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this report any changes in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant's auditors and to the Registrant's Audit Committee:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: August 12, 2004

By  /s/ George Liszicasz

Name:

George Liszicasz

Title:

Chief Executive Officer and interim Chief Financial Officer (Principal Executive Officer and Principal Accounting Officer)

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Energy Exploration Technologies Inc. (the "Company") on Form 10-Q for the period ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, George Liszicasz, Chief Executive Officer and interim Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 12, 2004

By   /s/ George Liszicasz

Name: George Liszicasz

Title:    Chief Executive Officer and interim Chief

Financial Officer (Principal Executive Officer and

Principal Accounting Officer)