[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2005
---------------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from to
------------------------------ --------------------------
Commission file number 333-102930
----------------------------------------------------
Silver Star Energy, Inc.
----------------------------------------------------------------------------
(Exact name of small business issuer as
specified in its charter)
Nevada 98-0385312
- --------------------------------------------------------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
11300 W. Olympic Boulevard, Suite 800, Los Angeles, California 90064
-------------------------------------------------------------------------------
(Address of principal executive offices)
(310) 477-2211
Issuer's telephone number
(Former name, former address and former fiscal year, if changed
since last report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date: March 31, 2005 85,021,035
Transitional Small Business Disclosure Format (check one).
Yes ; No X
---- -----
PART I
ITEM 1. FINANCIAL STATEMENTS
SILVER STAR ENERGY, INC.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
March 31, December 31,
ASSETS 2005 2004
------------------ -----------------
Current Assets
Cash $ 228,478 $ 138,005
Accounts Receivable 28,740 -
Prepaid Expense 30,540 18,825
------------------ -----------------
Total Current Assets 287,758 156,830
------------------ -----------------
Fixed Assets
Furniture and Fixtures 7,751 7,751
Computers 6,222 6,222
Vehicles 18,316 18,316
Accumulated Depreciation (6,631) (4,809)
------------------ -----------------
Net Fixed Assets 25,658 27,480
------------------ -----------------
Other Assets
Oil and Gas Properties 2,978,495 2,586,353
Debt Issue Costs, net of amortization of $38,602 and $11,059 413,899 441,441
------------------ -----------------
Total Other Assets 3,392,394 3,027,794
------------------ -----------------
Total Assets $ 3,705,810 $ 3,212,104
================== =================
3
SILVER STAR ENERGY, INC.
(A Development Stage Company)
BALANCE SHEETS
(Continued)
(Unaudited)
March 31, December 31,
2005 2004
------------------- ------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 31,204 $ 75,893
Accrued Liabilities 18,793 9,725
Notes Payable 450,000 450,000
Due to Related Party 92,318 92,318
------------------- ------------------
Total Current Liabilities 592,315 627,936
Convertible Debentures 1,500,000 750,000
Accrued Interest 14,938 3,904
------------------- ------------------
Total Liabilities 2,107,253 1,381,840
------------------- ------------------
Stockholders' Equity
Preferred stock (Par Value $.001), 5,000,000 shares
authorized. -0- issued at March 31, 2005 and
December 31, 2004 - -
Common Stock (Par Value $.001), 300,000,000 shares
authorized. 85,021,035 issued and outstanding at
March 31, 2005 and December 31, 2004 85,021 85,021
Paid in Capital in Excess of Par Value 3,056,658 3,056,658
Retained Deficit (128,480) (128,480)
Deficit accumulated during the development stage (1,414,642) (1,182,935)
------------------- ------------------
Total Stockholders' Equity 1,598,557 1,830,264
------------------- ------------------
Total Liabilities and Stockholders' Equity $ 3,705,810 $ 3,212,104
=================== ==================
See accompanying notes.
4
SILVER STAR ENERGY, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Deficit
Accumulated
Since
October 28,
2003
For the Three Months Ended Inception of
March 31, Development
--------------------------------------
2005 2004 Stage
------------------ ------------------ ------------------
Revenue $ 28,740 $ - $ 28,740
------------------ ------------------ ------------------
Expenses
Consulting and Management Fees 63,045 76,830 358,779
General and Administrative 133,082 102,658 884,340
Professional Fees 16,675 36,531 127,930
------------------ ------------------ ------------------
Total Expenses 212,802 216,019 1,371,049
------------------ ------------------ ------------------
Other Income ( Expense)
Interest Expense (47,645) - (72,333)
------------------ ------------------ ------------------
Net Income (Loss) $ (231,707) $ (216,019) $ (1,414,642)
================== ================== ==================
Income (Loss) per Common Share $ - $ -
================== ==================
Weighted Average Shares Outstanding 85,021,035 118,183,008
================== ==================
See accompanying notes.
5
SILVER STAR ENERGY, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Deficit
Accumulated
Since
October 28,
2003
For the Three Months Ended Inception of
March 31, Development
-------------------------------------
2005 2004 Stage
----------------- ------------------ ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (231,707) $ (216,019) $ (1,414,642)
Adjustments used to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and Amortization 29,364 - 45,232
Common stock issued for account payable - - 40,600
(Increase) decrease in other assets & prepaids (11,715) (15,216) (30,520)
(Increase) decrease in accounts receivable (28,740) (28,740)
Increase (decrease) in accounts payable (44,689) 61,207 111,274
Increase (decrease) in accrued liabilities 20,102 - 33,731
----------------- ------------------ ------------------
Net cash used in operating activities (267,385) (170,028) (1,243,065)
----------------- ------------------ ------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition/Sale of equipment, net - (9,347) (32,289)
Acquisition of oil & gas property interests (392,142) (1,069,093) (2,978,495)
Proceeds on sale of Netcash (net of cash) - - 25,000
----------------- ------------------ ------------------
Net cash used by investing activities (392,142) (1,078,440) (2,985,784)
----------------- ------------------ ------------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from convertible debentures 750,000 - 1,397,500
Proceeds from loans - - 450,000
Proceeds from shareholder loans - - 445,000
Proceeds on sale of common stock - 750,000 2,155,000
----------------- ------------------ ------------------
Net Cash Provided by Financing Activities 750,000 750,000 4,447,500
----------------- ------------------ ------------------
6
SILVER STAR ENERGY, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(continued)
Deficit
Accumulated
Since
October 28,
2003
For the Three Months Ended Inception of
March 31, Development
-------------------------------------
2005 2004 Stage
----------------- ------------------ ------------------
Net Increase (Decrease) in
Cash and Cash Equivalents 90,473 (498,468) 218,651
Cash and Cash Equivalents at
Beginning of the Period 138,005 502,428 9,827
----------------- ------------------ ------------------
Cash and Cash Equivalents at
End of the Period $ 228,478 $ 3,960 $ 228,478
================= ================== ==================
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest $ - $ - $ -
Income Taxes $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: NONE
- -----------
See accompanying notes.
7
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN
The accompanying financial statements have been prepared on the basis
of accounting principles applicable to a "going concern", which assume that the
Company will continue in operation for at least one year and will be able to
realize its assets and discharge its liabilities in the normal course of
operations.
Several conditions and events cast doubt about the Company's ability to
continue as a "going concern". The Company is a development stage company, and
has incurred net losses of approximately $232,000 for the three months ended
March 31, 2005, losses of approximately $216,000 for the three months ended
March 31, 2004, and losses of approximately $1,415,000 since inception of the
development stage.
The Company's general business strategy is to acquire oil and gas
properties either directly or through the acquisition of operating entities. The
continued operations of the Company and the recoverability of oil and gas
property acquisition, exploration and development costs is dependent upon the
existence of economically recoverable reserves and the ability of the Company to
obtain necessary financing to complete the development of those reserves, and
upon future profitable production. To date, the Company has not generated
significant revenues from operations and will require additional funds to meet
its obligations and the costs of its operations. As a result, significant losses
are anticipated prior to the generation of any revenues. The Company is planning
additional ongoing equity financing by way of private placements to fund its
obligations and operations.
The Company's future capital requirements will depend on many factors,
including costs of exploration of the properties, cash flow from operations,
costs to complete well production, if warranted, and competition and global
market conditions. The Company's anticipated recurring operating losses and
growing working capital needs will require that it obtain additional capital to
operate its business. Further, the Company does not have sufficient funds on
hand to complete the exploration of the properties.
The Company will depend almost exclusively on outside capital to
complete the exploration and development of the oil and gas properties. Such
outside capital will include the sale of additional stock and may include
commercial borrowing. There can be no assurance that capital will be available
as necessary to meet these continuing exploration and development costs or, if
the capital is available, that it will be on terms acceptable to the Company.
The issuances of additional equity securities by the Company may result in a
significant dilution in the equity interests of its current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase the Company's liabilities and future cash commitments. If the Company
is unable to obtain financing in the amounts and on terms deemed acceptable, the
business and future success may be adversely affected.
8
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN (continued)
These financial statements do not reflect adjustments that would be
necessary if the Company were unable to continue as a "going concern". While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful.
If the Company were unable to continue as a "going concern", then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported revenues and expenses, and the
balance sheet classifications used.
Organization and Basis of Presentation
Silver Star Energy, Inc. (the "Company") was incorporated on September
25, 2002 in the State of Nevada and commenced operations on October 3, 2002.
During the year ended December 31, 2003, the Company changed its name from
Movito Holdings Ltd. to Silver Star Energy Inc.
Nature of Business
The Company is in the development stage of the oil and gas industry.
The Company's primary objective is to identify, acquire and develop significant
working interest percentages in underdeveloped oil and gas projects that do not
meet the requirements of the larger producers and developers. During 2003 and
2004 the Company acquired interests in several oil and gas prospects and was
setting up the extraction process.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies for Silver Star Energy, Inc. (a
development stage company) is presented to assist in understanding the Company's
financial statements. The accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
The unaudited financial statements as of March 31, 2005, and for the
three month period then ended, reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three
months. Operating results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Cash Equivalents
For the purpose of reporting cash flows, the Company considers all
highly liquid debt instruments purchased with maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
9
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Reclassifications
Certain reclassifications have been made in the 2004 financial
statements to conform with the 2005 presentation.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements.
Loss per Share
Basic earnings per common share were computed by dividing net loss by
the weighted average number of shares of common stock outstanding during the
year. There are no dilutive outstanding common stock equivalents at March 31,
2005 and 2004.
Fixed Assets
Fixed assets are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the assets which range
from three to seven years. Fixed assets consisted of the following at March 31,
2005 and December 31, 2004:
(Unaudited)
March 31, December 31,
2005 2004
------------------ ------------------
Furniture and Fixtures $ 7,751 $ 7,751
Computers 6,222 6,222
Vehicles 18,316 18,316
Less: Accumulated Depreciation (6,631) (4,809)
------------------ ------------------
Total $ 25,658 $ 27,480
================== ==================
One-half year depreciation is taken in the year of acquisition on
certain fixed assets.
10
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)
Maintenance and repairs are charged to operations; betterments are
capitalized. The cost of property sold or otherwise disposed of and the
accumulated depreciation thereon are eliminated from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.
Total depreciation expense for the three months ended March 31, 2005
and 2004 was $1,822 and $0, respectively.
Intangibles
The Company has adopted the provisions of the Financial Accounting
Standards Board ("FASB") Statement No. 142, "Goodwill and Intangible Assets"
("SFAS 142"). Under SFAS 142, goodwill and intangible assets with indefinite
lives will no longer be amortized and will be tested for impairment annually.
The determination of any impairment would include a comparison of estimated
future operating cash flows anticipated during the remaining life with the net
carrying value of the asset as well as a comparison of the fair value to the
book value of the Company or the reporting unit to which the goodwill can be
attributed.
Oil and Gas Properties
The Company follows the full cost method of accounting for its oil and
gas operations whereby all costs related to the acquisition of petroleum and
natural gas interests are capitalized. Such costs include land and lease
acquisition costs, annual carrying charges of non-producing properties,
geological and geophysical costs, costs of drilling and equipping productive and
non- productive wells, and direct exploration salaries and related benefits.
Proceeds from the disposal of oil and gas properties are recorded as a reduction
of the related capitalized costs without recognition of a gain or loss unless
the disposal would result in a change of 20 percent or more in the depletion
rate. The Company operates in two cost centers, being Canada and the U.S.A. To
date the Company has not established any proven recoverable reserves on its
properties.
Depletion and depreciation of the capitalized costs are computed using
the unit-of-production method based on the estimated proven reserves of oil and
gas determined by independent consultants.
Estimated future removal and site restoration costs are provided over
the life of proven reserves on a unit-of-production basis. Costs, which include
the cost of production equipment removal and environmental clean-up, are
estimated each period by management based on current regulations, costs,
technology and industry standards. The charge is included in the provision for
depletion and depreciation and the actual restoration expenditures are charged
to the accumulated provision amounts as incurred.
11
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)
The Company applies a ceiling test to capitalized costs to ensure that
such costs do not exceed estimated future net revenues from production of proven
reserves at year end market prices less future production, administrative,
financing, site restoration, and income tax costs plus the lower of cost or
estimated market value of unproved properties. If capitalized costs are
determined to exceed estimated future net revenues, a write-down of carrying
value is charged to depletion in the period.
Fair Value of Financial Instruments
In accordance with the requirements of SFAS No. 107, the Company has
determined the estimated fair value of financial instruments using available
market information and appropriate valuation methodologies. The fair value of
financial instruments classified as current assets or liabilities approximate
carrying value due to the short-term maturity of the instruments.
Foreign currency transactions
The financial statements are presented in United States dollars. In
accordance with Statement of Financial Accounting Standards No. 52, "Foreign
Currency Translation", foreign denominated monetary assets and liabilities are
translated to their United States dollar equivalents using foreign exchange
rates that prevailed at the balance sheet date. Revenue and expenses are
translated at average rates of exchange during the year. Related translation
adjustments are reported as a separate component of stockholders' equity,
whereas gains or losses resulting from foreign currency transactions are
included in results of operations.
Stock-based compensation
In December 2002, the Financial Accounting Standards Board issued
Financial Accounting Standard No. 148, "ACCOUNTING FOR STOCK-BASED COMPENSATION
- - TRANSITION AND DISCLOSURE" ("SFAS No. 148"), an amendment of Financial
Accounting Standard No. 123 "ACCOUNTING FOR STOCK- BASED COMPENSATION" ("SFAS
No. 123"). The purpose of SFAS No. 148 is to: (1) provide alternative methods of
transition for an entity that voluntarily changes to the fair value based method
of accounting for stock-based employee compensation, (2) amend the disclosure
provisions to require prominent disclosure about the effects on reported net
income of an entity's accounting policy decisions with respect to stock-based
employee compensation, and (3) to require disclosure of those effects in interim
financial information. The disclosure provisions of SFAS No. 148 were effective
for the Company commencing December 31, 2002.
The Company has elected to account for stock-based employee
compensation arrangements in accordance with the provisions of Accounting
Principles Board Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES",
("APB No. 25") and comply with the disclosure provisions of SFAS No. 123 as
amended by SFAS No. 148 as described above. In addition, in accordance with SFAS
No. 123 the Company applies the fair value method using the Black-Scholes
option-pricing model
12
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)
in accounting for options granted to consultants. Under APB No. 25, compensation
expense is recognized based on the difference, if any, on the date of grant
between the estimated fair value of the Company's stock and the amount an
employee must pay to acquire the stock. Compensation expense is recognized
immediately for past services and pro-rata for future services over the option-
vesting period.
The Company accounts for equity instruments issued in exchange for the
receipt of goods or services from other than employees in accordance with SFAS
No. 123 and the conclusions reached by the Emerging Issues Task Force in Issue
No. 96-18, "ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN
EMPLOYEES FOR ACQUIRING OR IN CONJUNCTION WITH SELLING GOODS OR SERVICES" ("EITF
96-18"). Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on the
earlier of a performance commitment or completion of performance by the provider
of goods or services as defined by EITF 96-18.
The Company has also adopted the provisions of the Financial Accounting
Standards Board Interpretation No.44, "ACCOUNTING FOR CERTAIN TRANSACTIONS
INVOLVING STOCK COMPENSATION - AN INTERPRETATION OF APB OPINION NO. 25" ("FIN
44"), which provides guidance as to certain applications of APB 25. FIN 44 is
generally effective July 1, 2000 with the exception of certain events occurring
after December 15, 1998.
Income taxes
The Company follows the liability method of accounting for income
taxes. Under this method, future tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax balances. Future tax assets and liabilities are measured using
enacted or substantially enacted tax rates expected to apply to the taxable
income in the years in which those differences are expected to be recovered or
settled. The effect on future tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the date of enactment
or substantive enactment. As at December 31, 2004 the Company had net operating
loss carryforwards; however, due to the uncertainty of realization the Company
has provided a full valuation allowance for the deferred tax assets resulting
from these loss carryforwards.
Recent accounting pronouncements
In April 2003, the Financial Accounting Standards Board issued SFAS No.
149, "AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES", which clarifies financial
13
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)
accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities
under SFAS No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES". SFAS No. 149 is effective for contracts entered into or modified
after June 30, 2003 and for hedging relationships designated after June 30,
2003. The adoption of SFAS 149 does not affect the Company's financial position
or results of operations.
In May 2003, SFAS 150, "ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS
WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY", was issued. This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. Generally, a financial instrument, whether
in the form of shares or otherwise, that is mandatorily redeemable, i.e. that
embodies an unconditional obligation requiring the issuer to redeem it by
transferring its shares or assets at a specified or determinable date (or dates)
or upon an event that is certain to occur, must be classified as a liability (or
asset in some circumstances). In some cases, a financial instrument that is
conditionally redeemable may also be subject to the same treatment. This
Statement does not apply to features that are embedded in a financial instrument
that is not a derivative (as defined) in its entirety. For public entities, this
Statement is effective for financial instruments entered into or modified after
May 31, 2003. The adoption of SFAS 150 does not affect the Company's financial
position or results of operations.
In November 2004, the FASB issued Statement No. 151, INVENTORY COSTS,
to amend the guidance in Chapter 4, INVENTORY PRICING, of FASB Accounting
Research Bulletin No. 43, RESTATEMENT AND REVISION OF ACCOUNTING RESEARCH
BULLETINS, which will become effective for the Company in fiscal year 2006.
Statement 151 clarifies the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage). The Statement
requires that those items be recognized as current-period charges. Additionally,
Statement 151 requires that allocation of fixed production overhead to the costs
of conversion be based on the normal capacity of the production facilities. The
adoption of SFAS 151 will not affect the Company's financial position or results
of operations.
In December 2004, FASB issued Statement No. 123 (R), SHARE-BASED
PAYMENT, which establishes accounting standards for transactions in which an
entity receives employee services in exchange for (a) equity instruments of the
entity or (b) liabilities that are based on the fair value of the entity's
equity instruments or that may be settled by the issuance of equity instruments.
Effective in the third quarter of 2005, SFAS 123(R) will require us to recognize
the grant-date fair value of stock options and equity based compensation issued
to employees in the statement of operations. The statement also requires that
such transactions be accounted for using the fair-value-based method, thereby
eliminating use of the intrinsic value method of accounting in APB No. 25,
ACCOUNTING FOR
14
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)
STOCK ISSUED TO EMPLOYEES, which was permitted under Statement 123, as
originally issued. We currently are evaluating the impact of Statement 123 (R)
on our financial condition and results of operations.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not commenced its intended principal operations and as
is common with a company in the development stage of oil and gas extraction, the
Company has had recurring losses. Continuation of the Company as a going concern
is dependent upon obtaining the additional working capital necessary to be
successful in its planned activity, and the management of the Company has
developed a strategy, which it believes will accomplish this objective through
additional equity funding and long term financing, which will enable the Company
to operate for the coming year.
NOTE 4 - OIL AND GAS PROPERTIES
The Company entered into agreements to acquire interests in various
unproven oil and gas properties as follows:
Alberta Prospects, Canada
In October 2003, the Company entered into two agreements with 1048136
Alberta Ltd. Pursuant to these agreements, the Company acquired the right to
participate and earn an interest in two oil and gas exploration and development
projects located in the province of Alberta, Canada known respectively as the
Evi prospect and the Verdigris prospect. In February 2004, the Company entered
into two agreements with 1048136 Alberta Ltd. to acquire the right to
participate and earn an interest in two additional oil and gas exploration and
development projects located in the province of Alberta known as the Joarcam
prospect and the Buffalo Lake prospect. 1048136 Alberta Ltd. is a private
Alberta company (see Note 6).
Pursuant to the agreements, the Company shall advance funds, as
required, in connection with the drilling, testing, completion, capping and/or
abandonment of up to three wells on each of the properties. Once the Company has
completed its funding obligation, it will have earned the following interest in
each prospect:
Evi Prospect 66.67%
Verdigris Prospect 66.67%
Joarcam Prospect 70.00%
Buffalo Lake Prospect 70.00%
15
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - OIL AND GAS PROPERTIES (continued)
In the event the Company does not provide the funds as required, the
Company will retain no interest in the prospects.
During the year ended December 31, 2004, the Company paid $1,283,149
towards the exploration and development of the oil and gas prospects in Alberta.
During the three months ended March 31, 2005, the Company paid $375,279 towards
the exploration and development of the oil and gas prospects in Alberta. All of
these costs have been capitalized.
California Prospects, U.S.A.
On December 5, 2003, the Company entered into two option agreements
with Archer Exploration, Inc. (Archer) to acquire Archer's interest in certain
unproven oil and gas prospects located in the State of California, U.S.A., known
as North Franklin Prospect and Winter Pinchout Prospect.
To earn an assignment of 100% of Archer's interests in the North
Franklin Prospect, being a 100% working interest (76% net revenue interest), the
Company made an initial cash payment of $85,000 and is required to pay $15,000
at spud of the initial test well and $25,000 at completion of the initial test
well. In addition, the Company is responsible for all expenses for lease
extensions and rental of existing leases (including a 20% fee), acquisition of
any additional leases (including a 20% fee) and costs in connection with
drilling and completion of the initial test well.
Pursuant to the agreement, Archer retains a 2.5% overriding royalty, a
5% working interest through the completion of the initial test well and the
right to participate in a 5% working interest.
The Company has an agreement to farm-out a 35% working interest in the
North Franklin Project to Fidelis Energy, Inc. (see Note 6). Under the terms of
the agreement, Fidelis will contribute $500,000 towards the drilling and
completion of the Archer-Whitney #1 well and participate as a full working
interest partner on all further costs including drilling of any additional wells
on the project.
To earn an assignment of 100% of Archer's interests in the Winter
Pinchout Prospect, being a 100% working interest (76% net revenue interest), the
Company made an initial cash payment of $100,000 and is required to pay $15,000
at spud of the initial test well of the first three prospects drilled and
$25,000 at completion of the initial test well of each prospect drilled. In
addition, the Company is responsible for all expenses for acquisition of leases
acquired (including a 20% fee), acquisition and analysis of seismic data,
drilling and completion of the initial test well on the first prospect drilled
and a monthly management fee in the amount of $10,000 commencing January 2004.
16
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - OIL AND GAS PROPERTIES (continued)
Pursuant to the agreement, Archer retains a 2.5% overriding royalty, a
5% working interest through the completion of the initial test well and the
right to participate in a 10% working interest.
In August 2004, the Company executed acquisition and joint operating
agreements on five natural gas propects in California with Archer Exploration,
Inc. Pursuant to the agreements, the Company has acquired a 7.5% carried working
interest on four of the prospects and has acquired a 25% carried working
interest in the fifth prospect. The Company is carried on all costs related to
the prospect through the licensing, permitting, drilling and completion of the
first well on each project. In the event of a successful gas well being drilled,
the Company, following testing and completion, would be responsible for the
working interest costs of well tie-in and pipeline. The Company would also be a
working interest participant on any additional gas wells drilled.
During the year ended December 31, 2003, the Company incurred a total
of $405,000 in acquisition and exploration costs relating to the California
prospects. During the year ended December 31, 2004, the Company incurred a total
of $898,204 in acquisition, exploration and development costs relating to the
California prospects. During the three months ended March 31, 2005, the Company
incurred a total of $16,863 in acquisition, exploration and development costs
relating to the California prospects. As of March 31, 2005, total capitalized
costs for the California prospects was $1,320,067.
NOTE 5 - COMMON STOCK
On November 20, 2003, the Company restructured its share capital
whereby the total common shares presently issued and outstanding was forward
split on a 1 (old) to 12 (new) basis. Effective January 5, 2004 the Company
restructured its share capital whereby the total common shares presently issued
and outstanding was forward split on a 1 (old) to 2 (new) basis. All references
to common stock, common shares outstanding, average numbers of common shares
outstanding and per share amounts in these Financial Statements and Notes to
Financial Statements prior to the effective date of the forward stock splits
have been restated to reflect the 12:1 and the 2:1 common stock splits on a
retroactive basis.
On December 5, 2003, the Company received $500,000 in subscription
proceeds from a director and officer for the purchase of 444,444 common shares
of the company's stock pursuant to a Regulation S Private Placement Financing
which was announced on November 25, 2003 and whereby the Company plans to issue
up to 3,555,556 common shares of its capital stock. During the three months
ended March 31, 2004, the Company received subscription proceeds of $750,000
pursuant to the Private Placement Financing. During the three months ended March
31, 2004, 1,112,102 shares were issued in accordance with the $1,250,000 in
subscription proceeds received.
17
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - COMMON STOCK (continued)
On March 23, 2004, the Company entered into an agreement with two
shareholders for the shareholders to surrender for cancellation 24,600,000
regulation 144 restricted shares of the Company's common stock.
During the three months ended June 30, 2004, the Company received
subscription proceeds of $630,000 pursuant to the Private Placement Financing.
During the three months ended June 30, 2004, 661,915 shares were issued in
accordance with the $630,000 in subscription proceeds received.
On June 30, 2004, the Company received share subscription proceeds of
$275,000 for 500,000 shares of restricted common stock pursuant to the Private
Placement Financing announced on November 25, 2003. During the three months
ended September 30, 2004, 500,000 shares were issued in accordance with the
$275,000 in subscription proceeds received.
On August 18, 2004, the Company issued 250,000 restricted shares of
common stock for $25,000 in accounts payable.
On October 18, 2004, the Company issued 156,000 restricted shares of
common stock for consulting expense of $15,600.
On November 23, 2004, the Company issued 362,394 shares of common stock
for debt issue costs of $350,000 associated with the Company's issuance of
convertible debt.
As of December 31, 2004, the Company has not adopted a stock option
plan or granted any stock options and accordingly has not recorded any
stock-based compensation.
Treasury Stock
On December 18, 2003, upon the resignation of an officer of the
Company, 48,000,000 common shares were returned to Treasury, for consideration
of $3,500. The shares were cancelled on January 23, 2004.
NOTE 6- RELATED PARTY TRANSACTIONS
Pursuant to consulting agreements dated November 15, 2003 the Company
agreed to pay $5,500 per month to the CFO and director of the Company and $7,000
per month to the President and director of the Company.
18
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 6- RELATED PARTY TRANSACTIONS (continued)
During 2003 and 2004, the Company entered into several acquisition
agreements with 1048136 Alberta Ltd. (see Note 4). The Company's current
president, Robert McIntosh, was a director of 1048136 Alberta Ltd. and had
resigned from that position prior to his involvement with the Company. Sak
Narwal, a shareholder of the Company, was also a director of 1048136 Alberta Ltd
and Scott Marshall, the majority shareholder of 1048136 Alberta Ltd., is the
spouse of Naomi Patricia Johnston, owner of a 11.76% interest in the Company.
Despite the existence of these related parties, the consideration exchanged
under the Agreements described above was negotiated at "arms length," and the
directors and executive officers of the Company used criteria used in similar
uncompleted proposals involving the Company in comparison to those of 1048136
Alberta Ltd.
At December 31, 2004, the Company owed $92,318 to 1048136 Alberta Ltd.
for expenses related to corporate development.
The Company has a "working interest" relationship with joint venture
partner Fidelis Energy Inc. (FDEI: OTC: BB) (see Note 4). Both companies have an
interest in the North Franklin gas project in Sacramento, California. More
recently in January 2005 Fidelis entered into an agreement to acquire an
interest in 2 oil wells at the Joarcam Project located in Alberta Canada. The
Company is earning a 70% working interest in the entire Joarcam Project. Fidelis
has also entered into an agreement for the first right of refusal to acquire the
remaining 30% working interest on all future drilling locations at Joarcam.
Silver Star and Fidelis will collectively have acquired a 100% working interest
at Joarcam.
In addition, Silver Star and Fidelis management work closely in the
evaluation of other potential, jointly feasible exploration prospects. Also, the
two companies share a common origin in that certain beneficial shareholders of
both companies have contributed to their formation.
NOTE 7 - INCOME TAXES
As of December 31, 2004, the Company has incurred operating losses of
approximately $1,212,000 which, if utilized, will expire through 2024. Future
tax benefits which may arise as a result of these losses and resource deductions
have not been recognized in these financial statements, as their realization is
determined not likely to occur.
NOTE 8 - LEASE COMMITMENT
On February 20, 2004, the Company entered into a lease agreement for
approximately 900 square feet of office space at 1701 Westwind Drive, #119, in
Bakersfield, California. The lease expires February 28, 2005 and continues on a
month to month after that date. The lease payments are $1,040 per month.
19
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - LEASE COMMITMENT (continued)
The minimum future lease payments under these leases for the next five
years are:
Year Ended December 31,
- -------------------------------------------
2005 $ 2,080
2006 -
2007 -
2008 -
2009 -
--------------
Total minimum future lease payments $ 2,080
==============
NOTE 9 - NOTES PAYABLE
During the year ended December 31, 2004, the Company received the
following short-term loans:
(Unaudited)
March 31, December 31,
2005 2004
----------------- -----------------
Note payable with interest at 8% due August 24, 2005 $ 150,000 $ 150,000
Note payable with interest at 8% due September 2, 2005 100,000 100,000
Note payable with interest at 8% due October 12, 2005 50,000 50,000
Note payable with interest at 8% due October 27, 2005 50,000 50,000
Note payable with interest at 8% due November 5, 2005 100,000 100,000
----------------- -----------------
Total Notes Payable $ 450,000 $ 450,000
================= =================
As of March 31, 2005 and December 31, 2004, accrued interest on these
loans was $18,793 and $9,725, respectively. For the three months ended March 31,
2005 and 2004, interest expense charged to these loans was $9,068 and $0,
respectively.
NOTE 10 - CONVERTIBLE DEBENTURES
On November 23, 2004, the Company sold $750,000 in secured convertible
debentures to Cornell Capital Partners, L.P. (Cornell). The convertible
debentures carry an interest rate of 5% per annum. Principal and interest will
be due on November 23, 2007. At any time, Cornell is entitled to convert all or
any part of the principal amount of the debenture, plus accrued interest, into
shares of the Company's common stock. On November 23, 2007, at the Company's
option, the entire principal amount and all accrued interest shall be either (a)
paid to Cornell or (b) converted to common stock. For the three months ended
March 31, 2005 and 2004, interest expense charged to the convertible debentures
was $9,424 and $0, respectively.
20
SILVER STAR ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 10 - CONVERTIBLE DEBENTURES (continued)
As part of the purchase of the debentures, Cornell was also issued a
Warrant to purchase 750,000 shares of the Company's common stock. The Warrant
will expire on November 23, 2009. The exercise price of the warrant shall be one
hundred twenty percent (120%) of the closing bid price of the Company's common
stock on the exercise date or as subsequently adjusted.
On November 23, 2004, the Company paid $102,500 in cash for debt issue
costs. The Company also issued 362,394 shares of common stock valued at $350,000
for debt issue costs. Total debt issue costs of $452,500 have been capitalized
in financial statements. These debt issue costs are being amortized over three
years. As of March 31, 2005 and December 31, 2004, debt issue costs of $38,602
and $11,059 have been amortized and recorded as interest expense. At March 31,
2005 and December 31, 2004, net debt issue costs were $413,899 and $441,441,
respectively.
On March 10, 2005, the Company executed a Convertible Debenture for
$550,000. The note is due and payable in full on or before March 10, 2006 and
carries an interest rate of 5% per annum. The notes are convertible, at the
discretion of the holder, into shares of common stock of the Company at a
conversion price of $1.00 per share. As of March 31, 2005, the Company had
received the full $550,000 from the convertible debenture. On March 30, 2005,
the Company executed a Convertible Debenture for $200,000. The note is due and
payable in full on or before March 10, 2006 and carries an interest rate of 5%
per annum. The notes are convertible, at the discretion of the holder, into
shares of common stock of the Company at a conversion price of $1.00 per share.
As of March 31, 2005, the Company had received the full $200,000 from the
convertible debenture. As of March 31, 2005, interest expense charged to these
convertible debentures was $1,610.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
GENERAL - This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Company's annual report on Form 10-KSB for the year ended December 31, 2004.
PLAN OF OPERATIONS
JOARCAM:
On January 18th the Company announced that drilling of the "13-27" oil
well at the Joarcam Project, Alberta Canada has commenced. The objective of the
well is the Viking formation and the well is planned to a depth of 1,020 metres
(3,347 feet) and that drilling and well completion is anticipated to take 7-10
days. Silver Star had previously anticipated to begin drilling by year-end but
has experienced a short delay due to limited rig availability, owing to the high
prices of oil and gas in Alberta this winter, which has resulted in fierce
province-wide competition for drilling equipment. The overall development
strategy at Joarcam could see up to 16 well locations ultimately drilled,
21
with 10 wells in 2005. With success at Joarcam, it is anticipated that the field
could produce 500 barrels of oil per day (bbls/d) if fully developed.
On January 24th, the Company announced that pipe was run at the "13-27"
well following the drilling to a depth of 1,020 metres (3,347 feet) due to
positive oil indications on logs in the objective Viking Formation. The "13-27"
well location directly offsets the "16-28-47-20W4M" well that initially produced
at rates of approximately 75 barrels per day. Following a successful perforation
resulting in oil flow at the "13-27" well, the Company moved forward to put the
well into production. A pump-jack was installed at the well location and tank
facilities were constructed. A several week evaluation of the daily flow rates
of oil from the well began. The Company has also executed an AFE for the
drilling of the next Joarcam location, this being the "5-22". The well site was
surveyed, permitted and site preparation planning began. Transaction Oil & Gas
Ventures that operates the project for Silver Star is now calling for a drilling
rig. Silver Star advanced funds of $274,500.00 USD in full for the D.N.A. costs
of the well.
At the 13-27, the production rates were estimated to have the potential
to exceed the original estimates of 75 barrels per day. Silver Star and the
operator made a comparison between the logs of the 13-27 and adjacent well and
had determined that the 5.2 metre (17.1) interval at the "13-27" well appeared
to be cleaner sand and thus may be more productive than the offsetting "16-28"
well. Third party analysis of the swab report indicated, "That the well will
begin pumping at a rate exceeding 75 barrels oil per day."
On April 4, 2005, a subsequent event but relating to the production
from Q1, the Company announced the March production for the 13-27 well at
Joarcam. The well commenced commercial oil production on March 1, 2005 and the
Company has received production results for the first 29 days. Total oil
produced and shipped for sale was 1414 barrels with an average daily production
rate of 49 barrels per day.
The swab test analysis of the well during the completion phase
indicated that the production rate should exceed the original estimate of 75
barrels per day. The I.P.R.'s (Initial Production Rates) are being evaluated and
production has, over many days in the month, exceeded a rate of 60 barrels per
day. The Company and operator are analyzing the results and will determine
whether a larger down-hole pump may be required to increase the flow rates of
the well. Total fluid measured during the testing period indicates the well
should perform better. However, during this current period of Government imposed
road bans, equipment to perform this operation cannot be moved to the well site
until spring breakup is complete.
Using current "West Edmonton Light" pricing for Joarcam light crude
oil, Silver Star has now projected that the well has generated $80,600 in
revenue or $967,000 per year and will payout its entire cost in 7 months. The
long-life reserves in the Viking allow wells to be in commercial production for
20 years. Currently, the 38-degree API light oil at Joarcam has been priced at
over $57.00USD per barrel. The prospect lands are located about 25 miles
southeast of Edmonton, Alberta and there is year round access to the property.
NORTH FRANKLIN:
On January 31st, Silver Star updated shareholders as to the process of
permitting the North
22
Franklin pipeline project. Silver Star was informed by the office of the
Congressional Representative from the Third District of California that he has
had confirmation from the office of the Secretary of the Interior and the U.S.
Fish and Wildlife that the final government permit covering the easement over
the last 177' of pipeline will be posted in the Federal Register on February 2,
2005. On February 2nd, the easement Permit required prior to tie-in of the North
Franklin Gas Field was posted to the Federal Register. The Federal Register
states that any public comments on the permit are to be received by March 3,
2005. The Company was in regular contact with the Congressman's office of the
3rd District of California and with the Fish and Wildlife service office in
Sacramento since late December, and hoped to be able to tie-in the pipeline as
soon as possible. The previous comment period at the local level was
accomplished and ended December 26, 2004.
On March 7th Silver Star reported that the operator of the North
Franklin Project had informed the Company that the final government permit
allowing for the completion of construction of the North Franklin gas pipeline
has been received from the "U.S. Fish and Wildlife Service". The permit covers
the easement over the final 177' of the gas pipeline. The Company has also been
informed that the final construction of the tie-in of pipeline could commence
and a tie-in crew was being organized for the job. Silver Star anticipated the
tie-in to be completed shortly, following which gas production will occur from
the "Archer-Whitney #1" well. The operator subsequently informed the Company
that the tie-in operations of the "Archer-Whitney #1" well did commenced with a
crew is onsite for the underground boring operation of approximately 20 feet
underground, connecting the last 177 foot section of the pipeline to the gas
well.
On March 18th, Silver Star was pleased to finally report that the
pipeline at the North Franklin Project had been finished and that the
"Archer-Whitney #1" gas well was now tied-in and would be put online and on
March 21st, natural gas production began from the "Archer-Whitney #1" gas well.
The well was put on production and began flowing gas into the gas buyers system.
A gas sales contract is in place with a natural gas purchaser and Silver Star
will begin to receive revenue as of March 21, 2005. The operator of the project
had choked down and metered the flow at an initial rate of 2.0MMcf and would be
increasing the flow in small increments until the pressures from the reservoir
stabilize at an acceptable rate that will not damage the casing or productive
sand layer. It is critical for the field health to inhibit a simple open flow
and to choke down pressures to prevent gas reservoir "coning" and drawing water
into the sands by the outgoing gas. The Company has always expected excellent
deliverability from the well and is optimistic that ultimately, gas flow rates
will be similar to area analog gas fields and that 5,000 mcf/day is a realistic
flow rate target. The production rate will now be evaluated and assessed by the
Company, partners and operator as to optimal numbers for the well and reservoir.
Robert McIntosh, President of Silver Star stated "the inaugural
production at North Franklin is a tremendous accomplishment for the Company. Now
that the well is finally online it comes at a time when gas prices continue to
rise due to high demand and Silver Star is positioned to take advantage of these
natural gas prices. The Company has plans for drilling 5 more wells on the
leases and the second well is scheduled to begin drilling immediately on the
lease when the conditions allow us to mobilize drilling equipment".
23
SUBSEQUENT EVENTS:
On April 1st, the Company advanced funds to the operator of North
Franklin for the drilling of the second well, named "Archer-Wildlands" in the
amount of $152,000 representing Silver Star's 40% working interest D.N.A. costs
pursuant to an executed A.F.E. (Authority for Expenditure). The spud date of the
well has not been finalized but the Company anticipates drilling in late April
or May 2005.
ITEM 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer are
responsible for establishing and maintaining disclosure controls and procedures
for the Company.
(a) Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's President, of the effectiveness of
the design and operation of the Company's disclosure controls and procedures
pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Based upon the evaluation, the Company's President
concluded that, as of the end of the period, the Company's disclosure controls
and procedures were effective in timely alerting him to material information
relating to the Company required to be included in the reports that the Company
files and submits pursuant to the Exchange Act.
(b) Changes in Internal Controls
Based on his evaluation as of March 31, 2005, there were no significant
changes in the Company's internal controls over financial reporting or in any
other areas that could significantly affect the Company's internal controls
subsequent to the date of his most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against us.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
24
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit
Number Title of Document
10.1 Robert McIntosh's Consulting Agreement dated November 15, 2003, filed
on April 21, 2004 on Form 10KSB/A.
10.2 David Naylor's Consulting Agreement dated November 15, 2003, filed on
April 21, 2004 on Form 10KSB/A.
10.3 Robert McIntosh's Loan Agreement dated December 31, 2003, filed on
April 21, 2004 on Form 10KSB/A.
10.4 Agreement dated October 21, 2003 between the Company and Adil Dinani
disposing of 657333 BC Ltd. (Netcash), filed on November 13, 2003 on
Form 8-K.
10.5 Agreement dated October 29, 2003 between the Company and 1048136
Alberta, Ltd. respecting the acquisition of the Evi oil and gas
prospect, filed on November 13, 2003 on Form 8-K.
10.6 Agreement dated October 29, 2003 between the Company and 1048136
Alberta, Ltd. respecting the acquisition of the Verdigris oil and gas
prospect, filed on November 13, 2003 on Form 8-K.
10.7 Agreement dated December 5, 2003 between the Company and Archer
Exploration, Inc. respecting the North Franklin oil and gas prospect,
filed on December 23, 2003 on Form 8-K.
10.8 Agreement dated December 5, 2003 between the Company and Archer
Exploration, Inc. respecting the Winter Pinchout oil and gas project,
filed on December 23, 2003 on Form 8-K.
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(b) Reports on Form 8-K filed.
None.
25
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Silver Star Energy, Inc.
(Registrant)
DATE: May 6, 2005
By: /s/ Robert McIntosh
Robert McIntosh
President, CEO & Director
(Principal Executive Officer)
By: /s/ David Naylor
David Naylor
Treasurer, Director
(Principal Financial Officer)
26