Frontier Energy Corp. - Annual Report (Small Business Issuers) (10KSB)

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

FORM 10-KSB

(Mark One)

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

For the Fiscal Year Ended December 31,2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to __________

Commission File Number 033-05384

 FRONTIER ENERGY CORP.
 ----------------------------------------------
 (Name of Small Business Issuer in its charter)

 NEVADA 87-0443026
--------------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)


 2413 Morocco Avenue, North Las Vegas, Nevada 89031
 ---------------------------------------------- ----------
 (Address of principal executive offices) (Zip code)

Issuer's telephone number: (702) 648-5849

Securities registered under section 12(b) of the Exchange Act:

None

Securities registered under section 12(b) of the Exchange Act:

Common Stock
(Title of class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

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 [ ] No [ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act

Yes [ ] No [X]

Revenues for the fiscal year ending December 31, 2007 were $0.

The aggregate market value of the voting stock held by non-affiliates computed by reference to the last reported sale price of such stock as of April 1, 2008 $1,155,000.

The number of shares of the issuer's Common Stock outstanding as of April 1, 2008 is 53,300,484

Transitional Small Business Issuer Format: Yes [ ] No [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]

FRONTIER ENERGY CORP.

FORM 10-KSB

TABLE OF CONTENTS

 Page



 Item 1. Description of Business........................................2
 Item 2. Description of Property........................................9
 Item 3. Legal Proceedings.............................................10
 Item 4. Submissions of Matters to a Vote of Security Holders..........10

PART II......................................................................11

 Item 5. Market for Registrant's Common Stock and Related
 Stockholder Matters.......................................... 11
 Item 6. Management's Discussion and Analysis or Plan of Operation.....13
 Item 7. Financial Statements..........................................16
 Item 8. Changes In and Disagreements With Accountants on
 Accounting and Financial Disclosures..........................30
 Item 8a.Controls and Procedures.......................................30

PART III.....................................................................31

 Item 9. Directors and Executive Officers of the Registrant............31
 Item 10.Executive Compensation........................................32
 Item 11.Security Ownership of Certain Beneficial Owners and
 Management and Related Stockholder Matters....................33
 Item 12.Certain Relationships and Related Transactions................34
 Item 13.Exhibits, Lists and Reports on Form 8-K.......................35
 Item 14.Principal Accountant Fees and Services........................36

FORWARD LOOKING STATEMENTS

This report includes "Forward-Looking Statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be considered "forward looking statements". We do not guarantee that the transactions and events described in this Report will happen as described or that any positive trends noted in this Report will continue. These types of statements are generally located in the section entitled "Management's Discussion and Analysis or Plan of Operation," but may be found elsewhere in this Report as well. Forward-looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. You should understand that many important factors, in addition to those discussed elsewhere in this Report, could cause our results to differ materially from those expressed in the forward-looking statements. These factors include, without limitation, the timing and extent of changes in commodity prices for crude oil, natural gas and related products, foreign currency exchange rates, and interest rates; the timing and impact of liquefied natural gas imports; the extent and effect of any hedging activities engaged in by Frontier Energy Corp.; the extent of Frontier Energy Corp.'s success in discovering, developing, marketing and producing reserves and in acquiring oil and gas properties; the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise; the availability and cost of drilling rigs, experienced drilling crews, materials and equipment used in well completions, and tubular steel; the availability, terms and timing of governmental and other permits and rights of way; the availability of pipeline transportation capacity; political developments around the world; acts of war and terrorism and responses to these acts; weather; and financial market conditions. In light of these risks, uncertainties and assumptions, the events anticipated by Frontier Energy Corp.'s forward-looking statements might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Report. Unless legally required, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information about these and other risks, uncertainties and factors, please review the disclosure included in this report under the caption "Risk Factors."

PART

ITEM 1.DESCRIPTION OF BUSINESS

OVERVIEW

Frontier Energy Corp. is an oil and natural gas exploration company that has a lease on an oil and gas property in the United States. We intend to develop this property as our limited capital resources will allow and to purchase additional oil and gas leases.

INDUSTRY BACKGROUND

The United States currently depends on natural gas for approximately 23% of its total primary energy requirements. But with its commitment to the use of natural gas, particularly in the electricity sector, the U.S. now finds itself with a supply shortage at a time of increased demand.

The demand for natural gas is further influenced by the crude oil market. Although crude oil and natural gas are two separate commodities, their prices have historically been correlated at irregular intervals. Strong oil prices generally keep natural gas prices elevated because fuel oil is a possible substitute for natural gas. As the price of crude oil increases, some industries switch to natural gas. This is particularly true in the electricity sector.

Presently, the United States relies on three sources for its natural gas. Domestic production accounts for 81% of supply. Imports from Canada, mainly the western provinces of Alberta, British Columbia and Saskatchewan provide an additional 17%. Imports of liquefied natural gas make up the remainder.

Despite rising new natural gas well completions, high drilling rates are expected to only modestly improve U.S. production levels to 24.1 Tcf by 2025. Many of the wells that have produced abundant quantities of natural gas since the 1980s and 1990s are in terminal decline, yielding rapidly diminishing returns. These waning reserves have not become readily apparent because the natural gas industry has been bringing new fields online in a frantic effort to keep production levels from dropping too rapidly. Since nearly half of the U.S. natural gas supply is coming from wells that have been drilled in the past five years, this declining trend is likely to continue.

COMPETITION

The strength of commodity prices has resulted in significantly increased operating cash flows and has led to increased drilling activity. This industry activity has increased competition for undeveloped lands; skilled personnel; access to drilling rigs, service rigs and other equipment; and access to processing and gathering facilities, all of which may cause drilling and operating costs to increase. Some of our competitors are larger than us and have substantially greater financial and marketing resources. In addition, some of our competitors may be able to secure products and services from vendors on more favorable terms, offer a greater product selection, and adopt more aggressive pricing policies than we can.

Some of the larger and well capitalized companies that are actively exploring and producing in our area include, but not limited to, BP, Conoco Phillips, Gibraltar Exploration Ltd, Mosaic Energy Ltd., Northrock Resources Ltd., and Temple Energy Inc. Each of these companies has significant existing cash flow, capital budgets and in-house expertise to continue seeking additional oil and gas reserves in the western United States.

GOVERNMENTAL REGULATIONS

The oil and natural gas industry in the United States is subject to extensive controls and regulations imposed by various levels of government. We do not expect that any of these controls or regulations will affect our operations in a manner materially different than they would affect other oil and gas industry participants of similar size.

Crude oil and natural gas located in the western United States is owned both by private landowners and the federal government. Land owners or the Bureau of Land Management grant rights to explore for and produce oil and natural gas under leases, licenses and permits with terms generally varying from two years to five years and on conditions contained in legislation. Leases, licenses and permits may be continued indefinitely by producing under the lease, license or permit. Some of the oil and natural gas located in the western United States is privately owned and rights to explore for and produce oil and natural gas are granted by the mineral owners on negotiated terms and conditions.

ENVIRONMENTAL REGULATIONS

The oil and natural gas industry is governed by environmental regulation under federal and state laws, rules and regulations, which restrict and prohibit the release or emission and regulate the storage and transportation of various substances, produced or utilized in association with oil and natural gas industry operations. In addition, applicable environmental laws require that well and facility sites are abandoned and reclaimed, to the satisfaction of state authorities, in order to remediate these sites to near natural conditions. Also, environmental laws may impose upon "responsible persons" remediation obligations on property designated as a contaminated site. Responsible persons include persons responsible for the substance causing the contamination, persons who caused the release of the substance and any present or past owner, tenant or other person in possession of the site. Compliance with such legislation can require significant expenditures. A breach of environmental laws may result in the imposition of fines and penalties and suspension of production, in addition to the costs of abandonment and reclamation.

We have established guidelines and management systems to ensure compliance with environmental laws, rules and regulations. We have designated an individual responsible for compliance whose responsibility is to monitor regulatory requirements and their impact on us, to implement appropriate compliance procedures and to cause our operations to be carried out in accordance with applicable environmental guidelines and implementing adequate safety precautions. The existence of these controls cannot, however, guarantee total compliance with environmental laws, rules and regulations. We believe that we are in material compliance with applicable environmental laws and regulations. We also believe that it is reasonably likely that the trend in environmental legislation and regulation will continue toward stricter standards.

PAST ACTIVITIES OF OUR COMPANY

Up until November 2003, we were engaged in the sale, repair and support service of in-warranty and out-of-warranty computer peripheral devices for a variety of large and small brand name manufacturers through our wholly owned subsidiary, Technical Services & Logistics Inc. ("TSLi"). On November 17, 2003, our Board of Directors voted unanimously to liquidate TSLi through a General Assignment benefiting the creditors of TSLi. On November 26, 2003, the Company consummated a General Assignment Agreement ("the agreement") that assign all the assets and liabilities of TSLi to the C.F. Boham Company, Inc., d.b.a. the Hamer Group, of Los Angeles, California. The assignment was essentially a liquidation of TSLi that was overseen by the Hamer Group, who acted as trustee of TSLi's affairs during the liquidation process.

The decision to liquidate TSLi provided our Board of Directors with the opportunity to restructure our debts so that we could continue as a going concern. On January 22, 2005, we acquired a 100% interest in a copper, gold and platinum mineral prospect (the "Property"). The Property consists of 20 claim units in central British Columbia, Canada approximately 45 miles east of Williams Lake. The Property is located in the central Quesnel Trough and adjoins the south border of Imperial Metals', Mount Polley copper/gold mine. Our business plan became to explore and develop the potential minerals on the Property. In October 2005, the Board of Directors, based on the estimated costs and related benefits to be received from the mineral prospect at Williams Lake, determined it to be in our best interest to begin exploration of oil and natural gas properties in the Alberta region of Canada.

EMPLOYEES

As of March 15, 2008, we had 1 employee, our Chief Executive Officer. Our employee is not covered by a collective bargaining agreement and our management considers relations with our employee to be good.

RISK FACTORS

RISKS SPECIFIC TO OUR COMPANY

WE HAVE A HISTORY OF LOSSES WHICH MAY CONTINUE, WHICH MAY NEGATIVELY IMPACT OUR ABILITY TO ACHIEVE OUR BUSINESS OBJECTIVES.

We incurred net losses of approximately $2,209,576 and $911,386 for the years ended December 31, 2007 and 2006, respectively. We cannot assure you that we can achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. There can be no assurance that future operations will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.

IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDING OUR BUSINESS OPERATIONS WILL BE HARMED AND IF WE DO OBTAIN ADDITIONAL FINANCING OUR THEN EXISTING SHAREHOLDERS MAY SUFFER SUBSTANTIAL DILUTION.

We will require additional funds to sustain and expand our oil and gas exploration activities. We anticipate that we will require approximately $1,000,000 to fund our continued operations for the fiscal year 2008. Additional capital will be required to effectively support the operations and to otherwise implement our overall business strategy. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and exploration plans and possibly cease our operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.

OUR INDEPENDENT AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.

In their report dated April 14, 2008, our independent auditors stated that our financial statements for the year ended December 31, 2007 were prepared assuming that we would continue as a going concern. Our ability to continue as a going concern is an issue raised as a result of recurring losses from operations and working capital deficiency. We continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities and loans from certain stockholders. Our continued net operating loss increases the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

WE HAVE A LIMITED OPERATING HISTORY AND IF WE ARE NOT SUCCESSFUL IN CONTINUING TO GROW OUR BUSINESS, THEN WE MAY HAVE TO SCALE BACK OR EVEN CEASE OUR ONGOING BUSINESS OPERATIONS.

We have no history of revenues from oil and gas operations and have no significant tangible assets. We own a mineral lease with a carrying valued of $9,814. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating history and must be considered in the development stage. Our success is significantly dependent on a successful acquisition, drilling, completion and production program. Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate recoverable reserves or operate on a profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.

OUR INTERESTS IN THE PRODUCTION SHARING CONTRACTS INVOLVE HIGHLY SPECULATIVE EXPLORATION OPPORTUNITIES THAT INVOLVE MATERIAL RISKS THAT WE WILL BE UNSUCCESSFUL

Our working interests that comprise our portfolio should be considered to be highly speculative exploration opportunities that will involve material risks. None of the working interests in which we have an interest have any proven reserves and are not producing any quantities of oil or natural gas. Exploratory drilling activities are subject to many risks, including the risk that no commercially productive reservoirs will be encountered. There can be no assurance that wells drilled in any of our land portfolio in which we have an interest or by any venture in which we may acquire an interest in the future will be productive or that we will receive any return or recover all or any portion of our investment. Drilling for oil and gas may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. The cost of drilling, completing and operating wells is often uncertain. Drilling operations may be curtailed, delayed or canceled as a result of numerous factors, many of which are beyond the operator's control, including economic conditions, mechanical problems, title problems, weather conditions, compliance with governmental requirements and shortages or delays of equipment and services. Drilling activities on land in which we hold an interest may not be successful and, if unsuccessful, such failure may have a material adverse effect on our future results of operations and financial condition.

IF WE ARE UNABLE TO SUCCESSFULLY RECRUIT QUALIFIED MANAGERIAL AND FIELD PERSONNEL HAVING EXPERIENCE IN OIL AND GAS EXPLORATION, WE MAY NOT BE ABLE TO CONTINUE OUR OPERATIONS.

In order to successfully implement and manage our business and acquisition plans, we will be dependent upon, among other things, successfully recruiting qualified managerial and field personnel having experience in the oil and gas exploration business. Competition for qualified individuals is intense. There can be no assurance that we will be able to find, attract and retain existing employees or that we will be able to find, attract and retain qualified personnel on acceptable terms.

AS OUR PROPERTIES ARE IN THE EXPLORATION AND DEVELOPMENT STAGE, THERE CAN BE NO ASSURANCE THAT WE WILL ESTABLISH COMMERCIAL DISCOVERIES ON OUR PROPERTIES.

Exploration for economic reserves of oil and gas is subject to a number of risk factors. Few properties that are explored are ultimately developed into producing oil and/or gas wells. Our properties are in the exploration and development stage only and are without proven reserves of oil and gas. We may not establish commercial discoveries on any of our properties.

THE POTENTIAL PROFITABILITY OF OIL AND GAS VENTURES DEPENDS UPON FACTORS BEYOND THE CONTROL OF OUR COMPANY.

The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. In addition, adverse weather conditions can also hinder drilling operations. These changes and events may materially affect our financial performance. These factors cannot be accurately predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital.

EVEN IF WE ARE ABLE TO DISCOVER AND GENERATE A GAS WELL, THERE CAN BE NO ASSURANCE THE WELL WILL BECOME PROFITABLE.

We have not yet made a discovery of gas or drilled a gas well to capture any gas. Even if we are able to, a productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. In addition, the marketability of oil and gas which may be acquired or discovered will be affected by numerous factors, including the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection, all of which could result in greater expenses than revenue generated by the well.

COMPETITION IN THE OIL AND GAS INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL BE SUCCESSFUL IN ACQUIRING THE LEASES.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staffs. Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict if the necessary funds can be raised or that any projected work will be completed. Our budget anticipates our acquisition of additional land the Alberta area. This acreage may not become available or if it is available for leasing, that we may not be successful in acquiring the leases.

RISKS SPECIFIC TO OUR INDUSTRY

THE MARKETABILITY OF NATURAL RESOURCES WILL BE AFFECTED BY NUMEROUS FACTORS BEYOND OUR CONTROL WHICH MAY RESULT IN US NOT RECEIVING AN ADEQUATE RETURN ON INVESTED CAPITAL TO BE PROFITABLE OR VIABLE.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

OIL AND GAS OPERATIONS ARE SUBJECT TO COMPREHENSIVE REGULATION WHICH MAY CAUSE SUBSTANTIAL DELAYS OR REQUIRE CAPITAL OUTLAYS IN EXCESS OF THOSE ANTICIPATED CAUSING AN ADVERSE EFFECT ON OUR COMPANY.

Oil and gas operations are subject to federal, state and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, state or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages. To date we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations.

EXPLORATION AND PRODUCTION ACTIVITIES ARE SUBJECT TO CERTAIN ENVIRONMENTAL REGULATIONS WHICH MAY PREVENT OR DELAY THE COMMENCEMENT OR CONTINUANCE OF OUR OPERATIONS.

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry. We believe that our operations comply, in all material respects, with all applicable environmental regulations. Our operating partners maintain insurance coverage customary to the industry; however, we are not fully insured against all possible environmental risks.

EXPLORATORY DRILLING INVOLVES MANY RISKS AND WE MAY BECOME LIABLE FOR POLLUTION OR OTHER LIABILITIES WHICH MAY HAVE AN ADVERSE EFFECT ON OUR FINANCIAL POSITION.

Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labor, and other risks are involved. We may become subject to liability for pollution or hazards against which it cannot adequately insure or which it may elect not to insure. Incurring any such liability may have a material adverse effect on our financial position and results from operations.

THE EXPLORATION FOR AND DEVELOPMENT OF OIL AND NATURAL GAS RESERVES DEPENDS ON ACCESS TO AREAS WHERE OPERATIONS ARE TO BE CONDUCTED.

Seasonal weather variations, including freeze-up and break-up affect access in certain circumstances. Natural gas is used principally as a heating fuel and for power generation. Accordingly, seasonal variations in weather patterns affect the demand for natural gas. Depending on prevailing conditions, the prices received for sales of natural gas are generally higher in winter than summer months, while prices are generally higher in summer than spring and fall months. A decrease in natural gas or oil prices due to seasonal variations may have a material adverse effect on our results from operations.

RISKS RELATED TO OUR SECURITIES

OUR COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

- that a broker or dealer approve a person's account for transactions in penny stocks; and
- the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

- obtain financial information and investment experience objectives of the person; and
- make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

- sets forth the basis on which the broker or dealer made the suitability determination; and
- that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

FUTURE SALES OF SHARES MAY ADVERSELY IMPACT THE VALUE OF OUR STOCK.

We will seek to raise additional capital through the sale of our common stock. Future sales of our common stock could cause the market price of our common stock to decline.

IF A MARKET WERE TO DEVELOP FOR OUR SHARES, THE SHARE PRICES MAY BE HIGHLY VOLATILE.

The market prices of equity securities of small companies have experienced extreme price volatility in recent years not necessarily related to the individual performance of specific companies. Factors such as announcements by us, or our competitors concerning products, technology, governmental regulatory actions, other events affecting tanning companies generally and general market conditions may have a significant impact on the market price of our shares and could cause it to fluctuate substantially.

POSSIBLE ISSUANCE OF ADDITIONAL SHARES MAY IMPACT THE PRICE OF OUR STOCK SHOULD A PUBLIC TRADING MARKET EVER DEVELOP.

Our Certificate of Incorporation authorizes the issuance of 100,000,000 shares of common stock. Our Board of Directors has the power to issue any or all of such additional common stock without stockholder approval. Investors should be aware that any stock issuances might result in a reduction of the book value or market price, if any, of the then outstanding common stock. If we were to issue additional common stock, such issuance will reduce proportionate ownership and voting power of the other stockholders. Also, any new issuance of common stock may result in a change of control.

ITEM 2.DESCRIPTION OF PROPERTY

We do not own or lease any real property. An office is maintained for the Company at the present time at 2413 Morocco Avenue, North Las Vegas, Nevada 89031. This office is provided as an accommodation to the Company by the president of the Company.

OIL AND GAS PROPERTIES

The following is a brief description of the oil and gas properties in which Frontier held an interest as of December 31, 2007. In 2006, the Company purchased at auctions the oil and gas rights on one 640 acre section from the United States Bureau of Land Management. The property is located in the state of New Mexico.

Exploratory and Development Wells Drilled

Frontier did not participate in the drilling of any wells during the last three fiscal years.

Miscellaneous

Frontier is not obligated to provide quantities of oil or gas in the future under existing contracts or agreements. Frontier has not filed any reports containing oil or gas reserve estimates with any federal or foreign governmental authority or agency within the past 12 months.

ITEM 3.LEGAL PROCEEDINGS

We are not a party to any pending legal proceeding or litigation, except as described in the following paragraph. In addition, none of our property is the subject of a pending legal proceeding. We are not aware of any legal proceedings against the Company or our property contemplated by any governmental authority.

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

No matters were submitted to a vote of security holders during the last quarter of the fiscal year ended December 31, 2007.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Our common stock is quoted on the "Pink sheets" electronic over-the- counter quotation system under the symbol "FRGY".

For the periods indicated, the following table sets forth the high and low per share closing prices for our common stock. These prices represent inter-dealer quotations without retail markup, markdown or commission and may not necessarily represent actual transactions.

2006 HIGH LOW

First Quarter 1.50 1.02
Second Quarter 1.30 0.55
Third Quarter 1.10 0.51
Fourth Quarter 0.65 0.15

2007

First Quarter 0.60 0.14
Second Quarter 0.18 0.02
Third Quarter 0.03 0.004
Fourth Quarter 0.02 0.002

HOLDERS

As of April 14, 2008, we had approximately 704 holders of our common stock. The number of record holders includes beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. The transfer agent of our common stock is Standard Registrar and Transfer Company, Inc., 12528 South 1840 East, Draper, Utah 84020.

On October 4, 2005, the Company declared a stock dividend of one share of common stock for each forty shares of common stock outstanding. On December 14, 2004, the Company declared a stock dividend of one share of common stock for each ten shares of common stock outstanding. We have not declared any cash dividends since inception, and have no present intention of paying any cash dividends on our shares in the foreseeable future. The payment of dividends, if any, in the future, rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors.

RECENT SALES OF UNREGISTERED SECURITIES

In 2007, the Company did not issue any shares to investors.

In 2006, the Company issued 939,858 shares of restricted common stock to an offshore investor pursuant to Regulation S for net proceeds of $185,073.

In July 2006, the company issued its chief Executive Officer, Mr. Genesi, 700,000 shares of restricted common stock in connection with his employment agreement.

On October 12, 2005, the Company issued 5,000,000 restricted shares to Jeffery A. Cocks which 500,000 shares is considered as a finder's fee and 4,500,000 shares as a fee for securing future financing totaling $2,000,000. The Bindloss Agreement contained an upset provision that stated in the event that Angels or Mr. Cocks were unable to finance $1,000,000 in 90 days from the signing of this agreement (at terms acceptable to the Board of Directors), the Company will acquire 4,500,000 of the Payment Shares in exchange for the mutual release of this Agreement by all parties. In the event that Angels and Mr. Cocks were unable to finance less than $2,000,000 within 90 days from the signing of this Agreement, the Company will have the right to cancel 2,500,000 of the total Payment Shares. On March 10, 2006, based on the non performance of the agreement, the Company cancelled 4,500,000 of the 5,000,000 shares issued per the agreement.

On July 22, 2005, the Company issued 16,250 shares in consideration for $46,000 of debt that was cancelled.

ITEM 6.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion of our plan of operation, financial condition and results of operations should be read in conjunction with the Company's consolidated financial statements, and notes thereto, included elsewhere herein. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to, those discussed in this Annual Report.

IN GENERAL

Frontier Energy Corp. has recently purchased one oil lease property that we believe is capable of producing oil revenue. Our ability to emerge from the exploration stage with respect to any planned principal business activity is dependent upon our efforts to raise additional equity financing and generate significant revenue.

PLAN OF OPERATION

The Company has purchased one oil lease on property located in the western United States and we are currently attempting to raise sufficient funds to exploit this lease and purchase other leases. We can give no assurances that the Company will be able to exploit its existing lease or purchase any additional leases.

MARKETING OF PRODUCTION

Each oil and gas property in which we have an interest in will have an operator who will be responsible for marketing production. In our current project, we are not subject to any contractual restrictions that require that non-operators such as us consent to the terms and conditions of any sales contract before it is entered into.

Any non-operator who chooses to do so may negotiate and enter into a sales contract with third parties for the sale of its share of oil and/or gas.

LIQUIDITY AND CAPITAL RESOURCES

We have not generated sufficient operating revenue or had access to sufficient capital to implement our business plan. Since our revenues from operations alone are not likely to provide sufficient capital to allow us to implement our acquisition and merger plans in the near future, we must secure a source of additional capital.

We currently have very limited operating funds, and we will require additional cash to maintain our operations for the next twelve months. Based on the cash we currently have, we will likely need additional financing to continue operations beyond 2008. We have been dependent on loans from certain stockholders to continue operations. Thus, our success is greatly dependent upon our ability to raise additional capital. In the event that we obtain only modest amounts of additional capital to fund our operations, we will be forced to seek such additional capital or discontinue operations.

We believe that we will require an additional $1,000,000 to fund our currently anticipated requirements for ongoing operations for our existing business for the next twelve-month period. We currently intend to satisfy our long-term liquidity requirements from cash flow from operations and to the extent such funds are insufficient, we must raise additional funds to sustain operations.

VARIABLES AND TRENDS

We have no operating history with respect to oil and natural gas exploration. In the event we are able to obtain the necessary financing to move forward with our business plan, we expect our expenses to increase significantly as we grow our business with the acquisition of additional property or through acquisitions. Accordingly, the comparison of the financial data for the periods presented may not be a meaningful indicator of our future performance and must be considered in light of our operating history.

CRITICAL ACCOUNTING POLICIES

We prepare our financial statements in conformity with accounting principals generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available to us. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The significant accounting policies that we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Full Cost Method. We utilize the full cost method to account for our investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs, interest costs relating to unproved properties, geological expenditures and direct internal costs are capitalized into the full cost pool. As of December 31, 2007, we had no properties with proven reserves. When we obtain proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. Investments in unproved properties and major development projects including capitalized interest, if any, are not amortized until proved reserves associated with the projects can be determined. If the future exploration of unproved properties is determined uneconomical, the amount of such properties is added to the capitalized cost to be amortized. During the year ended December 31, 2007, amortization was $1,095.

The capitalized costs included in the full cost pool are subject to a "ceiling test," which limits such costs to the aggregate of the estimated present value, using an estimated discount rate, of the future net revenues from proved reserves, based on current economic and operating conditions and the estimated value of unproven properties. As at December 31, 2007, none of our unproved oil and gas properties were considered impaired.

Net operating loss carryforwards. We have not recognized the benefit in our financial statements with respect to the approximately $2,620,000 net operating loss carryforward for federal income tax purposes as of December 31, 2007. This benefit was not recognized due to the possibility that the net operating loss carryforward would not be utilized, for various reasons, including the potential that we might not have sufficient profits to use the carryforward or that the carryforward may be limited as a result of changes in our equity ownership. We intend to use this carryforward to offset our future taxable income. If we were to use any of this net operating loss carryforward to reduce our future taxable income and the Internal Revenue Service were to then successfully assert that our carryforward is subject to limitation as a result of certain capital transactions, we may be liable for back taxes, interest and, possibly, penalties prospectively.

Impairment of Long Lived Assets. We assess the impairment of long-lived assets on an ongoing basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable based upon an estimate of future undiscounted cash flows. Factors we consider that could trigger an impairment review include the following: (i) significant underperformance relative to expected historical or projected future operating results; (ii) significant changes in the manner of our use of the acquired assets or the strategy for our overall business; (iii) significant negative industry or economic trends; (iv) significant decline in our stock price for a sustained period; and (v) our market capitalization relative to net book value.

When we determine that the carrying value of any long-lived asset may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure impairment based on the difference between an asset's carrying value and an estimate of fair value, which may be determined based upon quotes or a projected discounted cash flow, using a discount rate determined by our management to be commensurate with our cost of capital and the risk inherent in our current business model, and other measures of fair value.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued Statement No. 123R, "Share-Based Payment," which requires companies to recognize in the statement of operations all share-based payments to employees, including grants of employee stock options, based on their fair values. Accounting for share-based compensation transactions using the intrinsic method supplemented by pro forma disclosures will no longer be permissible. The new statement will be effective for public entities in the first interim period for fiscal years beginning after June 15, 2005, and, accordingly, will be adopted by us in the first quarter of calendar year 2006. The actual impact of adoption of SFAS 123R cannot be fully predicted at this time because it will depend on levels of share-based payments granted in the future. The adoption of this new statement will have no effect until share-based compensation is issued by the Company.

OFF BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

ITEM 7. FINANCIAL STATEMENTS

TABLE OF CONTENTS

 Page No.

Report of Independent Registered Public Accounting Firm F-1

Consolidated Financial Statements

 Consolidated Balance Sheets F-2

 Consolidated Statements of Operations F-3

 Consolidated Statement of Stockholders' Deficit F-4 - F-5

 Consolidated Statements of Cash Flows F-6

Notes to Consolidated Financial Statements F-7 - F-16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors Frontier Energy Corp.
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheets of Frontier Energy Corp. as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Frontier Energy Corp., as of December 31, 2007 and 2006, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered losses and current liabilities exceed current assets, all of which raise substantial doubt about its ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ De Joya Griffith & Associates
---------------------------------
De Joya Griffith & Associates
Henderson, Nevada
April 14, 2008

F-1

FRONTIER ENERGY CORP.
(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED BALANCE SHEETS

 December 31,
 --------------------------
 2007 2006
 ----------- -----------
 ASSETS

Current assets
 Cash $ 131 $ 23,390
 Receivables, net of allowance for doubtful accounts of $76,696 - -
 ----------- -----------
 Total current assets 131 23,390
 ----------- -----------
 Fixed assets, net of $219 accumulated depreciation 875 1,094
 Mineral leases, net of $1,091 accumulated amortization 9,814 10,905
 ----------- -----------
Total assets $ 10,820 $ 35,389
 =========== ===========

 LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
 Accounts payable and accrued liabilities $ 332,458 $ 267,724
 Loans payable 192,322 127,322
 Due to related parties - 446
 ----------- -----------
 Total current liabilities 524,780 395,492
 ----------- -----------
 Total liabilities 524,780 395,492


Stockholders' deficit

 Series A preferred stock, $0.001 par value; 1 share
 authorized, issued and outstanding - -
 Series B preferred stock, $0.001 par value; 10,000,000
 authorized; and 80,000 and 40,000 shares issued or outstanding 80 40
 Common stock, $0.001 par value; 100,000,000 shares
 authorized, 41,256,464 and 3,886,464 shares issued and outstanding 41,256 3,886
 Additional paid-in capital 6,631,034 4,982,210
 Common stock subscribed 38,485 26,000
 Common stock issued for future services on employment agreement (29,750) (386,750)
 Accumulated deficit prior to reentering exploration stage (3,042,536) (3,042,536)
 Accumulated deficit after reentering exploration stage (4,152,529) (1,942,953)
 ----------- -----------
 Total stockholders' deficit (513,960) (360,103)
 ----------- -----------
Total liabilities and stockholders' deficit $ 10,820 $ 35,389
 =========== ===========