EGPI FIRECREEK, INC. - Quarter Report: 2008 June (Form 10-Q)

Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

o	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2008
or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	o		Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o Yes x No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of June 30, 2008, the registrant had 1,184,257,619 shares of its $0.001 par value common stock issued and outstanding. There are also -0- shares of Series A, or B preferred stock, and 20,000,000 shares of its Series C preferred stock, issued and outstanding, at $0.001 par value for each of the Series of Preferred, and no shares of non-voting common stock issued and outstanding.

Check whether the registrant has 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. x Yes o No

EGPI FIRECREEK, INC

f/k/a Energy Producers, Inc.

10-QSB

June 30, 2008

TABLE OF CONTENTS

		PAGE
PART 1:	FINANCIAL INFORMATION

Item 1.	Financial Statements - Unaudited

	Consolidated Balance Sheets	3

	Consolidated Statement of Operations	4

	Consolidated Statement of Cash Flows	5

	Consolidated Statement of Changes in Shareholders' Equity	6

	Notes to the Unaudited Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis or Plan of Operation	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20

Item 4(T)	Controls and Procedures	21

PART II:	OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 2.	Unregisterd Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults upon Senior Securities	24

Item 4.	Submission of Matters to a Vote of Security Holders	24

Item 5.	Other Information	24

Item 6.	Exhibits	24

	Certifications

	Signature	25

PART I FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2008 AND DECEMBER 31, 2007

	30-Jun-08			31-Dec-07

ASSETS

Current assets:
Cash	$	137,107		$	2,009,734
Accounts receivable		225,721			76,348
Deferred charges		17,843			13,739
Total current assets	$	380,671		$	2,099,821

Other assets:
Investment in Star Energy, fair market value		70,000			382,200
Deferred charges		76,454			116,934
Fixed assets- net		3,496,421			2,234,930

Total assets	$	4,023,546		$	4,833,885

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Accounts payable & accrued expenses	$	731,841		$	866,110
Notes payable- net of discount		4,932,223			4,753,349
Total current liabilities	$	5,664,064		$	5,619,459

Advances payable to shareholders		314,298			218,926
Convertible debentures- net of discount		1,065,066			632,563
Derivative liability		2,806,206			2,146,974
Total liabilities	$	9,849,634		$	8,617,922

Shareholders' deficit:
Series A preferred stock, 20 million authorized, par value $0.001,one share convertible to one common share, no stated dividend, none outstanding	$	0		$	0
Series B preferred stock, 20 million authorized, par value $0.001,one share convertible to one common share, no stated dividend, none outstanding		0			0
Series C preferred stock, 20 million authorized, stated value $.001,one share convertible to ten common shares, no stated dividend. 20 million shares outstanding		200,000			200,000
Common stock- $.001 par value, authorized 1,320,000,000 shares, issued and outstanding, 1,184,257,619 at December 31, 2007 and at June 30, 2008	$	1,184,257		$	1,184,257
Additional paid in capital		20,970,812			20,970,812
Other comprehensive loss		(497,000	)		(184,800	)
Accumulated deficit		(27,684,157	)		(25,954,306	)
Total shareholders' deficit		(5,826,088	)		(3,784,037	)

Total Liabilities & Shareholders' Deficit	$	4,023,546		$	4,833,885

See the notes to the unaudited consolidated financial statements.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

	Six Months			Six Months			Three Months			Three Months
	Unaudited			Unaudited			Unaudited			Unaudited
	30-Jun-08			30-Jun-07			30-Jun-08			30-Jun-07
				As restated						As restated
Gross Revenues from sales	$	820,634		$	80,216		$	600,664		$	46,333
Cost of sales		(522,819	)		(86,018	)		(359,334	)		(56,113	)
Net Revenues from sales	$	297,815		$	(5,802	)	$	241,330		$	(9,780	)

General and administrative expenses:
General administration	$	645,788		$	658,646		$	153,412		$	360,273
Total general & administrative expenses		645,788			658,646			153,412			360,273

Net gain (loss) from operations	$	(347,973	)	$	(664,448	)	$	87,918		$	(370,053	)

Other revenues and expenses:
Gain (loss) on derivative liability		(693,530	)		36,261			(514,461	)		21,646
Interest income		3,687			0			426			0
Interest expense		(692,035	)		(790,503	)		(231,539	)		(602,847	)

Net loss before provision for income taxes	$	(1,729,851	)	$	(1,418,690	)	$	(657,656	)	$	(951,254	)

Provision for income taxes		0			0			0			0

Net loss	$	(1,729,851	)	$	(1,418,690	)	$	(657,656	)	$	(951,254	)

Basic & fully diluted net loss per common share:
Loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average of common shares outstanding:
Basic & fully diluted		1,184,257,619			403,154,759			1,184,257,619			410,082,378

See the notes to the unaudited consolidated financial statements.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

	30-Jun-08			30-Jun-07
	Un Audited			As restated
Operating Activities:
Net loss	$	(1,729,851	)	$	(1,418,690	)
Adjustments to reconcile net loss items not requiring the use of cash:
Depreciation & depletion expense		73,305			73,602
Interest expense		564,234			669,842
Amortization of deferred charges		36,376			230,067
Gain on derivative liability		693,530			(36,261	)
Changes in other operating assets and liabilities :
Accounts receivable		(149,373	)		(7,152	)
Accounts payable and accrued expenses		39,152			(57,031	)
Net cash used by operations	$	(472,627	)	$	(545,623	)

Investing activities:
Purchase of lease & equipment	$	(1,400,000	)	$	0
Net cash used for investing activities		(1,400,000	)		0

Financing Activities:
Credit equity line	$	0		$	435,000
Convertible debentures		0			1,900,000
Shareholder advances received (paid)		0			49,086
Net cash provided by financing activities		0			2,384,086

Net increase (decrease) in cash during the period	$	(1,872,627	)	$	1,838,463

Cash balance at December 31st		2,009,734			14,955

Cash balance at June 30th	$	137,107		$	1,853,418

Supplemental disclosures of cash flow information:
Interest paid during the period	$	0		$	0
Income taxes paid during the period	$	0		$	0

See the notes to the unaudited consolidated financial statements.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

AS RESTATED

														Other
	Preferred		Preferred		Common		Par		Paid in		Accumulated			Comprehensive
	Shares		Value		Shares		Value		Capital		Deficit			Loss			Total

Balance at December 31, 2007		20,000,000	$	200,000		1,184,257,619	$	1,184,257	$	20,970,812	$	(25,954,306	)	$	(184,800	)	$	(3,784,037	)

Loss on investment (Star Energy)															(312,200	)		(312,200	)

Net loss for the period												(1,729,851	)					(1,729,851	)

Balance at June 30, 2008		20,000,000	$	200,000		1,184,257,619	$	1,184,257	$	20,970,812	$	(27,684,157	)	$	(497,000	)	$	(5,826,088	)

	Common		Par		Paid in		Accumulated
	Shares		Value		Capital		Deficit			Total

Balance at December 31, 2006		395,367,446	$	395,367	$	18,887,168	$	(24,480,256	)	$	(5,197,721	)

Issued shares to pay equity line		21,986,358		21,986		113,597					135,583

Net loss for the period								(1,418,690	)		(1,418,690	)

Balance at June 30, 2007		417,353,804	$	417,353	$	19,000,765	$	(25,898,946	)	$	(6,480,828	)

See the notes to the unaudited consolidated financial statements.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

1. ORGANIZATION OF THE COMPANY AND SIGNIFICANT ACCOUNTING PRINCIPLES

EGPI Firecreek, Inc. (the “Company”) was incorporated in the State of Nevada in October 1995. Effective October 13, 2004, the Company, previously known as Energy Producers Inc., changed its name to EGPI Firecreek, Inc.

The Company is a 50% non controlling owner of three gas wells in Sweetwater County, Wyoming, and owns other controlling oil and gas interests located in Knox and Ward Counties, Texas.

In December 2006, the Company increased its authorized common stock to 1,320,000,000 shares with par value of $.001. Twenty million of these shares are non-voting.

Consolidation- the accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Firecreek Petroleum, Inc. All significant inter-company balances have been eliminated.

Use of Estimates- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make reasonable estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses at the date of the consolidated financial statements and for the period they include. Actual results may differ from these estimates.

Revenue and Cost Recognition- Revenue is recognized from oil and gas sales at such time as the oil and gas is delivered to the buyer. For its producing activities, the Company uses successful efforts costing.

Properties and Equipment-The Company uses the successful efforts method of accounting for oil and gas producing activities. Under this method, acquisition costs for proved and unproved properties are capitalized when incurred. Exploration costs, including geological and geophysical costs, the costs of carrying and retaining unproved properties and exploratory dry hole drilling costs, are expensed. Development costs, including the costs to drill and equip development wells, and successful exploratory drilling costs to locate proved reserves are capitalized.

Exploratory drilling costs are capitalized when incurred pending the determination of whether a well has found proved reserves. A determination of whether a well has found proved reserves is made shortly after drilling is completed. The determination is based on a process which relies on interpretations of available geologic, geophysic, and engineering data. If a well is determined to be successful, the capitalized drilling costs will be reclassified as part of the cost of the well. If a well is determined to be unsuccessful, the capitalized drilling costs will be charged to expense in the period the determination is made. If an exploratory well requires a major capital expenditure before production can begin, the cost of drilling the exploratory well will continue to be carried as an asset pending determination of whether proved reserves have been found only as long as: i) the well has found a sufficient quantity of reserves to justify its completion as a producing well if the required capital expenditure is made and ii) drilling of the additional exploratory wells is under way or firmly planned for the near future. If drilling in the area is not under way or firmly planned, or if the well has not found a commercially producible quantity of reserves, the exploratory well is assumed to be impaired, and its costs are charged to expense.

In the absence of a determination as to whether the reserves that have been found can be classified as proved, the costs of drilling such an exploratory well is not carried as an asset for more than one year following completion of drilling. If, after that year has passed, a determination that proved reserves exist cannot be made, the well is assumed to be impaired, and its costs are charged to expense. Its costs can, however, continue to be capitalized if a sufficient quantity of reserves is discovered in the well to justify its completion as a producing well and sufficient progress is made in assessing the reserves and the well’s economic and operating feasibility.

The impairment of unamortized capital costs is measured at a lease level and is reduced to fair value if it is determined that the sum of expected future net cash flows is less than the net book value. The Company determines if impairment has occurred through either adverse changes or as a result of the annual review of all fields. During 2008 and 2007, the Company did not record any impairment.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

1. ORGANIZATION OF THE COMPANY AND SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)

Development costs of proved oil and gas properties, including estimated dismantlement, restoration and abandonment costs and acquisition costs, are depreciated and depleted on a field basis by the units-of-production method using proved developed and proved reserves, respectively. The costs of unproved oil and gas properties are generally combined and impaired over a period that is based on the average holding period for such properties and the Company's experience of successful drilling.

Costs of retired, sold or abandoned properties that make up a part of an amortization base (partial field) are charged to accumulated depreciation, depletion and amortization if the units-of-production rate is not significantly affected. Accordingly, a gain or loss, if any, is recognized only when a group of proved properties (entire field) that make up the amortization base has been retired, abandoned or sold.

Cash- For the purpose of calculating changes in cash flows, cash includes all cash balances and highly liquid short-term investments with original maturity dates of three months or less.

Deferred costs- Deferred costs are the costs of obtaining the equity line of credit discussed in Note 10 and are amortized over the life of the loan.

Long Lived Assets- The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

Income taxes- The Company accounts for income taxes in accordance with the Statement of Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income Taxes". SFAS No. 109 requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.

2. GOING CONCERN

The accompanying unaudited consolidated financial statements have been presented in accordance with generally accepted accounting principals, which assume the continuity of the Company as a going concern. However, during the quarter ended June 30, 2008 and the year ended December 31, 2007, the Company generated no material revenues and has relied on borrowings and the issuance of common and preferred stock to raise money for its business operations and plans. This situation raises the doubt of the Company’s ability to continue as a going concern

Management’s plans with regard to this matter are as follows:

·	Raise interim and long term finance in addition to its present equity line to assist expansion-development and acquisition programs for oil and gas, corporate operations, and for the purpose of building on the current revenue base.
·	Obtain asset based project finance or develop joint ventures to fund work programs for oil and gas projects domestically and overseas.

·	Pursue formation of strategic alliances with more firmly established peer groups to assist acquisition activities.
·	Initiate search for experienced oil and gas personnel to add to our staff.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

3. Net Loss per Share

The Company applies SFAS No. 128, Earnings per Share to compute net loss per share. In accordance with SFAS No. 128, basic net loss per share has been computed based on the weighted average of common shares outstanding during the years. Diluted net loss per share gives the effect of outstanding common stock equivalents in the form of warrants, convertible preferred stock, and convertible debentures.

The effects on net loss per share of the common stock equivalents, however, are not included in the calculation of net loss per share since their inclusion would be anti-dilutive.

Net loss per common share has been computed as follows:

	6 Months			6 Months			3 Months			3 Months
	30-Jun-08			30-Jun-07			30-Jun-08			30-Jun-07

Net loss	$	(1,729,851	)	$	(1,418,690	)	$	(657,656	)	$	(951,254	)

Total shares outstanding		1,184,257,619			417,353,804			1,184,257,619			417,353,804

Weighted average		1,184,257,619			403,154,759			1,184,257,619			410,082,378

Loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

4. COMMON STOCK TRANSACTIONS

During the first quarter of 2007, the Company issued 4,021,500 shares of common stock to pay down the equity line of credit.

5. PREFERRED STOCK SERIES

Series A preferred stock: Series A preferred stock has a par value of $0.001 per share and no stated dividend preference. The Series A is convertible into common stock at a conversion ratio of one preferred share for one share of common stock. Preferred A has liquidation preference over Preferred B stock and common stock.

Series B preferred stock: Series B preferred stock has a par value of $0.001 per share and no stated dividend preference. The Series B is convertible into common stock at a conversion ratio of one preferred share for one share of common stock. The Series B has liquidation preference over Preferred C stock and common stock.

Series C preferred stock: The Series C Preferred stock has a stated value of $0.001 and no stated dividend rate and is non-participatory. One share of preferred is convertible into 10 shares of common stock. The Series C has liquidation preference over common stock.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

6. Common Stock Warrants

A listing of common stock warrants outstanding is as follows:

				Weighted Average		Weighted Average
	Amount			Exercise Price		Years to Maturity

Outstanding at December 31, 2006		41,562,000		$	0.40		2.72

Issued		0
Exercised		0
Expired		(5,800,000	)

Outstanding at December 31, 2007		35,762,000		$	0.36		1.61

Issued		0
Exercised		0
Expired		0

Outstanding at June 30, 2008		35,762,000		$	0.36		1.11

7. Fixed Assets- Net

The following is a detailed list of fixed assets:

	30-Jun-08			31-Dec-07

Well leases	$	2,313,325		$	1,068,650
Well equipment		1,472,035			1,316,710
Accumulated depreciation & depletion		(288,939	)		(150,430	)

Fixed assets- net	$	3,496,421		$	2,234,930

In January 2008, the Company, through it’s wholly owned subsidiary, Firecreek Petroleum, Inc, purchased a certain 40 acre tract of land and leases with first right for an additional 40 acre lease located in Ward County, Texas, more commonly known as the J.B. Tubb Leasehold Estate. The Company paid $1,400,000 for the lease, equipment and a Participation Agreement which provides for turnkey drilling, re-entry and includes multiple wells.

8. Promissory Notes

The following is the schedule of the promissory notes payable at June 30, 2008:

Matured in September 2006, effective interest of 18.55%	$	1,041,626
Matured in November 2006, effective interest of 22.12%		1,488,215
Matured in December 2006, effective interest of 22.12%		129,885
Matured in April 2007, effective interest of 22.12%		581,603
Matured in December 2007, effective interest of 17.34%		1,042,651
Matured in March 2008, effective interest of 25.68%		648,244

Total for promissory notes payable	$	4,932,223

At June 30, 2008, the Company is in default of the promissory note agreement(s). The note agreements provide for interest and penalties in the event of a default. The interest penalties are $2,199,450 at June 30, 2008, however, the lender, Dutchess has agreed not to enforce any of the penalty provisions at the date of this report.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

9. Income Tax Provision

	30-Jun-08			30-Jun-07

Provision for income taxes is comprised of the following:

Net loss before provision for income taxes	$	(1,729,851	)	$	(1,240,164	)

Current tax expense:
Federal	$	0		$	0
State		0			0
Total	$	0		$	0

Less deferred tax benefit:
Timing differences		(1,289,034	)		(1,185,311	)
Allowance for recoverability		1,289,034			1,185,311
Provision for income taxes	$	0		$	0

A reconciliation of provision for income taxes at the statutory rate to provision for income taxes at the Company's effective tax rate is as follows:

Statutory U.S. federal rate		34	%		34	%
Statutory state and local income tax		10	%		10	%
Less allowance for tax recoverability		-44	%		-44	%
Effective rate		0	%		0	%

Deferred income taxes are comprised of the following:

Timing differences	$	1,289,034		$	1,185,311
Allowance for recoverability		(1,289,034	)		(1,185,311	)
Deferred tax benefit	$	0		$	0

Note: The deferred tax benefits arising from the timing differences begin to expire in fiscal years 2007 and 2028 and may not be recoverable upon the purchase of the Company under current IRS statutes.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

10. RESTATEMENT

During 2007, the Company discovered errors made in its financial statements. The Company adjusted subsequent period financial statements to reflect the following:

Balance Sheet Restatements:

Equity Line Notes Payable:

The equity line notes payable were issued with incentive debentures attached to the host contract. In accordance with EITF 00-19 and SFAS 133, the derivative liabilities were bifurcated from the host contract at fair market value. The corresponding debt discount is amortized over the life of the equity line note payable to interest expense on the statements of operations. As of June 30, 2007, the debt discount associated with the issuance of the incentive debenture and the embedded conversion feature within the incentive debenture were $320,257..

Convertible Debenture:

The incentive convertible debentures attached to the equity line notes payable were bifurcated at fair market value as of the issuance date. In accordance with SFAS 133, these debentures are marked to market at each balance sheet date. As of June 30, 2007, the fair value of the incentive debentures were $392,229.

Derivative Liability:

The Company identified conversion features embedded within the incentive debentures. In accordance with SFAS 133 and EITF 00-19, these conversion features were bifurcated from the incentive debentures and recorded at fair market value as of the issuance date. In accordance with SFAS 133, the conversion features are marked to market at each balance sheet date, with the corresponding gain or loss recorded in the statements of operations. As of June 30, 2007, the fair value of the conversion features are $1,353,996.

The fair value of the conversion options are estimated at each balance sheet date utilizing the Black Scholes Option Pricing Model utilizing the following assumptions:

	June 30, 2007

Dividend yield		0
Risk-free interest rate		4.0	%
Straight bond yield		5.0	%
Expected volatility		20
Market price	$	0.053

Additional Paid in Capital and Other Comprehensive Income

The Company previously misapplied the guidance of EITF 00-19 and SFAS 133 and bifurcated the incentive debentures from the host contract at intrinsic value to paid in capital and other comprehensive income. The application was reversed and the Company correctly applied the accounting guidance as set forth in EITF 00-19 and SFAS 133. The change resulted in a ($1,563,039) decrease to paid in capital for the quarter ended June 30, 2007.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

10. RESTATEMENT (CONTINUED)

Statements of Operations Restatements:

General and Administrative:

The Company previously recorded the face amount of the incentive debentures to general and administrative expenses during the quarter ended June 30, 2007. These incentives debentures were reclassified to at fair market value as a debt discount to the equity credit line. The change resulted in a decrease of $159,125 to general and administrative expenses during the quarter ended June 30, 2007.

Interest Expense:

The Company previously misapplied the guidance of EITF 00-19 and SFAS 133. The Company re-evaluated the application and recorded the incentive debentures and the conversion features at fair market value to debt discount. The debt discount will be amortized over the life of the equity credit line to interest expense. This change resulted in a $373,912 increase to interest expense during the quarter ended June 30, 2007.

Gain on Derivative Liability:

The Company accounted for the incentive debentures and conversion features utilizing the accounting guidance in EITF 00-19 and SFAS 133. Both the incentive debentures and the conversion features were recorded at the fair market value on the date of issuance, and are marked to market on each balance sheet date. The Company realized a gain on derivative liability in the amount of $36,261 for the quarter ended June 30, 2007.

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

EGPI Firecreek, Inc.

Consolidated Balance Sheet

	Unaudited As Restated			Unaudited Adjustment			As Filed
ASSETS		30-Jun-07			30-Jun-07			30-Jun-07
Current assets:
Cash	$	1,853,418		$	—		$	1,853,418
Accounts receivable		7,152			7,152
Deferred charges		229,866			—			229,866
Total current assets		2,090,436			—			2,090,436
Other assets:		—
Deferred Charges		99,257			—			99,257
Fixed assets, net		795,267			—			795,267
Total assets	$	2,984,960		$	—		$	2,984,960

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
Accounts payable & accrued expenses	$	782,342		$	—		$	782,342
Convertible debentures payable, net		—			(171,875	)		171,875
Equity line notes payable, net of debt discount $320,257		4,925,940			61,500			4,864,440
Total current liabilties		5,708,282			(110,375	)		5,818,657
Advances payable to shareholders		217,138			—			217,138
Convertible debenture, net of debt discount $1,607,771		392,229			(1,609,413	)		2,001,642
Derivative liability		3,148,139			3,148,139			—
Total liabilities		9,465,788			1,428,351			8,037,437
Shareholders' deficit:
Series A preferred stock, 20 million authorized, par value $0.001, one share convertible to one common share, no stated dividend, none outstanding		—			—			—
Series B preferred stock, 20 million authorized, par value $0.001, one share convertible to one common share, no stated dividend, none outstanding		—			—			—
Series C preferred stock, 20 million authorized, par value $0.001, one share convertible to ten common share, no stated dividend		—			—			—
Common stock, $0.001 par value, authorized 1,320,000,000 shares, issued and outstanding, 417,353,804 at June 30, 2007		417,353			—			417,353
Additional paid in capital		19,000,765			(1,563,039	)		20,563,804
Accumulated deficit		(25,898,946	)		134,688			(26,033,634	)
Total shareholders' deficit		(6,480,828	)		(1,428,351	)		(5,052,477	)
Total Liabilities & Shareholders' Deficit	$	2,984,960		$	—		$	2,984,960

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

EGPI Firecreek, Inc.

Consolidated Statement of Operations

	Unaudited Six Months As Restated			Adjustment			Unaudited Six Months As Filed
	30-Jun-07			30-Jun-07			30-Jun-07

Gross revenues from sales	$	80,216		$	—		$	80,216
Cost of sales		(86,018	)		—			(86,018	)
Net revenue from sales		(5,802	)		—			(5,802	)
General and administrative expenses:
General administration		658,646			(159,125	)		817,771
Total general & administrative expenses		658,646			(159,125	)		817,771
Net loss from operations		(664,448	)		159,125			(823,573	)
Other revenue and expenses
Interest Expense		(790,503	)		(373,912	)		(416,591	)
Gain on derivative liability		36,261			36,261			—
Net loss before provision for income taxes		(1,418,690	)		(178,526	)		(1,240,164	)
Provision for income taxes		—			—			—
Net loss before extraordinary item		(1,418,690	)		(178,526	)		(1,240,164	)
Extraordinary item - extinguishment of debt (net of tax)		—			—			—
Net loss from continuing operations		(1,418,690	)		(178,526	)		(1,240,164	)
Loss from discontinued operations (net of tax)		—			—			—
Net loss	$	(1,418,690	)	$	(178,526	)	$	(1,240,164	)
Basic & fully diluted net loss per common share:
Loss from continuing operations	$	(0.00	)	$	(0.00	)	$	—
Loss from discontinued operations		—			—			—
Gain from extraordinary item		—			—			—
Loss per share	$	(0.00	)	$	(0.00	)	$	—
Weighted average common shares outstanding:
Basic & Fully diluted		403,154,759			—			403,154,759

EGPI FIRECREEK, INC.

(FORMERLY ENERGY PRODUCERS, INC.)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE QUARTERS ENDED JUNE 30, 2008 AND JUNE 30, 2007

11. COMMITMENTS AND CONTINGENCIES

Background

As previously reported by EGPI Firecreek, Inc. in its Current Report on Form 8-K, dated August 9, 2007, EGPI Firecreek through its wholly owned subsidiary, Firecreek Petroleum, Inc. (collectively, the “Company”) entered into a Letter Agreement with Star Energy Corp. (“Star”) relating to the purchase and sale of all of the Company’s rights to and interest in certain projects in Ukraine (the “Agreement”). Pursuant to the Agreement, the Company received 2,100,000 shares of Star’s restricted Common Stock (“Company Shares”) and one hundred thousand dollars ($100,000) in cash upon execution of the Agreement (“Cash Payment”). As previously reported in the March 2008 Form 8-K, the Company received a Demand for Arbitration (the “Arbitration”) from Star against the Company and Double Coin Ltd. (“Double Coin”), an entity co-owned in part by a former Director of the Company. Pursuant to the Arbitration, Star sought: (i) to have the Agreement declared null and void; (ii) the return of the Company Shares; and (iii) the Company to return the $100,000 Cash Payment.

Settlement

On June 30, 2008, the Company entered into a Settlement Agreement with Star to resolve all disputes relating to the Arbitration (the “Settlement”). Pursuant to the Settlement: (i) the Company shall be entitled to retain the Cash Payment; (ii) the Company shall retain 1,000,000 of the Company Shares (“Retained Shares”); (iii) the Company agreed that the Retained Shares may only be sold pursuant to a leak-out, as provided in the Settlement; and (iv) the Company and Star agreed to dismiss the Arbitration with prejudice in its entirety as against the Company. Furthermore, Star and the Company executed and delivered to one another General Releases.

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

You should read the following discussion and analysis in conjunction with the Consolidated Financial Statements in Form 10-KSB, and Form 10-Q, as amended, and the other financial data appearing elsewhere in this Form 10-Q Report.

The information set forth in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among others (i) expected changes in the Company’s revenues and profitability, (ii) prospective business opportunities and (iii) the Company’s strategy for financing its business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward-looking statements relate to the plans, objectives and expectations of the Company for future operations. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. In light of these risks and uncertainties, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. The foregoing review of important factors should not be construed as exhaustive. The Company undertakes no obligation to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Overview

The Company is currently focused on oil and gas activities for development of interests acquired in Knox and Ward Counties, Texas and Sweetwater County, Wyoming for the production of oil and natural gas. During 2007 we limited and wound down the pursuit of and potential completion of projects overseas in Central Asian and European countries, but reserve the right to re-enter these activities at a future date.

The Company has been making presentations to asset-based lenders and other financial institutions for the purpose of expanding and supporting our growth potential by development of our oil and gas operations in 2008 with a goal to increase our revenue base and cash flow; however, the Company makes no guarantees and can provide no assurances that it will be successful in these endeavors.

One of the ways our plans for growth could be altered if current opportunities now available become unavailable:

The Company would need to identify, locate, or address replacing current potential acquisitions or strategic alliances with new prospects or initiate other existing available projects that may have been planned for later stages of growth and the Company may therefore not be ready to activate. This process can place a strain on the Company. New acquisitions, business opportunities, and alliances, take time for review, analysis, inspections and negotiations. The time taken in the review activities is an unknown factor, including the business structuring of the project and related specific due diligence factors.

General

The Company historically derived its revenues primarily from retail sales of oil and gas field inventory equipment, service, and supply items primarily in the southern Arkansas area, and from acquired interests owned in revenue producing oil wells, leases, and equipment located in Olney, Young County, Texas. The Company disposed of these two segments of operations in 2003. The Company acquired a marine vessel sales brokerage and charter business, International Yacht Sales Group, Ltd. of Great Britain in December 2003 later disposing of its operations in late 2005. We accounted for the segments as discontinued operations in the consolidated statements of operations for the related fiscal year.

Effective July 1, 2004, we acquired Firecreek Petroleum, Inc., and its subsidiary Firecreek Romania, SRL. Firecreek was focused on exploration and development specializing in the niche market of rehabilitation and enhancement of existing oilfields through modern management and state of the art technological applications internationally. Throughout 2004 and 2005, the Firecreek unit developed relationships, pursued and prepared for potential acquisitions in Romania and Libya, and through its strategic alliances developed other potential projects for acquisition located in Russia, Romania, Kazakhstan, Ukraine, and Turkey. Firecreek’s business was subsequently restructured in the first quarter of 2006. This process undertook closing our Firecreek subsidiary Ft. Worth Texas offices, eliminating or lowering many expenses including employees, consultants, telephones, long distance, cellular fees, travel, office supplies, data fees, and other. Books, accounting records and data were transferred to the Parent offices located in Scottsdale Arizona. The restructuring helped to decrease overall operating losses for the year 2006, and also to a lesser extent conserved existing cash flows. Through 2007 and first quarter 2008, Firecreek has focused primarily on development of U.S. based domestic oil and gas operations in Texas and Wyoming.

Effective November 15, 2005, Firecreek purchased a 50% undivided working interest in leases, wells, equipment, gas and to a lesser extent oil reserves, and other rights, located in Green River Basin, Sweetwater County, Wyoming. The project is listed under the prospect name “Ten Mile Draw” (“TMD”). Through our operator Newport Oil Corporation (“Newport”) having completed a successful workover program we commenced with gas production from two wells, the 16-1 and 7-16, in the first and second quarters of 2006, and subsequently began a workover program for a third well, the 13-9, in July of 2006 thereof. Historically, the Company has encountered and reported several technical issues to date with the 13-9 well, and bringing the well online to satisfactory commercial production levels. Depending on the results for bringing this well on line, the Company may ultimately elect to shut the well if reasonable commercial production levels are not achieved in a reasonable amount of time or approximately 90 days from the date of this report. Depending on the economics in the Wyoming area and other factors, the Company continues to contemplate one or more additional drilling programs for future development in the TMD, or sale of the asset.

Effective July 1, 2007, Firecreek purchased a 100% working interest and related 75% net revenue interest in leases, wells, equipment, and oil reserves located in Knox County, Texas. The project is listed as the Fant Ranch Unit. Through our operator Success Oil Co. Inc., we took over operations, commenced with oil production in the third and fourth quarter of 2007, and implemented a phase one program to rehabilitate and bring two additional wells on line in the Fant Unit. The Company, subsequent to December 31, 2007 has commenced with enhancement and rehabilitation for the majority of the producing wells in the Fant Unit which the Company believes will improve and stabilize mechanical aspects and performance levels for the wells, equipment, and overall production. For additional information please see our Report on Form 8-K filed on July 16, 2007 incorporated herein by reference.

On August 3, 2007, the Company through its Firecreek unit concluded a transaction for the sale of rights and opportunities for development works and projects located in the Ukraine. Through the agreement the purchaser acquired the rights to acquire licenses, permits and permissions to explore for and extract oil, natural gas or other natural resources on the territories referenced in the agreement. For additional information please see information and exhibits to a Report on Form 8-K filed on August 13, 2007, incorporated herein by reference. Please also see Item 1, Legal Proceedings in this report for updated status.

In January, 2008, Firecreek commenced with an enhancement/rehabilitation phase 2 program for the Fant Ranch Unit located in Knox County, Texas. The program included cleaning out casing perforations, maintenance, paraffin removal, repair and acid stimulation for a majority of the oil wells in the unit. The purpose of the program has been to maintain the existing wells regularly, and to increase the overall well efficiency and production for the field. The Company has received indications from its operator that the program has been successful.

In January, 2008, Firecreek entered into an Assignment and Bill of Sale (the “Assignment”) with Success Oil Co., Inc. (“SOC”) relating to the purchase and sale of 75% working interests along with 56.25% corresponding net revenue in certain 40 acre tract of land and leases (the “North 40”), with and including a first right for an additional 40 acre lease (the “South 40”), located in Ward County, Texas, more commonly known as the J.B. Tubb leasehold estate (the “Tubb Lease”). The Company participated in a workover, drilling and development program, and has recently brought three wells online as a result. The Company paid $1,400,000 for the lease, equipment and a Participation Agreement which provided for turnkey drilling, re-entry, and included multiple wells on the North 40 Acres. Firecreek has subsequently acquired assignment of one Lower Clearfork formation in the Highland 2 Wellbore which is located on the South 40 of the J.B. Tubb Leasehold Estate (also see information contained in Current Report on Form 8-K/A filed on April 30, 2008). The Tubb Lease workover, drilling and development programs, have recently brought three wells online as a result, with two of the three wells effectively producing and selling oil and gas at the date of this report. For further information please see our Current Report on Form 8-K, as amended, originally filed on January 9, 2008, and amended and filed on April 30, 2008, incorporated herein by reference.

The Company expects to incur an increase in operating expenses during the next year from commencing activities related to its plans for the Company and Firecreek oil and gas operations. The amount of net losses and the time required for the Company to reach and maintain profitability are uncertain at this time. There is a likelihood that the Company will encounter difficulties and delays encountered with business subsidiary operations, including, but not limited to uncertainty as to development and the time and timing required for the Company’s plans to be fully implemented, governmental regulatory responses to the Company’s plans, fluctuating markets and corresponding spikes, or dips in our products demand, currency exchange rates between countries, acquisition and development pricing, related costs, expenses, offsets, increases, and adjustments. There can be no assurance that the Company will ever generate significant revenues or achieve profitability at all or on any substantial basis.

General Statement: Factors that may affect future results:

With the exception of historical information, the matters discussed in Management’s Discussion and Analysis or Plan of Operation contain forward looking statements under the 1995 Private Securities Litigation Reform Act that involve various risks and uncertainties. Typically, these statements are indicated by words such as “anticipates”, “expects”, “believes”, “plans”, “could”, and similar words and phrases. Factors that could cause the company’s actual results to differ materially from management’s projections, forecasts, estimates and expectations include but are not limited to the following:

– Inability of the company to secure additional financing.

– Unexpected economic changes in the United States.

– The imposition of new restrictions or regulations by government agencies that affect the Company’s business activities.

To the extent possible, the following discussion will highlight the Company’s business activities for the quarters ended June 30, 2008 and June 30, 2007.

I. Results of Operations

Six months ended June 30, 2008 versus six months ended June 30, 2007.

There was $820,634 in revenues generated from the Company’s oil and gas lease production activities for the first six months of 2008 compared to $80,216 in revenues for the same six month period of 2007. Revenues for the first six months of 2008 increased approximately 1024% over the comparative six month period. Revenues were attributed to i) producing oil wells on the Company’s Fant Ranch Unit interests located in Knox County, Benjamin, Texas, ii) recently acquired oil and gas interests, including re entry and workover programs, known as the J.B. Tubb Leasehold Estate located in the Amoco Crawar Field, Ward County, Texas, and iii) natural gas production located in Sweetwater County, Wyoming, known as the Ten Mile Draw project. Operating costs were $522,819 in the for the first six months of 2008 compared to $86,018 for the same period in 2007, producing gross profits of $297,815 for the first six months of 2008 compared with a loss of ($5,802) for the first six months of 2007.

General and administrative expense for the first six months of operations in 2008 decreased to $645,788 from $658,646 in the first six months of 2007. The decrease was attributed to a decrease in well enhancement/rehabilitation costs for wells in the Fant Ranch Unit.

Detail of general & administrative expenses:

	30-Jun-08		30-Jun-07
Advertising & promotion	$	3,784	$	1,837
Administration		16,496		16,976
Consulting		47,695		96,590
Depreciation		0		46,843
Investor incentives/commissions		36,376		90,067
Professional fees		214,023		313,631
Rent & storage		0		44,093
Travel costs		2,414		0
Well workover		325,000		48,609

Total	$	645,788	$	658,646

Administration used $16,496 for corporate parent costs related to printing, office, postage, transfer agent, filing agent, and other costs.

Investor incentives/commissions of $36,376 were incurred related to financing activities.

Consulting fees of $47,695 were incurred for business advisory services.

Professional fees of $214,023 were incurred for management advisory, legal costs, accounting, and financial modeling.

Rent and storage was $0 compared to $44,093 as prior office lease expenses in Fort Worth, Texas for the historical Firecreek Petroleum operations expired and was not renewed.

Travel costs were $2,414 and was incurred in relation to business meetings and legal agenda held in Boston, and Texas.

Well workover costs of $325,000 were paid toward enhancement/rehabilitation program charges related to the Company’s interests owned in the Fant Ranch oil wells.

After deducting general and administrative costs, the Company experienced a loss from operations of $347,973 for the six months ended June 30, 2008 compared to an operating loss of $664,448 for the same period in 2007.

Interest expense decreased for the six months ended June 30, 2008 to $692,035 compared to $790,503 for the same period in 2007. The decrease of interest was due to the corrected recording of the debt discount associated with prior and new debentures and accrued interest on outstanding notes and debentures.

Net loss for the first six months in 2008 was $1,729,851 or ($0.00) per share compared to a loss of $1,418,690 or ($0.00) per share for the first six months in 2007. Increases in losses for the first six months of 2008 are attributable primarily to interest expense, and increased activities related to oil and gas well work over and or field expenses.

Three months ended June 30, 2008 versus Three months ended June 30, 2007

The Company had revenues of $600,664 for the three months ended June 30, 2008 as compared with $46,333 in revenues for the same period in 2007. Net revenues for the period were $241,330 for the period as compared to a net loss of $9,780 for the same period in 2007.

General and administrative expense for the three months ended June 30, 2008 decreased to $153,412 from $360,273 for the three months ended June 30, 2007. The decrease was attributed to a decrease in well enhancement/rehabilitation costs for wells in the Fant Ranch Unit.

Interest expense decreased in the three months ended June 30, 2008 to $231,539 compared to $602,847 for the same period in 2007. The decrease of interest was due to the corrected recording of the debt discount associated with prior and new debentures and accrued interest on outstanding notes and debentures.

Consulting and professional fees increased approximately $3,028 to $14,580 for the three month period ended June 30, 2008 from $11,552 for the comparative three month period in 2007.

Net loss for the three month period ended June 30, 2008 was $657,656 or ($0.00) per share compared to a loss of $951,254, or ($0.00) per share for the same three month period in 2007.

Discussion of Financial Condition: Liquidity and Capital Resources

At June 30, 2008 cash on hand was $137,107 as compared with $2,009,734 at December 31, 2007. Operations used $472,627 of cash and the company paid $1,400,000 to purchase its interest in the Tubbs field.

At June 30, 2008, the Company had working capital deficit of $5,334,267 compared to a working capital deficit of $3,519,638 at December 31, 2007. Working capital decreased mainly as a result of operating losses and financing costs.

Total assets at June 30, 2008 were $4,023,546 as compared to $4,833,885 at December 31, 2007. Decrease in total assets was attributable in part to decrease in value of Star Energy investment, and increased depreciation on oil and gas related assets.

The Company’s total stockholders’ deficit increased from $3,784,037 at December 31, 2007 to $5,826,088 at June 30, 2008. The Stockholders’ deficit increased $2,042,051 due net losses incurred in the first six months of 2008 which include the Company’s loss from operations of $1,729,851 along with a comprehensive loss of $312,500 form the Star Energy investment.

ITEM 4(T) – CONTROLS AND PROCEDURES

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

Texas Litigation

Hickman Investments, Ltd.

Settlement

On July 9, 2008, the Company entered into a Settlement Agreement with Hickman, effective July 1, 2008, to resolve all disputes relating to the Lawsuit (the “Settlement”), which concludes the disputed litigation. For further information please see Current Report on Form 8-K, as amended, filed on July 10, 2008, incorporated herein by reference.

New York Litigation

Star Energy Corp. Transaction

Settlement

On June 30, 2008, the Company entered into a Settlement Agreement with Star to resolve all disputes relating to the Arbitration (the “Settlement”). For further information please see Current Report on Form 8-K, as amended, filed July 2, 3008, incorporated herein by reference.

During the quarter ended June 30, 2008, the Company was not a party to any legal proceedings requiring disclosure in this Report and none of the Company’s officers or directors are involved in any litigation in their capacities as such officers or directors of the Company.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Required information has been furnished in current Report on Form 8-K filings and other reports, as amended, during the period covered by this Report and additionally as listed and following.

On March 27 and December 26 of 2007, the Company issued to Dutchess two convertible debentures one with a face value of $140,000 and the other with a face amount $500,000, to pay an incentive fee to the holder. The debentures became convertible at the date of the issuances and mature in March 27, 2012 and December 26, 2014, respectively. The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”) for the private placement of these securities pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the Investor is an “accredited investor” and/or qualified institutional buyer, the Investor has access to information about the Company and its investment, the Investor will take the securities for investment and not resale, and the Company is taking appropriate measures to restrict the transfer of the securities. For terms of the debentures please see information furnished in our Current Reports and Exhibits thereto on Form 8-K filed on March 29, 2007 and January 7, 2008, respectively, incorporated herein by reference.

On June 11, 2007 the Company issued to Dutchess a debenture in the face amount of $2,000,000 for acquisitions and working capital. The Debenture bears interest at 12% per annum and matures on June 11, 2014. For terms of the debenture please see information furnished in our Current Report on Form 8-K, and Exhibits thereto filed on Jun 11, 2007, incorporated herein by reference.

On December 26, 2007, EGPI Firecreek, Inc. the Company issued to Dutchess a debenture in the face amount of $2,100,000. The Debenture bears interest at 12% per annum and matures on December 26, 2014. The Company claims an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the Investor is an “accredited investor” and/or qualified institutional buyer, the Investor has access to information about the Company and its investment, the Investor will take the securities for investment and not resale, and the Company is taking appropriate measures to restrict the transfer of the securities. For terms of the debenture please see information furnished in our Current Report on Form 8-K, and Exhibits thereto filed on January 7, 2008, incorporated herein by reference.

On April 21 and June 29 of 2006, the Company issued to Dutchess convertible debentures with a face value of $171,875 and $300,000 respectively, to pay an incentive fee to the holder. The debentures became convertible at the date of the issuances and mature in April and June of 2011. The Company claims an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the Investor is an “accredited investor” and/or qualified institutional buyer, the Investor has access to information about the Company and its investment, the Investor will take the securities for investment and not resale, and the Company is taking appropriate measures to restrict the transfer of the securities. For terms of the debentures please see information furnished in Exhibit “A” to each of Exhibits 99.1 and 99.2 to our Current Reports on Form 8-K filed on April 27, 2006 and June 7, 2006, respectively, incorporated herein by reference.

On November 14 and December 15 of 2005, the Company issued to Dutchess convertible debentures with a face value of $375,000 and $82,500, respectively, to pay an incentive fee to the holder. The debentures became convertible at the date of the issuances and mature in November and December 2010. The Company claims an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated thereunder since, among other things, the transaction does not involve a public offering, the Investor is an “accredited investor” and/or qualified institutional buyer, the Investor has access to information about the Company and its investment, the Investor will take the securities for investment and not resale, and the Company is taking appropriate measures to restrict the transfer of the securities. For terms of the debentures please see information furnished in Exhibit “A” to each of Exhibits 10.3, and 99.1 to our Current Reports on Form 8-K filed on November and December 16, 2005, respectively, incorporated herein by reference.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5 – OTHER INFORMATION

The Company and its Firecreek unit are presently in different stages of review and discussion, gathering data and information, and any available reports on other potential acquisitions in Texas, and other productive regions and areas in the U.S.

From time to time Management will examine oil and gas operations in other geographical areas for potential acquisition and joint venture development.

ITEM 6 – EXHIBITS

Exhibit No.		Description

31.1		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (3)
32.1		Certification Pursuant to 18 U.S.C. SECTION 1350 (3)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 14, 2008

	EGPI FIRECREEK, INC.

	By:	/s/ DENNIS ALEXANDER
	Name	Dennis Alexander
	Title:	Chairman, President, and CFO