NXT Energy Solutions Inc. - Quarter Report: 2004 March (Form 10-Q)

As filed with the Securities and Exchange Commission on May 14, 2004.

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

FORM 10-Q

(Mark One)

Commission File No. 0-24027

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

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

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

Indicate by check mark whether the registrant (1) has filed all Reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registration was required to file such Reports), and (2) has been subject to such filing requirements for the past 90 days:   YES  [√]   NO  [  ]

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

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

20,005,959 common shares, no par value, as of April 30, 2004

ENERGY EXPLORATION TECHNOLOGIES INC.

INDEX TO THE FORM 10-Q

For the three month period ended March 31, 2004

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PART I

ITEM 1.   FINANCIAL INFORMATION

The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets

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ENERGY EXPLORATION TECHNOLOGIES INC.

Consolidated Statements Of Loss And Comprehensive Loss (Unaudited) (expressed in U.S. dollars except share data)

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

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ENERGY EXPLORATION TECHNOLOGIES INC.

Consolidated Statements Of Shareholders' Equity (Deficit)

 (Unaudited) (expressed in U.S. dollars except share data)

The accompanying notes to consolidated financial statements are an integral part of these consolidated statements of shareholders' equity (deficit)

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

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ENERGY EXPLORATION TECHNOLOGIES INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(expressed in U.S. dollars) 

(unaudited)

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Net oil and natural gas property costs at March 31, 2004 are comprised of $1,228,427 ($1,194,406 at

December 31, 2003) of unproved property costs. At March 31, 2004 there were no impairments of our Canadian full cost center.

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

At the end of each quarter, our management performs an overall assessment of each of our unproved oil and natural gas properties to determine if any of these properties has been subject to any impairment in value (see note 2). Based upon these evaluations, our management has determined that each of our oil and natural gas properties continued to have prospective commercial viability as of these dates. While we are currently conducting active exploration and development programs with respect to each of these unproved oil and natural gas properties, we anticipate that all of these properties will be evaluated and the associated costs transferred into the amortization base or be impaired over the next five years.

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

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Summarized below is geographic information relating to our assets as of March 31, 2004 and

December 31, 2003, allocated amongst the geographic areas in which the assets were physically located or principally connected:

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

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

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

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

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

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

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

RESULTS OF OPERATIONS

Revenues

On February 4, 2004, a well at Entice, Alberta, in which we have a 22.5% working interest, commenced production. Our share of production has averaged 61 thousand cubic feet (mcf) per day from February 4, 2004 until March 31, 2004. The average price received was $4.54 per mcf and the operating cost was $0.43 per mcf. We had no Canadian wells on production in 2003.

We sold the Scandia, Alberta property in the first quarter of 2004 for a gain of $27,770 compared with gains on sales of properties in the first quarter of 2003 of $12,970.

Operating loss from continuing operations

We incurred an operating loss of $1,029,307 for our three-month period ended March 31, 2004, as compared to a loss of $396,015 for the corresponding period in 2003, representing a $633,292 (160 %) overall increase. This increase was primarily attributable to the following changes:

• Administrative costs increased $233,948 (78%) in 2004 compared to the same period in 2003 primarily due to increased costs related to taxadvice and assistance ($25,000), legal advice($30,000) and investor relations( $159,000 ) and ;
  

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• Survey operations and support increased by $511,991 (2,990%) in 2004 compared to 2003. In 2003 there was very little activity but in 2004, in addition to a survey flight in Canada, we initiated an extensive series of survey flights in Syria. The purpose of the Syrian surveys is to provide the Syrians with documented evidence of the effectiveness of our SFD technology. We flew patterns that they selected and they are in the process of comparing our SFD results with their private proprietary seismic data;
  

partially offset by the following:

• Oil and gas revenue of $16,829 and an increase in sale of Canadian properties from $12,970 to $27,770 in 2004 which was the sale of the Scandia property.
  
• Depletion and impairment decreased $59,974 (100%) in 2004 compared to 2003. The expense in 2003 was impairments on Canadian properties. There were no impairments in 2004. There are no proved reserves assigned to the Entice property as it has just begun production. Also, there is only a minimal amount of costs associated with this property.  For this reason, depletion expense has not yet been recorded.
  

Interest income

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

Income (loss) from discontinued operations

The loss from discontinued operations in 2004 was $11,032 and consisted of administrative expenses for tax return preparation. The income from discontinued operations in 2003 was $198,600 which consists of the gain on the sale of the properties of $175,685 and income from oil and gas operations of $22,915.

Other comprehensive income

The foreign currency exchange loss of $64,642 for the three-month period ended March 31, 2004 was caused by the change in the United States – Canadian currency rates from $1.2965 at December 31, 2003 to $1.31 at March 31, 2004. The foreign currency exchange income of $143,533 for the same period in 2003 was due to the change in rates from $1.59 at December 31, 2002 to $1.33 at March 31, 2003. Comprehensive gains or losses arise in consolidating our accounting records for financial reporting purposes as a result of the fluctuations in during the period.

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

We have not entered into any transactions during our three-month period ended March 31, 2004 with any parties that are not clearly independent on terms that might not be available from other clearly independent third parties.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Cash

Our major source of cash flow in the three months ended March 31, 2004 was a private placement of 573,269 units for net proceeds of $1,078,066. Each unit consisted of one (1) common share and a warrant to purchase one (1) additional common share for $2.75 with a term of one (1) year.

Current Cash Position and Historical Changes in Cash Position

Our cash position as of March 31, 2004 was $1,309,244 as compared to $1,024,201 as of December 31, 2003. Our cash position as of March 31, 2003 was $429,919 as compared to $585,070 as of December 31, 2002. The increase in our cash position as of March 31, 2004 compared to December 31, 2003 was due to the private placement.

Our working capital as of March 31, 2004 was virtually unchanged at $597,009, compared to working capital of $563,857 as of December 31, 2003.

Cash used in operating activities increased by $614,633 (345%) to $792,634 for 2004 as compared to the same period in 2003. The increased cash draws were needed to fund the Syrian survey tests as well as the increased administrative costs due to additional consulting expenses for legal and tax assistance and investor relations.

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Financing activities in 2004 generated $1,078,066 from the issue of common shares and $81,106 from the exercise of stock options. There was no cash provided by or used in financing activities in 2003.

Investing activities used cash of $5,821 for the three month period ended March 31, 2004 as compared to $142,780 used in the three month period ended March 31, 2003. The reason for the decrease of $138,959 was the decrease in oil and gas expenditures in 2004 as we devoted most of our efforts to the Syrian surveys.

Other comprehensive income, specifically currency exchange, was a loss of $64,642 in the three month period ended March 31, 2004 as compared to the gain $143,533 in the three month period ended March 31,2003. The reasons for the change are explained above.

Plan of Operation and Prospective Capital Requirements

We have approximately $850,000 in cash on hand as of May 10, 2004 to fund our plans and to contribute toward our administration, operational and research and development requirements for the next twelve months. We will be required to raise additional financing through equity issues, borrowings or property dispositions.

We believe we can maintain a minimal level of operations for approximately twelve months. At this time, we have capital commitments of $203,000 related to obligations under flow through shares which we issued in December 2003. However, if we ramp -up operations, we will be required to raise additional capital to support increased operations.

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

OTHER MATTERS

Foreign Exchange

We recorded a $64,642 foreign currency translation loss for the three months ended March 31, 2004 compared to a gain of $143,533 for the same period in 2003 as a comprehensive income (loss) item on our statements of loss and comprehensive loss and shareholders' equity (deficit) in consolidating our accounting records for financial reporting purposes as a result of the fluctuation in United States-Canadian currency exchange rates during that period. We cannot give you any assurance that our future operating results will not be adversely affected by currency exchange rate fluctuations.

Effect of Inflation

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

Critical Accounting Policies

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

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

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

Management

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

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

OIL AND GAS PRICE FLUCTUATIONS

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

CURRENCY FLUCTUATIONS

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

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effects of foreign currency. At our current levels of activity, a U.S. $0.01 change in the U.S. / Canadian exchange rate will impact our net income by $63,000.

INTEREST RATE FLUCTUATIONS

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

ITEM 4. CONTROLS AND PROCEDURES

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

As of March 31, 2004, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, our Chief Executive Officer /Chief Financial Officer concluded that our internal controls over financial reporting are effective in the timely alerting of management to material information relating to us which is required to be included in our periodic SEC filings.

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

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

During our most recently completed fiscal quarter ended March 31 2004, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

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

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
  
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
  
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant's assets that could have a material effect on the financial statements.
  

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PART II

ITEM 1. LEGAL PROCEEDINGS

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

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

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

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

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On February 12, 2004, NXT completed a private placement of 573,269 units at $2.00 per unit for gross proceeds of $1,143,633. Each unit consisted of one (1) common share and a warrant to purchase an additional share for $2.75, with a term of one (1) year. No underwriters were utilized in this offering. NXT paid commissions of $65,567 in connection with this offering. The offering was sold to a total of 56 investors, who are employees, former employees and consultants of NXT as well as certain accredited investors introduced to NXT’s by its management and employees.

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

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from registration. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption there from and we are required to refuse to register any transfer that does not comply with such requirements.

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

During the quarter ended March 31, 2004, NXT issued a total of 81,172 common shares in connection with the exercise of outstanding options held by its employees, former employees and consultants.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

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

Not Applicable.

ITEM 5. OTHER INFORMATION

Not Applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

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

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

SIGNATURE

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

Dated at Calgary, Alberta, this 13^th day of May, 2004.

ENERGY EXPLORATION TECHNOLO GIES INC.

By:           /s/ George Liszicasz    

        George Liszicasz 

        Chief Executive Officer

       (principal executive officer and principal accounting officer)

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