1373683--10/6/2010--PHOENIX_ENERGY_RESOURCE

related topics

{stock, price, share}

{gas, price, oil}

{loss, insurance, financial}

{acquisition, growth, future}

{cost, regulation, environmental}

{financial, litigation, operation}

{cost, operation, labor}

{cost, contract, operation}

{operation, natural, condition}

{competitive, industry, competition}

{provision, law, control}

{control, financial, internal}

RISKS ASSOCIATED WITH OUR BUSINESS We have sustained losses, which raises doubt as to our ability to successfully develop profitable business operations. Natural gas and oil prices are volatile. This volatility may occur in the future, causing negative change in cash flows which may result in our inability to cover our operating or capital expenditures. Because we face uncertainties in estimating proven recoverable reserves, you should not place undue reliance on such reserve information. The differential between the New York Mercantile Exchange, or NYMEX, or other benchmark price of oil and natural gas and the wellhead price we receive could have a material adverse effect on our results of operations, financial condition and cash flows. The natural gas and oil business involves numerous uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses. Drilling wells is speculative, often involving significant costs that may be more than our estimates, and may not result in any addition to our production or reserves. Any material inaccuracies in drilling costs, estimates or underlying assumptions will materially affect our business. A significant portion of our potential future reserves and our business plan depend upon secondary recovery techniques to establish production. There are significant risks associated with such techniques. Any acquisitions we complete are subject to considerable risk. Our decision to acquire a property will depend in part on the evaluation of data obtained from production reports and engineering studies, geophysical and geological analyses and seismic and other information, the results of which are often incomplete or inconclusive. We must obtain governmental permits and approvals for drilling operations, which can result in delays in our operations, be a costly and time consuming process, and result in restrictions on our operations. Our business depends in part on gathering and transportation facilities owned by others. Any limitation in the availability of those facilities could interfere with our ability to market our oil and natural gas production and could harm our business. The high cost of drilling rigs, equipment, supplies, personnel and other services could adversely affect our ability to execute on a timely basis our development, exploitation and exploration plans within our budget. Our exposure to possible leasehold defects and potential title failure could materially adversely impact our ability to conduct drilling operations. We are subject to complex laws and regulations, including environmental regulations, which can adversely affect the cost, manner or feasibility of doing business. Our operations may expose us to significant costs and liabilities with respect to environmental, operational safety and other matters. Our facilities and activities could be subject to regulation by the Federal Energy Regulatory Commission or the Department of Transportation, which could take actions that could result in a material adverse effect on our financial condition. We operate in a highly competitive environment and our competitors may have greater resources than us. We will need additional capital to finance our planned growth, which we may not be able to raise or may only be available on terms unfavorable to us or our stockholders, which may result in our inability to fund our working capital requirements and harm our operational results. Our success depends on our key management and professional personnel, including Rene Soullier, the loss of whom would harm our ability to execute our business plan. RISKS ASSOCIATED WITH OUR COMMON STOCK Our common stock is traded on an illiquid market, making it difficult for investors to sell their shares. The price of our common stock may be volatile and you may not be able to resell your shares at a favorable price. Our articles of incorporation, bylaws and Nevada Law contain provisions that could discourage an acquisition or change of control of us. We have no plans to pay dividends on our common stock. You may not receive funds without selling your stock. We may issue shares of preferred stock with greater rights than our common stock. Because our common stock is deemed a low-priced Penny stock, an investment in our common stock should be considered high risk and subject to marketability restrictions. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. FINRA sales practice requirements may limit a stockholder's ability to buy and sell our stock.

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1373683--10/6/2010--PHOENIX_ENERGY_RESOURCE_CORP