UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

Commission file number: 001-32628

Storm Cat Energy Corporation

(Exact name of Registrant as specified in its charter)

British Columbia, Canada

(Jurisdiction of incorporation or organization)

1125 17^th Street, Suite 2310, Denver, Colorado, 80202

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act. None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common shares as of the close of the period covered by the annual report:

65,654,388 Common Shares

Indicate by check mark if the registrant is a well-known seasoned issuer.  o  Yes    ý  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  o  Yes    ý  No

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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ý  Yes    o  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

o  Large accelerated filer    ý  Accelerated filer    o  Non-accelerated filer

Indicate by check mark which financial statement item the registrant has elected to follow.  ý  Item 17    o  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.  o  Yes    ý  No

Storm Cat Energy

Form 20-F Annual Report

Table of Contents

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In this Annual Report, the terms “Storm Cat,” the “Corporation,” the “Company” “we,” “our” and “us” refer to Storm Cat Energy Corporation and its consolidated subsidiaries unless the context otherwise requires. All dollar amounts in this Annual Report are expressed in United States dollars unless otherwise specified. References in this document to “$” and “US$” refer to United States dollars and references to “C$” refer to Canadian dollars. In certain instances in this Annual Report, figures reported in United States dollars have been converted from Canadian dollars, based on the foreign exchange rate of December 31, 2005, of C$0.8580 convertible to US$1.00; however, any equity issuance was converted based on the exchange rate on the date of such equity issuance and the amounts in our income statement were converted based on the average of the exchange rate of December 31, 2005 and December 31, 2004, or C$0.84411.

Cautionary Statement Regarding Forward-Looking Statements

This Annual Report and the documents incorporated herein by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended:

i.      any statements contained herein or therein regarding the prospects for our business or any of our services;

ii.     any statements preceded by, followed by or that include the words “may,” “will,” “seeks,” “believes,” “expects,” “anticipates,” “intends,” “continues,” “estimates,” “plans” or similar expressions; and

iii.    other statements contained herein or therein regarding matters that are not historical facts.

Forward-looking statements in this Annual Report and our filings with the SEC include, without limitation, statements regarding:

•                  financial position;

•                  business strategy;

•                  budgets;

•                  amount, nature and timing of capital expenditures;

•                  drilling of wells;

•                  potential reserves;

•                  timing and amount of future production of natural gas and oil;

•                  operating costs and other expenditures;

•                  future net revenues from production and estimates of potential oil and gas reserves;

•                  cash flow and anticipated liquidity; and

•                  prospect development and property acquisitions.

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Our business and results of operations are subject to risks and uncertainties, many of which are beyond our ability to control or predict. Because of these risks and uncertainties, actual results may differ materially from those expressed or implied by forward-looking statements, and investors are cautioned not to place undue reliance on such statements, which speak only as of the date thereof. In addition to the specific risk factors described in the section of this Form 20-F entitled “Risk Factors,” important factors that could cause actual results to differ materially from our expectations and may affect our operations, revenues or the common shares, include, but are not limited to:

•                  the effects of competition;

•                  risks associated with oil and gas exploration;

•                  operational hazards;

•                  availability and cost of material and equipment;

•                  availability of capital and unexpected substantial variances in capital requirements;

•                  uncertainty of reserve estimates and timing of development expenditures;

•                  the impact of petroleum and natural gas price fluctuations;

•                  our ability to find, acquire, market, develop and produce new properties;

•                  the threat of terrorist attacks or war;

•                  the impact of current and future laws and governmental regulations;

•                  climactic conditions;

•                  liability for environmental claims;

•                  the impact of the departure of any key officers; and

•                  general economic, market or business conditions.

We do not intend to update these forward-looking statements except as required by law.

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Part I

Item 1. Identity Directors, Senior Management and Advisers

Storm Cat is filing this Form 20-F as an annual report and therefore, this item is not required.

Item 2. Offer Statistics and Expected Timetable

Storm Cat is filing this Form 20-F as an annual report and therefore, this item is not required.

Item 3. Key Information

Selected Financial Data

The selected historical financial data presented in the table below for each of the years ended December 31, 2005, 2004, 2003, 2002 and 2001 was derived from the audited consolidated financial statements of the Corporation. The audited consolidated financial statements of the Corporation for the years ended December 31, 2005, 2004 and 2003 are included in this filing. The selected financial data presented in the table below should be read in conjunction with the consolidated financial statements and the notes thereto (Item 17) and with the information appearing under the heading “Item 5 – Operating and Financial Review and Prospects.”

We have presented our financial statements for Fiscal 2005 in conformity with United States generally accepted accounting principles (“U.S. GAAP”). We have reclassified certain prior year amounts to conform to the current year’s presentation. In previous years, we prepared and reported our financial statements in conformity with Canadian generally accepted accounting principles and provided a reconciliation to U.S. GAAP.

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Selected Financial Data

(US$ in Thousands, except per share data)

(1)          Effective March 31, 2005, we completed a forward share split of our common shares on a two-for-one basis. All per share amounts have been adjusted to reflect this share split.

(2)          As a result of net losses incurred, diluted earnings per share is not presented.

(3)          As of December 31, 2005, we have not paid any dividends on our common shares.

Capitalization and Indebtedness

Storm Cat is filing this Form 20-F as an annual report and therefore, this item is not required.

Reasons for the Offer and Use of Proceeds

Storm Cat is filing this Form 20-F as an annual report and therefore, this item is not required.

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Risk Factors

Our business, operations and financial condition are subject to various risks. If any of these risks and uncertainties actually occur, our business, financial condition or results of operations could be materially and adversely affected and the value of our common shares could decline.

Risks Related to Our Business

We have recently changed our business model.

From 2000 to late 2003, our business consisted of mineral exploration operations in Canada and Argentina. In 2003 and 2004 we disposed of, or abandoned, substantially all of our interests in mineral exploration properties. In 2004, we changed our name from Toby Ventures Inc. to Storm Cat Energy Corporation and began to focus on exploring conventional, unconventional and coalbed methane gas projects. In January 2004, we began acquiring exploration, development and/or production rights for coalbed methane and/or natural gas in Mongolia, Wyoming, Alaska and Canada. Our limited financial history makes it difficult for us to project our revenues, expenses, and potential for successful development of these exploration properties.

Price volatility may affect our financial condition.

The prices of oil and natural gas are volatile and our operating results and future rate of growth depend heavily on prevailing market prices for these resources. A substantial or extended decline in prices for these resources would have a material adverse effect on us. These prices are affected by numerous factors beyond our control, including international economic and political trends, the effects of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, worldwide and domestic supplies of oil and gas, the ability of members of the Organization of Petroleum Exporting Countries (OPEC) to agree to and maintain oil price and production controls, actions of governmental authorities, the availability of transportation facilities, increased production due to new discoveries or improved recovery techniques and weather conditions.

We operate in a highly competitive industry.

We compete with other energy development companies for properties, equipment, materials and labor. Our industry is highly competitive in all aspects. Many of our competitors have larger operations and greater financial resources than we do. Competition in our business may adversely affect our ability to acquire properties, equipment and materials, attract and retain qualified labor, and attract the necessary capital to sustain our resource exploration and production in the future.

Oil and gas exploration is a speculative undertaking.

Oil and gas exploration is a speculative business. Our future success depends on our ability to economically locate oil and gas production and reserves in commercial

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quantities. Our anticipated exploration and development activities are subject to reservoir and operational risks. Even when oil and gas is found in what are believed to be commercial quantities, reservoir risks, which may be heightened in new discoveries, may lead to higher costs and/or lower production than originally anticipated. These risks include the inability to sustain deliverability at commercially productive levels as a result of decreased reservoir pressures, large amounts of water, or other factors that might be encountered. The effects of these factors may result in Storm Cat not receiving an adequate return on investment capital.

Reserves are imprecise estimates.

The information on reserves provided in this Annual Report and other filings with the SEC are estimates of our reserves and the future revenues from these reserves. If the assumptions underlying these estimates prove to be incorrect, the quantity of our reserves and our future cash flows could be materially different from these estimates.

We face operating risks in our exploration and production activities.

Our business involves operating risks, including well blowouts, craterings, explosions, uncontrollable flows of oil, natural gas or well fluids, leaks, fires, formations with abnormal pressures, pipeline ruptures or spills, pollution, releases of toxic gas and other environmental hazards and risks, any one of which can cause personal injury, damage to property, equipment and the environment, as well as interruption of our operations. We maintain insurance against some, but not all, of these risks. If any of these events occurred, we could face substantial losses that could reduce or even eliminate funds available for our operations.

Our industry is highly regulated.

Our business is heavily regulated by federal, state, and local authorities. These regulations control many aspects of our business including, among other things, land use, prospecting, the drilling and spacing of wells, protection of ground water, conservation of soil, safety standards, site reclamation, restoration, exports, labor standards, occupational health, waste disposal, toxic substances and other matters. The regulations and laws governing our industry are under constant review and may be amended or expanded. Regulation increases the cost of doing business and decreases profitability. If we fail to comply with these laws and regulations, we may be subject to substantial penalties or suspension or termination of our operations.

Our operations are subject to complex environmental regulations.

Our current and anticipated future operations require permits from various federal, state and local governmental authorities and such operations are and will be regulated by laws and regulations governing various elements of the oil and gas industries.

We cannot predict what environmental legislation, regulation or policy will be enacted or adopted in the future or how in the future laws and regulations will be

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administered or interpreted. The recent trend in environmental legislation and regulation generally is toward stricter standards and this trend is likely to continue in the future. This recent trend includes, without limitation, laws and regulations relating to air and water quality, waste handling and disposal, the protection of certain species and the preservation of certain lands. These regulations may require permits or other authorizations for certain activities. These laws and regulations may also limit or prohibit activities on certain lands lying within wetland areas, areas providing for habitat for certain species or other protected areas. Compliance with more stringent laws and regulations, as well as potentially more vigorous enforcement policies or stricter interpretation of existing laws, may necessitate significant capital expenditures, may materially affect the results of our operations and business, or may cause material changes or delays in our intended activities.

There can be no assurance that we will be able to obtain all permits required for future exploration on reasonable terms or that such laws and regulations, or new legislation or modifications to existing legislation, will not have an adverse effect on any project we might undertake. Our failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing our operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.

We have a history of net losses.

Since our incorporation in May of 2000, we have experienced annual net losses. In the year ended December 31, 2005 we had a net loss of $8,367,697 and our cumulative net loss from date of our incorporation to December 31, 2005 is $9,760,993. There is no guarantee as to when, if ever, we will realize a net profit.

We have limited cash flow to support our capital needs and will require additional capital to fund our operations.

Only a limited number of our projects have advanced to the commercial production stage and we have no history of positive cash flow to support our operations. Even if our current exploration programs are successful, we will require additional capital to complete future exploration activities and fund our operations. If we are unable to obtain additional financing, we may be forced to reduce or discontinue our activities, forfeit our interest in properties and/or reduce or terminate our operations, which would likely have a negative effect on our share price.

We have not paid dividends on our common shares since incorporation and do not anticipate doing so in the foreseeable future.

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We may not be able to obtain additional funding to meet our capital needs and if we raise additional capital through equity, present and prospective shareholders may realize significant dilution.

There is no guarantee that we will be successful in raising additional capital or be able to obtain financing on favorable terms. Historically, our only source of funds has been through the sale of our common shares. Any transaction involving the issuance of previously authorized but unissued shares of common shares or securities convertible into common shares will result in dilution, which could be substantial, to holders of our common shares.

We operate in international markets, which subject us to additional risks.

We operate in a number of countries, subjecting our business to risks that often characterize international markets, including economic and political instability; longer payment cycles; difficulties in collecting accounts receivable; licensing requirements; unexpected changes in regulatory requirements and tariffs; potentially adverse tax consequences and fluctuations in exchange rates.

Fluctuations in foreign currency exchange rates could adversely affect our business.

We maintain accounts in U.S. and Canadian dollars. A material decrease in the value of the Canadian dollar relative to the U.S. dollar could negatively impact our income statement and share price.

We depend on certain key personnel.

We strongly depend on the business and technical expertise of our management and key personnel, particularly that of our President and Chief Executive Officer, J. Scott Zimmerman and our Chief Financial Officer, Paul Wiesner. There is little possibility that this dependence will decrease in the near term. We carry no “key man” life insurance on any of our executives. As our operations expand, we will require additional key personnel and related resources.

Some of our officers and directors serve as officers and directors of other companies.

Some of our officers and directors are also officers, directors or shareholders of other companies including those that are similarly engaged in the business of acquiring, developing and exploiting oil and gas producing properties. Such associations may give rise to conflicts of interest from time to time. Our directors are required by law to act honestly and in good faith with a view to the best interests of Storm Cat and to disclose any interest that they may have in any Storm Cat project or opportunity. Further, we have an internal conflict policy, which is sometimes referred to as the Policy, and a Code of Ethics, both which address directors’ conflicts of interest. Under the Policy, if a conflict of interest arises at a meeting of our Board, any director with a conflict must disclose his interest and abstain from voting on such matters. In making the determination as to whether or not we will participate in any project or opportunity, the directors will primarily consider the degree of risk to us and our financial position at that time.

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We focus heavily on risky unconventional plays, which rely on technological advances that in the future may not be effective.

The unconventional plays are a central element of our business model. The development of typical unconventional plays may involve greater extraction and retrieval costs than are involved in development of typical conventional plays. Often the quality of gas and commercial viability is less known in a typical unconventional play. Therefore, the process of developing an unconventional play involves significant expenditures before commercial viability can be ascertained and presents a risk of cost overruns and inadequate gas recovery. Although unconventional coalbed methane wells can be shallower and less costly to drill than conventional natural gas wells, the speculative nature of these unconventional plays may lead them to be unprofitable undertakings.

Further, technological innovation is a key component to realizing the economic value of unconventional plays. We continue to explore and rely on advances in technologies such as drilling, well completion and geophysical technologies that have helped the viability of the unconventional play. We expect future advances in technology to continue to make the unconventional play a superior model to a conventional play. The continued advancement of such technologies, however, is uncertain and even if developed and advanced, such technologies may not be effective.

Coal bed methane may not continue to rise as an energy source in the United States.

Currently, coalbed methane accounts for over 9% of U.S. natural gas production. While we expect this figure to continue to rise, there can be no guarantee that it will continue to do so. If demand for coalbed methane is flat or decreases, our business model could prove unsuccessful and our share price could decline.

We may incur compression difficulties and expense.

As production increases, more compression is generally required to maximize the production flowing through the pipeline. Production costs increase as additional compression is required, primarily because the compression process requires more fuel. In addition, the compression process is a mechanical process, and should a breakdown occur we will be unable to deliver gas until repairs to the machinery are completed.

If we are not successful in acquiring and developing producing properties, we may be unable to expand our business and be competitive in our industry.

We anticipate that a significant portion of our growth will be the result of acquisition and the exploitation of gas producing properties. We expect to continue to evaluate and pursue acquisition opportunities available on terms management considers favorable. The successful acquisition of producing properties requires an assessment of recoverable reserves, future gas prices, operating costs, potential environmental and other liabilities and other factors beyond our control. This assessment is necessarily inexact and its accuracy is inherently uncertain. It will not reveal all existing or potential problems, nor will it permit us to become sufficiently familiar with the properties to assess fully their deficiencies and capabilities. Inspections may not be performed on every well, and

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structural and environmental problems are not always observable even when inspection is undertaken. There can be no assurance that our acquisitions will be successful, and any unsuccessful acquisition could be costly, damaging to our operations, and could have a material adverse effect on our business.

We have contracts to sell gas for some of our properties and any contracts we are able to secure may not be long-term contracts.

As of December 31, 2005, the Corporation does have short term forward gas sales contracts of a small percentage of our gas production. Please see Note 10 of the Notes to the Consolidated Financial Statements for detailed information.

There is no assurance that we will be able to secure contracts for the sale of gas on any or all of our properties, nor is there any assurance that if we are able to do so that any of these will be long-term contracts. If we are able to obtain contracts of the desired duration, there is still no assurance as to what gas prices the contracts will provide.

Pipeline capacity may be inadequate.

Due to the nature of natural gas development, during certain time periods, pipeline capacity may be inadequate to meet our transportation needs. Often, as new development comes on-line, existing pipelines may be close to or at capacity for a period of time before new pipelines are built. During periods when pipeline capacity is inadequate to meet demand, we may be forced to reduce production or incur additional expense as existing production is compressed to fit into existing pipelines.

We do not obtain title insurance or other warranties of title with our leases and working interests.

We do not obtain title insurance or other guaranty or warranty of good title with our gas leases and well working interests. Title insurance is not available for subsurface leases. Accordingly, third parties may assert claims against our legal entitlement to the gas leases and working interests being acquired, irrespective of our leases and working well interests. In order to alleviate this risk, we require a title search and title opinion on all leases prior to drilling. There is no assurance, however, that all title defects will be cured prior to drilling.

Risks Related To Our Common Shares

U.S. Investors may have difficulty effecting service of process against some of our Canadian directors.

We are incorporated under the laws of the Province of British Columbia, Canada. Consequently, it may be difficult for United States investors to effect service of process in the United States upon our directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). A judgment of a U.S. court predicated solely upon such civil

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liabilities would probably be enforceable in Canada by a Canadian court if the U.S. court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or Storm Cat predicated solely upon such civil liabilities.

We are a “Foreign Private Issuer” and exempt from the Section 16 and the Proxy Rules of Section 14 of the Securities Exchange Act of 1934.

Under the U.S. federal securities laws, we are a “foreign private issuer.” Unless and until such time as we become a “U.S. Issuer” under these laws, we are not subject to certain regulation under U.S. securities laws, such as Section 16 and the Proxy Rules of Section 14 of the Exchange Act. Further, as a foreign private issuer, we make our Annual Report on Form 20-F and report our current events, including the dissemination of proxy materials and information regarding our annual meeting of shareholders, on Form 6-K. These disclosure obligations may result in the reduced availability public information regarding us, compared to the disclosure required of U.S. Issuers under U.S. federal securities laws.

Our common shares are traded on more than one market and this may result in price variations.

Our common shares are traded primarily on the American Stock Exchange and on the TSX Venture Exchange. Trading in our common shares on these markets is effected in different currencies (U.S. dollars on the American Stock Exchange and Canadian dollars on the TSX Venture Exchange) and at different times, as the result of different time zones, different trading days and different public holidays in the United States and Canada. Consequently, the trading prices of our common shares on these two markets often differ, resulting from the factors described herein as well as differences in exchange rates and from political events and economic conditions in the United States and Canada. Any decrease in the trading price of our common shares on one of these markets could cause a decrease in the trading price of our common shares on the other market.

We are subject to the Continued Listing Criteria of The American Stock Exchange (“AMEX”).

Our common shares are currently listed on AMEX. In order to maintain our listing on AMEX, we must maintain certain share prices, financial and distribution targets, including maintaining a minimum amount of shareholders’ equity and a minimum number of public shareholders. In addition to objective standards, AMEX may delist the securities of any issuer if in its opinion, the issuer’s financial condition and/or operating results appear unsatisfactory; if it appears that the extent of public distribution or the aggregate market value of the security has become so reduced as to make further dealings on AMEX inadvisable; if the issuer sells or disposes of principal operating assets or ceases to be an operating company; if an issuer fails to comply with AMEX’s listing requirements; if an issuer’s common shares sell at what AMEX considers a “low selling price” and the issuer fails to correct this via a reverse split of shares after notification by

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AMEX; or if any other event shall occur or any condition shall exist which makes further dealings with AMEX, in its opinion, unadvisable.

If AMEX delists our common shares, investors may face material adverse consequences, including, but not limited to, a lack of trading market for our securities, decreased analyst coverage of our securities, and an inability for us to obtain additional financing to fund our operations.

Our share price has fluctuated and could continue to fluctuate significantly.

The market price for our common shares, as well as the price of shares of other energy companies, has been volatile. Numerous factors, many of which are beyond our control, may cause the market price of our common shares to fluctuate significantly, such as:

•                  Fluctuations in our quarterly revenues and earnings and those of our publicly held competitors;

•                  Shortfalls in our operating results from levels forecast by securities analysts;

•                  Announcements concerning us or our competitors;

•                  Changes in pricing policies by us or our competitors;

•                  General market conditions and changes in market conditions in our industry; and

•                  The general state of the securities market.

In addition, trading in shares of companies listed on AMEX and the TSX Venture Exchange, generally, and trading in shares of energy companies, specifically, has experienced price and volume fluctuations that have often been unrelated or disproportionate to operating performance. These broad market and industry factors may depress our share price, regardless of our actual operating results. In addition, if we issue additional shares in financings or acquisitions, our shareholders will experience additional dilution and the existence of more shares could decrease the amount that purchasers are willing to pay for our common shares.

Item 4. Information on the Corporation

History and Development of the Corporation

Corporate and General

Storm Cat is an independent oil and gas company focused on the pursuit, exploration and development of large unconventional gas reserves from fractured shales, coalbeds and tight sand formations.

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The Corporation was incorporated under the laws of British Columbia, Canada on May 15, 2000 under the name “Toby Ventures Inc.” We conducted an Initial Public Offering in Canada and our shares began trading on the Canadian Venture Exchange (now the TSX Venture Exchange) on November 15, 2001 under the symbol “SME.”

Since incorporation, we have been involved in the exploration of natural resource properties. We commenced active exploration and acquisition of mineral resource properties in 2000. In late 2003, we decided to dispose, sell or abandon our mineral exploration interests and enter the oil and gas industry through the acquisition of interests in conventional, unconventional and coalbed methane gas projects.

Under a special resolution passed by its shareholders, the Corporation changed its name to Storm Cat Energy Corporation effective January 30, 2004.

We currently have producing properties in Wyoming’s Powder River Basin and have exploration and development acreage in Canada and Alaska. We have also conducted exploration activities in Mongolia.

The Corporation’s corporate headquarters and executive offices are located at 1125 17^th St., Suite 2310, Denver, Colorado 80202. The telephone number is (303) 991-5070. Contact person is J. Scott Zimmerman, President. The Corporation’s Canadian registered office is located at 209 8^th Avenue, Alberta, Canada, T2P 1B8. The telephone number is (403) 451-5070. Our website address is www.stormcatenergy.com.

Development of the Corporation’s Business.

Mineral Resources Activities. From inception until late 2003, our primary business consisted of mineral resource activities. In 2000, we acquired the Sadim Property of 4 mineral claims located in the Similkameen Mining Division in British Columbia. We began exploration at Sadim in November 2001 and commenced a drill program on the property in June 2002.

In January and February 2002, we applied for and received 3 mineral exploration claim blocks located in Northern Quebec. These properties were located in an area that was being explored for diamonds by many different companies. During the year ended December 31, 2003, we abandoned the claims.

During 2003, we applied for and received a 100% interest in 5 mineral exploration properties in Argentina.

In late 2003, our management and board of directors determined that we would exit the mineral resources business and focus our efforts on oil and gas operations. Through December 31, 2003, our cumulative expenditures with respect to mineral resources activities totaled $0.5 million. All of these amounts had been expensed under U.S. GAAP.

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Under a Special Resolution passed by our shareholders, the Corporation changed its name, effective January 30, 2004 to Storm Cat Energy Corporation. We adopted new Articles of incorporation under the Business Corporations Act of British Columbia on May 21, 2004. In June 2004, the Corporation changed its authorized share capital to an unlimited number of common shares without par value. Prior to June 2004, the authorized share capital was 20,000,000 common shares without par value. Effective March 31, 2005, the Corporation undertook a two-for-one share split. All share and per share amounts included in this filing have been restated to give retroactive effect, as necessary, to the effect of the share split.

The Corporation’s common shares began trading on AMEX on October 3, 2005 under the symbol “SCU.”

Throughout 2004, we disposed of our interests in mineral resources properties and claims. In January 2004, we entered into an option agreement to sell a 50% undivided interest in our Sadim claims in British Columbia to an affiliated company of a former Storm Cat director. We received C$10,000 related to this option agreement. The agreement was subsequently terminated and we ceased all activities related to these claims.

In February 2004, we sold 100% of the interests in Argentina for C$10,000 to a third party, one of whose directors was also a director of Storm Cat.

At December 31, 2005, we hold the Sadim claims in British Columbia but attribute no value to the property.

Oil and Gas Operations. Since the beginning of 2004, we have concentrated our efforts on the oil and gas business. Our business model consists of three strategies:  (1) acquiring producing properties with drilling prospects in focused basins in both the U.S. and Canada; (2) exploring areas of moderate risk; and (3) initiating higher risk projects with the potential for higher reward.

Our primary source of financing for our exploration and drilling programs has been the net proceeds from private placements of our common shares and warrants. In 2004 and 2005, we raised a total of $51.1 million in connection with private equity offerings and issuance of common shares pursuant to warrant exercises net of issuance costs.

As part of the 2005 private placements, we entered into registration rights agreements with our investors requiring us to file with the Securities and Exchange Commission (“SEC”) a registration statement covering the resale of the common shares issued as well as any common shares issuable upon exercise of the warrants. Additionally, certain of our shares have “flow-through” rights which entitle the holders to certain tax deductions in Canada as a result of our exploration and development activities.

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Since the beginning of 2004, we have also retained key oil and gas exploration personnel, included as a significant cost in our general and administrative expenses, in order to maintain our work commitments, undertake our acquisition and exploration efforts, manage our producing properties and provide administrative support. We have also incurred significantly higher general and administrative expenses for legal, accounting and other professional services related to our various undertakings.

During the past two years, our oil and gas activities have been conducted in the United States, Canada and Mongolia. During 2005, the two significant events occurred with respect to our oil and gas operations. First, in February 2005 we acquired producing leases in the NE Spotted Horse Field in the Powder River Basin of Wyoming for approximately $8.7 million. The production from this field represented 68% of our 2005 production volumes and 69% of our 2005 natural gas revenue, and the reserves attributable to this acquisition comprise approximately 86% of our estimated proved reserves as of December 31, 2005.

The second significant event with respect to our oil and gas properties was the impairments of our investments in Mongolia. As of December 31, 2004, we had approximately $1.3 million of capitalized costs related to our Noyon and Tsaidam prospects in Mongolia, and our 2005 capital spending in Mongolia was $0.8 million. Our exploration programs on these prospects during 2005 showed that, while the potential resource is relatively large, production of the reserves would not be economic under current conditions due to lack of infrastructure. In addition, the government of Mongolia’s senior cabinet members resigned in January 2006; although, the Petroleum Authority of Mongolia (“PAM”) is still an active body. The Corporation cannot be assured that we will be granted any further rights under the five-year Production Sharing Contract that was granted to us in 2004 by the government as it was constituted at that time. As a result of the foregoing factors, as of December 31, 2005 we have impaired the full amount of our capitalized costs in Mongolia. The amount of the impairment was $2.1 million. We are maintaining a presence in Mongolia and once the government and PAM re-stabilize we will re-evaluate our activities there.

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Capital Expenditures and Dispositions.

The following table summarizes capital expenditures made by Storm Cat with respect to its oil and gas operations during the periods indicated:

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During the year ended December 31, 2003, we incurred capital expenditures of $24,000 in Mongolia, and there were no dispositions of properties.

Principal Capital Expenditures and Divestitures Currently in Progress.

From December 31, 2005 to March 15, 2006 we completed 2 wells in Elk Valley that were drilled in 2005 and we drilled and completed 1 well in Alaska. Funding for these wells and related facilities and equipment has been through expenditure of a portion of our cash and cash equivalents on hand at December 31, 2005.

In January 2006, we completed the sale of certain gathering assets in the Powder River Basin for $1.0 million. Concurrently, we entered into an agreement with the purchaser to provide natural gas gathering and compression services for our properties in this area.

Our capital program for 2006 includes approximately $32.0 million of capital expenditures, including $22.0 million of exploration and $10.0 million for development. In addition to our planned exploration and development spending, in early May 2006, we closed on acquisitions of approximately 16,000 net unproved mineral acres in Van Buren, Pope and Searcy counties, Arkansas and approximately 3,550 net unproved acres in Campbell County, Wyoming. In March 2006, the Corporation acquired 2,560 acres of land prospective for gas from the Duvernay shale in the Redwater area of Central Alberta. Total payment for the lease was C$362,383. We are also investigating additional exploration and development projects for possible acquisition.

Currently, we do not have sufficient funds to carry out our 2006 capital program or to undertake additional acquisitions. We intend to fund our operations in 2006 by establishing a bank line of credit secured by our proved properties, or through additional equity issuances, or a combination thereof. There can be no assurance that we will be able to obtain the required funds for all or any of our capital program.

We have, from inception, financed our activities through the distribution of equity capital. We anticipate having to raise additional funds by equity issuance in the next several years in order to fund planned exploration and development programs on existing properties, to acquire interests in additional exploration and development projects, and to fund exploration and development programs on such acquisitions. The amount and timing of such offerings is dependent upon the success of our exploration programs as well as the amount of cash flow generated by our producing properties and the general economic climate.

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Public Takeover Offers.

During the years ended December 31, 2005 and 2004, and the period from January 1, 2006 to May 31, 2006, we have not received any public takeover offers nor have we made any such takeover offers.

Business Overview

Operations and Principal Activities. Our operations and principal activities focus on the pursuit, exploration and development of large unconventional gas reserves from fractured shales, coalbeds and tight sand formations. All of our production volumes and product sales to date have been from the production of coalbed methane in the Powder River Basin in Wyoming. We have also conducted exploration activities in Canada and Mongolia.

Competition. All aspects of the oil and gas industry are highly competitive and we compete with other entities primarily in the areas of (1) exploration for and development of new sources of oil and natural gas reserves; (2) reserve and property acquisitions; (3) transportation and marketing of products; (4) access to services and equipment to carry out our capital programs and operating activities; and (5) attracting and retaining experienced personnel. The oil and gas industry also competes with other industries in many of these areas.

Seasonality. Market prices for natural gas frequently exhibit volatile characteristics, some of which may be seasonal. In addition, seasonal weather conditions may affect our operations, particularly with respect to access to worksites and drilling operations. To date, however, we have not experienced any significant seasonal impacts on our operations.

Raw Materials. Not applicable.

Marketing. We market our natural gas to purchasers in the Powder River Basin. In 2004 and 2005, we sold a significant portion of our production to Enserco Energy, Inc., as described in Note 1 of Notes to the Consolidated Financial Statements in Item 17 of this Annual Report. Although we sell the majority of our production to a few purchasers, there are numerous other purchasers in the areas in which our properties are located. Accordingly, we do not believe that a loss of one or more of our major purchasers would have a significant adverse effect on our operations.

The price we receive for our natural gas is determined by negotiation with our purchasers. Such price depends, in part, on natural gas quality, prices of competing natural gas and other fuels, distance to market, access to transportation, length of contract term and the supply/demand balance. We have chosen to enter into certain gas sales contracts in order to optimize the prices we receive for our natural gas. Our delivery commitments pursuant to these contracts as of December 31, 2005 is disclosed in Note 8 of Notes to the Consolidated Financial Statements in Item 17 of this Annual Report.

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Dependency on patents, licenses, contracts or new manufacturing processes. This is not applicable, except as to the marketing contracts disclosed above.

Effects of Government Regulation.

Regulation

Our oil and gas operations are subject to various U.S. federal, state, and local laws and regulations, as well as foreign laws and regulations.

United States

The state of Wyoming has adopted laws regulating the exploration for and production of coalbed methane gas, including laws requiring permits for the drilling of wells, imposing bonding requirements in order to drill or operate wells, and providing authority for regulation relating to the location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, and the abandonment of wells. Our operations are also subject to various conservation laws and regulations.

Certain of our operations are conducted on federal land pursuant to oil and gas leases administered by the Bureau of Land Management (“BLM”). These leases contain relatively standardized terms and require compliance with detailed regulations and orders. In addition to permits required from other agencies, lessees must obtain a permit from the BLM prior to the commencement of drilling, and comply with regulations governing, among other things, engineering and construction specifications for production facilities, safety procedures, plugging and abandonment of wells, the valuation of production, and the removal of facilities. Under certain circumstances, the BLM or the Mineral Management Service (“MMS”), as applicable, may require our operations on federal leases to be suspended or terminated. Any such suspension or termination could materially and adversely affect our financial condition and operations.

In August 2005, Congress enacted the Energy Policy Act of 2005 (“EP Act 2005”), which amends the Natural Gas Act (“NGA”), to make it unlawful for any entity, as defined in EP Act 2005, to use any deceptive of manipulative device or contrivance in connection with the purchase or sale of natural gas or the purchase or sale of transportation services subject to regulation by the Federal Energy Regulatory Commission (“FERC”), in contravention of rules prescribed by the FERC. The EP Act 2005 also gives the FERC authority to impose civil penalties for violations of the NGA. The EP Act 2005 reflects a significant expansion of the FERC’s enforcement authority. Storm Cat does not anticipate it will be affected by the EP Act 2005 any differently than other producers of natural gas of similar size with operations in the United States.

Additional proposals and proceedings that might affect the oil and gas industry are regularly considered by Congress, the states, the FERC, and the courts. We cannot predict when or whether any such proposals may become effective. No material portion of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the federal government.

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Canada

The oil and natural gas industry in Canada is subject to extensive controls and regulations imposed by various levels of government. Federal authorities do not regulate the price of oil and gas in export trade. Legislation exists, however, that regulates the quantities of oil and natural gas which may be removed from the provinces and exported from Canada in certain circumstances. Regulatory requirements also exist related to licensing for drilling of wells, the method and ability to produce wells, surface usage, transportation of production from wells, and conservation matters. We do not expect that any of these controls and regulations will affect Storm Cat in a manner significantly different from other oil and natural gas companies of similar size with operations in Canada.

The provinces in which we operate have legislation and regulation which govern land tenure, royalties, production rates and taxes, and environmental protection and other matters under their respective jurisdictions. The royalty regime in the provinces in which we operate will represent a significant factor in the profitability of any production. Crown royalties are determined by government regulation and are typically calculated as a percentage of the value of production. The value of the production and the rate of royalties payable depends on prescribed reference prices, well productivity, geographical location, and the type or quality of the product produced.

Mongolia

Several members of the Mongolian government resigned in January 2006. The Corporation’s production sharing agreements are still valid according to PAM, however given the recent events; there is no assurance as to the enforceability and validity of the agreements under a new regime.

As of December 31, 2005, the Corporation has taken a full impairment on it Mongolian assets. Storm Cat will continue to keep a skeletal work force in place and monitor the situation.

Environmental Regulation

Our operations are subject to government laws and regulations concerning pollution, protection of the environment and the handling and transport of hazardous materials in both the United States and Canada. These laws and regulations generally require Storm Cat to remove or remedy the effect of our activities on the environment at present and former operating sites, including dismantling production facilities and remediating damage caused by the use or release of specified substances. We believe that it is reasonably likely that the trend in environmental legislation and regulation will continue toward stricter standards. While we believe that we are in substantial compliance with applicable environmental laws and regulations in effect at the present time and that continued compliance with existing requirements will not have a material adverse impact on us, we cannot give any assurance that we will not be adversely affected in the future.

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Storm Cat expects to incur abandonment and site reclamation costs as existing oil and gas properties are abandoned and reclaimed in the United States and Canada. As of the date of this Annual Report, such expenditures have been insignificant and we do not anticipate making material expenditures beyond normal compliance with environmental regulations in 2006.

Organizational Structure

Storm Cat is incorporated under the laws of British Columbia, Canada. We are a public company whose common shares are listed on the TSX Venture Exchange under the symbol “SME” on the American Stock Exchange under the symbol “SCU”  Our operations are conducted in part through our wholly-subsidiaries listed below. All of our subsidiaries are 100% owned and we hold 100% of the voting rights.

Storm Cat Energy Mongol Co. Ltd.

Storm Cat Energy (USA) Corporation

Storm Cat Energy (USA) Operating Corporation

Storm Cat Energy (Powder River) LLC

Storm Cat Energy (Alaska) LLC

Triple Crown Gathering Corporation

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Oil and Gas Properties

Powder River Basin, Wyoming, United States

In December 2004, we acquired a 100% working interest before payout (90% after payout) in 1,481 acres of the Jamison/North Twenty Mile fields, located in Campbell County, Wyoming, for consideration of approximately $1.25 million. In February 2005, we acquired producing leases in the NE Spotted Horse Field, located on the eastern portion of the Powder River Basin approximately 35 miles northwest of Gillette, Wyoming, for consideration of approximately $8.7 million after purchase price adjustments. The acquisition included the seller’s gas gathering assets, which we subsequently sold in January 2006. All of our natural gas production in 2005 and 2004 relates to these Powder River Basin fields.

Northeast Spotted Horse Field

The Northeast Spotted Horse Field is a producing coalbed methane project located in the Powder River Basin of Wyoming, approximately 35 miles northwest of Gillette, Wyoming. The project consists of 6,320 gross contiguous acres located in the eastern portion of the Powder River Basin. The property contains 111 producing wells,

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all of which are operated by Storm Cat. The Corporation paid $8.6 million to acquire the property.

The Corporation began drilling the undeveloped acreage in July 2005. Through December 31, 2005, the Corporation drilled 43 wells. Twenty-nine multi-seam completion wells were drilled in a combination of the Cook, Wall and Pawnee coal seams. The remaining 14 wells were completed only in the shallower Canyon coal seam on an experimental 160-acre pattern. The Corporation invested $6.5 million on the Northeast Spotted Horse Field development program.

In 2006, we plan to complete our drilling program in the North East Spotted Horse Field. As of the date of this Annual Report, the Corporation has begun the drilling program.

Jamison/North Twenty Mile Fields

The Jamison/North Twenty Mile Fields are producing coalbed methane projects located on the eastern flank of the Powder River Basin coalbed methane natural gas region in Campbell County, Wyoming. The Corporation has a 100% Working Interest (81.5% Net Interest) in the projects. The projects cover approximately 1,481 acres and currently contain 28 producing wells that were originally placed into production in early 2002. Storm Cat paid $1.25 million to acquire the property.

In 2005, the Corporation initiated a comprehensive recompletion and rework program on the projects. This program consists of pulling and reinstalling bottomhole pumps, re-perforating currently producing formations and deepening of some wells to test new zones. Storm Cat invested $750,000 to develop the Jamison/North Twenty Mile Fields in 2005.

In 2006, the Corporation plans to drill up to 20 wells late in the third quarter to test the deeper Cook/Wall coals.

Powder River Basin Production and Reserves

In 2004, we reported net production of 17 MMcf attributable to one month of ownership of our interests in the Jamison/North Twenty Mile fields. In 2005, we reported net production of 463 MMcf attributable to ten months of ownership of our interests in the NE Spotted Horse field and a full year of ownership of the Jamison/North Twenty Mile fields.

Netherland, Sewell & Associates, Inc. of Houston, Texas, independent reserve engineers, prepared an estimate of our proved reserves in the NE Spotted Horse and Jamison/North Twenty Mile fields as of December 31, 2005. A summary of the estimated net proved reserves by category is as follows:

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For additional information regarding our estimated proved reserves and changes therein, please refer to Note 12, “Oil and Gas Producing Activities” of Notes to the Consolidated Financial Statements included in Item 17 of this Annual Report.

Alaska Exploration Licenses, United States

In November 2004, Storm Cat acquired two Petroleum and National Gas leases in the onshore Cook Inlet region of Alaska comprising approximately 18,400 gross unproven acres for total consideration of approximately $204,000. The rentals are $1.50 per acre for 2006 (the second year), $2.00 per acre for the third year, $2.50 per acre for the fourth year and $3.00 per acre for the fifth year.

In January 2005, the Corporation acquired an additional lease in the Cook Inlet region comprising approximately 3,751 gross unproven acres in close proximity to the existing acreage. Consideration for this lease was a payment of approximately $9,000 and the assumption by Storm Cat of all future rental obligations with estimated annual rental of $3.00 per acre and expiring January 1, 2009.

In May 2005, Storm Cat was the successful bidder at the May 2005 Cook Inlet State Lease Sale on 8 tracts in the Cook Inlet. Total annual consideration for these leases

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is estimated at $6.00 per acre. We tendered a deposit in the amount of $56,693. The final determination of the Corporation’s final acreage position from the State of Alaska is expected in the second quarter of 2006. When the leases are issued, Storm Cat will owe the remaining consideration due the State on approximately 20,000 unproven acres. The term of the leases will be 7 years and rentals are $1.00 per acre for the first year, $1.50 per acre for the second year, $2.00 per acre for the third year, $2.50 per acre for the fourth year and $3.00 per acre for the fifth and following years.

Storm Cat has completed a geological evaluation of the licenses and established a drilling target in December 2005. On February 14, 2006, the Corporation spud the Northern Dancer #1 well. Currently, Storm Cat is evaluating the drilling results. From inception through December 31, 2005, Storm Cat spent approximately $0.6 million on the exploration program in Alaska.

Canada

British Columbia, Canada

In June 2005, we entered into a Farm-In and Joint Venture agreement on approximately 78,000 acres of provincial lands and freehold mineral rights in the Elk Valley area in the southeast part of British Columbia. Under the terms of the agreement, the Corporation has access to all existing infrastructure and facilities on the lands. To earn a 50% working interest in the property and all existing development and infrastructure, the Corporation must spend a total of C$12.0 million over three years (of which C$2.0 million must be spent in the first year). The Corporation has met is its C$2.0 million spending commitment in the first year.

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During 2005, the Corporation re-activated three existing wells on the West test pilot. On two of the re-activated wells the Corporation completed into a lower coal seam that had not been tested. Two new wells were drilled in the West pilot using the methods the Corporation believes are critical to drilling CBM wells.

In 2006, the two new wells were completed and are in the process of dewatering. The Corporation has licensed 6 additional drilling locations with estimated spud dates in the second quarter. Storm Cat will also submit licenses for an additional 6 wells providing the Corporation with 12 potential drilling locations and licenses. Work will also begin on evaluating and planning for facilities, water management, and compression to a sales point depending upon the success of the drilling program.

Saskatchewan, Canada

In February 2005, we entered into a Farm-In agreement with respect to a large exploration permit called “Moose Mountain” in eastern Saskatchewan. The Moose Mountain exploration permit comprises approximately 236,000 acres of land (368 contiguous sections). Storm Cat paid C$750,000 consideration to the lessee upon execution of the Farm-In agreement, and agreed to pay approximately C$475,000 of the first two years’ work commitment and approximately C$95,000 of technical and geological expenses. Subsequently, we will pay our 45% working interest share of costs and will receive our 45% working interest share of production until payout, which will be considered to have occurred when gross production reaches 5.5 bcfe. After payout, our interest will convert to a 30% working interest in these lands.

The Moose Mountain transaction is considered to be a related party transaction as Michael J. O’Byrne, a director of Storm Cat, is Vice-President of Land and a Principal of the lessee. Mr. O’Byrne abstained from Storm Cat’s decision to enter into the farm-in agreement. A copy of the Moose Mountain acquisition agreement has been filed as an exhibit to this Annual Report.

The Corporation drilled a single well on the Moose Mountain prospect in June of 2005 to meet the terms of the farm-in agreement. The well had to be abandoned because of a stuck drill pipe. However, the Corporation was able to log the well and the test results provided enough encouragement to continue the exploration program in Moose Mountain. For 2006, the Corporation has licensed three drilling locations. Depending on rig availability, these wells should be spud in the second quarter of 2006. From inception through December 31, 2005, Storm Cat spent approximately $1.3 million on the exploration program in Saskatchewan.

Alberta, Canada

In the fourth quarter of 2005, we acquired two exploration prospects in the south central portion of Alberta. In the Cessford area, we secured access to approximately 3,200 gross unproven acres through a drill-to-earn agreement whereby the Corporation must drill prior to March 15, 2006 (subject to rig availability). Storm Cat spud this well on May 23, 2006. The Corporation has 60 days after rig release of each well to elect to drill the next one. Each well earns the Corporation 640 acres. To earn all 3,200 acres, the Corporation must drill a total of 5

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wells. In the Red Deer area, we were the successful bidder on approximately 2,100 acres in the December 2005 Alberta Crown Land Sale. Consideration paid for the Red Deer leases, which have a lease term of five years, was approximately C$1.1 million and consideration from the Alberta Crown Land Sale was C$0.95 million.

The Corporation is actively seeking a rig to drill the initial test well on the Cessford prospect. Development plans for Red Deer are to drill an exploratory well to the Mannville formation sometime during the fourth quarter of 2006. From inception through December 31, 2005, Storm Cat spent approximately $4.2 million on the exploration program in Alberta.

Mongolia

In the second quarter of 2004, pursuant to a five-year Production Sharing Contract, the Mongolian government granted Storm Cat the exclusive rights for conducting coalbed methane gas operations in the Noyon prospect area in the South Gobi region of Mongolia. In the fourth quarter of 2004, we were granted a second exploration block known as the Tsiadam prospect area. The Corporation paid $0.7 million to acquire the property.

The exploration program on the Noyon prospect was completed in March 2005. Results of testing showed that, while the potential resource is relatively large, production of the reserves would be not economic under current conditions and due to a lack of infrastructure. Exploration activities on the Tsaidam prospect were undertaken throughout 2005. The Corporation has concluded that this block of acreage can not be developed economically because of a lack of infrastructure.

From inception through December 31, 2005, Storm Cat spent approximately $2.1 million on the Mongolian exploration program, all of which has been written off. In January of 2006, the government of Mongolia resigned. The Corporation cannot be assured that it will be granted any further rights under the Production Sharing Contract. However, the Corporation is maintaining a small presence in the country and is assessing its opportunities in Mongolia.

Item 4A. Unresolved Staff Comments

Not applicable.

Item 5. Operating and Financial Review and Prospects

This discussion and analysis should be read in conjunction with the consolidated audited financial statements for the years ended December 31, 2005, 2004 and 2003 and related notes thereto included in Item 17 of this Annual Report and with the Selected Financial Data set forth in Item 3 above. Our financial statements are prepared in accordance with U.S. GAAP and are presented in U.S. dollars. All share and per-share amounts have been retroactively adjusted to reflect a 2-for-1 share split that took place in March, 2005.

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Operating Results

Fiscal Year 2005 Ended December 31, 2005 versus Fiscal Year 2004 ended December 31, 2004.

In 2005, we recorded our first full year of coalbed methane sales revenue from the Jamison/Twenty Mile field and 10 months of sales from the NE Spotted Horse field. Total revenue of $4,627,000 represented a 4,349% increase compared to revenue of $104,000 recorded in December 2004. The significant increase was attributable to more months of production from these acquisitions, higher average sales prices, and the favorable results of our 43 well drilling program. Total sales volumes for the year ended December 31, 2005 were approximately 682.4 MMcf, an increase of 3,845% compared to 17.3 MMcf recorded for one month of sales in 2004.

Depletion of property and equipment was $1,350,000 or $1.97 per Mcfe, in 2005 compared to $20,000 or $1.18 per Mcfe, in 2004. The increase in depletion expense is attributable primarily to higher production in 2005.

In 2005, impairment expense of $2,125,000 is attributable to the writedown in the value of our Mongolian cost pool. In 2004, we did not record any impairment expense.

General and administrative expense for the year ended December 31, 2005 was $5,520,000 compared to $951,000 for the year ended December 31, 2004. The increased expense is attributable to increasing the Corporation’s technical workforce, increases in legal and accounting fees, additional consulting and investor relations expenses. Additional legal fees are attributable to the Corporation’s special Extraordinary General Meeting held in September, listing application on the American Stock Exchange, three private placements closed in the fourth quarter of 2005, and the filing of the resale registration statement of Form F-3 relating to the private placements, which closed in the fourth quarter of 2005.

Interest income of $125,000 for the year ended December 31, 2005 was attributable to higher average cash balances on hand throughout the year, primarily as a result of net proceeds from equity offerings.

As a result of the increased level of general and administrative expenditures and the impairment of our Mongolian cost center, offset partially by the profit margin contributed by natural gas sales, the net loss of $8,368,000, or $0.17 per basic share, was significantly higher than the $909,000, or $0.04 per share, reported in 2004.

Fiscal Year 2004 Ended December 31, 2004 versus Fiscal Year 2003 Ended December 31, 2003

During the year, we shifted our focus from mineral exploration to petroleum exploration and production. We reported one month of production and sales revenue from one field during the 2004 year.

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The net loss of the year was ($909,735), or ($0.04) per share, compared to a net loss of ($173,116), or ($0.01) per share, in the prior year. The higher loss was due to increased levels of corporate activity as management refocused our operations from mineral exploration to natural gas exploration and production. The Jamison/North Twenty Mile fields were acquired December 1, 2004 and revenue recorded from one month of production totaled $103,999. Direct Costs related to production totaled ($42,000), which included Gathering and Transportation of ($39,000), and Operating Expense of ($4,000).

Expenses totaled ($1,013,000) compared to ($173,000) in fiscal 2003. Large changes in expenses occurred in General & Administration Fees, which rose to ($951,000) compared to ($173,000) in the prior year; Depreciation, Depletion and Amortization rose to ($19,000) from zero in the prior year.

The Corporation does not consider the impact of inflation or foreign currency fluctuations to be material.

Liquidity and Capital Resources

The Corporation’s primary source of funds since inception has been through the issuance of its common shares in equity offerings and through the exercise of options and warrants. We have not utilized debt financing or otherwise encumbered any of our assets.

The Corporation’s working capital position as of December 31, 2005 was $18.4 million, including cash and cash equivalents of $29.5 million. The cash balances represent primarily the net proceeds of the private placements completed in 2005.

Storm Cat plans to invest $32.0 million to execute its 2006 drilling and exploration program: $15.0 million in Elk Valley, British Columbia, $10.0million in the Powder River Basin, $3.0 million in Alaska, $1.8million in Saskatchewan, $1.2 million in Alberta and $1.0 million in other projects. The Corporation has $30 million in cash as of December 31, 2005. When adjusting for payments relating to 2005, Storm Cat will have approximately $20 million plus cash flow from its properties to fund its $32 million capital budget for 2006.

We expect to fund our 2006 programs through the private placement of common shares and/or the issuance of debt. There can be no assurance that we will be able to obtain the required funds to finance such programs.

The Corporation does not know of any trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, the Corporation’s liquidity either materially increasing or decreasing at present or in the foreseeable future. Material increases or decreases in the Corporation’s liquidity are substantially determined by the cash flow from natural gas production at the Corporation’s producing projects, the success or failure of the Corporation’s exploration programs, and any future acquisition of new project interests.

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As of the following fiscal year ends, the Corporation’s deficit and working capital were as follows:

Fiscal Year Ended December 31, 2005

The Corporation’s working capital totaled $18.445 million as of December 31, 2005 compared to $2.257 million as of December 31, 2004. The increase in cash was due to the issuance of common shares for cash for $45.652 million.

Operating activities used cash of ($2.272 million). the net loss for the year of ($8.368 million) was partially offset by items not involving cash of, depreciation, depletion and amortization of $1.572 million and a $2.125 million impairment. changes in non-cash working capital items included an increase in other current assets of ($360,000), and accounts receivable of ($1.099 million), other liabilities of $1.426 million and accounts payable of $509,000.

Financing activities provided cash of $44.920 million and consisted of issuance of common shares for cash.

Investing activities used cash of ($15.733 million), with restricted investments using cash of ($150,000), capital expenditures - oil and gas properties using cash of ($14.766 million) and other capital expenditures using cash of ($817,000). the corporation’s cash position as of December 31, 2005 was $29.502 million, which was an increase of $26.837 million from the end of fiscal 2004.

During the year, the Corporation issued a total of 33,093,674 (post-split) common shares for proceeds of $44.920 million, net of share issuance costs of ($3.043 million). 18,993,826 (post-split) shares were issued in pursuant to private placements for proceeds of $37.745 million; 646,668 (post-split) shares were issued pursuant to the exercise of stock options for proceeds of $287,000; 13,453,180 (post-split) shares were issued pursuant to the exercise of stock purchase warrants for proceeds of $10.661 million.

Of the common share issued by the Corporation in 2005, 2.143 million are subject to Canadian flow-through provisions that provide certain tax benefits to Canadian shareholders. Please refer Note 15 in the Corporation’s 2005 Consolidated Financial Statements.

Fiscal Year Ended December 31, 2004         

The Corporation’s working capital totaled $2.257 million as of December 31, 2004 compared to $430,000 as of December 31, 2003. The increase in cash was due to the issuance of common shares for cash, as well and from the disposal of certain of the Corporation’s mineral property interests. The Corporation also began natural gas

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production in December 2004 through the acquisition of the Jamison/North Twenty Mile Fields in Wyoming and recorded one month of cash flow from natural gas sales.

Operating activities used cash of ($135,000). The net loss for the year of ($909,000) was partially offset by items not involving cash of amortization and depletion of $36,000. Changes in non-cash working capital items included an increase in account receivable of ($108,000), other current assets of ($78,000), and other current liabilities of $599,000 and a decrease in accounts payable of ($28,000).

Financing activities provided cash of $5.056 million and consisted entirely of issuance of common shares for cash. investing activities used cash of ($2.893 million), with restricted investments using cash of ($26,000), capital expenditures - oil and gas properties using cash of ($2.777 million) and other capital expenditures using cash of ($90,000). The Corporation’s cash position as of December 31, 2004 was $2.665 million, which was an increase of $2.212 million from the end of fiscal 2003.

During the year, the Corporation issued a total of 18,907,384 (post-split) common shares for proceeds of $5.409 million, net of share issuance costs of ($276,000); 15,041,000 (post-split) shares were issued in pursuant to private placements for proceeds of $4.866 million; 93,334 (post-split) shares were issued pursuant to the exercise of stock options for proceeds of $38,000; 3,684,500 (post-split) shares were issued pursuant to the exercise of stock purchase warrants for proceeds of $745,000; and 88,550 (post-split) common shares were issued for Finders Fees.

Research and development, patents and licenses, etc.

Not applicable.

Trend Information

The Corporation is presently exploring certain of its properties for sufficient reserves to justify production, while natural gas is being produced from the Jamison/North Twenty Mile and Northeast Spotted Horse Fields in Wyoming. The Corporation’s revenue in future periods is expected to vary due to the price of natural gas as well as the amount of natural gas produced as new wells are drilled and begin producing and existing wells decline.

The price we receive for our natural gas production is driven by the fundamentals of the North American gas markets. Over the past two years, prices have remained strong due to continuing supply concerns in North America. We expect to see continuing strong prices in 2006.

Off-Balance Sheet Arrangements

The Corporation has no off-balance sheet arrangements.

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Tabular Disclosure of Contractual Arrangements

The Company has not included asset retirement obligations as discussed in Note 5 of the accompanying financial statements, as the Company cannot determine with accuracy the timing of such payments.

Item 6. Directors, Senior Management and Employees

Directors and Senior Management

As of April 4, 2006, the directors and officers of the Corporation are:

All directors have a term of office expiring at the next annual meeting of the Corporation expected to be held in June of 2006. All officers have a term of office lasting until their removal or replacement by the board of directors.

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J. Scott Zimmerman serves as President, Chief Executive Officer and a Director of the Corporation. He is a Petroleum Engineer and member of the Society of Petroleum Engineers. He graduated from Texas Tech University with a BS in Petroleum Engineering in 1979. Mr. Zimmerman has spent 20 years specializing in coalbed methane gas exploration and production in the Rocky Mountain Region. He is a former Senior Production & Reservoir Engineer with Amoco Production Corporation and was Vice-President, Energy Sector, for J.M. Huber Corporation. Mr. Zimmerman was employed at J.M. Huber Corporation from June 1982 to January 2002 when he became employed in February 2002 as Vice-President of Operations and Engineering for Evergreen Resources, a developer of coalbed natural gas. Mr. Zimmerman devotes 100% of his time to the Corporation’s affairs.

Paul Wiesner is the Chief Financial Officer and Secretary-Treasurer of the Corporation. Mr. Wiesner has over 20 years of experience in financial management, including 13 years in the oil and gas industry for upstream and midstream companies with financial responsibilities ranging from Analyst to Vice-President, Finance. Before joining Storm Cat, he was Chief Financial Officer for NRT Colorado Inc., a corporation with over 150 employees in 20 locations, from April 2002 to March 2005. Mr. Wiesner was a financial analyst at Bear Paw Energy and Crestone Energy Ventures from 2000 to 2002. Prior to 2000, Mr. Wiesner served as CFO for Anchor Bay Corporation, an oil and gas company with assets in the central Rockies. Mr. Wiesner holds a BA in Economics from Claremont McKenna College and an MBA from the MIT Sloan School of Management, and devotes 100% of his time to the Corporation’s affairs.

Michael O’Byrne serves as a Director of the Corporation. Mr. O’Byrne has been involved in the oil and gas business for over 10 years as a Landman, Land Manager and Vice-President, Land. He has been President of OMJ Land Services Ltd. specializing in preparation of joint-venture documentation and other areas of oil and gas administration. He is currently Vice-President, Land for Golden Eagle Energy Ltd. and Chaperon Energy, private oil and gas companies, and as a Director and Principal of White Max Energy, Ltd., a private oil and gas production company.

Robert Penner serves as a Director of the Corporation. Mr. Penner is a Chartered Accountant and a recently retired senior tax partner with KPMG. Mr. Penner was with KPMG from March 1965 to April 2004. He has over 35 years of public accounting experience, and specialized in advising clients on Canadian and International tax matters, with a particular emphasis on the taxation and financing of oil and gas and natural resource projects. He is a member of the Canadian Institute of Chartered Accountants, Institute of Chartered Accountants of Alberta and Manitoba, Canadian Petroleum Tax Society, and the Canadian Tax Foundation. He currently serves as a director of the following companies: Sustainable Energy Technology Ltd, a manufacturer of energy converters traded on the TSX Venture Exchange; Terra Energy, a Canadian oil and gas production company traded on the TSX Venture Exchange; Corridor Resources Inc., a Canadian TSX Venture listed oil and gas company; Golden Eagle Energy Ltd., an unlisted Canadian oil and gas company.

Michael J. Wozniak is a Director of the Corporation and was a partner in the Environmental, Natural Resources and Energy Group of the international law firm of

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Dorsey & Whitney LLP from March 2002 until 2005, where he also served as Partner-in-Charge of the Denver office. Mr. Wozniak is a current and founding partner of Beatty & Wozniak LLC, a natural resources law firm located in Denver, Colorado. He received his B.A. degree with distinction from Indiana University in 1976 (Phi Beta Kappa) and his J.D. from the University of Colorado School of Law in 1980. Mr. Wozniak has an active merger, divestiture and acquisition practice, representing buyers and sellers of oil and gas producing properties, midstream assets, gas processing plants and natural gas and oil pipelines throughout the United States. He represents oil and gas clients in regulatory and environmental compliance matters, Public Lands appeals, and natural resources litigation in both state and federal courts. He is licensed to practice law in the states of Colorado and Wyoming, is a member of the Colorado, Wyoming, Southern Ute Tribe and Federal Energy Bar Associations and is a frequent lecturer on natural resources matters.

Robert J. Clark is a Director of the Corporation and is a 38-year veteran of the oil and gas industry. Mr. Clark is President of Bear Cub Energy, LLC, a privately held gas gathering and processing company, which he founded in 2001. In 1995, Mr. Clark formed a predecessor company, Bear Paw Energy LLC, which was sold in early 2001 to Northern Border Partners. Earlier experience included officer positions with Snyder Oil Corporation, Ladd Petroleum Corporation and NICOR, Inc. Mr. Clark received his Bachelor of Science Degree from Bradley University and his M.B.A. from Northern Illinois University. Mr. Clark currently serves on the board of KFX Inc and is a member of the Board of Managers for Bear Cub Energy, LLC and Fluid Compressor Partners LLC. He most recently served on the Board of Directors for Evergreen Resources, Inc. which was sold in late 2004 and Patina Oil and Gas Corporation which was sold in early 2005.

Keith Knapstad is the Vice-President, Operations (USA) and has a strong managerial and operational background, most recently as Manager Powder River Basin Assets for J. M. Huber Corporation from May 2003 to April 2005; a privately held corporation with extensive unconventional resource holdings. Prior to Huber, Mr. Knapstad worked for Marathon Oil Corporation/Pennaco Energy from January 1990 to May 2003 in the Rocky Mountain region managing a multi-disciplined team responsible for engineering and development of various Rocky Mountain producing areas. Mr. Knapstad received a BS in Petroleum Engineering from Montana Tech in 1984.

Don Martin is Vice President, Canada and International Operations, of the Corporation. He has over 25 years exploration and development experience in the western Canadian sedimentary basin. Prior to joining the Corporation, Mr. Martin was with Nytis Exploration Corporation as Vice President Exploitation, a private Canadian based exploration and production company from November 2004 to August 2005. Prior to Nytis, Mr. Martin was employed by Evergreen Natural Resources Canada and its predecessor company Carbon Energy Corporation from January 2001 to October 2004. Mr. Martin rose to the position of Vice President of Canadian Exploration assuming responsibility for all exploration functions as well as the engineering and production operations groups. A professional geologist by trade, Mr. Martin is a member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta, and the Canadian Society of Petroleum Geologists.

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Compensation

The following table sets forth all compensation paid and options granted by the Corporation for services rendered during the most recently completed financial year by directors, senior officers, or senior management of the Corporation.

Summary Compensation Table

(1)                                  Effective March 31, 2005, the issued shares of the Corporation were subdivided on a 1:2 basis. The number of options is on a post-split basis.

(2)                                  Mr. Dyakowski resigned as Chief Financial Officer of the Corporation on March 16, 2005 and as Chief Administrative Officer on June 23, 2005.

(3)                                  Mr. Wiesner was appointed Chief Financial Officer of the Corporation on March 16, 2005.

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Board Practices

Term of office

All directors have a term of office expiring at the next annual general meeting, to be scheduled in June 2006, unless re-elected or unless a director’s office is earlier vacated in accordance with the Corporation’s Articles or the provisions of the Business Corporations Act (British Columbia). All officers have a term of office lasting until their removal or replacement by the board of directors.

During the most recently ended financial year, two directors resigned, Ronald K. Husband on January 4, 2005 and Robert Bereskin on April 18, 2005, and two directors were appointed, Craig Steinke on April 18, 2005 and Michael J. Wozniak on June 23, 2005. In April 2006, Craig Steinke resigned from the board of directors.

Service Contracts

Mr. Dyakowski’s services were provided to the Corporation under the terms of a contract for services dated May 21, 2004 between the Corporation and Max Investments Inc. pursuant to which Mr. Dyakowski was paid the sum of $5,000 per month. This contact terminated on June 22, 2005 and Mr. Dyakowski resigned as a director of the Corporation on January 6, 2006 and as an officer of the Corporation on June 23, 2005.

Mr. Steinke’s services were provided to the Corporation under the terms of a contract for services dated October 1, 2003 between the Corporation and Reconnaissance Energy International pursuant to which Mr. Steinke was paid varying amounts between $5,000 and $10,000 per month depending on the amount of services provided to the Corporation. This contract terminated on December 31, 2005.

Board Committees

The Board has established three committees, an Audit Committee, a Compensation Committee and a Nominating Committee. The Audit Committee is currently comprised of Michael O’Byrne, Robert Penner, and Robert Clark. The Compensation Committee is currently comprised of Michael O’Byrne and Michael Wozniak and the Nominating Committee is currently comprised of Michael O’Byrne, Robert Clark and Michael Wozniak.

Audit Committee

The members of the Audit Committee do not have any fixed terms for holding their positions, are appointed by and may be replaced by the Board of Directors. Audit Committee members do not receive any separate or additional remuneration for acting as members of the committee. It has the responsibility of reviewing with management and the Corporation’s independent auditors the annual financial statements and related footnotes, management’s discussion and analysis and the annual information form, all for recommending their approval by the Board of Directors. The shareholders of the Corporation recently adopted an Audit Committee Charter that mandates the Audit Committee assists the Board in fulfilling its financial oversight responsibilities. The

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Audit Committee’s primary duties and responsibilities under this mandate are to serve as an independent and objective party to monitor:

1.               the quality and integrity of the Corporation’s financial statements and other financial information;

2.               the compliance of such statements and information with legal and regulatory requirements;

3.               the qualifications and independence of the Corporation’s independent external auditor (the “Auditor”); and

4.               the performance of the Corporation’s internal accounting procedures and Auditor.

The Audit Committee shall be comprised of three or more members. Each member of the Audit Committee must be a member of the Board and must be able to read and understand fundamental financial statements, including the Corporation’s balance sheet, income statement, and cash flow statement.

The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that a decision of such subcommittee to grant a pre-approval shall be presented to the full Audit Committee at its next scheduled meeting.

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Corporation’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the Auditor.

Compensation Committee

The members of the Compensation Committee do not have any fixed terms for holding their positions, are appointed by and may be replaced by the Board of Directors. Committee members do not receive any separate or additional remuneration for acting as members of the committee. The Compensation Committee is currently comprised of Michael O’Byrne and Michael Wozniak. It has the responsibility of discharging the responsibilities of the Board of Directors relating to compensation of the Corporation’s officers and directors, to provide general oversight of the Corporation’s compensation structure including equity compensation plans and benefits programs and to perform the additional specific duties and responsibilities set out in the Compensation Committee Charter.

The Compensation Committee will consist of at least two members, all of whom will be independent directors of the Corporation, and one of whom will act as chairperson. An “independent” director is a director who is independent, as determined

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by the Board, within the definitions prescribed for executive compensation committee members by applicable stock exchange listing standards, and applicable laws or U.S. Securities and Exchange Commission (“SEC”) rules. Committee members will be appointed, and the Chairperson will be selected from among them, by the Board.

The Compensation Committee will have the authority to retain, at the Corporation’s expense, such outside consultants, legal counsel, and other advisors as it determines is appropriate to assist it in the full performance of its functions, including the authority to approve such advisors’ fees and other engagement terms.

Nominating Committee

The members of the Nominating Committee do not have any fixed terms for holding their positions, are appointed by and may be replaced by the Board of Directors. Committee members do not receive any separate or additional remuneration for acting as members of the committee. The Nominating Committee is currently comprised of Michael O’Byrne, Robert Clark and Michael Wozniak. The Corporation recently adopted a Nominating Committee Charter that requires the following:

The Nominating Committee (a) assists the Board, on an annual basis, by identifying individuals qualified to become Board members, and recommends to the Board the director nominees for the next annual meeting of shareholders; (b) assists the Board in the event of any vacancy on the Board by identifying individuals qualified to become Board members, and recommends to the Board qualified individuals to fill any such vacancy; and (c) recommends to the Board, on an annual basis, director nominees for each Board committee.

The Nominating Committee will consist of no fewer than three members, each of whom will be appointed and removed by the Board of Directors. A majority of the members of the Committee will constitute a quorum. Each member of the Committee will be a director of the Corporation and qualify as independent in accordance with the listing standards of the American Stock Exchange.

Employees

As of December 31, 2005, Storm Cat had 15 full-time employees.  There are 4 senior officers, 6 employees focusing on geology, engineering and land, and 4 employees in administrative support and accounting.  The 15 full-time employees represents a significant increase from the prior years because of the Corporation’s increased asset base and activity with developing and operating those assets.

Share Ownership

The following table sets out the share ownership of the directors and officers of the Corporation as of February 28, 2006:

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(1)           Based on 66,337,574 issued and outstanding common shares of the Corporation as of February 28, 2006.

Stock Options

The following table sets forth the number of stock options held by the directors and officers of the Corporation as of March 20, 2006.

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Share Option Plan

The shareholders of the Corporation adopted an Amended and Restated Share Option Plan (the “Plan”) at the extraordinary general meeting held on October 20, 2005 (the “Meeting”). The key amendments to the Plan included the following:

1.               the maximum aggregate number of common shares reserved for issuance under the Plan was changed from 10% of the issued and outstanding common shares at the time of the option grant to a fixed maximum number of 7,000,000 common shares including all options that were outstanding when the Plan was adopted; and

2.               a cashless exercise provision was added to permit Optionees to exercise their Option and pay the exercise price (and any applicable withholding taxes) of the Option in a number of ways without using their personal funds, at the discretion of the Board of Directors of the Corporation, as follows:

a.               an Optionee to tender existing common shares in the Corporation;

b.              the Corporation to withhold an appropriate number of common shares issuable upon exercise of the Option;

c.               the Corporation to arrange a broker-assisted sale of an appropriate number of common shares; or

any combination thereof, in a sufficient number based on the fair market value at the time of tendering, withholding or selling such common shares to satisfy the exercise price and any applicable withholding taxes and commissions, if applicable.

The Plan provides that the directors of the Corporation may grant options to purchase common shares on terms that the directors may determine, within the limitations of the Plan.

The Plan complies with the requirements of TSX Venture Exchange (“TSX-V”) Policy 4.4 for Tier 1 issuers. This is a “fixed” plan as the maximum number of shares reserved for issuance pursuant to the grant of stock options is 7,000,000 common shares. The exercise price of an option issued under the Plan is determined by the directors, but may not be less than the closing market price of the Corporation’s shares on the day

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preceding the date of granting of the option less any available discount, in accordance with the policies of the TSX-V. No option may be granted for a term longer than ten years. An option may expire on such earlier date or dates as may be fixed by the Board, subject to earlier termination in the event the optionee ceases to be eligible under the Plan by reason of death, retirement or otherwise.

The principal features of the Plan are as follows:

1.               The maximum number of common shares issuable pursuant to the Plan (including all options that were outstanding when the Plan was adopted) shall not exceed 7,000,000.

2.               The maximum number of shares under option to the benefit of one person under the Plan may not exceed 5%, on an annual basis, of the total of the issued and outstanding shares of the Corporation (on a non diluted basis) at the time of grant (in the case of a consultant, as defined by the Exchange’s policies, the annual maximum is 2%).

3.               In the case where the holder of an option is engaged in investor relations activities (as defined by the Exchange’s policies) for the Corporation or one of its subsidiaries, the total number of shares under option may not exceed 2% of the total of the issued and outstanding shares of the Corporation (on a non-diluted basis) at the time of grant.

4.               The options granted will have a maximum term of 10 years from the date of grant.

5.               The option is non-assignable and non-transferable.

6.               If an optionee ceases to be employed by the Corporation or provide services to the Corporation or a subsidiary of the Corporation (other than as a result of being dismissed from employment or service for cause), any option held by such optionee may be exercised within 90 days after the date such optionee ceases to be employed by the Corporation or ceases to provide services to the Corporation, as the case may be.

7.               In the event of the death of an optionee, the optionee’s heirs or administrators may exercise any portion of the outstanding option up to a period of one year from the date of the optionee’s death or the termination date of the option, whichever is earlier.

8.               Any common shares subject to an option which for any reason is cancelled or terminated without having been exercised shall again be available for grant under the Plan.

9.               The exercise price of an option will be set by the Board of Directors of the Corporation at the time such option is allocated under the Plan and cannot be less than the discounted market price.

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10.         Vesting of options is at the discretion of the Board of Directors of the Corporation.

Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

A major shareholder is a shareholder owning directly or indirectly more than 5% of the issued shares of the Corporation.

As of December 31, 2005, to the best of the Corporation’s knowledge, only the following hold, directly or indirectly, more than 5% of the issued common shares of the Corporation. To the best of the knowledge of the Corporation, there are no voting arrangements with other shareholders of the Corporation. The Corporation’s major shareholders do not have different voting rights from other shareholders.

The information in the table above is based on the Registered Shareholder List maintained by the transfer agent of the Corporation as of December 31, 2005.

The Corporation is a publicly owned corporation, the majority of the common shares of which are owned by persons resident outside the United States. To the best of the Corporation’s knowledge, the Corporation is not directly owned or controlled by another corporation or any foreign government. No arrangements exist, to the knowledge of the Corporation, the operations of which may at a subsequent date result in a change in control of the Corporation.

As of December 31, 2005, the Registered Shareholder List maintained by the transfer agent of the Corporation confirmed that 14,931,776 (or approximately 22.7%) of the 65,654,388 issued and outstanding common shares were held by 43 shareholders with addresses of record in the United States.

Related Party Transactions

During the period December 31, 2005 up to and including the date hereof, no related party transactions occurred other than as described below or otherwise disclosed herein.

Christopher Dyakowski, our former Chief Administrative Officer and a former Director, controls Max Investments, a private investment company that previously provided management services to the Corporation under a management contract. During

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the year ended December 31, 2005, the Corporation paid Max Investments $35,000 for management services.

Craig Steinke, our former Chairman, is the owner of a private company, Reconnaissance Energy, which the Corporation paid $154,366 in 2005 for consulting services.

Carmen Etchart, our former Corporate Secretary, was paid administrative fees of $39,149 in 2005.

Michael Wozniak, a Director, was previously a partner in the law firm of Dorsey & Whitney LLP for which we paid $109,436 in 2005 for legal services. We also paid $61,933 to Beatty and Wozniak PC for legal services. Mr. Wozniak is a current partner at such firm.

Michael J. O’Byrne, a director of Storm Cat, is Vice-President of Land and a Principal of the Moose Mountain lessee. In February 2005, the Corporation entered into a Farm-In agreement called “Moose Mountain” in eastern Saskatchewan. Storm Cat paid C$750,000 consideration to the lessee upon execution of the Farm-In agreement, and agreed to pay approximately C$475,000 of the first two years’ work commitment and approximately C$95,000 of technical and geological expenses. Subsequently, the Corporation will pay 45% of the working interest share of costs and will receive a 45% working interest share of production until payout. After payout, the Corporation’s interest will convert to a 30% working interest in these lands. Mr. O’Byrne abstained from Storm Cat’s decision to enter into the farm-in agreement.

2005 Fiscal Year

On February 24, 2005, the Corporation issued by way of private placement a total of 3,200,000 (pre-split) units at a price of $3.90 (pre-split) per unit, each unit consisting of one common share and one warrant. Each warrant entitling the holder to purchase one additional common share for a term of two years ending on February 24, 2007 at a price of $5.20 (pre-split) per share. Effective March 31, 2005, the issued shares of the Corporation were subdivided on a 1:2 basis. J. Scott Zimmerman, a director and officer of the Corporation, and Chris Dyakowski, a director and officer of the Corporation at the time, participated in this private placement as to 26,000 and 20,000 units, respectively. Mr. Dyakowski ceased as a director of the Corporation on January 5, 2006 and as an officer on June 23, 2005.

During the year ended December 31, 2005, no related party transactions occurred other than as described above or otherwise disclosed herein.

Interests of Experts and Counsel

Storm Cat is filing this Form 20-F as an annual report and therefore, this item is not required.

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Item 8. Financial Information

See Part III, Item 17, “Financial Statements.”

Item 9. The Offer and Listing

Markets and Price History of the Shares

Our common shares are traded on the American Stock Exchange under the symbol “SCU” and the TSX Venture Exchange under the symbol “SME.”  The following tables set forth the reported high and low prices of our common shares for the past five years on a post-split basis.

Annual High and Low Market Price for the Five Most Recent Fiscal Years on the

TSX Venture Exchange (C$)†**

Annual High and Low Market Price for the Five Most Recent Fiscal Years on the

American Stock Exchange (US$)†*

Quarterly High and Low Market Price for the Two Most Recent Fiscal Years:

Quarterly High and Low Market Price for the Two Most Recent Fiscal Years on the

TSX Venture Exchange (C$)†**