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British Columbia, Canada		1311		75-3183021
(State or other jurisdiction of		(Primary standard industrial		(I.R.S. employer
incorporation or organization)		classification code number)		identification number)

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		Page
Prospectus Summary			1
Risk Factors			8
Cautionary Note Regarding Forward-Looking Statements			14
Use of Proceeds			14
Market for Our Common Stock			15
Dividend Policy			15
Capitalization			16
Selected Historical Financial Data			17
Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Business			30
Management			45
Certain Relationships and Related Transactions			51
Our Shareholders			52
Selling Shareholders			53
Plan of Distribution			57
Description of Our Common Stock			58
Material Tax Consequences to U.S. Holders			60
Where You Can Find More Information			62
Legal Matters			62
Change of Auditor			63
Experts			64
Appendix A: Glossary of Natural Gas Terms			A-1
Index to Consolidated Financial Statements			F-1
EX-5.1 Opinion of Anfield Sujir Kennedy & Durno
EX-21.1 Subsidiaries of BPI Energy Holdings
EX-23.1 Consent of De Visser, Gray,Chartered Accountants
EX-23.3 Consent of Schlumberger Technology Corp.
EX-23.4 Consent of Meaden & Moore, Ltd.
EX-24.1 Power of Attorney

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	Our current revenues are minimal and not sufficient to support our operations. If we are unable to raise additional financing, we may not be able to carry out our long-term plans.

	We have incurred significant operating losses since our inception and may not achieve profitability in the future.

	CBM exploration is speculative in nature and may not result in operating revenues or profits.

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	•	unexpected drilling conditions;
	•	pressure or irregularities in formations;
	•	equipment failures or accidents;
	•	shortages or delays in the availability of drilling rigs or the delivery of equipment;
	•	the inability to hire personnel or engage other third parties for drilling and completion services;
	•	the inability to obtain regulatory approvals to drill CBM wells where planned;
	•	adverse weather; and
	•	the inability to sell CBM production, due to the loss of access to the pipelines into which CBM production is sold or an oversupply of natural gas in the market.

	We could experience delays in securing drilling equipment and crews, which would cause us to fail to meet our drilling plans and negatively impact our operations.

	We could lose significant portions of our CBM acreage rights and all of our existing productive wells if we do not place into production a sufficient number of CBM wells.

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	We could encounter strong competition for properties in the Illinois Basin.

	Because approximately 77% of our CBM acreage rights are inferior to coal mining rights covering the same properties, our affected operations could be displaced by coal mining operations, which would negatively impact our operations.

	The CBM rights that we have acquired under lease and option agreements are subject to a number of uncertainties, which, when resolved, could cause us to lose some of our CBM rights.

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	We could incur significant costs in connection with disputes over surface rights, which would have a negative impact on our financial performance.

	We have granted BHP Billiton a right of first refusal to acquire us, which could deter other potential acquirors from seeking to acquire us.

	We could incur substantial costs to comply with environmental regulations, and our failure to comply with environmental regulations could result in significant fines and/or penalties, either of which could adversely affect our operations.

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	The occurrence of a significant adverse event that is not covered by insurance could have a material adverse effect on our financial condition.

	Our ability to attain profitable operations could be negatively impacted by any decline in natural gas prices.

	We will incur increased costs as a result of registering in the United States.

	You will experience dilution of your ownership interest if we issue additional equity in the future.

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	There is no significant market for our common stock, which could prevent you from selling your common stock at acceptable prices or at all.

	The trading price of our common stock may be volatile, and resales under this prospectus may impact prices and liquidity.

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	•	failure to accurately forecast operating and capital expenditures and capital needs due to rising costs or different drilling or production conditions in the field;
	•	the inability to attract or retain qualified personnel with the requisite CBM or other experience;
	•	unexpected economic and market conditions, in the general economy or the market for natural gas; and
	•	the other factors discussed in this prospectus under the heading “Risk Factors” and elsewhere.

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			High				Low
Fiscal Year Ended July 31, 2004
	Quarter ended October 31, 2003		$	0.80			$	0.47
	Quarter ended January 31, 2004			0.79				0.48
	Quarter ended April 30, 2004			0.72				0.51
	Quarter ended July 31, 2004			0.66				0.47
Fiscal Year Ended July 31, 2005
	Quarter ended October 31, 2004		$	0.98			$	0.57
	Quarter ended January 31, 2005			2.05				0.78
	Quarter ended April 30, 2005			2.02				1.31
	Quarter ended July 31, 2005			1.96				1.37
Fiscal Year Ended July 31, 2006
	Quarter ended October 31, 2005		$	2.25			$	1.37
	Quarter ended January 31, 2006			4.00				1.92
	Quarter ended April 30, 2006			3.60				1.20

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					As of
					January 31,
					2006
Cash and cash equivalents					$	26,623,707
Capitalization:
Long-term notes payable(1)						333,839
Shareholders’ equity:
	Common stock, no par value, 100,000,000 shares authorized, of which 64,378,087 shares issued and outstanding (actual)					64,573,394
	Paid-in capital					4,891,266
	Accumulated deficit					(20,404,770	)
		Total shareholders’ equity				49,059,890
			Total capitalization		$	49,393,729

(1)	Long-term notes payable (including current portion) consists of notes used to finance vehicles and equipment. The notes are secured by the underlying vehicles and equipment.

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		For the Six Months
		Ended January 31,								For the Year Ended July 31,
		2006				2005				2005				2004				2003				2002				2001
		(Unaudited)				(Unaudited)																				(Unaudited)
Statement of Operations Data:
Gas sales(1)		$	537,505			$	6,341			$	117,835			$	0			$	0			$	0			$	0
Stock-based compensation expense			397,586				2,200,777				3,344,738				193,796				515,286				439,860				256,684
Loss before income taxes			(2,047,487	)			(3,218,907	)			(6,120,821	)			(1,091,227	)			(1,109,218	)			(1,245,853	)			(184,475	)
Net loss			(2,047,487	)			(2,874,190	)			(5,396,351	)			(793,116	)			(934,305	)			(1,129,209	)			(184,475	)
Net loss per common share			(0.04	)			(0.09	)			(0.14	)			(0.03	)			(0.04	)			(0.06	)			(0.01	)
Weighted average number of shares outstanding			57,889,094				32,018,325				37,665,019				25,007,237				21,485,381				18,300,433				14,588,122

		As of				As of July 31,
		January 31,
		2006				2005				2004				2003				2002				2001
		(Unaudited)																				(Unaudited)
Balance Sheet Data:
Total assets		$	50,998,590			$	23,527,712			$	9,382,977			$	6,328,178			$	5,418,158			$	1,970,104
Long-term notes payable (including current maturities)			333,839				549,822				462,177				378,174				0				0
Cash dividends per common share			0				0				0				0				0				0

(1)	Gas sales commenced in January 2005. All of our productive wells existing as of May 1, 2006 are located at our Southern Illinois Basin Project. Since our Southern Illinois Basin Project is currently subject to litigation, we may lose our right to continue to operate and produce CBM from all of these productive wells.

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	•	negotiating to obtain leases that grant us the broadest possible rights to CBM for any given tract of land;
	•	conducting ongoing title reviews of existing mineral interests;

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	•	where possible, negotiating and securing long-term service company commitments to insure availability of equipment and services; and
	•	attempting to create a low cost structure in order to reduce our vulnerability to many of these factors.

	•	developing the in-house capabilities necessary to enable us to meet our regulatory and reporting obligations to various regulatory agencies, constituencies and our shareholders;
	•	raise the capital necessary to achieve our plans and goals; and
	•	transition BPI from a company focused primarily on the acquisition of mineral rights to a company focused on producing CBM.

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	Accounting for CBM Projects

	•	there are no firm plans for further drilling on the unproved property;
	•	negative results were obtained from studies of the unproved property;
	•	negative results were obtained from studies conducted in the vicinity of the unproved property; or
	•	the remaining term of the unproved property does not allow sufficient time for further studies or drilling.

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	Share-Based Payment

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	Revenue Recognition

	Asset Retirement Obligations

	Deferred Income Taxes

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		Six Months Ended January 31
										Dollar				%
		2006				2005				Variance				Change
Revenues:
Gas sales		$	537,505			$	6,341			$	531,164				8,377	%
Expenses:
Lease operating expense			461,610				—				461,610				100	%
General and administrative expense			2,437,239				3,165,087				(727,848	)			(23	)%
Depreciation, depletion and amortization			212,692				57,562				155,130				270	%
			3,111,541				3,222,649				(111,108	)			(3	)%
Other income (expenses):
Interest income			402,804				4,847				397,957				8,210	%
Interest expense			(13,778	)			(10,582	)			(3,196	)			(30	)%
Other income			137,523				3,246				134,277				4,137	%
			526,549				(2,489	)			529,038				n/a
Loss before income taxes			(2,047,487	)			(3,218,797	)			1,171,310				36	%
Deferred income tax benefit			—				344,717				(344,717	)			(100	)%
Net loss		$	(2,047,487	)		$	(2,874,080	)		$	826,593				29	%

		Six Months Ended
		January 31
										Dollar				%
		2006				2005				Variance				Change
Salaries and benefits		$	727,240			$	410,249			$	316,991				77	%
Stock-based compensation			397,586				2,200,777				(1,803,191	)			(82	)%
Professional fees			858,002				240,125				617,877				257	%
Other			454,411				313,936				140,475				45	%
Total general and administrative expense		$	2,437,239			$	3,165,087			$	(727,848	)			(23	)%

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	Year Ended July 31, 2005 Compared to Year Ended July 31, 2004

			For the Fiscal Year Ended
			July 31,				July 31,				Dollar				Percentage
			2005				2004				Variance				Change
Gas sales			$	117,835			$	—			$	117,835				100	%
Lease operating expenses				307,178				—				307,178				100	%
Salaries and benefits:
	Corporate			516,961				262,223				254,738				97	%
	Field administration			261,692				112,408				149,284				133	%
	Field operations			115,488				44,070				71,418				162	%
				894,141				418,701				475,440				114	%
Stock-based compensation				3,344,738				193,796				3,150,942				1626	%
General and administrative:
	Travel			161,371				139,273				22,098				16	%
	Office			266,875				146,969				119,906				82	%
	Professional and regulatory			1,137,996				98,458				1,039,538				1056	%
	Other			—				2,910				(2,910	)			(100	)%
				1,566,242				387,610				1,178,632				304	%
Depreciation, depletion and amortization				260,141				80,417				179,724				223	%
Other income (expense):
	Interest income			123,219				2,008				121,211				6036	%
	Interest expense			(24,820	)			(15,165	)			(9,655	)			(64	)%
	Other expense, net			35,385				2,454				32,931				1342	%
				133,784				(10,703	)			144,487				1350	%
Loss before income taxes			$	(6,120,821	)		$	(1,091,227	)		$	(5,029,594	)			(461	)%
Deferred income tax benefit				724,470				298,111				426,359				143	%
Net loss			$	(5,396,351	)		$	(793,116	)		$	(4,603,235	)			(580	)%

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• Additional legal fees incurred in connection with surface disputes		$	303,305
• Increase in fees related to accounting, auditing and tax services			193,046
• Increase in legal fees incurred in connection with SEC filings			175,567
• Increase in fees related to general corporate legal and professional advice			150,522
• Increase in fees related to outside investor relations services			141,757
• Increase in other professional fees			75,341
• Total increase over corresponding period in the preceding year		$	1,039,538

			For the Fiscal Year Ended
			July 31,				July 31,				Dollar				Percentage
			2004				2003				Variance				Change
Gas sales			$	—			$	—			$	—				0	%
Salaries and benefits:
	Corporate			262,223				220,198				42,025				19	%
	Field administration			112,408				68,704				43,704				64	%
	Field operations			44,070				16,890				27,180				161	%
				418,701				305,792				112,909				37	%
Stock-based compensation				193,796				515,286				(321,490	)			(62	)%
General and administrative:
	Travel			139,273				79,975				59,298				74	%
	Office			146,969				68,814				78,155				114	%
	Professional and regulatory			98,458				60,296				38,162				63	%
	Other			2,910				6,240				(3,330	)			(53	)%
				387,610				215,325				172,285				80	%
Depreciation, depletion and amortization				80,417				58,593				21,824				37	%
Other income (expense):
	Interest income			2,008				3,550				(1,542	)			(43	)%
	Interest expense			(15,165	)			(17,772	)			2,607				15	%
	Other expense, net			2,454				—				2,454				100	%
				(10,703	)			(14,222	)			3,519				25	%
Loss before income taxes			$	(1,091,227	)		$	(1,109,218	)		$	17,991				2	%
Deferred income tax benefit				298,111				174,913				123,198				70	%
Net loss			$	(793,116	)		$	(934,305	)		$	141,189				15	%

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	•	the price of, and demand for, natural gas;
	•	availability of drilling equipment;
	•	lease terms;
	•	availability of sufficient capital resources; and
	•	the accuracy of production estimates for current and future wells.

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	•	the price of, and demand for, natural gas;
	•	availability of drilling equipment;
	•	lease terms;
	•	availability of sufficient capital resources; and
	•	the accuracy of production estimates for current and future wells.

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	Commodity Risk

	Interest Rate Risk

	Financial Instruments

	Inflation and Changes in Prices

			Payments Due by Period
			Less Than												More Than
			1 Year				1-3 Years				3-5 Years				5 Years				Total
Contractual Obligations As of July 31, 2005
Long-term debt			$	26,624			$	50,075			$	15,158			$	0			$	91,857
Equipment leases				69,063				165,760				13,813				0				248,626
Other leases(1)				6,000				12,730				13,763				146,171				178,669
Long-term notes payable(2)				—				—				392,000				—				392,000
	Total		$	101,687			$	228,555			$	434,739			$	146,171			$	911,152

(1)	These amounts do not include annual minimum royalty payments required to hold mineral lease and farm-out agreements. Although we are not obligated to make these payments under existing mineral leases and farm-out agreements, these payments are required to maintain individual leases/farm-out agreements after the expiration of the initial terms of the lease/farm-out agreements. The mineral leases/farm-out agreements in existence as of November 1, 2005 expire at various times beginning in April 2006. If we were to pay the total minimum royalty payments due under all mineral leases/farm-out agreements in existence as of November 1, 2005, the amount would initially total approximately $702,000 annually and could increase to as much as $831,000 annually.
(2)	The long-term note payable was cancelled in connection with our sale of our interest in Hite Coalbed Methane, L.L.C. on January 4, 2006.

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	•	as free gas within the micropores (pores with a diameter of less than .0025 inch) and cleats (set of natural fractures) of coal;
	•	as dissolved gas in water within the coal;
	•	as adsorbed gas held by molecular attraction on the surface of macerals (organic constituents that comprise the coal mass), micropores and cleats in the coal; and
	•	as adsorbed gas within the molecular structure of the coal.

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	•	Explore and Develop Properties. As of May 1, 2006, we have drilled 107 wells. These wells consist of 77 productive wells, 17 shut-in wells and 13 wells that have been drilled but are not in production, including three test wells. All of our productive wells are located at our Southern Illinois Basin Project. Since our Southern Illinois Basin Project is currently subject to litigation, we may lose our right to continue to operate and produce CBM from all of our productive wells existing as of May 1, 2006.

	Due to the litigation with respect to our Southern Illinois Basin Project, we are not drilling any new wells at our Southern Illinois Basin Project and have moved the focus of our drilling activities to our

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	Northern Illinois Basin Project. During April 2006, we filed permit applications for drilling the first 10 CBM production wells at our Northern Illinois Basin Project.
	During the 12-month period ending April 30, 2007, we plan to drill 123 new wells, including 115 vertical wells, three horizontal wells and five test wells. This plan contemplates a capital expenditure budget of approximately $30.0 million. Our cash balance as of May 1, 2006 is approximately $25.0 million and therefore not sufficient to fully fund these capital expenditures and our anticipated cash needs through April 30, 2007. In order to fully fund our operations through April 30, 2007, we will need to raise additional financing.
	The number of wells that we drill during the 12-month period ending April 30, 2007 will be dependant on the success of our initial production wells at our Northern Illinois Basin Project, the additional capital that we are able to raise and the risk factors described in this prospectus.

	•	Expand CBM Acreage Rights. We continue to look for opportunities to acquire additional CBM acreage rights in the Illinois Basin. Our strategy has been to acquire leases and options on large acreage blocks in areas where the coal seams are the thickest and there is currently pipeline delivery infrastructure in place.
	•	Pursue Joint Ventures. We continue to consider joint venture opportunities. With our asset base and technical expertise, we believe that we are well positioned to attract industry joint venture partners for the purposes of providing capital, technical operating expertise and development opportunities to accelerate our growth.

	•	Substantial CBM Acreage Position. The Illinois Basin is one of the few remaining high potential CBM areas in North America. We were the first company to begin acquiring substantial blocks of CBM acreage rights in the Illinois Basin. We believe that we currently control more CBM acreage than any other CBM company in the Illinois Basin.
	•	Demonstrated Commercial Production. We believe that we have taken the initial steps to demonstrate the commercial production capabilities of the Illinois Basin. As of May 1, 2006, we have drilled 107 wells, including 77 productive wells located at our Southern Illinois Basin Project, most of which have not yet reached peak production. For the six months ended January 31, 2006, our gas sales totaled $537,505. Although it is possible that we may lose our productive wells at our Southern Illinois Basin Project due to ongoing litigation, we believe that our production at the Southern Illinois Basin Project demonstrates the commercial viability of the Illinois Basin.
	•	Short Drilling Permit Lead Times. We typically experience short turnaround times in obtaining drilling permits as compared to CBM drillers in other CBM basins. Historically, we have enjoyed quick turnaround of vertical CBM well drilling permits from state regulatory bodies. We have not yet submitted any permit applications for drilling horizontal wells. However, we do not anticipate any significant delays in obtaining permits for these wells.
	•	Low Water Disposal Costs. A significant advantage of operating in the Illinois Basin is that we are not required to build costly water disposal facilities. We have disposed of the water we encounter in connection with our drilling and production by re-injecting the water into disposal wells drilled and operated by us.
	•	Substantial Interstate Pipeline Capacity and Low Transportation Costs. A significant advantage that we have over CBM producers in other basins is our proximity to a large number of interstate gas pipelines that have substantial take-away capacity. Because our operations and CBM acreage are located near several large metropolitan gas consuming markets (e.g., Chicago, St. Louis, Nashville, Indianapolis and Detroit) and the fact that many interstate pipelines headed to the East Coast pass through the Illinois Basin, we expect to incur little or no pipeline related transportation charges. In

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		addition, we do not expect to experience any lost production or sales due to insufficient local or interstate pipeline capacity to transport the CBM that we produce and sell.
	•	Experienced and Incentivized Management and Operating Teams. Our operating team includes individuals that have been drilling or operating CBM wells in the Illinois Basin since 1996. In addition, James G. Azlein, our President and Chief Executive Officer, George J. Zilich, our Chief Financial Officer and General Counsel, and James E. Craddock, our Senior Vice President of Operations, beneficially own 6.97% of our common stock. In addition, the majority of BPI’s management and operating employees owns common stock and/or stock options in the company.

		Developed				Undeveloped				Total
Project		Acres				Acres				Acres(1)
Southern Illinois Basin Project(2)			10,550				32,450				43,000
Northern Illinois Basin Project			0				351,487				351,487
Western Illinois Basin Project			0				135,948				135,948
Total			10,550				519,885				530,435

(1)	Because we are the exclusive owner of the CBM rights under each of our lease, option and farm-out agreements, our acreage rights are shown on a gross (as opposed to net) basis.
(2)	In connection with ongoing litigation relating to our Southern Illinois Basin Project, it is possible that we will lose all of our acreage rights at this Project. For more information about the litigation relating to our Southern Illinois Basin Project, see the section of the Summary entitled “Litigation Relating to Our CBM Rights at Our Southern Illinois Basin Project.”

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	Southern Illinois Basin Project

	Northern Illinois Basin Project

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	Western Illinois Basin Project

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	Farm-out Agreement with Addington Exploration, LLC

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	Technical Services Agreement with BHP Billiton

	•	BHP agreed to support us in connection with BPI’s drilling of three initial pilot wells utilizing BHP’s medium radius drilling (MRD) techniques and the appraisal and subsequent development and production of these wells; and
	•	BHP agreed to provide an assessment of its tight radius drilling (TRD) technology at our projects, and to provide a field test of the TRD technology at our projects at such time as BHP is satisfied that its TRD technology is commercially and technically viable.

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	General and Administrative Operations

	Status of CBM Operations

						Wells Drilled
		Productive				but not yet in				Shut-in				Test				Total
Project		Wells				Production				Wells				Wells				Wells
Southern Illinois Basin Project(1)			77				8				17				0				102
Northern Illinois Basin Project			0				2				0				3				5
Western Illinois Basin Project			0				0				0				0				0
Total			77				10				17				3				107

(1)	In connection with ongoing litigation relating to our Southern Illinois Basin Project, it is possible that we will lose all of our wells at this Project. For more information about the litigation relating to our Southern Illinois Basin Project, see the section of the Summary entitled “Litigation Relating to Our CBM Rights at Our Southern Illinois Basin Project.”

	Production

		Twelve Months Ended July 31,
		2005 (1) (2)				2004(2)				2003(2)
Total produced (Mcf)			17,885				0				0

(1)	Total production represents gross production and omits (i) gas consumed in operations and (ii) gas sales equivalent to royalty interests held by our various lessors.

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(2)	No gas was produced until January 2005. All of our productive wells are located at our Southern Illinois Basin Project. Since our Southern Illinois Basin Project is currently subject to litigation, we may lose our right to continue to operate and produce CBM from all of our productive wells existing as of May 1, 2006.

	Average Sales Prices and Lifting Costs

		Twelve Months Ended
		July 31,
		2005				2004				2003
Average gas sales price (per Mcf)		$	6.59			$	0			$	0
Average lifting cost (per Mcf)			14.97				0				0

	Drilling Plan

Total

Vertical

Horizontal

Test

Additional

Wells

Wells

Wells

Wells

115

3

5

123

	Reserves

		Net Reserves (MMcf)
		As of July 31,
		2005				2004				2003
Estimated proved developed reserves			2,971				0				0
Estimated proved undeveloped reserves			7,321				0				0
Total estimated proved developed and undeveloped reserves			10,292				0				0

	Discounted Future Cash Flows

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		Discounted Future Net
		Cash Flows (Dollars in
		thousands)
		As of July 31,
		2005				2004				2003
Future net cash flows (net of taxes)		$	43,940			$	0			$	0
Total standardized measure of discounted future net cash flows (net of taxes)			23,068				0				0
Total standardized measure of pre-tax discounted future net cash flows			30,767				0				0

	Net Cash Used by Operations and Cash Resources

	Operational Needs as We Increase Our Drilling and Production

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	State Regulations

	•	requiring permits for the drilling of wells;
	•	maintaining bonding requirements to drill or operate wells;
	•	regulating the location of wells, the method of drilling and casing wells, surface use and the restoration of properties upon which wells are drilled; and
	•	regulating the plugging and abandoning of wells and the disposing of fluids used and produced in connection with operations.

	Environmental Regulations

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	•	acquiring CBM acreage rights;
	•	selling our natural gas production;
	•	identifying and employing new technologies; and
	•	acquiring the equipment and expertise necessary to develop and operate our properties.

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Name		Age				Position
James G. Azlein			56			President, Chief Executive Officer and Director
George J. Zilich			48			Chief Financial Officer, General Counsel and Director
James E. Craddock			47			Senior Vice President — Operations
Costa Vrisakis			70			Director
William J. Centa			53			Director
Dennis Carlton			55			Director
David E. Preng			59			Director

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																			Long-Term Compensation
																			Awards								Payouts
							Annual Compensation
																			Restricted				Securities
															Other Annual				Stock Wards				Underlying				LTIP				All Other
Name and Principal Position			Year				Salary				Bonus				Compensation				and SARs				Options				Payouts				Compensation
James G. Azlein				2005			$	163,000			$	100,000			$	0			$	0				1,422,278			$	0			$	0
	CEO and President			2004				111,286				7,808				0				0				320,000				0				0
				2003				145,917				6,500				0				0				320,000				0				0
George J. Zilich(1)				2005			$	65,000			$	0			$	0			$	0				475,000			$	0			$	0
	Chief Financial Officer			2004				—				—				—				—				—				—				—
	and General Counsel			2003				—				—				—				—				—				—				—
Keith A. Ebert(2)				2005			$	44,200			$	40,000			$	0			$	0				341,667			$	0			$	0
	Vice President			2004				58,338				7,479				0				0				0				0				0
				2003				47,272				6,705				0				0				125,000				0				0

(1)	Mr. Zilich became our Chief Financial Officer and General Counsel on January 21, 2005.
(2)	Mr. Ebert resigned as an officer and director on March 28, 2005.

		Individual Grants
						Percent of												Potential Realizable Value
		Number of				Total												at Assumed Annual Rate of
		Securities				Options												Stock Price Appreciation
		Underlying				Granted to												for Option Term(2)
		Options				Employees in				Exercise				Expiration
		Granted				Fiscal Year				Price(1)				Date				5%				10%
James G. Azlein			456,666							$	1.25				11/29/09			$	157,949			$	349,026
			965,612								1.97				1/20/10				524,342				1,158,658
			1,422,278				51.91	%										$	682,291			$	1,507,684
George J. Zilich			175,000							$	1.97				1/20/10			$	95,028			$	209,986
			300,000								1.79				3/27/10				148,371				327,861
			475,000				17.34	%										$	243,399			$	537,847
Keith A. Ebert			341,667				12.47	%		$	1.00				11/29/09			$	94,380			$	208,556

(1)	The exercise price per share of each option is equal to the fair market value per share of the underlying stock on the date of grant, as determined by quoted market prices, and converted from Canadian dollars to U.S. dollars using the published exchange rate on the date of grant.
(2)	The potential realizable value shown is calculated based on the term of the option at the time of grant. Stock price appreciation of 5% and 10% is assumed pursuant to the rules and regulations of the SEC and does not represent our prediction of stock price performance. The potential realizable values at 5% and 10% appreciation are calculated by assuming that the U.S. dollar equivalent exercise price on the date of grant appreciates at the indicated rate for the entire term of the option and that the option is exercised at the U.S. dollar equivalent exercise price and sold on the last day of its term at the U.S. dollar equivalent appreciated price, assuming a constant exchange rate from the date of grant.

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Number of Shares

Underlying

Value of Unexercised

Unexercised

In-the-Money

Options at FY-End

Options at FY-End(1)

Shares

Acquired

Value

Exercisable/

Exercisable/

Name

on Exercise

Realized

Unexercisable

Unexercisable

James G. Azlein

445,555

$

317,569

1,985,612/0

$

660,983/$0

George J. Zilich

0

—

475,000/0

$0/$0

Keith A. Ebert

313,889

$

246,054

341,667/0

$

192,339/$0

(1)	Value is determined based on the closing market price of our common stock on July 31, 2005 as reported by the TSX Venture Exchange, converted from Canadian dollars to U.S. dollars using the published exchange rate on July 31, 2005.

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							Number of Shares
			Number of				Underlying Options				Percent
Name and Address			Shares				and Warrants				Ownership
James G. Azlein				2,124,296				1,402,812				4.88	%
	30775 Bainbridge Road, Suite 280
	Solon, Ohio 44139
George J. Zilich				841,523				40,000				1.24	%
	30775 Bainbridge Road, Suite 280
	Solon, Ohio 44139
James E. Craddock				600,000				0				0.85	%
	30775 Bainbridge Road, Suite 280
	Solon, Ohio 44139
Costa Vrisakis				1,945,522				0				2.75	%
	30775 Bainbridge Road, Suite 280
	Solon, Ohio 44139
William J. Centa				300,000				0				0.42	%
	30775 Bainbridge Road, Suite 280
	Solon, Ohio 44139
Dennis Carlton				300,000				0				0.42	%
	30775 Bainbridge Road, Suite 280
	Solon, Ohio 44139
David E. Preng				200,000				0				0.28	%
	30775 Bainbridge Road, Suite 280
	Solon, Ohio 44139
All directors and				6,311,341				1,442,812				10.73	%
	executive officers as a group
	(7 persons)
Advisory Research, Inc.(1)				9,372,500				0				13.23	%
	180 N. Stetson Street, Suite 5500
	Chicago, Illinois 60601
CFSIL a/c Colonial First				3,900,000				1,200,000				7.08	%
	State Wholesale Global
	Resources Fund
	Level 29, 52 Martin Place
	Sydney, Australia NSW 2001
Jennison Associates LLC(2)				6,400,000				1,200,000				10.55	%
	466 Lexington Avenue
	New York, New York 10017
Wellington Capital Management(3)				6,000,000				0				8.47	%
	227 West Monroe Street
	Chicago, Illinois 60606

(1)	The common stock listed was reported by Advisory Research, Inc. in a Schedule 13G filed with the Securities and Exchange Commission on January 10, 2006.
(2)	The common stock listed was reported by Jennison Associates LLC in a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2006.
(3)	The common stock listed was reported by Wellington Capital Management in a Schedule 13G filed with the Securities and Exchange Commission on February 14, 2006.

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		Number of								Percent
		Shares Owned				Number of				Owned
		Before				Shares				Before this
Name of Selling Shareholder		Offering(1)				Offered(1)				Offering
Sanders Morris Harris Inc.(2)			1,037,200				1,037,200				1.44	%
Jennison Associates LLC(3)			7,600,000				3,600,000				10.55	%
Jan Bartholomew			60,000				60,000				*
IRA FBO Melton R. Pipes Pershing LLC as Custodian			30,000				30,000				*
George J. Zilich(4)			841,523				120,000				1.24	%
Seth Silberman			120,000				120,000				*
Crestview Capital Funds			2,400,000				2,400,000				3.33	%
JMG Trinton Offshore Fund, Ltd.			420,000				420,000				*
JMG Capital Partners, LP			420,000				420,000				*
George L. Ball(5)(6)			60,000				60,000				*
Richard E. Bean(5)(7)			120,000				120,000				*
Robert E. Garrison, II(5)(8)			120,000				120,000				*
Ben T. Morris(5)(9)			60,000				60,000				*
Frederic L. Saalwachter(5)(10)			30,000				30,000				*
Don A. Sanders(5)(11)			240,000				240,000				*
Sanders Opportunity Fund, L.P.(5)(11)			107,439				107,439				*
Sanders Opportunity Fund (Institutional), L.P.(5)(11)			342,561				342,561				*
Katherine U. Sanders(5)			120,000				120,000				*
Donald V. Weir and Julie Ellen Weir T/ I/ C(5)(12)			120,000				120,000				*
Donald V. Weir TTEE Sanders 1998 Children’s Trust DTD 12/01/97(5)(12)			180,000				180,000				*
Eric G. Weir TTEE FBO Weir 1998 Children’s Trust U/ A/ D 08/14/98(5)			30,000				30,000				*
Lee H. Corbin & Daniel A. Corbin JT/ TEN			120,000				120,000				*
T. Buchanan & J. Buchanan CO/ TTEEs for the Buchanan Advisors, Inc. Defined Benefit Plan V/ A DTD 1/1/2002			60,000				60,000				*
Hunter & Company LLC Pension Trust			60,000				60,000				*
Rune Medhus and Elisa Medhus MD TIC(5)(13)			60,000				60,000				*
Elisa Medhus TTEE for the Atlantis Software Company Employee Pro SH PL UAD 01/01/93(5)(13)			60,000				60,000				*
T. Scott O’Keefe			60,000				60,000				*

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		Number of								Percent
		Shares Owned				Number of				Owned
		Before				Shares				Before this
Name of Selling Shareholder		Offering(1)				Offered(1)				Offering
Jan Rask			60,000				60,000				*
Vincent Vazquez			60,000				60,000				*
Mark Newton Davis			30,000				30,000				*
Steven R. Elliott			60,000				60,000				*
Marie Mildren			30,000				30,000				*
Gerald W. Pope TTEE for the Gerald W. Pope REV TR U/A DTD 11/30/78			30,000				30,000				*
David L. Shadid			30,000				30,000				*
Edwin Freedman			120,000				120,000				*
John H. Malanga and Jodi F. Malanga JT/ TEN(5)(14)			18,000				18,000				*
Carl Pipes			30,000				30,000				*
Mark Leszczynski			60,000				60,000				*
Vessels Coal Gas, Inc.(15)			2,925,000				900,000				4.08	%
Thomas Asarch and Barbara Asarch JT/ TEN			60,000				60,000				*
IRA FBO Scott M Marshall Pershing LLC as Custodian			111,600				111,600				*
Bascom Baynes			60,000				60,000				*
Lenny Olim			30,000				30,000				*
CFSIL a/c Colonial First State Wholesale Global Resources Fund(16)			5,100,000				3,600,000				7.08	%
Crescent International, Ltd.			360,000				360,000				*
Brian Kuhn			120,000				120,000				*
Rose Anna Marshall			73,200				73,200				*
Nite Capital L.P.			240,000				240,000				*
Delaware Charter Guarantee and Trust Co. F/ B/ O Erik Klefos IRA(5)(17)			30,000				30,000				*
Delaware Charter Guarantee and Trust Co. F/ B/ O Brede C. Klefos IRA(5)(18)			85,200				85,200				*
Mathew Dobbs			105,000				105,000				*
Mark Bridgeman			60,000				60,000				*
Sarah-Jane Bridgeman			22,500				22,500				*
Peter Bridgeman			22,500				22,500				*
IRA FBO Charles L. Ramsay, Jr. Pershing LLC as Custodian			30,000				30,000				*

	*	Less than 1%.

	(1)	Includes shares underlying options and warrants that may not have yet been exercised.
	(2)	Represents shares underlying the warrant owned by Sanders Morris Harris Inc., the placement agent for our December 2004/ January 2005 private placement. This warrant was issued to Sanders Morris Harris Inc. as compensation for serving as placement agent in connection with our December 2004/ January 2005 private placement. Sanders Morris Harris Inc. is a registered broker dealer and member of the National Association of Securities Dealers, Inc.
	(3)	If Jennison Associates LLC sells all of its shares offered by this prospectus, the remaining shares of our common stock beneficially owned by it will constitute 5.55% of our outstanding shares.

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(4)	Mr. Zilich became our Chief Financial Officer and General Counsel and a Director on January 21, 2005, subsequent to his purchase of the shares of our common stock and warrants currently held by him. If Mr. Zilich sells all of his shares offered by this prospectus, the remaining shares of our common stock beneficially owned by him will constitute 1.19% of our outstanding shares.

(5)

May be deemed to be an affiliate of Sanders Morris Harris Inc., the placement agent in our December 2004/January 2005 private placement and a registered broker dealer. At the time of our December 2004/ January 2005 private placement, each of these selling shareholders represented to us that they acquired their securities for their own account, for investment, and not with a view to or for resale in connection with any distribution.

(6)	Mr. Ball is the Chairman of the Board of Directors of Sanders Morris Harris Inc.

(7)	Mr. Bean is a director of Sanders Morris Harris Group Inc., the parent of Sanders Morris Harris Inc.

(8)	Mr. Garrison is President of Sanders Morris Harris Inc.

(9)	Mr. Morris is Chief Executive Officer of Sanders Morris Harris Inc.

(10)	Mr. Saalwachter is Managing Director of Sanders Morris Harris Inc.
(11)	Mr. Sanders is the Chairman of the Executive Committee of Sanders Morris Harris Inc. Mr. Sanders also is Chief Investment Officer for Sanders Opportunity Fund, L.P., and exercises voting and investment authority over the shares held by this fund. Mr. Sanders also is Chief Investment Officer for Sanders Opportunity Fund (Institutional), L.P., and exercises voting and investment authority over the shares held by this fund.
(12)	Mr. Weir is an employee of Sanders Morris Harris Inc. As trustee of the Sanders 1998 Children’s Trust, Mr. Weir exercises voting and investment authority over the shares held by the trust.
(13)	Mr. Medhus is an employee of Sanders Morris Harris Inc.
(14)	Mr. Malanga is an employee of Sanders Morris Harris Inc.
(15)	Thomas J. Vessels is the Chief Executive Officer of Vessels Coal Gas, Inc. and is a member of our Advisory Board. If Vessels Coal Gas, Inc. sells all of its shares offered by this prospectus, the remaining shares of our common stock beneficially owned by it will constitute 2.86% of our outstanding shares.
(16)	If CFSIL sells all of its shares offered by this prospectus, the remaining shares of our common stock beneficially owned by it will constitute 2.08% of our outstanding shares.
(17)	Mr. Klefos is an employee of Sanders Morris Harris Inc.
(18)	Mr. Klefos is an employee of Sanders Morris Harris Inc.

	•	10,372,000 shares of our common stock and warrants to purchase 5,186,000 shares of our common stock, at an exercise price of $1.50 per share, were issued by us in a private placement completed in December 2004 and January 2005. The selling shareholders paid us $2.50 per unit, which consisted of two shares of our common stock and a warrant to purchase one share of common stock.
	•	Warrants to purchase 1,037,200 shares of our common stock, at an exercise price of $1.25 per share, were issued by us to Sanders Morris Harris Inc. in connection our December 2004/ January 2005 private placement as partial compensation for services as placement agent.

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	•	privately negotiated transactions;
	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	•	an exchange distribution in accordance with the rules of the applicable exchange;
	•	settlement of short sales entered into after the date of this prospectus (a short sale occurs when shares, not owned by the seller, are sold in hopes of a decline in market price so the seller can purchase shares in the market at a lower price to be able to replace the shares sold);
	•	broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;
	•	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
	•	a combination of any such methods of sale; or
	•	any other method permitted by applicable law.

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	•	the effect of the investment on the level and nature of economic activity in Canada;
	•	the degree of involvement by Canadians in the business;
	•	the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada;
	•	the effect of the investment on competition within any industry in Canada;
	•	the compatibility of the investment with national industrial, economic and cultural policies; and
	•	the effect of the investment on Canada’s ability to compete in world markets.

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	•	the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by the shareholder when the shareholder ceased to be resident in Canada; or
	•	the shares formed part of the business property of a “permanent establishment” that the shareholder has or had in Canada within the 12 months preceding the disposition.

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	•	that the internal controls necessary for us to develop reliable financial statements do not exist;
	•	that information came to De Visser’s attention that led it to no longer be able to rely on management’s representations, or that made it unwilling to be associated with the financial statements prepared by management;
	•	(1) the need for De Visser to expand significantly the scope of its audit, or that information came to its attention during our two most recent fiscal years or any subsequent interim period preceding De Visser’s resignation, that if further investigated may have: (i) materially impacted the fairness or reliability of either: a previously issued audit report or the underlying financial statements; or the financial statements issued or to be issued covering the fiscal period(s) subsequent to the date of the most recent financial statements covered by an audit report (including information that may have prevented it from rendering an unqualified audit report on those financial statements), or (ii) caused De Visser to be unwilling to rely on management’s representations or be associated with our financial statements, and

	•	(1) that information has come to their attention that it has concluded materially impacts the fairness or reliability of either (i) a previously issued audit report or the underlying financial statements, or (ii) the financial statements issued or to be issued covering the fiscal period(s) subsequent to the date of the most recent financial statements covered by an audit report (including information that, unless resolved to De Visser’s satisfaction, would prevent it from rendering an unqualified audit report on those financial statements), and

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A-2

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Reports of Independent Registered Public Accounting Firms			F-2
Consolidated Balance Sheets as of July 31, 2005 and 2004			F-4
Consolidated Statements of Operations for the years ended July 31, 2005, 2004 and 2003			F-5
Consolidated Statements of Shareholders’ Equity for the years ended July 31, 2005, 2004 and 2003			F-6
Consolidated Statements of Cash Flows for the years ended July 31, 2005, 2004 and 2003			F-7
Notes to Consolidated Financial Statements as of July 31, 2005 and 2004 and for the years ended July 31, 2005, 2004 and 2003			F-8
Consolidated Balance Sheet as of January 31, 2006 (unaudited)			F-27
Consolidated Statements of Operations and Deficit for the three months ended and six months ended January 31, 2006 and 2005 (unaudited)			F-28
Consolidated Statement of Shareholders’ Equity for the six months ended January 31, 2006 (unaudited)			F-29
Consolidated Statements of Cash Flows for the six months ended January 31, 2006 and 2005 (unaudited)			F-30
Notes to Consolidated Financial Statements (unaudited) as of and for the six months ended January 31, 2006			F-31

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				July 31
				2005				2004
ASSETS
Current Assets
	Cash and cash equivalents			$	7,251,503			$	970,795
	Accounts receivable				34,671				—
	Marketable securities				—				71,281
	Other current assets				23,534				44,926
		Total current assets			7,309,708				1,087,002
Property and equipment, at cost:
	Oil and gas properties, full cost method of accounting:
		Proved, net of accumulated depreciation, depletion and
		amortization of $58,523 and $0			10,190,929				—
		Unproved			3,149,372				6,772,177
	Net oil and gas properties				13,340,301				6,772,177
	Other property and equipment, net of accumulated depreciation and amortization of $398,988 and $217,144				1,769,812				447,032
	Net property and equipment				15,110,113				7,219,209
Equity investment in joint venture					—				100,500
Investment in Hite Coalbed Methane, L.L.C.					846,766				846,766
Restricted cash					100,000				—
Other non-current assets					161,125				129,500
				$	23,527,712			$	9,382,977
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
	Accounts payable			$	2,144,066			$	465,881
	Current maturity of long-term notes payable				42,227				21,977
	Accrued liabilities and other				31,405				20,393
		Total current liabilities			2,217,698				508,251
Long-term notes payable, less current portion					507,595				440,200
Deferred income taxes					—				724,470
		Total liabilities		$	2,725,293			$	1,672,921
Shareholders’ Equity
	Common shares, no par value, authorized 100,000,000 shares, 43,912,961 and 28,374,296 issued and outstanding				34,666,022				19,236,780
	Additional paid-in capital				4,493,680				1,162,768
	Common shares issuable				—				271,440
	Accumulated deficit				(18,357,283	)			(12,960,932	)
		Total shareholders’ equity			20,802,419				7,710,056
				$	23,527,712			$	9,382,977

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			Years Ended July 31
			2005				2004				2003
Revenue
	Gas sales		$	117,835			$	—			$	—
Expenses
	Lease operating expense			307,178				—				—
	Salaries and benefits			894,141				418,701				305,792
	Stock-based compensation			3,344,738				193,796				515,286
	General and administrative expenses			1,566,242				387,610				215,325
	Depreciation, depletion and amortization			260,141				80,417				58,593
				6,372,440				1,080,524				1,094,996
				(6,254,605	)			(1,080,524	)			(1,094,996	)
Other income (expense):
	Interest income			123,219				2,008				3,550
	Interest expense			(24,820	)			(15,165	)			(17,772	)
	Other income			35,385				2,454				—
				133,784				(10,703	)			(14,222	)
Loss before income taxes				(6,120,821	)			(1,091,227	)			(1,109,218	)
Deferred income tax benefit				724,470				298,111				174,913
Net loss			$	(5,396,351	)		$	(793,116	)		$	(934,305	)
Basic and diluted loss per share			$	(0.14	)		$	(0.03	)		$	(0.04	)
Weighted average common shares outstanding				37,665,019				25,007,327				21,485,381

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		Common Shares																				Total
										Paid-in				Accumulated				Common Stock				Shareholders’
		Shares				Amount				Capital				Deficit				Issuable				Equity
Balance, July 31, 2002			19,283,035			$	14,874,211			$	439,860			$	(11,233,511	)		$	—			$	4,080,560
Proceeds from stock options exercised			150,000				78,900				—				—				—				78,900
Proceeds from warrants exercised			1,065,000				371,549				—				—				—				371,549
Proceeds from shares issued in private placement — November 7, 2002(1)			1,780,717				628,528				—				—				—				628,528
Proceeds from shares issuable in private placement			—				—				—				—				30,579				30,579
Other			—				—				13,826				—				—				13,826
Stock-based compensation			—				—				515,286				—				—				515,286
Net loss			—				—				—				(934,305	)			—				(934,305	)
Balance, July 31, 2003			22,278,752				15,953,188				968,972				(12,167,816	)			30,579				4,784,923
Proceeds from stock options exercised			69,444				43,036				—				—				—				43,036
Proceeds from shares issued in private placement — September 18, 2003			725,000				339,787				—				—				(30,579	)			309,208
Proceeds from shares issued in private placement — December 22, 2003(2)			1,975,000				928,259				—				—				—				928,259
Proceeds from shares issued in private placement — April 27, 2004			3,326,100				1,972,510				—				—				—				1,972,510
Proceeds from shares issuable for warrants exercised			—				—				—				—				271,440				271,440
Stock-based compensation			—				—				193,796				—				—				193,796
Net loss			—				—				—				(793,116	)			—				(793,116	)
Balance, July 31, 2004			28,374,296				19,236,780				1,162,768				(12,960,932	)			271,440				7,710,056
Proceeds from stock options exercised			2,254,333				1,617,005				—				—				—				1,617,005
Proceeds from warrants exercised			2,861,342				1,714,882				—				—				(271,440	)			1,443,442
Proceeds from shares issued in private placement — December 29, 2004(3)			2,400,000				2,793,854				—				—				—				2,793,854
Proceeds from shares issued in private placement — December 30, 2004(4)			4,032,000				4,693,675				—				—				—				4,693,675
Proceeds from shares issued in private placement — January 6, 2005(5)			3,723,200				4,334,199				—				—				—				4,334,199
Proceeds from shares issued in private placement — January 12, 2005(6)			216,800				252,378				—				—				—				252,378
Bonus shares			50,990				23,249				—				—				—				23,249
Stock-based compensation			—				—				3,344,738				—				—				3,344,738
Other			—				—				(13,826	)			—				—				(13,826	)
Net loss			—				—				—				(5,396,351	)			—				(5,396,351	)
Balance, July 31, 2005			43,912,961			$	34,666,022			$	4,493,680			$	(18,357,283	)		$	—			$	20,802,419

(1)	net of share issue costs of $59,220
(2)	net of share issue costs of $18,730
(3)	net of share issue costs of $206,146
(4)	net of share issue costs of $346,325
(5)	net of share issue costs of $319,801
(6)	net of share issue costs of $18,622

F-6

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Table of Contents

				Years Ended July 31
				2005				2004				2003
Cash Provided by (Used in):
Operating Activities
	Net loss			$	(5,396,351	)		$	(793,116	)		$	(934,305	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation, depletion and amortization			260,141				80,417				58,593
		Stock-based compensation expense			3,344,738				193,796				515,286
		Gain on sale of marketable securities			(42,276	)			(2,454	)			—
		Loss on disposal of property and equipment			16,415				—				—
		Deferred income tax benefit			(724,470	)			(298,111	)			(174,913	)
		Other			20,339				(564	)			20,417
	Changes in assets and liabilities:
		Accounts receivable			(34,671	)			—				—
		Other current assets			21,392				(26,909	)			(14,035	)
		Other non-current assets			(31,625	)			(88,000	)			(41,500	)
		Accounts payable			1,678,185				323,381				(138,876	)
		Accrued liabilities and other			11,012				20,393				—
	Net cash used in operating activities				(877,171	)			(591,167	)			(709,333	)
Investing Activities
	Proceeds from sale of marketable securities				113,557				5,407				—
	Business acquisition, net of cash acquired				(857,638	)			—				—
	Additions to oil and gas properties				(5,629,953	)			(1,729,411	)			(78,522	)
	Additions to other property and equipment				(1,383,208	)			(191,794	)			(24,972	)
	Acquisition of equity interest in joint venture				(78,112	)			(100,500	)			—
	Investment in Hite Coalbed Methane, L.L.C.				—				(86,766	)			(340,097	)
	Increase in restricted cash				(100,000	)			—				—
	Net cash used in investing activities				(7,935,354	)			(2,103,064	)			(443,591	)
Financing Activities:
	Payments on long-term notes payable				(41,320	)			(26,014	)			—
	Net proceeds from issuance of common shares				15,134,553				3,524,453				1,109,556
	Net cash provided by financing activities				15,093,233				3,498,439				1,109,556
Net increase (decrease) in cash and cash equivalents					6,280,708				804,208				(43,368	)
Cash and cash equivalents at the beginning of the year					970,795				166,587				209,955
Cash and cash equivalents at the end of the year				$	7,251,503			$	970,795			$	166,587
Supplementary cash flow information:
	Interest paid			$	11,540			$	2,425			$	15,967
	Non-cash investing and financing activities:
	Acquisition of equipment by issuance of notes payable			$	118,049			$	105,847			$	—

F-7

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Table of Contents

1.	Summary of Significant Accounting Policies

	Basis of Presentation and Going Concern

	Use of Estimates

	Revenue Recognition

	Investments in Unconsolidated Entities

F-8

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Table of Contents

	Translation of Foreign Currency

	Principles of Consolidation

	Cash and Cash Equivalents

	Accounts Receivable

	Fair Value of Financial Instruments

	Oil and Gas Properties

F-9

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Table of Contents

	i) there are no firm plans for further drilling on the unproved property;
	ii) negative results were obtained from studies of the unproved property;
	iii) negative results were obtained from studies conducted in the vicinity of the unproved property;
	iv) the remaining term of the unproved property does not allow sufficient time for further studies or drilling.

	Impact of Recently Issued Accounting Pronouncements

	Other Property and Equipment

F-10

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Table of Contents

			2005				2004
Other Property and Equipment:
	Gas collection equipment		$	1,332,012			$	106,899
	Support equipment			760,467				501,418
	Other			76,321				55,859
	Less: Accumulated depreciation and amortization			(398,988	)			(217,144	)
			$	1,769,812			$	447,032

	Asset Retirement Obligations

	Accounting for Long-Lived Assets

F-11

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Table of Contents

2.	Marketable Securities

3.	Purchase of Illinois Mine Gas, L.L.C.

4.	Investment in Hite Coalbed Methane, L.L.C.

F-12

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Table of Contents

5.	Restricted Cash

6.	Long-Term Notes Payable

		July 31
		2005				2004
Case Credit term note due in fiscal year 2006, 6.50%		$	32,833			$	49,163
GMAC term notes due in fiscal year 2009, 6.50%			26,633				31,930
GMAC term notes due in fiscal year 2010, 6.1% to 6.50%			98,356				—
Convertible note due in fiscal year 2008, 3.25%			392,000				381,084
			549,822				462,177
Less current maturities			42,227				21,977
Long-term notes payable		$	507,595			$	440,200

		Principal				Interest				Total
2006		$	42,227			$	8,654			$	50,881
2007			41,712				5,995				47,707
2008			419,981				67,555				487,536
2009			29,766				2,070				31,836
2010			16,136				1,702				17,838
		$	549,822			$	85,976			$	635,798

F-13

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Table of Contents

7.	Income Taxes

			Year Ended July 31
			2005				2004				2003
Current			$	—			$	—			$	—
Deferred:
	Canadian			—				—				—
	United States			(581,582	)			(239,314	)			(140,415	)
	U.S. state taxes			(142,888	)			(58,797	)			(34,498	)
	Total deferred income taxes			(724,470	)			(298,111	)			(174,913	)
	Total income tax benefit		$	(724,470	)		$	(298,111	)		$	(174,913	)

			Year Ended July 31
			2005				2004				2003
Statutory Canadian income tax rate				(36.00	)%			(36.00	)%			(36.00	)%
Non-deductible stock compensation				21.09	%			6.39	%			16.72	%
Current year Canadian loss with no tax benefit				2.32	%			6.14	%			2.83	%
Net increase in deductible temporary differences due to foreign currency conversion and expired losses				(5.38	)%			(4.47	)%			(15.26	)%
Increase (decrease) in valuation allowance				7.32	%			2.57	%			17.31	%
Other				(1.19	)%			(1.95	)%			(1.37	)%
	Effective income tax rate			(11.84	)%			(27.32	)%			(15.77	)%

				July 31, 2005
				United States				Canada				Total
Deferred tax assets:
Net operating loss carryforwards				$	4,130,549			$	643,332			$	4,773,881
Resource related allowances					—				1,705,249				1,705,249
	Investments and advances to subsidiaries				—				375,215				375,215
		Total non-current deferred tax asset			4,130,549				2,723,796				6,854,345
		Valuation allowance			(261,405	)			(2,640,396	)			(2,901,801	)
		Net deferred tax assets			3,869,144				83,400				3,952,544
Deferred tax liabilities:
Net property plant and equipment					(3,869,144	)			(83,400	)			(3,952,544	)
		Total non-current deferred tax liability			(3,869,144	)			(83,400	)			(3,952,544	)
Net deferred tax liability				$	—			$	—			$	—

F-14

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Table of Contents

				July 31, 2004
				United States				Canada				Total
Deferred tax assets:
Net operating loss carryforwards				$	1,497,594			$	602,531			$	2,100,125
	Resource related allowances				—				1,573,717				1,573,717
	Investments and advances to subsidiaries				—				345,543				345,543
		Total non-current deferred tax asset			1,497,594				2,521,791				4,019,385
		Valuation allowance			—				(2,425,233	)			(2,425,233	)
		Net deferred tax assets			1,497,594				96,558				1,594,152
Deferred tax liabilities:
Net property plant and equipment					(2,222,064	)			(96,558	)			(2,318,622	)
		Total non-current deferred tax liability			(2,222,064	)			(96,558	)			(2,318,622	)
Net deferred tax liability				$	(724,470	)		$	—			$	(724,470	)

		Year Ended July 31
		2006				2007				2008				2009				2010 and Later				Total
Canadian		$	338,308			$	292,245			$	46,297			$	442,034			$	668,151			$	1,787,035
United States			—				—				—				—				10,591,151				10,591,151
		$	338,308			$	292,245			$	46,297			$	442,034			$	11,259,302			$	12,378,186

F-15

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Table of Contents

Number				Exercise
Outstanding				Price				Expiry Date
	644,375			CAD $	0.80				September 19, 2005
	1,000,000			CAD $	0.80				December 10, 2005
	3,301,100			CAD $	1.00				April 29, 2006
	1,037,200			USD $	1.25				January 15, 2007
	5,186,000			USD $	1.50				January 15, 2007
	11,168,675

9.	Commitments and Contingencies

2006		$	128,483
2007			107,409
2008			20,562
2009			7,019
2010			7,300
Thereafter			144,870
		$	415,643

F-16

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Table of Contents

10.	Concentrations

11.	Stock-Based Compensation

						Weighted-Average
						Exercise Price
		Number of
		Options				CAD$				USD$
Outstanding at July 31, 2002			1,555,000			$	1.08			$	0.69
Granted — exercise price less than market price of stock on date of grant			650,000				0.56				0.38
Granted — exercise price exceeds market price of stock on date of grant			900,000				0.90				0.63
Cancelled			(800,000	)			1.20				0.84
Exercised/expired			(480,000	)			0.82				0.57
Outstanding at July 31, 2003			1,825,000				0.81				0.58
Granted — exercise price less than market price of stock on date of grant			475,000				0.65				0.49
Exercised/expired			(69,444	)			0.82				0.62
Outstanding at July 31, 2004			2,230,556				0.78				0.59

F-17

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Table of Contents

						Weighted-Average
						Exercise Price
		Number of
		Options				CAD$				USD$
Granted — exercise price equals market price of stock on date of grant			3,423,278				2.04				1.64
Granted — exercise price less than market price of stock on date of grant			852,778				1.19				0.96
Cancelled			(25,000	)			1.20				0.98
Exercised/expired			(2,254,333	)			0.87				0.72
Outstanding at July 31, 2005			4,227,279			$	1.82			$	1.49

		Year Ended July 31,
		2005				2004				2003
Risk-free interest rate			3.0-3.7%				4.1%				4.0-4.3%
Expected dividend yield			Nil				Nil				Nil
Expected stock price volatility			69-81%				105%				109%
Expected option life			3 years				5  years				5 years

		2005				2004				2003
Exercise price equals market price of stock on date of grant		$	0.81			$	—			$	—
Exercise price is less than market price of stock on date of grant			0.66				0.41				0.34
Exercise price exceeds market price of stock on date of grant			—				—				0.33
Total grants		$	0.78			$	0.55			$	0.33

F-18

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Table of Contents

		Exercise Price				Number				Remaining
		CAD$				Outstanding				Life (Years)				Expiry Date
		$	0.65				350,000				3.3				November 3, 2008
			0.90				143,334				1.4				January 10, 2007
			0.90				100,000				1.7				April 10, 2007
			0.90				20,000				4.1				September 22, 2009
			1.19				341,667				4.3				November 29, 2009
			1.20				50,000				1.4				January 10, 2007
			1.49				755,666				4.3				November 29, 2009
			2.19				911,000				4.5				March 27, 2010
			2.19				300,000				—				August 12, 2005
			2.36				115,000				4.7				May 23, 2010
			2.40				1,140,612				4.3				January 20, 2010
		$	1.82				4,227,279				3.9

12.	Other Income (Expense), Net

		2005				2004				2003
Gain on sale of marketable securities		$	42,276			$	2,454			$	—
Loss on disposal of property and equipment			(16,415	)			—				—
Distribution from Hite Coalbed Methane, L.L.C.			6,615				—				—
Other			2,909				—				—
		$	35,385			$	2,454			$	—

13.	Oil and Gas Properties

F-19

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Table of Contents

	Montgomery County

	Christian County

F-20

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Table of Contents

		2005				2004				2003
Property acquisition — proved		$	—			$	—			$	—
Property acquisition — unproved			341,634				2,664				2,896
Exploration			743,991				1,778,517				75,626
Development			5,541,022				—				—
		$	6,626,647			$	1,781,181			$	78,522

F-21

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Table of Contents

																		2002
		Total				2005				2004				2003				and Prior
Property acquisition costs		$	2,404,887			$	341,634			$	2,664			$	2,896			$	2,057,693
Exploration and development, net of transfers to proved oil and gas properties			744,485				742,005				2,480				—				—
		$	3,149,372			$	1,083,639			$	5,144			$	2,896			$	2,057,693

14.	Related Party Transaction

15.	Technical Services Agreement

F-22

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Table of Contents

F-23

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Table of Contents

16.	Subsequent Event

17.	Supplemental Oil and Gas Data (Unaudited)

Gas revenues		$	117,835
Production costs			(307,178	)
Depreciation, depletion and amortization			(238,366	)
Pre-tax operating loss			(427,709	)
Income taxes			166,807
Loss from oil and gas producing activities		$	(260,902	)

F-24

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Table of Contents

			Year Ended July 31,
			2005				2004				2003
			Mcf				Mcf				Mcf
Proved reserves
	Beginning of year			—				—				—
	Purchase of reserves in place			—				—				—
	Extensions and discoveries			10,325,989				—				—
	Revisions of previous estimates			—				—				—
	Production			(33,967	)			—				—
	End of year			10,292,022				—				—
Proved developed reserves
	Beginning of year			—				—				—
	End of year			2,970,606				—				—

		July 31,
		2005				2004				2003
		(Amounts in thousands)
Future cash inflows		$	76,608			$	—			$	—
Future production costs and taxes			(10,181	)			—				—
Future development costs			(7,824	)			—				—
Future income tax expenses			(14,663	)			—				—
Net future cash flows			43,940				—				—
Discounted at 10% for estimated timing of cash flows			(20,872	)			—				—
Standardized measure of discounted future net cash flows		$	23,068			$	—			$	—

F-25

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Table of Contents

			Year Ended July 31,
			2005				2004				2003
			(Amounts in thousands)
Standardized measure, beginning of year			$	—			$	—			$	—
Sales, net of production costs and taxes				189				—				—
Extensions and discoveries				27,758				—				—
Purchases of reserves in place				—				—				—
Net changes in prices and production costs				—				—				—
Revisions of quantity estimates				—				—				—
Net changes in development costs				(5,541	)			—				—
Interest factor — accretion of discount				—				—				—
Net change in income taxes				—				—				—
Changes in production rates (timing) and other				662				—				—
	Net increase			23,068				—				—
Standardized measure, end of year			$	23,068			$	—			$	—

F-26

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Table of Contents

				January 31, 2006				July 31, 2005
				(Unaudited)
Current Assets:
	Cash and cash equivalents			$	26,623,707			$	7,251,503
	Accounts receivable				159,634				34,671
	Other current assets				270,445				23,534
		Total current assets			27,053,786				7,309,708
Property and equipment, at cost:
	Oil and gas properties, full cost method of accounting:
		Proved, net of accumulated depreciation, depletion and amortization of $142,023 and $58,523			15,970,561				10,190,929
		Unproved			3,244,807				3,149,372
	Net oil and gas properties				19,215,368				13,340,301
	Other property and equipment, net of accumulated depreciation and amortization of $462,530 and $398,988				4,434,311				1,769,812
	Net property and equipment				23,649,679				15,110,113
Investment in Hite Coalbed Methane, L.L.C.					—				846,766
Restricted cash					134,000				100,000
Other non-current assets					161,125				161,125
				$	50,998,590			$	23,527,712
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	1,486,767			$	2,144,066
	Current maturity of long-term notes payable				239,071				42,227
	Accrued liabilities and other				72,145				31,405
		Total current liabilities			1,797,983				2,217,698
Long-term notes payable, less current portion					94,768				507,595
Other non-current liabilities					45,949				—
		Total liabilities			1,938,700				2,725,293
Shareholders’ equity:
	Common shares, no par value, authorized 100,000,000 shares, 64,378,087 and 43,912,961 outstanding				64,573,394				34,666,022
	Additional paid-in capital				4,891,266				4,493,680
	Accumulated deficit				(20,404,770	)			(18,357,283	)
		Total shareholders’ equity			49,059,890				20,802,419
				$	50,998,590			$	23,527,712

F-27

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Table of Contents

			Three Months Ended January 31								Six Months Ended January 31
			2006				2005				2006				2005
Revenues:
	Gas sales		$	327,811			$	6,341			$	537,505			$	6,341
Expenses:
	Lease operating expense			300,806				—				461,610				—
	General and administrative expenses			1,165,483				2,752,852				2,437,239				3,165,087
	Depreciation, depletion and amortization			117,890				34,086				212,692				57,672
				1,584,179				2,786,938				3,111,541				3,222,759
Other income (expenses):
	Interest income			270,186				4,353				402,804				4,847
	Interest expense			(6,234	)			(5,407	)			(13,778	)			(10,582	)
	Other income (expense)			138,191				3,246				137,523				3,246
				402,143				2,192				526,549				(2,489	)
Loss before income taxes				(854,225	)			(2,778,405	)			(2,047,487	)			(3,218,907	)
Deferred income tax benefit				—				292,562				—				344,717
Net loss			$	(854,225	)		$	(2,485,843	)		$	(2,047,487	)		$	(2,874,190	)
Basic and diluted loss per share			$	(0.01	)		$	(0.07	)		$	(0.04	)		$	(0.09	)
Weighted average common shares outstanding				63,654,794				34,790,336				57,889,094				32,018,325

F-28

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Table of Contents

		Common Shares								Additional								Total
										Paid-In				Accumulated				Shareholder
		Shares				Amounts				Capital				Deficit				Equity
Balance, July 31, 2005			43,912,961			$	34,666,022			$	4,493,680			$	(18,357,283	)		$	20,802,419
Proceeds from stock options exercised			391,667				379,379				—				—				379,379
Proceeds from warrants exercised			2,073,459				1,644,039				—				—				1,644,039
Net proceeds from shares issued in private placement — September 23, 2005(1)			18,000,000				27,883,954				—				—				27,883,954
Stock-based compensation			—				—				397,586				—				397,586
Net loss			—				—				—				(2,047,487	)			(2,047,487	)
Balance, January 31, 2006			64,378,087			$	64,573,394			$	4,891,266			$	(20,404,770	)		$	49,059,890

(1)	Net of share issuance costs of $2,619,953

F-29

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Table of Contents

				Six Months Ended January 31
				2006				2005
Operating activities:
	Net loss			$	(2,047,487	)		$	(2,874,190	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation, depletion and amortization			212,692				57,672
		Stock-based compensation expense			397,586				2,200,777
		Gain on sale of investment			(127,416	)			(3,246	)
		Deferred income tax benefit			—				(344,717	)
		Other			—				14,881
	Changes in assets and liabilities:
		Accounts receivable			(124,963	)			(6,341	)
		Other current assets			(246,911	)			(17,714	)
		Accounts payable			(657,299	)			(99,039	)
		Accrued liabilities and other			71,922				496
		Other non-current liabilities			45,949				—
	Net cash used in operating activities				(2,475,927	)			(1,071,421	)
Investing activities:
	Proceeds from sale of investment				551,000				43,956
	Additions to oil and gas properties				(5,958,567	)			(1,907,403	)
	Additions to other property and equipment				(2,560,216	)			(371,736	)
	Acquisition of equity interest in joint venture				—				(78,112	)
	Increase in restricted cash				(34,000	)			—
Net cash used in investment activities					(8,001,783	)			(2,313,295	)
Financing activities:
	Payments on long-term notes payable				(57,458	)			(14,828	)
	Net proceeds from issuance of common shares				29,907,372				14,140,215
	Net cash provided by financing activities				29,849,914				14,125,387
Net increase in cash and cash equivalents					19,372,204				10,740,671
Cash and cash equivalents at the beginning of the period					7,251,503				970,795
Cash and cash equivalents at the end of the period				$	26,623,707			$	11,711,466
Supplementary disclosure of cash flow information:
	Non-cash investing and financing activity:
	Acquisition of equipment by issuance of notes payable			$	233,475			$	—

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1.	Summary of Significant Accounting Policies

F-31

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	i) there are no firm plans for further drilling on the unproved property;
	ii) negative results were obtained from studies of the unproved property;
	iii) negative results were obtained from studies conducted in the vicinity of the unproved property; or
	iv) the remaining term of the unproved property does not allow sufficient time for further studies or drilling.

			January 31,				July 31,
			2006				2005
Other Property and Equipment:
	Gas collection equipment		$	3,758,264			$	1,332,012
	Support equipment			1,058,731				760,467
	Other			79,846				76,321
	Less: Accumulated depreciation and amortization			(462,530	)			(398,988	)
			$	4,434,311			$	1,769,812

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		Six Months
		Ended
		January 31,
		2006				2005
Asset retirement obligation at beginning of period		$	19,778			$	—
Accretion expense			1,335				—
Liabilities incurred			24,836				—
Asset retirement obligation at end of period		$	45,949			$	—

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2.	Stock-Based Compensation

						Weighted-Average
						Exercise Price
		Number of
Six Months Ended January 31, 2006:		Options				CAD$				USD$
Outstanding at July 31, 2005			4,227,279			$	1.82			$	1.49
Granted — exercise price equal to market price of stock on date of grant			495,000				2.05				1.75
Exercised			(341,667	)			1.19				1.00
Cancelled			(300,000	)			1.82				1.52
Outstanding at October 31, 2005			4,080,612			$	1.88			$	1.60
Exercised			(50,000	)			1.43				1.22
Outstanding at January 31, 2006			4,030,612			$	1.88			$	1.64

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						Weighted-Average
						Exercise Price
Six Months Ended January 31, 2005:		Number of Options				CAD$				USD$
Outstanding at July 31, 2004			2,230,556			$	.78			$	0.59
Cancelled			(13,889	)			1.20				0.98
Outstanding at October 31, 2004			2,216,667			$	0.77			$	0.63
Granted — exercise price equal to market price of stock on date of grant			2,097,278				1.93				1.55
Granted — exercise price less than market price of stock on date of grant			852,778				1.19				.96
Exercised			(1,040,000	)			0.69				0.57
Cancelled			(11,111	)			1.20				0.98
Outstanding at January 31, 2005			4,115,612			$	1.47			$	1.19

		Six Months Ended
		January 31,
		2006				2005
Risk-free interest rate			3.3	%			3.0 - 3.5	%
Expected dividend yield			Nil				Nil
Expected stock price volatility			66	%			74 - 81	%
Expected option life			3 years				3 years

		Exercise Price				Number				Remaining
		CAD$				Outstanding				Life (Years)				Expiry Date
		$	0.65				350,000				2.8				November 3, 2008
			0.90				143,334				0.9				January 10, 2007
			0.90				100,000				1.2				April 10, 2007
			0.90				15,000				3.6				September 22, 2009
			1.20				50,000				0.9				January 10, 2007
			1.49				710,666				3.8				November 29, 2009
			2.05				495,000				4.6				September 22, 2010
			2.19				911,000				4.2				March 27, 2010
			2.36				115,000				4.3				May 23, 2010
			2.40				1,140,612				4.0				January 20, 2010
		$	1.88				4,030,612				3.8

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3.	Income Taxes

4.	Long-Term Notes Payable

		January 31,				July 31,
		2006				2005
Case Credit term note due in fiscal year 2006, 6.50%		$	28,582			$	32,833
GMAC term notes due in fiscal year 2009, 6.50%			25,163				26,633
GMAC term notes due in fiscal year 2010, 6.1% to 6.50%			94,979				98,356
Convertible note due in fiscal year 2008, 3.25%			—				392,000
Caterpillar Financial Services Corp.			195,568				—
			333,839				549,822
Less current maturities			(239,071	)			(42,227	)
Long-term notes payable		$	94,768			$	507,595

		Principal				Interest				Total
2006		$	137,451			$	9,201			$	146,652
2007			121,239				7,160				128,399
2008			27,982				3,855				31,837
2009			29,767				2,070				31,837
2010			17,400				440				17,840
		$	333,839			$	22,726			$	356,565

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5.	Shareholders’ Equity

Number				Exercise
Outstanding				Price				Expiry Date
	3,177,016			CAD $	1.00				April 29, 2006
	4,906,000			USD $	1.50				December 13, 2007
	1,037,200			USD $	1.25				January 15, 2010
	9,120,216

6.	Related Party Transactions

7.	Sale of Investment in Hite Coalbed Methane, L.L.C.

8.	Legal Proceedings

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9.	Subsequent Event

F-38

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Item 13.	Other Expenses of Issuance and Distribution

SEC registration fee		$	3,570
Accounting			40,000
Legal fees and expenses			100,000
Printing			50,000
Total		$	193,570

Item 14.	Indemnification of Directors and Officers

Item 15.	Recent Sales of Unregistered Securities

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								Aggregate Offering
Date of Sale		Title and Amount of Securities Sold		Offering Price				Price
9/18/03		Units consisting of 725,000 shares of common stock and warrants to purchase 725,000 shares of common stock for CAD$0.80 per share.			USD$0.47 per Unit				USD$340,076
12/3/03		Units consisting of 1,950,000 shares of common stock and warrants to purchase 1,950,000 shares of common stock for CAD$0.80 per share.			USD$0.49 per Unit				USD$960,000
4/29/04		Units consisting of 3,326,100 shares of common stock and warrants to purchase 3,326,100 shares of common stock for CAD$1.00 per share.			USD$0.58 per Unit				USD$1,942,674

								Aggregate Offering
Date of Sale		Title and Amount of Securities Sold		Offering Price				Price
12/30/04 to 1/13/05		Units consisting of 10,372,000 shares of common stock and warrants to purchase 5,186,000 shares of common stock for USD$1.50 per share.			USD$2.50 per Unit				USD$12,965,000
		A warrant to purchase 1,037,200 shares of common stock for USD$1.25 per share.

								Aggregate Offering
Date of sale		Title and Amount of Securities Sold		Offering Price				Price
9/26/05		18,000,000 shares of common stock			USD$1.69				USD$30,500,000

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Item 16.	Exhibits and Financial Statement Schedule

	See the Exhibit Index, which is hereby incorporated herein by reference.

	All schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedules, or because the information required is included in the financial statements and notes thereto.

Item 17.	Undertakings

	(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or in the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

	(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and
	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

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	BPI Energy Holdings, Inc.

	By:	/s/ George J. Zilich

	George J. Zilich,
	Chief Financial Officer and General Counsel

Signature				Title
/s/ James G. Azlein   James G. Azlein				President, Chief Executive Officer and Director
/s/ George J. Zilich   George J. Zilich				Chief Financial Officer, General Counsel and Director
/s/ Costa Vrisakis   Costa Vrisakis				Director
/s/ William J. Centa   William J. Centa				Director
/s/ Dennis Carlton   Dennis Carlton				Director
/s/ David E. Preng   David E. Preng				Director
By:		/s/ George J. Zilich   George J. Zilich, Attorney-in-Fact for the officers and directors signing in the capacities indicated		Date: May 11, 2006

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Number				Description
	3	.1		Articles of Incorporation of BPI Energy Holdings, Inc. (Incorporated by reference to Appendix A of the Proxy Statement filed by BPI Energy Holdings, Inc. with the SEC on January 12, 2006.)
	4	.1		Stock Purchase Agreement, dated September 20, 2005, by and among BPI Energy Holdings, Inc. and the investors party thereto.(***)
	4	.2		BPI Energy Holdings, Inc. 2005 Omnibus Stock Plan (Filed as Exhibit 99.1 to the Form 8-K of BPI Energy Holdings, Inc. filed with the SEC on December 15, 2005 and incorporated herein by reference).
	5	.1		Opinion of Anfield Sujir Kennedy & Durno.(+)
	10	.1		Financial Advisor Agreement, dated as of September 29, 2004, by and between BPI Energy Holdings, Inc. and Sanders Morris Harris Inc.(*)
	10	.2		Placement Agent Agreement, dated as of December 8, 2004, by and between BPI Energy Holdings, Inc. and Sanders Morris Harris Inc.(*)
	10	.3		Registration Rights Agreement, dated as of December 30, 2004, by and between BPI Energy Holdings, Inc. and Sanders Morris Harris Inc., individually and as Agent and Attorney-in-Fact for the Purchasers listed on Exhibit A thereto.(*)
	10	.4		Amendment No. 1 to Registration Rights Agreement, dated as of April 20, 2005, by and among BPI Energy Holdings, Inc. and the holders of shares of its common stock executing signatures pages attached thereto.(*)
	10	.5		Technical Services Agreement, dated as of March 31, 2005, by and between BPI Energy Holdings, Inc. and BHP Petroleum (Exploration) Inc.(*)
	10	.6		Oil, Gas and Coalbed Methane Gas Lease, dated as of April 3, 2001, by and among BPI Industries (USA), Inc., AFC Coal Properties, Inc., American Premier Underwriters, Inc. and Methane Management, Inc. (Southern Illinois Basin Project).(*)
	10	.7		Amendment to Oil, Gas and Coalbed Methane Gas Lease, dated as of November 23, 2004, by and among BPI Industries (USA), Inc., AFC Coal Properties, Inc. and American Premier Underwriters, Inc. (Southern Illinois Basin Project).(*)
	10	.8		Option to Purchase Mineral Lease, dated as of October 10, 2002, by and between BPI Energy Holdings, Inc. and the County of Montgomery, Illinois (Northern Illinois Basin Project).(*)
	10	.9		Option to Purchase Mineral Lease, dated as of January 20, 2004, by and between BPI Energy Holdings, Inc. and the County of Christian, Illinois (Northern Illinois Basin Project).(*)
	10	.10		Mineral Lease, dated as of November 12, 2003, by and between BPI Energy Holdings, Inc. and the County of Shelby, Illinois (Northern Illinois Basin Project).(*)
	10	.11		Option to Purchase Mineral Lease, dated as of November 3, 2003, by and between BPI Energy Holdings, Inc. and the County of Clinton, Illinois (Western Illinois Basin Project).(*)
	10	.12		Option to Purchase Mineral Lease, dated as of September 9, 2003, by and between BPI Energy Holdings, Inc. and the County of Washington, Illinois (Western Illinois Basin Project).(*)
	10	.13		Option to Purchase Mineral Lease, dated as of June 8, 2004, by and between BPI Energy Holdings, Inc. and the County of Marion, Illinois (Western Illinois Basin Project).(*)
	10	.14		Farmout Agreement, dated as of November 2, 2004, by and between BPI Energy Holdings, Inc. and Addington Exploration, LLC (Northern Illinois Basin and Western Illinois Basin Projects).(*)
	10	.15		Incentive Stock Option Plan of BPI Energy Holdings, Inc., dated as of December 16, 2002.(*)
	10	.16		Employment Letter Agreement, dated as of January 6, 2005, by and between BPI Energy Holdings, Inc. and George J. Zilich.(*)
	10	.17		Employment Letter Agreement, dated as of January 31, 2005, by and between BPI Energy Holdings, Inc. and Randy Elkins.(*)
	10	.18		Agreement, dated as of April 17, 2004, by and between BPI Energy Holdings, Inc. and James G. Azlein.(*)
	10	.19		Confidential Lock-Up Agreement, dated as of December 31, 2004, by and between BPI Energy Holdings, Inc. and James G. Azlein.(*)
	10	.20		Form of Confidential Lock-Up Agreement, dated as of December 31, 2004.(*)

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Table of Contents

Number				Description
	10	.21		Letter agreement, dated as of July 7, 2005, by and among BPI Energy Holdings, Inc., KeyBanc Capital Markets, a division of McDonald Investments, Inc., and Sanders Morris Harris, Inc.(**)
	10	.22		Base Contract for Sale and Purchase of Natural Gas, dated as of December 1, 2004, by and between BPI Energy Holdings, Inc. and Atmos Energy Marketing, LLC.(**)
	10	.23		Form of Confidential Lock-up Agreement, dated September 26, 2005.(***)
	10	.24		Common Stock Purchase Warrant issued by BPI Energy Holdings, Inc. on December 31, 2004 to Sanders Morris Harris Inc.(*)
	10	.25		Common Stock Purchase Warrant issued by BPI Energy Holdings, Inc. on January 12, 2005 to Sanders Morris Harris Inc.(*)
	10	.26		Form of Warrant Certificate issued by BPI Energy Holdings, Inc. in its December 2004/ January 2005 private placement.(*)
	10	.27		Form of Subscription Agreement entered into by the investors in the December 2004/ January 2005 private placement of BPI Energy Holdings, Inc.(*)
	10	.28		Coal Seam Gas Lease Agreement, dated April 26, 2006, by and between BPI Energy, Inc. and IEC (Montgomery), LLC (Northern Illinois Basin Project) (Filed as Exhibit 10.1 to the Form 8-K of BPI Energy Holdings, Inc. filed with the SEC on April 28, 2006 and incorporated herein by reference).
	10	.29		Coal Seam Gas Lease Agreement, dated April 26, 2006, by and between BPI Energy, Inc. and Christian Coal Holdings, LLC (Northern Illinois Basin Project) (Filed as Exhibit 10.2 to the Form 8-K of BPI Energy Holdings, Inc. filed with the SEC on April 28, 2006 and incorporated herein by reference).
	16	.1		Letter from former independent accounting firm, De Visser Gray, Chartered Accountants, pursuant to Item 304 of Regulation S-K.(***)
	21	.1		Subsidiaries of BPI Energy Holdings, Inc.(+)
	23	.1		Consent of De Visser Gray, Chartered Accountants.(+)
	23	.2		Consent of Anfield Sujir Kennedy & Durno (included in Exhibit 5.1).
	23	.3		Consent of Schlumberger Technology Corporation.(+)
	23	.4		Consent of Meaden & Moore, Ltd.(+)
	24	.1		Power of Attorney, dated as of April 28, 2006.(+)

(*)	Incorporated by reference to the S-1 Registration Statement filed by BPI Energy Holdings, Inc. with the SEC on June 3, 2005 (File No. 333-125483).
(**)	Incorporated by reference to Amendment No. 2 to the S-1 Registration Statement filed by BPI Energy Holdings, Inc. with the SEC on September 6, 2005 (File No. 333-125483).
(***)	Incorporated by reference to Amendment No. 3 to the S-1 Registration Statement filed by BPI Energy Holdings, Inc. with the SEC on October 28, 2005 (File No. 333-125483).
(+)	Filed herewith.