Nevada
|
87-0645378
|
(State
or Other Jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer I.D. No.)
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Page
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||
PART
I
|
||
Item
1.
|
Financial
Statements
|
3
|
Balance
Sheets
|
4
|
|
Statements
of Operations
|
5
|
|
Statements
of Cash Flows
|
6
|
|
Notes
to Unaudited Condensed Financial Statements
|
7
|
|
Item
2.
|
Management’s
Discussion and Analysis or Plan of Operation
|
11
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Item
3.A.(T)
|
Controls
and Procedures
|
15
|
PART
II
|
||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
15
|
Item
6.
|
Exhibits
|
16
|
Signatures
|
17
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
(Unaudited)
|
(Audited)
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and Cash Equivalents
|
$
|
924,148
|
$
|
61,935
|
|||
Restricted
Cash
|
-
|
788,000
|
|||||
Prepaid
Expenses
|
62,528
|
1,000
|
|||||
Total
Current Assets
|
986,676
|
850,935
|
|||||
PROPERTY
AND EQUIPMENT
|
|||||||
Oil
and Natural Gas Properties - Unproved, Using Full Cost Accounting:
|
|||||||
Leasehold
Interest - Montana
|
1,245,000
|
-
|
|||||
Leasehold
Interest - North Dakota
|
556,493
|
-
|
|||||
Total
Oil and Natural Gas Properties - Unproved
|
1,801,493
|
-
|
|||||
Office
Equipment and Furniture, Net
|
8,412
|
-
|
|||||
Total
Property and Equipment, Net
|
1,809,905
|
-
|
|||||
OTHER
ASSETS
|
|||||||
Deposit
- MSP Leasehold
|
-
|
165,000
|
|||||
Deposit
- Southfork Leasehold
|
-
|
65,000
|
|||||
Deposit
- KNTX Shell
|
-
|
25,000
|
|||||
Total
Other Assets
|
-
|
255,000
|
|||||
Total
Assets
|
$
|
2,796,581
|
$
|
1,105,935
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
Payable
|
$
|
33,339
|
$
|
-
|
|||
Investor
Subscriptions Net of Issuance Costs
|
- |
778,067
|
|||||
Convertible
Notes Payable
|
-
|
365,000
|
|||||
Total
Current Liabilities
|
33,339
|
1,143,067
|
|||||
LONG-TERM
LIABILITIES
|
-
|
-
|
|||||
|
|||||||
Total
Liabilities
|
33,339
|
1,143,067
|
|||||
STOCKHOLDERS’
EQUITY (DEFICIT)
|
|||||||
Preferred
Stock, Par Value $.0001; 100,000 Authorized, 0 Outstanding
|
-
|
-
|
|||||
Common
Stock, Par Value $.001; 100,000,000 Authorized, 22,664,123 Outstanding
(2006 - Par Value $.0001; 18,000,000 Shares
Outstanding)
|
22,664
|
1,800
|
|||||
Additional
Paid-in Capital
|
3,104,271
|
38,575
|
|||||
Subscriptions
Receivable
|
-
|
(1,400
|
)
|
||||
Deficit
Accumulated during Development Stage
|
(363,693
|
)
|
(76,107
|
)
|
|||
Total
Stockholders’ Equity (Deficit)
|
2,763,242
|
(37,132
|
)
|
||||
Total
Liabilities and Stockholders’ Equity (Deficit)
|
$
|
2,796,581
|
$
|
1,105,935
|
From
|
|||||||
Inception
on
|
|||||||
October
5,
|
|||||||
Three
Months
|
2006
|
||||||
Ended
|
Through
|
||||||
March
31,
|
March
31,
|
||||||
2007
|
2007
|
||||||
REVENUES
|
$
|
-
|
$
|
-
|
|||
EXPENSES
|
|||||||
Share
- Based Compensation Expense
|
216,986
|
255,561
|
|||||
General
and Administrative Expense
|
80,733
|
118,532
|
|||||
Total
Expenses
|
297,719
|
374,093
|
|||||
LOSS
FROM OPERATIONS
|
(297,719
|
)
|
(374,093
|
)
|
|||
OTHER
INCOME
|
10,133
|
10,400
|
|||||
LOSS
BEFORE INCOME TAXES
|
(287,586
|
)
|
(363,693
|
)
|
|||
INCOME
TAX PROVISION (BENEFIT)
|
-
|
-
|
|||||
NET
LOSS
|
$
|
(287,586
|
)
|
$
|
(363,693
|
)
|
|
Net
Loss Per Common Share - Basic and Diluted
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
|
Weighted
Average Shares Outstanding - Basic and Diluted
|
20,196,836
|
19,110,760
|
|
From
|
|
|||||
|
|
|
|
Inception
on
|
|
||
|
|
|
|
October
5,
|
|
||
|
|
Three
Months
|
|
2006
|
|
||
|
|
Ended
|
|
Through
|
|
||
|
|
March
31,
|
|
March
31,
|
|
||
|
|
2007
|
|
2007
|
|||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
Loss
|
$
|
(287,586
|
)
|
$
|
(363,693
|
)
|
|
Adjustments
to Reconcile Net Loss to Net Cash Used for Operating Activities:
|
|||||||
Depreciation
|
260
|
260
|
|||||
Share
– Based Compensation Expense
|
216,986
|
255,561
|
|||||
Increase
in Prepaid Expenses
|
(61,528
|
)
|
(62,528
|
)
|
|||
Increase
in Accounts Payable
|
33,339
|
33,339
|
|||||
Net
Cash Used For Operating Activities
|
(98,529
|
)
|
(137,061
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Purchases
of Office Equipment and Furniture
|
(8,672
|
)
|
(8,672
|
)
|
|||
Acquisition
of Leasehold Interests in Oil and Gas Properties
|
(841,481
|
)
|
(1,096,481
|
)
|
|||
Net
Cash Used For Investing Activities
|
(850,153
|
)
|
(1,105,153
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Repayments
of Convertible Notes Payable (Related Party)
|
(165,000
|
)
|
-
|
||||
Proceeds
from the Issuance of Common Stock –
Net of Issuance Costs
|
1,187,895
|
2,166,362
|
|||||
Net
Cash Provided by Financing Activities
|
1,022,895
|
2,166,362
|
|||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
74,213
|
924,148
|
|||||
CASH
AND CASH EQUIVALENTS – BEGINNING
|
849,935
|
-
|
|||||
CASH
AND CASH EQUIVALENTS – ENDING
|
$
|
924,148
|
$
|
924,148
|
|||
Supplemental
Disclosure of Cash Flow Information
|
|||||||
Cash
paid during the period for interest
|
$
|
-
|
$
|
-
|
|||
Cash
paid during the period for income taxes
|
$
|
-
|
$
|
-
|
|||
Non-Cash
Financing and Investing Activities:
|
|||||||
Purchase
of Oil and Gas Properties through issuance of common stock
|
$
|
705,012
|
$
|
705,012
|
NOTE 1 |
ORGANIZATION
AND NATURE OF BUSINESS
|
NOTE 2 |
BASIS
OF PRESENTATION
|
NOTE 3 |
SIGNIFICANT
ACCOUNTING PRACTICES
|
NOTE 4 |
ACQUISITION
OF OIL AND GAS PROPERTIES
|
NOTE 5 |
PREFERRED
AND COMMON STOCK
|
NOTE 6 |
RELATED
PARTY TRANSACTIONS
|
NOTE 7 |
STOCK
OPTIONS/STOCK BASED
COMPENSATION
|
· |
1,100,000
with an Exercise price of $1.05 and a term of 10 years
|
· |
No
options were exercised or forfeited during the period from inception
to
3-31-07
|
· |
No
options are exercisable as of 3-31-07
|
· |
The
company recorded compensation expense related to these options of
$38,575
for the period from inception through December 31, 2006 and $216,986
for
the three months ended March 31, 2007.
|
· |
The
remaining cost of the options will be recognized in 2007 as a compensation
expense of $624,439
|
NOTE 8 |
GOING
CONCERN
|
|
•
|
Raise
the necessary capital required to acquire, explore for and produce
oil,
conventional natural gas and unconventional natural
gas;
|
|
•
|
Assemble
a group of talented and experienced employees, partners and consultants
to
execute the strategic objectives;
|
|
•
|
Create
value by executing an ‘asset roll up’ business plan, subsequently
optimizing the value of each newly acquired property. Executing this
phase
of the strategy should in turn provide asset value for the acquisition
and
enhancement of additional properties, and create synergies among
these
assets, further improving their value.
|
|
•
|
Identify
and utilize industry partners to mitigate risk and leverage resources
and
acreage through joint ventures, farmout agreements and strategic
pooling
of acreage.
|
|
March
31, 2007
|
|||
(Unaudited)
|
||||
Current
Assets
|
$
|
986,676
|
||
|
|
|||
Current
Liabilities
|
$
|
33,339
|
||
|
|
|||
Working
Capital
|
$
|
953,337
|
31.1 |
302
Certification of Chief Executive Officer
|
31.2 |
302
Certification of Chief Financial Officer
|
32 |
906
Certification
|
Date: May 10, 2007 | By: |
/s/
Michael Reger
|
Michael
Reger, Chief Executive Officer and
Director
|
Date: May 10, 2007 | By: |
/s/
Ryan Gilbertson
|
Ryan
Gilbertson, Chief Financial Officer and
Director
|