U.S.
SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q/A





QUARTERLY
REPORT UNDER SECTION 13 OR 15(d)


OF THE
SECURITIES EXCHANGE ACT OF 1934





For the
quarterly period ended: November 30, 2008





File No.
000-52547





Royal Energy
Resources,
Inc.


(Name
of small business issuer in our charter)





Delaware
            
            11-3480036(State
      or other jurisdiction of
            
            (IRS
      Employerincorporation
      or organization)
            
            Identification
      No.)





256-260 Broadway, Suite 309,
Brooklyn, NY11211


(Address
of principal executive offices) (Zip Code)





Registrant's
telephone number:  800-620-3029





Indicate
by check mark whether the registrant: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
x
No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.  (Check one):





Large
accelerated filer  ̈   
Accelerated filer  ̈   
Non-accelerated filer  ̈   
Smaller reporting company x





(Do not
check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act) Yes  ̈
Nox





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: 19,114,731 shares of common stock outstanding
as of January 13, 2009.





EXPLANATORY
NOTE





We filed
our Quarterly Report on Form 10-Q for the quarter ended November 30, 2008 on
January 14, 2009 (the "Original Report").  We are filing this
Amendment No. 1 on Form 10-


Q/A (this
"Amendment") to:





·
            include
      our non-producing mineral interests in our full cost pool since we adopted
      the full cost accounting method (see Note 8 for related
      details);


·
            modify
      our disclosure concerning the commencement date of our current development
      stage in Note 1;


·
            modify
      our disclosure concerning our non-producing mineral interests in Note
      2;


·
            modify
      our disclosure concerning income taxes in Note
  4;


·
            updated
      disclosures in Item 4T; and


·
            Include
      currently dated Exhibits 31 and 32.





This
Amendment is being filed in response to comments we received from the staff of
the Division of Corporate Finance of The Securities and Exchange Commission (the
"SEC") in connection with the staff's review of the Original
Report.  We have made no attempt in this Amendment to modify or update
the disclosures presented in the Original Report other than as noted in the
previous paragraph.  Also, this Amendment does not reflect events
occurring after the filing of the Original Report.  Accordingly, this
Amendment should be read in conjunction with the Original Report and our other
filings with the SEC subsequent to the filing of the Original
Report.


2





The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial reporting
and pursuant to the rules and regulations of the Securities and Exchange
Commission ("Commission"). While these statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for fair
presentation of the results of the interim period, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the financial statements and footnotes thereto, contained in the Company’s Form
10-K dated August 31, 2008.





TABLE OF
CONTENTS




PagePART
      I – FINANCIAL INFORMATIONItem
      1:
                        Financial
      Statements
                        
                        4Item 2:
                        Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                        
                        17Item
      3:
                        Quantitative
      and Qualitative Disclosures About Market Risk
                        
                        19Item 4T:
                        Controls
      and Procedures
                        
                        19PART
      II - OTHER INFORMATION
                        
                        20Item 1:
                        Legal
      Proceedings
                        
                        20Item
      1A:
                        Risk
      Factors
                        
                        20Item 2:
                        Unregistered
      Sales of Equity Securities and Use of Proceeds
                        
                        20Item 3:
                        Defaults
      upon Senior Securities
                        
                        20Item 4:
                        Submission
      of Matters to a Vote of Security Holders
                        
                        20Item 5:
                        Other
      Information
                        
                        20Item 6:
                        Exhibits
                        
                        20





3




PART I - FINANCIAL INFORMATION





ITEM 1:  FINANCIAL STATEMENTS





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Condensed
Balance Sheet


November
30, 2008 (unaudited) and August 31, 2008





November
      30,
                              
                              
                              August
      31,2008
                              
                              
                              2008(Restated
                              
                              
                              (RestatedNote
      8)
                              
                              
                              Note
      8)AssetsCurrent
      assetsCash
      and cash equivalents
                              
                              $
                              234,932
                              
                              
                              $
                              343,739Total
      current assets
                              
                              
                              234,932
                              
                              
                              
                              343,739Oil
      and gas properties, on full cost method:Proved
      properties
                              
                              
                              82,213
                              
                              
                              
                              63,097Undeveloped
      leasehold not being amortized
                              
                              
                              14,051
                              
                              
                              
                              18,05196,264
                              
                              
                              
                              81,148Other
      assetsPrepaid
      drilling costs
                              
                              
                              29,561
                              
                              
                              
                              55,914Investment
      in uranium properties
                              
                              
                              3,379
                              
                              
                              
                              3,379Deposits
                              
                              
                              1,040
                              
                              
                              
                              440Total
      other assets
                              
                              
                              33,980
                              
                              
                              
                              59,733Total
      assets
                              
                              $
                              365,176
                              
                              
                              $
                              484,620Liabilities
      and Stockholders' EquityCurrent
      liabilitiesAccounts
      payable
                              
                              $
                              10,200
                              
                              
                              $
                              53,343Note
      payable
                              
                              
                              110,000
                              
                              
                              
                              140,000Total
      current liabilities
                              
                              
                              120,200
                              
                              
                              
                              193,343Commitments
      and contingenciesStockholders'
      equityPreferred
      stock: $0.00001 par value; authorized10,000,000
      shares; 100,000 at November 30, 2008 andat
      August 31, 2008, issued and outstanding, respectively
                              
                              
                              1
                              
                              
                              
                              1Common
      stock: $0.00001 par value; authorized 100,000 shares;18,287,731
      and 17,267,731 shares issued and outstanding atNovember
      30, 2008 and August 31, 2008, respectively
                              
                              
                              183
                              
                              
                              
                              173Additional
      paid-in capital
                              
                              
                              2,088,567
                              
                              
                              
                              1,724,978Deferred
      option and stock compensation
                              
                              
                              (559,715
                              )
                              
                              
                              (680,699
                              )Common
      stock subscription receivable
                              
                              
                              (71,940
                              )
                              
                              
                              (72,092
                              )Deficit
      accumulated during the development stage
                              
                              
                              (1,212,120
                              )
                              
                              
                              (681,084
                              )Total
      stockholders' equity
                              
                              
                              244,976
                              
                              
                              
                              291,277Total
      liabilities and stockholders' equity
                              
                              $
                              365,176
                              
                              
                              $
                              484,620





See
accompanying notes to condensed financial statements.


4





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Condensed
Statements of Operations


Three
Months Ended November 30, 2008 and 2007 and


from
inception (July 22, 2005) through November 30, 2008


(Unaudited)





Inception(July
      22, 2005)Three
      Months Ended
                                                    
                                                    
                                                    ThroughNovember
      30,
                                                    
                                                    
                                                    November
      30,2008
                                                    
                                                    
                                                    2007
                                                    
                                                    
                                                    2008(Restated
                                                    
                                                    
                                                    (Restated
                                                    
                                                    
                                                    (RestatedNote
      8)
                                                    
                                                    
                                                    Note
      8)
                                                    
                                                    
                                                    Note
      8)Sales
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -
                                                    
                                                    
                                                    $
                                                    -Oil
      and gas production
                                                    
                                                    
                                                    689
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    689Total
      revenues
                                                    
                                                    
                                                    689
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    689Cost
      of sales
                                                    
                                                    
                                                    1,643
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    1,785Gross
      profit
                                                    
                                                    
                                                    (954
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (1,096
                                                    )Costs
      and expenses:Non-cash
      compensation
                                                    
                                                    
                                                    480,984
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    819,531Other
      selling, general and administrative expense
                                                    
                                                    
                                                    28,920
                                                    
                                                    
                                                    
                                                    14,442
                                                    
                                                    
                                                    
                                                    323,955Total
      costs and expenses
                                                    
                                                    
                                                    509,904
                                                    
                                                    
                                                    
                                                    14,442
                                                    
                                                    
                                                    
                                                    1,143,486Loss
      from operations
                                                    
                                                    
                                                    (510,858
                                                    )
                                                    
                                                    
                                                    (14,442
                                                    )
                                                    
                                                    
                                                    (1,144,582
                                                    )Other
      expenses (income):Loss
      on disposition by rescission agreementof
      condominium
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    15,000Loss
      on comodities trading
                                                    
                                                    
                                                    18,023
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    18,023Interest
      income
                                                    
                                                    
                                                    (1,497
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (2,980
                                                    )Interest
      income - related party
                                                    
                                                    
                                                    (848
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (4,750
                                                    )Interest
      expense
                                                    
                                                    
                                                    4,500
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    13,25020,178
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    38,543Loss
      before income taxes
                                                    
                                                    
                                                    (531,036
                                                    )
                                                    
                                                    
                                                    (14,442
                                                    )
                                                    
                                                    
                                                    (1,183,125
                                                    )Provision
      for income taxes
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -Net
      loss
                                                    
                                                    $
                                                    (531,036
                                                    )
                                                    
                                                    $
                                                    (14,442
                                                    )
                                                    
                                                    $
                                                    (1,183,125
                                                    )Net
      loss per share, basic and diluted
                                                    
                                                    $
                                                    (0.03
                                                    )
                                                    
                                                    $
                                                    (0.00
                                                    )
                                                    
                                                    $
                                                    (0.10
                                                    )Weighted
      average shares outstanding,basic
      and diluted
                                                    
                                                    
                                                    18,241,797
                                                    
                                                    
                                                    
                                                    13,907,027
                                                    
                                                    
                                                    
                                                    11,333,002





See
accompanying notes to condensed financial statements.


5





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Condensed
Statements of Cash Flows


Three
Months Ended November 30, 2008 and 2007, and


the
period from inception (July 22, 2005) through May 31, 2008


(Unaudited)





From
      inceptionJuly
      22, 2005Three
      months ended
                                            
                                            
                                            throughNovember
      30,
                                            
                                            
                                            November
      30,2008
                                            
                                            
                                            2007
                                            
                                            
                                            2008(Restated
                                            
                                            
                                            (Restated
                                            
                                            
                                            (RestatedNote
      8)
                                            
                                            
                                            Note
      8)
                                            
                                            
                                            Note
      8)Cash
      flows from operating activitiesNet
      loss
                                            
                                            $
                                            (531,036
                                            )
                                            
                                            $
                                            (14,442
                                            )
                                            
                                            $
                                            (1,183,125
                                            )Adjustment
      to reconcile net loss to net cash usedin
      operating activities:Depreciation
      and depletion
                                            
                                            
                                            189
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            189Value
      of common shares issued for services
                                            
                                            
                                            480,984
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            819,531Loss
      on rescission of condominium purchase
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            15,000Interest
      accrued on stock subscription
                                            
                                            
                                            (848
                                            )
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (4,750
                                            )Change
      in other assets and liablities:Prepaid
      expenses and other assets
                                            
                                            
                                            804
                                            
                                            
                                            
                                            2,980
                                            
                                            
                                            
                                            (55,550
                                            )Accounts
      payable
                                            
                                            
                                            (37,500
                                            )
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (39,628
                                            )Net
      cash used in operations
                                            
                                            
                                            (87,407
                                            )
                                            
                                            
                                            (11,462
                                            )
                                            
                                            
                                            (448,333
                                            )Cash
      flows from investing activitiesInvestment
      in real estate
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (11,000
                                            )Oil
      and gas property expenditures
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (97,512
                                            )Proceeds
      from sales of undeveloped leasehold
                                            
                                            
                                            4,000
                                            
                                            
                                            
                                            5,626
                                            
                                            
                                            
                                            21,708Investment
      in uranium properties
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (4,723
                                            )Net
      cash used in investing activities
                                            
                                            
                                            4,000
                                            
                                            
                                            
                                            5,626
                                            
                                            
                                            
                                            (91,527
                                            )Cash
      flows from financing activitiesProceeds
      of stockholder loans
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            50Proceeds
      from subscription receivable
                                            
                                            
                                            1,000
                                            
                                            
                                            
                                            5,000
                                            
                                            
                                            
                                            14,400Loan
      proceeds (repayment)
                                            
                                            
                                            (30,000
                                            )
                                            
                                            
                                            -
                                            
                                            
                                            
                                            110,000Proceeds
      from sale of common stock
                                            
                                            
                                            3,600
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            649,342Proceeds
      from sale of preferred stock
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,000Net
      cash provided by financing activities
                                            
                                            
                                            (25,400
                                            )
                                            
                                            
                                            5,000
                                            
                                            
                                            
                                            774,792Net
      increase (decrease) in cash and cash equivalents
                                            
                                            
                                            (108,807
                                            )
                                            
                                            
                                            (836
                                            )
                                            
                                            
                                            234,932Cash and cash
      equivalents, beginning of period
                                            
                                            
                                            343,739
                                            
                                            
                                            
                                            7,611
                                            
                                            
                                            
                                            -Cash and cash
      equivalents, end of period
                                            
                                            $
                                            234,932
                                            
                                            
                                            $
                                            6,775
                                            
                                            
                                            $
                                            234,932Supplemental
      cash flow informationCash
      paid for interest
                                            
                                            $
                                            4,500
                                            
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            13,250Cash
      paid for income taxes
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -Non-cash
      investing and financing activities:Issuance
      of common stock for real estate
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            190,000Contribution
      of stockholder loan to capital
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            6,560Disposition
      of real estate per stock rescissionagreement
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -
                                            
                                            
                                            
                                            200,000




See
accompanying notes to condensed financial statements.


6





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)





NOTES TO
FINANCIAL STATEMENTS





November
30, 2008


(Unaudited)





1
            ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





Basis of presentation





These
financial statements include the accounts of Royal Energy Resources, Inc.
(“RER”) (formerly known as World Marketing, Inc. ("WMI"). RER is a development
stage enterprise within the meaning of Statement of Financial Accounting
Standards No. 7, ("SFAS No. 7") "Accounting and Reporting by Development Stage
Enterprises."





RER was
organized in 1999 and attempted to start a web-based marketing business for
health-care products.  The health-care products business had no
revenue and was discontinued in 2001 and the Company remained inactive until
July 22, 2005 when it commenced its real estate
business.  Accordingly, the current development stage has a
commencement date of July 22, 2005 and all prior losses of $28,995 have been
transferred to accumulated deficit.





The
condensed financial statements included in this report have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission for interim reporting and include all adjustments (consisting only of
normal recurring adjustments) that are, in the opinion of  management,
necessary for a fair presentation. These condensed financial statements have not
been audited.





Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to such rules and
regulations for interim reporting. The Company believes that the disclosures
contained herein are adequate to make the information presented not misleading.
However, these condensed financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's Annual
Report for the year ended August 31, 2008.





Organization
and nature of business





RER is a
Delaware corporation which was incorporated on March 22, 1999, under the name
Webmarketing, Inc. ("Webmarketing"). On July 7, 2004, the Company revived its
charter and changed its name from Webmarketing to World Marketing,
Inc.  In December 2007 the Company changed its name to Royal Energy
Resources, Inc.


7





Commencing
at the end of August 2006, the Company began acquiring oil and gas and uranium
leases and has since resold some of its leases and retained an overriding
royalty interest.  During the last half of fiscal 2008, the Company
invested in three oil & gas drilling prospects in Washington County,
Oklahoma, and expects to continue this activity in the future, as funds become
available.  Two wells began initial sales in November 2008 and a third
well is being re-completed.





On July
22, 2005, the Company began selling its common stock to obtain the funds
necessary to begin implementation of its new business plan. The primary
objective of the new business plan was to acquire, make necessary renovations
and resell both residential and commercial real estate. The Company expected to
acquire real estate using cash, mortgage financing or its common stock, or any
combination thereof, and anticipated that the majority of the properties
acquired would be in the New York City area. The Company rescinded the purchase
of the real estate property it had during the quarter ended May 31, 2008 and
currently is limiting any potential real estate acquisitions to Eastern European
countries, due to the current real estate environment in the United
States.





Webmarketing
attempted to establish a web-based marketing business for health care products
from its inception in 1999 until 2001. However, the Company did not establish
any revenues and discontinued these operations in 2001.





Going
Concern





The
Company has not established sources of revenues sufficient to fund the
development of business, projected operating expenses and commitments for fiscal
year 2009. The Company has accumulated a net loss of $1,212,120 through November
30, 2008, and incurred losses of $531,036 for the three months then
ended.





RER was
organized in 1999 and attempted to start a web-based marketing business for
health-care products.  The health-care products business had no
revenue and was discontinued in 2001 and the Company remained inactive until
July 22, 2005 when it commenced its real estate
business.  Accordingly, the current development stage has a
commencement date of July 22, 2005 and all prior losses of $28,995 have been
transferred to accumulated deficit.





In March
2006, the Company sold 650,000 shares of its common stock for $65,000 to provide
a portion of the cash required to purchase its first real estate
investment.   Subsequently, the Company continued to sell its
common stock to raise capital to continue operations.  In the previous
fiscal year, the Company revised its business plan, rescinded its real estate
purchase and began investing in energy leases and oil and gas drilling
prospects.  The Company borrowed $140,000 ($110,000 balance at
November 30, 2008) with a note payable and raised $413,172 from the sale of its
common stock during fiscal 2008.  However, the energy business has a
high degree of risk and there can be no assurance that the Company will be able
to obtain sufficient funding to develop the Company's current business
plan.


8





Cash
and cash equivalents





The
Company considers all cash on hand, cash in banks and all highly liquid debt
instruments purchased with a maturity of three months or less to be cash and
cash equivalents.





Revenue
recognition





Revenue
from the sale of oil and gas leases is recognized in accordance with the
provisions of the full cost method of accounting.





Oil and
gas production income will be recognized when the product is delivered to the
purchaser.  We will receive payment from one to three months after
delivery.  At the end of each month, we will estimate the amount of
production delivered to purchasers and the price we will
receive.  Variances between our estimated revenue and actual payment
are recorded in the month the payment is received; however, differences should
be insignificant.





Revenue
from real estate sales is recognized when the related property is subject to a
binding contract and all significant obligations have been
satisfied.





Stock
option plans





In
December 2004, the FASB issued SFAS 123 (revised 2004), "Share-Based Payment"
(SFAS 123(R)). Among other things, SFAS 123(R) requires expensing the fair value
of stock options, previously optional accounting. For transition, upon adoption
on September 1, 2005, SFAS 123(R) would require expensing any unvested options
and will also require changing the classification of certain tax benefits from
option deductions to financing rather than operating cash flows. As of August
31, 2006, the Company did not have any unvested options which would require
adjustment upon adoption of SFAS 123(R).  SFAS No. 123, "Accounting
for Stock Based compensation" (SFAS No. 123), required the Company to disclose
pro forma information regarding option grants made to its employees until
adoption of SFAS 123(R) discussed above. SFAS No. 123 specifies certain
valuation techniques that produce estimated compensation charges that would be
included in the required pro forma results. These amounts would not have been
reflected in the Company's statements of operations, because APB No. 25
specifies that no compensation charge arises when the price of the employees'
stock options equal the market value of the underlying stock at the grant
date.





Under
SFAS No. 123, the fair value of each option grant is estimated on the date of
grant using the Black-Scholes option pricing model.   The
Company, during the three months ended May 31, 2008 granted options to acquire
1,000,000 shares of its common stock that were fair valued under the Black
Scholes model in the amount of $328,975.  This amount is being
amortized over the twelve month option period.


9





Property
and equipment





The
Company follows the full cost method of accounting for oil and natural gas
operations.  Under this method all productive and nonproductive costs
incurred in connection with the acquisition, exploration and development of oil
and natural gas reserves are capitalized.  No gains or losses are
recognized upon the sale or other disposition of oil and natural gas properties
except in transactions that would significantly alter the relationship between
capitalized costs and proved reserves.  The costs of unevaluated oil
and natural gas properties are excluded from the amortizable base until the time
that either proven reserves are found or it has determined that such properties
are impaired.  The Company had no capitalized costs related to
unevaluated properties at November 30, 2008.  As properties are
evaluated, the related costs would be transferred to proven oil and natural gas
properties using full cost accounting.  All capitalized costs were
included in the amortization base as of November 30,
2008.  Amortization in the amount of $189 was recorded in the quarter
ended November 30, 2008, based on initial production.





Under the
full cost method the net book value of oil and natural gas properties, less
related deferred income taxes, may not exceed the estimated after-tax future net
revenues from proved oil and natural gas properties, discounted at 10% (the
“Ceiling Limitation”).  In arriving at estimated future net revenues,
estimated lease operating expenses, development costs, and certain
production-related taxes are deducted.  In calculating future net
revenues, prices and costs in effect at the time of the calculation are held
constant indefinitely, except for changes that are fixed and determinable by
existing contracts.  The net book value is compared to the ceiling
limitation on a quarterly and yearly basis.  The excess, if any, of
the net book value above the ceiling limitation is charged to expense in the
period in which it occurs and is not subsequently reinstated.  Reserve
estimates used in determining estimated future net revenues have been prepared
by the Company with the assistance of the operator of the
properties.





In
accordance with the impairment provisions of Statement of Financial Accounting
Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets,” the Company assesses the recoverability of the carrying
value of its non-oil and gas long-lived assets when events occur that indicate
an impairment in value may exist.  An impairment loss is indicated if
the sum of the expected undiscounted future net cash flows is less than the
carrying amount of the assets.  If this occurs, an impairment loss is
recognized for the amount by which the carrying amount of the assets exceeds the
estimated fair value of the asset.  No impairments have been recorded
as of November 30, 2008.





Depreciation
and amortization





All
capitalized costs of oil and natural gas properties and equipment, including the
estimated future costs to develop proved reserves, are amortized using the
unit-of-production method based on total proved
reserves.  Depreciation of other equipment is computed on the straight
line method over the estimated useful lives of the assets, which range from
three to twenty-five years.


10





Natural
gas sales and gas imbalances





The
Company follows the entitlement method of accounting for natural gas sales,
recognizing as revenues only its net interest share of all production
sold.  Any amount attributable to the sale of production in excess of
or less than the Company’s net interest is recorded as a gas balancing asset or
liability.  At November 30, 2008 and August 31, 2008, there were no
natural gas imbalances.





Investments
in real estate





Costs
associated with the acquisition, development and construction of real estate
properties are capitalized when incurred. The carrying value of the properties
will be reviewed, at least annually, for impairment. In the event the property
is leased, depreciation will be recorded based upon a thirty-year
life.  The Company rescinded the purchase of the real estate property
it had during the quarter ended May 31, 2008.





Oil
and natural gas reserve estimates





The
Company prepared its oil and natural gas reserves with the assistance of the
operator of the properties.  Proved reserves, estimated future net
revenues and the present value of our reserves are estimated based upon a
combination of historical data and estimates of future
activity.  Consistent with SEC requirements, we have based our present
value of proved reserves on spot prices on the date of the
estimate.  The reserve estimates are used in calculating depletion,
depreciation and amortization and in the assessment of the Company’s Ceiling
Limitation.  Significant assumptions are required in the valuation of
proved oil and natural gas reserves which, as described herein, may affect the
amount at which oil and natural gas properties are recorded.  Actual
results could differ materially from these estimates.





Deferred
income taxes





Deferred
income taxes are provided for temporary differences between financial and tax
reporting in accordance with the liability method under the provisions of SFAS
No. 109, "Accounting for Income Taxes." A valuation allowance is recorded to
reduce the carrying amounts of deferred tax assets unless management believes it
is more likely than not that such asset will be realized.





Earnings
(loss) per common share





Earnings
(loss) per common share are calculated under the provisions of SFAS No. 128,
"Earnings per Share," which established new standards for computing and
presenting earnings per share. SFAS No. 128 requires RER to report both basic
earnings per share, which is based on the weighted-average number of common
shares outstanding, and diluted earnings per share, which is based on the
weighted-average number of common shares outstanding plus all potential dilutive
shares outstanding. At November 30, 2008 and 2007, there were no common stock
equivalents. Accordingly, basic and diluted earnings per share are the same for
all periods presented.


11





Use
of estimates in the preparation of financial statements





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.





Credit
risk





The
Company had cash deposits in certain banks that at times exceeded the maximum
insured by the Federal Deposit Insurance Corporation.  The Company
monitors the financial condition of the banks and has experienced no losses on
these accounts.





Contingencies





Certain
conditions may exist as of the date financial statements are issued, which may
result in a loss to the Company, but which will only be resolved when one or
more future events occur or fail to occur.  Company management and its
legal counsel assess such contingencies related to legal proceeding that are
pending against the Company or unasserted claims that may result in such
proceedings, the Company’s legal counsel evaluates the perceived merits of any
legal proceedings or unasserted claims as well as the perceived merits of the
amount of relief sought or expected to be sought therein.  If the
assessment of a contingency indicates that it is probably that a liability has
been incurred and the amount of the liability can be estimated, then the
estimated liability would be accrued in the Company’s financial
statements.  If the assessment indicates that a potentially material
loss contingency is not probable but is reasonably possible, or if probable but
cannot be estimated, then the nature of the contingent liability, together with
an estimate of the range of possible loss if determinable would be
disclosed.





Asset
retirement obligations





SFAS No.
143, “Accounting for Asset Retirement Obligations,” addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs and amends
FASB Statement No. 19, “Financial Accounting and Reporting by Oil and Gas
Producing Companies.”  SFAS No. 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made, and
that the associated retirement costs be capitalized as part of the carrying
amount of the long-lived asset.  The Company determines its asset
retirement obligation by calculating the present value of the estimated cash
flows related to the liability.  Periodic accretion of the discount of
the estimated liability would be recorded in the statement of
operations.  At November 30, 2008 and August 31, 2008, the Company has
estimated that its share of the salvage value of lease equipment would exceed
its share of the cost of plugging and abandoning its producing
properties.


12




Recent
accounting pronouncements





Recent
accounting pronouncements issued by the FASB (including its Emerging Issues Task
Force), the AICPA, and the SEC did not, or are not, believed by management to
have a material impact on the Company's present or future financial
statements.





Fair
value determination





Financial
instruments consist of cash, marketable securities, promissory notes receivable,
accounts payable, accrued expenses and short-term borrowings. The carrying
amount of these financial instruments approximates fair value due to their
short-term nature or the current rates at which the Company could borrow funds
with similar remaining maturities.





2
            INVESTMENT
      IN ENERGY PROPERTIES





Oil and
gas property costs using the full cost method are as follows at November 30,
2008 and August 31, 2008:





November
      30,
                      
                      
                      August
      31,2008
                      
                      
                      2008Leasehold
      cost
                      
                      $
                      4,933
                      
                      
                      $
                      4,933Intangible
      development cost
                      
                      
                      49,416
                      
                      
                      
                      40,932Lease
      equipment
                      
                      
                      28,053
                      
                      
                      
                      17,232Total
                      
                      
                      82,402
                      
                      
                      
                      63,097Accumulated
      depreciation and depletion
                      
                      
                      (189
                      )
                      
                      
                      -Total
      proved properties
                      
                      
                      82,213
                      
                      
                      
                      63,097Undeveloped
      leasehold not being amortized
                      
                      
                      14,051
                      
                      
                      
                      18,051$
                      96,264
                      
                      
                      $
                      81,148





LEASES





The
Company has been the successful bidder in United States Government auctions to
purchase certain oil and gas lease rights.  The oil and gas leases
currently comprise approximately 12,000 acres in Crook, Banner, Weston, Goshen,
Niobrara, Converse, Campbell, Freemont, Laramie, Sublette and Platt Counties,
Wyoming as of November 30, 2008 and August 31, 2008, respectively.  In
addition, the Company holds the lease for uranium rights on approximately 3,500
acres in Wyoming as of November 30, 2008 and August 31, 2008,
respectively.





The
Company is negotiating with energy companies to develop the potential resources
that may be contained in these properties.  The Company has entered
into agreements and then sold, by assignment, the rights, title and interest in
certain of these leases and retained an over-riding royalty
interest.  Revenue from these transactions is recorded when the
transaction is completed at which time the cost of the related leases is
included in cost of sales.


13


OIL
AND GAS PRODUCING PROPERTIES





During
fiscal 2008, the Company prepaid $119,153 as estimated drilling and completion
costs for a 25% working interest in three wells in Washington County,
Oklahoma.  Two of the wells began initial sales in November 2008 and
the third well is being re-completed.





Prepaid
drilling cost includes a balance of $29,561 and $55,914 in prepaid costs for the
initial three wells in Washington County, Oklahoma as of November 30, 2008 and
August 31, 2008, respectively.





3
            NOTE
      PAYABLE





The
Company has a loan with an individual in the original amount of $140,000, with
interest payable monthly at 15% and which is due July 29, 2009.  The
loan has a balance of $110,000 at November 30, 2008.





4
            INCOME
      TAXES





RER has
not recorded a deferred tax benefit or expense for all prior periods through
November 30, 2008, as all net deferred benefits have a full valuation
allowance.





Actual
income tax expense applicable to earnings before discontinued operations and
income taxes is reconciled with the “normally expected” Federal income tax for
the three months ended November 30, 2008 and 2007 as follows:





2008
                  
                  
                  2007"Normally
      expected" income tax benefit
                  
                  $
                  180,600
                  
                  
                  $
                  4,900State
      income taxes net of federal benefit
                  
                  
                  21,200
                  
                  
                  
                  600Valuation
      allowance
                  
                  
                  (201,800
                  )
                  
                  
                  (5,500
                  )Actual
      income tax expense
                  
                  $
                  -
                  
                  
                  $
                  -





RER has
available unused net operating loss carryforwards of approximately $1,233,000
which will expire in various periods from 2019 to 2028, some of which may be
limited as to the amount available on an annual basis.





5
            STOCKHOLDERS’
      EQUITY





In
November 2007, the Company amended its charter to authorize issuance of up to
100,000,000 shares of common stock with a par value of $.00001.  At
November 30, 2008 and August 31, 2008, 18,287,731 and 17,267,731 shares were
issued and outstanding, respectively.


14


At this
same time, the Company was authorized to issue 10,000,000 shares of its $0.00001
preferred stock.  In December 2007 the Company issued 100,000 shares
of its preferred stock for $1,000.





During
fiscal 2008 and September 2008, the Company entered into various consulting and
financial services agreements as well as a new loan agreement.  Included in
these agreements was the payment of $85,000 in cash, of which $74,800 has been
paid.  In addition, an aggregate of 3,965,000 shares of the Company’s
common stock were issued along with the granting of options to purchase
1,000,000 shares of the Company’s common stock.  The agreements cover
periods ranging from 6 months to 16.5 months and the related fair value of the
shares and options as well as the cash component, are being amortized over the
life of the agreements.  The Company has determined the total cost of the
agreements to approximate $1,422,775.  As of November 30, 2008, the
un-amortized portion of these agreements amounts to approximately $559,715 and
is included as a reduction of stockholders equity in the accompanying financial
statements.





6
            RELATED
      PARTY TRANSACTIONS





Stock subscription receivable
- On August 16, 2007, the President and Chief Executive Officer of the Company
purchased 4,100,000 shares of the Company’s $0.00001 par value common shares for
$0.02 per share.  The Company received a cash payment of $410 and a
note receivable in the amount of $81,590 for this purchase.  The note
bears interest at 5% per annum and payments of principal and interest are due on
August 15, 2012.  Payments of $14,400 have been received by the
Company and at November 30, 2008 the Company is owed $71,940, including accrued
interest.





Equity contribution - The
President and Chief Executive Officer of the Company made loans and advances to
the Company since its inception. During fiscal 2005, the total amount of $6,560
was contributed to the capital of the Company.





7
            CONTINGENCIES





The
Company has a lease for its corporate office which commences September 1, 2008,
for a period of two years at a monthly rental of $600.





8
            RESTATEMENT





We
adopted the full cost method of accounting for our oil and gas exploration and
development activities effective in 2007 when we began oil and gas
operations.  Prior to that time we had been the successful bidder in
United States Government auctions to purchase certain oil and gas lease
rights.  In our original report for the quarter ended November 30,
2008, we included sales and cost of sales in the statement of operations that,
under the full cost method, should have been recorded as a reduction of the
related cost included in the full cost pool.  The carryover effect
from the periods ended August 31, 2008 is a reduction in undeveloped leasehold
not being amortized of $15,821 and a corresponding increase to the deficit
accumulated during the development stage of $15,821.  The following
summarizes the effect of the adjustment:


15





As OriginallyReported
                          
                          
                          Adjustment
                          
                          
                          As RestatedThree months ended November 30,
      2008Balance sheetInvestment
      in oil and gas properties, net
                          
                          $
                          82,213
                          
                          
                          $
                          (82,213
                          )
                          
                          $
                          -Investment
      in oil and gas leases
                          
                          
                          33,767
                          
                          
                          
                          (33,767
                          )
                          
                          
                          -Oil
      and gas properties, on the full cost method:Proved
      properties
                          
                          
                          -
                          
                          
                          
                          82,213
                          
                          
                          
                          82,213Undeveloped
      leasehold not being amortized
                          
                          
                          -
                          
                          
                          
                          33,767
                          
                          
                          
                          14,051(3,895
                          )(15,821
                          )Deficit
      accumulated during development stage
                          
                          
                          (1,192,404
                          )
                          
                          
                          (15,821
                          )
                          
                          
                          (1,212,120
                          )(3,895
                          )Statements of operationsSales
      of oil and gas leases
                          
                          
                          4,000
                          
                          
                          
                          (4,000
                          )
                          
                          
                          -Cost
      of sales
                          
                          
                          1,748
                          
                          
                          
                          (105
                          )
                          
                          
                          1,643Net
      loss
                          
                          
                          (527,141
                          )
                          
                          
                          (3,895
                          )
                          
                          
                          (531,036
                          )Net
      loss per share, basic and diluted
                          
                          $
                          (0.03
                          )
                          
                          $
                          -
                          
                          
                          $
                          (0.03
                          )Statements of cash flowsNet
      loss
                          
                          
                          (527,141
                          )
                          
                          
                          (3,895
                          )
                          
                          
                          (531,036
                          )Investment
      in oil and gas leases
                          
                          
                          105
                          
                          
                          
                          (105
                          )
                          
                          
                          -Proceeds
      from sale of undeveloped leasehold
                          
                          
                          -
                          
                          
                          
                          4,000
                          
                          
                          
                          4,000





As OriginallyReported
                        
                        
                        Adjustment
                        
                        
                        As RestatedThree months ended November 30,
      2007Statements of operationsSales
      of oil and gas leases
                        
                        
                        5,626
                        
                        
                        
                        (5,626
                        )
                        
                        
                        -Cost
      of sales
                        
                        
                        449
                        
                        
                        
                        (449
                        )
                        
                        
                        -Net
      loss
                        
                        
                        (9,265
                        )
                        
                        
                        (5,177
                        )
                        
                        
                        (14,442
                        )Net
      loss per share, basic and diluted
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Statements of cash flowsNet
      loss
                        
                        
                        (9,265
                        )
                        
                        
                        (5,177
                        )
                        
                        
                        (14,442
                        )Investment
      in oil and gas leases
                        
                        
                        3,429
                        
                        
                        
                        (3,429
                        )
                        
                        
                        -Proceeds
      from sale of undeveloped leasehold
                        
                        
                        -
                        
                        
                        
                        5,626
                        
                        
                        
                        5,626Prepaid
      expenses and other assets
                        
                        
                        -
                        
                        
                        
                        2,980
                        
                        
                        
                        2,980




16


ITEM
2:             MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





This
statement contains forward-looking statements within the meaning of the
Securities Act.  Discussions containing such forward-looking
statements may be found throughout this statement.  Actual events or
results may differ materially from those discussed in the forward-looking
statements as a result of various factors, including the matters set forth in
this statement.





At the
present time we have only nominal overhead costs.  Our officers do not
receive any payroll and our administrative assistance is now being provided on a
reimbursement basis.  This situation will remain constant until such
time as we have sufficient capital to afford to pay salaries.





We
completed the acquisition of our first property on August 25, 2005; a
condominium located in Brooklyn, New York, in exchange for $25,000 in cash and
1,900,000 shares of our common stock which was valued at $190,000.  In
March 2008, we entered into a rescission agreement, the result of which was the
cancellation of 1,900,000 common shares in exchange for the condominium
property.  At the time of the exchange, the condominium was appraised
at a fair market value of $200,000 and we recorded a loss of $15,000 on the
transaction.  As a result of the current real estate environment in
the United States, we are currently limiting any potential acquisitions to
Eastern European countries.





The
Company was the successful bidder in United States Government auctions to
purchase certain oil and gas lease rights.  The oil and gas leases
currently represent approximately 12,000 acres of property located in Crook,
Banner, Weston, Goshen, Niobrara, Converse, Campbell, Freemont, Laramie,
Sublette and Platt County Wyoming.  The Company also holds leases for
the uranium rights on approximately 3,500 acres in Wyoming.  The
Company is negotiating with energy companies to develop the potential resources
that may be contained in these properties.  The Company has completed
several transactions wherein the Company sold the lease rights and retained a
royalty interest.  No exploration activities have yet taken
place.





During
fiscal 2008, we prepaid $119,153 as estimated drilling and completion costs for
a 25% working interest in three wells in Washington County,
Oklahoma.  Two of the wells began initial sales in November 2008 and
the third well is in process of being re-completed.  We have plans to
continue to participate in additional drilling prospects as funding becomes
available.





We have
had only nominal revenues since inception.  Our auditors have
expressed substantial doubt about our ability to continue as a going
concern.  Our current assets at November 30, 2008, consist of our cash
balance of $234,932.  Our ability to continue as a going concern is
contingent upon our ability to raise funds through private placements of our
common stock and obtaining loans until we establish sufficient business to
support our operating costs.





We
anticipate requiring substantial capital for investments in energy leases and
oil and gas drilling prospects and our operating costs have increased for
consultants finding prospects.  There can be no assurance that we will
be able to continue to find sufficient funding to support our current business
plan.


17


COMPARISON
OF THREE MONTHS ENDED NOVEMBER 30, 2008 AND 2007





During
the three-month period ended November 30, 2008 we had total revenues of $689 as
compared to none in the comparable 2007 period.  During the 2008
period, our revenues were from our initial oil production.


Non-cash
compensation amounted to $480,984 in 2008 as compared to none in
2007.  Non-cash compensation is from the amortization of the
calculated value of common shares issued for consulting
agreements.  (Note 5).





During
the three-month period ended November 30, 2008, selling, general and
administrative expenses amounted to $28,920 as compared to $14,442 in the year
earlier period.  Increases are consistent with the increased
activity.





During
the three-month period ended November 30, 2008, we recognized a loss of $18,023
from commodities trading, recognized interest expense of $4,500 and recorded
interest income in the amount of $2,345 ($848 from a related
party).





OFF-BALANCE
SHEET ARRANGEMENTS





None.


18


ITEM
      3:
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
applicable.





ITEM
      4T:
            CONTROLS
      AND PROCEDURES




1    (a)
Evaluation of Disclosure Controls and Procedures





The
Company’s Chief Executive Officer has reviewed and evaluated the effectiveness
of the Company’s disclosure controls and procedures (as defined in Rules
240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of
1934) as of November 30, 2008.  Based on that review and evaluation,
which included inquiries made to certain other employees of the Company, the CEO
concluded that the Company’s current disclosure controls and procedures, as
designed and implemented, are not effective, primarily due to a lack of
segregation of duties, in ensuring that information relating to the Company
required to be disclosed in the reports the Company files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission’s
rules and forms, including insuring that such information is accumulated and
communicated to the Company’s management, including the CEO, as appropriate to
allow timely decisions regarding required disclosure.





(b)  Changes in
Internal Controls





There
have been no changes in internal controls over financial reporting or in other
factors that could significantly affect these controls that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting during the quarter ended November 30, 2008, including
any corrective actions with regard to significant deficiencies and material
weaknesses.


19


PART
II - OTHER INFORMATION





ITEM
      1:
            LEGAL
      PROCEEDINGS





None





ITEM
      1A:
            RISK
      FACTORS





Not
applicable.





ITEM
      2:
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS





The
Company sold 20,000 shares of its $0.00001 par value common stock during the
three months ended November 30, 2008, for $3,600 in cash.  In
addition, the Company issued 1,000,000 shares of its common stock, valued at
$360,000, for a consulting services agreement.





The
shares issued were sold pursuant to an exemption from registration under Section
4(2) promulgated under the Securities Act of 1933, as amended.





ITEM
      3:
            DEFAULTS
      UPON SENIOR SECURITIES.





None





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





None





ITEM
      5:
            OTHER
      INFORMATION.





None





ITEM
      6:
            EXHIBITS





Exhibit
      31
                  
                  Certification
      pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act
      of 2002Exhibit
      32
                  
                  Certification
      pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act
      of 2002


20


SIGNATURE





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




ROYAL
      ENERGY RESOURCES, INC.Date:  December
      7, 2009By:  /s/
                Jacob RothPresident,
      Chief Executive Officer andChief
      Financial Officer




21