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

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|                                 |                                                                                  | Page   |
|--------------------------------------|---------------------------------------------------------------------------------------|--------|
|                                 |                                                                                  |   |
| PART I – FINANCIAL INFORMATION | 3                                                                                |
|                                 |                                                                                  |   |
| Item 1:                              | Condensed Unaudited Consolidated Financial Statements                                 | 3      |
|                                 |                                                                                  |   |
| Item 2:                              | Management's Discussion and Analysis of Financial Condition and Results of Operations | 24     |
|                                 |                                                                                  |   |
| Item 3:                              | Quantitative and Qualitative Disclosures About Market Risk                            | 26     |
|                                 |                                                                                  |   |
| Item 4T:                             | Controls and Procedures                                                               | 26     |
|                                 |                                                                                  |   |
| PART II - OTHER INFORMATION          | 27                                                                                    |
|                                 |                                                                                  |   |
| Item 1:                              | Legal Proceedings                                                                     | 27     |
|                                 |                                                                                  |   |
| Item 1A:                             | Risk Factors                                                                          | 27     |
|                                 |                                                                                  |   |
| Item 2:                              | Unregistered Sales of Equity Securities and Use of Proceeds                           | 27     |
|                                 |                                                                                  |   |
| Item 3:                              | Defaults upon Senior Securities                                                       | 27     |
|                                 |                                                                                  |   |
| Item 4:                              | Submission of Matters to a Vote of Security Holders                                   | 27     |
|                                 |                                                                                  |   |
| Item 5:                              | Other Information                                                                     | 27     |
|                                 |                                                                                  |   |
| Item 6:                              | Exhibits                                                                              | 27     |

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|                                                                                                                                                                       |   | May 31, |       |   | August 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|--------|-----------------|--------|
|                                                                                                                                                                       |   | 2011         |       |   | 2010            |   |
| Assets                                                                                                                                                                     |   |         |       |   |            |   |
| Current assets                                                                                                                                                             |   |         |       |   |            |   |
| Cash and cash equivalents                                                                                                                                                  |   | $            | 43         |   |            | $      | 311 |   |
| Accounts receivable                                                                                                                                                        |   |         | 17,619     |   |            |   | 10,617 |   |
| Prepaid expenses                                                                                                                                                           |   |         | -          |   |            |   | 20,571 |   |
| Total current assets                                                                                                                                                       |   |         | 17,662     |   |            |   | 31,499 |   |
| Oil and gas properties, on full cost method:                                                                                                                          |   |         |       |   |            |   |   |   |
| Unproved properties not being amortized                                                                                                                                    |   |         | 6,395      |   |            |   | 6,350 |   |
| Other assets                                                                                                                                                               |   |         |       |   |            |   |   |   |
| Prepaid drilling costs                                                                                                                                                     |   |         | -          |   |            |   | 28,583 |   |
| Investment in rare earth and precious metals properties                                                                                                                    |   |         | 3,890      |   |            |   | - |   |
| Investment in uranium properties                                                                                                                                           |   |         | 4,329      |   |            |   | 4,329 |   |
| Total other assets                                                                                                                                                         |   |         | 8,219      |   |            |   | 32,912 |   |
| Total assets                                                                                                                                                               |   | $            | 32,276     |   |            | $      | 70,761 |   |
| Liabilities and Stockholders' Equity (Deficit)                                                                                                                             |   |         |       |   |            |   |   |   |
| Current liabilities                                                                                                                                                        |   |         |       |   |            |   |   |   |
| Accounts payable                                                                                                                                                           |   | $            | 62,513     |   |            | $      | 73,226 |   |
| Accrued expenses                                                                                                                                                           |   |         | 2,630      |   |            |   | 243 |   |
| Debenture payable                                                                                                                                                          |   |         | 14,250     |   |            |   | - |   |
| Convertible note payable                                                                                                                                                   |   |         | 80,000     |   |            |   | 86,000 |   |
| Total current liabilities                                                                                                                                                  |   |         | 159,393    |   |            |   | 159,469 |   |
|                                                                                                                                                                       |   |         |       |   |            |   |   |   |
| Commitments and contingencies                                                                                                                                              |   |         |       |   |            |   |   |   |
|                                                                                                                                                                       |   |         |       |   |            |   |   |   |
| Stockholders' equity (deficit)                                                                                                                                             |   |         |       |   |            |   |   |   |
| Preferred stock: $0.00001 par value; authorized 10,000,000 shares; 100,000 shares issued and outstanding at May 31, 2011 and at August 31, 2010,  respectively   |   |         | 1          |   |            |   | 1 |   |
| Common stock: $0.00001 par value; authorized 100,000,000 shares; 85,763,731 and 39,713,731 shares issued and outstanding at May 31, 2011 and August 31, 2010, respectively |   |         | 858        |   |            |   | 397 |   |
| Additional paid-in capital                                                                                                                                                 |   |         | 3,499,596  |   |            |   | 3,267,893 |   |
| Deferred option and stock compensation                                                                                                                                     |   |         | (104,000   | )      |            |   | (28,809 | ) |
| Common stock subscription receivable                                                                                                                                       |   |         | (429,769   | )      |            |   | (422,340 | ) |
| Deficit accumulated during the development stage                                                                                                                           |   |         | (3,093,803 | )      |            |   | (2,905,850 | ) |
| Total stockholders' equity (deficit)                                                                                                                                       |   |         | (127,117   | )      |            |   | (88,708 | ) |
| Total liabilities and stockholders' equity (deficit)                                                                                                                       |   | $            | 32,276     |   |            | $      | 70,761 |   |

----

|                                                   |   | Three Months Ended |       |
|--------------------------------------------------------|--------|------------------------------|------------|
|                                                   |   | May 31,                 |       |
|                                                   |   | 2011                         |       |   | 2010 |   |
|                                                   |   |                         |       |   |   |   |
| Oil and gas production                                 |   | $                            | -          |   |   | $ | 3,221 |   |
| Total revenues                                         |   |                         | -          |   |   |   | 3,221 |   |
| Costs and expenses:                                    |   |                         |       |   |   |   |   |   |
| Lease operating expense                                |   |                         | -          |   |   |   | 2,739 |   |
| Production taxes                                       |   |                         | -          |   |   |   | 232 |   |
| Depreciation, depletion and amortization               |   |                         | -          |   |   |   | 336 |   |
| Asset impairment                                       |   |                         | -          |   |   |   | 18,676 |   |
| Non-cash compensation                                  |   |                         | 69,666     |   |   |   | 24,628 |   |
| Other selling, general and administrative expense      |   |                         | 14,345     |   |   |   | 8,421 |   |
| Total costs and expenses                               |   |                         | 84,011     |   |   |   | 55,032 |   |
| Loss from operations                                   |   |                         | (84,011    | ) |   |   | (51,811 | ) |
| Other expenses (income):                               |   |                         |       |   |   |   |   |   |
| Interest income - related party                        |   |                         | (1,220     | ) |   |   | (1,449 | ) |
| Interest expense                                       |   |                         | 5,130      |   |   |   | 18,755 |   |
|                                                   |   |                         | 3,910      |   |   |   | 17,306 |   |
| Loss before income taxes                               |   |                         | (87,921    | ) |   |   | (69,117 | ) |
| Provision for income taxes                             |   |                         | -          |   |   |   | - |   |
| Net loss                                               |   | $                            | (87,921    | ) |   | $ | (69,117 | ) |
|                                                   |   |                         |       |   |   |   |   |   |
| Net loss per share, basic and diluted                  |   | $                            | (0.00      | ) |   | $ | (0.00 | ) |
|                                                   |   |                         |       |   |   |   |   |   |
| Weighted average shares outstanding, basic and diluted |   |                         | 87,326,231 |   |   |   | 24,193,079 |   |

----

|                                                       |   |                        |       |   |         |   |       | Inception                 |   |
|------------------------------------------------------------|--------|-----------------------------|------------|--------|--------------|--------|------------|---------------------------|--------|
|                                                       |   |                        |       |   |         |   |       | (July 22, 2005) |   |
|                                                       |   | Nine Months Ended |       |   | Through      |   |
|                                                       |   | May 31.                |       |   | May 31, |   |
|                                                       |   | 2011                        |       |   | 2010         |   |       | 2011                      |   |
|                                                       |   |                        |       |   |         |   |       |                      |   |
| Oil and gas production                                     |   | $                           | -          |   |         | $      | 6,372      |                      |   | $ | 12,704 |   |
| Total revenues                                             |   |                        | -          |   |         |   | 6,372      |                      |   |   | 12,704 |   |
| Costs and expenses:                                        |   |                        |       |   |         |   |       |                      |   |   |   |   |
| Lease operating expense                                    |   |                        | 504        |   |         |   | 6,000      |                      |   |   | 14,494 |   |
| Production taxes                                           |   |                        | -          |   |         |   | 459        |                      |   |   | 913 |   |
| Depreciation, depletion and amortization                   |   |                        | -          |   |         |   | 713        |                      |   |   | 2,148 |   |
| Asset impairment                                           |   |                        | -          |   |         |   | 18,676     |                      |   |   | 75,164 |   |
| Non-cash compensation                                      |   |                        | 123,309    |   |         |   | 298,262    |                      |   |   | 2,227,215 |   |
| Other selling, general and administrative expense          |   |                        | 65,284     |   |         |   | 78,705     |                      |   |   | 670,518 |   |
| Total costs and expenses                                   |   |                        | 189,097    |   |         |   | 402,815    |                      |   |   | 2,990,452 |   |
| Loss from operations                                       |   |                        | (189,097   | )      |         |   | (396,443   | )                         |   |   | (2,977,748 | ) |
| Other expenses (income):                                   |   |                        |       |   |         |   |       |                      |   |   |   |   |
| Loss on disposition by rescission agreement of condominium |   |                        | -          |   |         |   | -          |                      |   |   | 15,000 |   |
| Loss on comodities trading                                 |   |                        | -          |   |         |   | 719        |                      |   |   | 36,557 |   |
| Interest income                                            |   |                        | -          |   |         |   | -          |                      |   |   | (4,414 | ) |
| Interest income - related party                            |   |                        | (7,028     | )      |         |   | (4,197     | )                         |   |   | (21,085 | ) |
| Interest expense                                           |   |                        | 5,884      |   |         |   | 25,505     |                      |   |   | 61,002 |   |
|                                                       |   |                        | (1,144     | )      |         |   | 22,027     |                      |   |   | 87,060 |   |
| Loss before income taxes                                   |   |                        | (187,953   | )      |         |   | (418,470   | )                         |   |   | (3,064,808 | ) |
| Provision for income taxes                                 |   |                        | -          |   |         |   | -          |                      |   |   | - |   |
| Net loss                                                   |   | $                           | (187,953   | )      |         | $      | (418,470   | )                         |   | $ | (3,064,808 | ) |
|                                                       |   |                        |       |   |         |   |       |                      |   |   |   |   |
| Net loss per share, basic and diluted                      |   | $                           | (0.00      | )      |         | $      | (0.02      | )                         |   |   |   |   |
|                                                       |   |                        |       |   |         |   |       |                      |   |   |   |   |
| Weighted average shares outstanding, basic and diluted     |   |                        | 71,997,064 |   |         |   | 23,372,064 |                      |   |   |   |   |

----

|                                           |   |                 |    |   |              |   |   |    |   |   |       |   |   | Additional |   |
|------------------------------------------------|--------|----------------------|---------|--------|-------------------|--------|--------|---------|--------|--------|------------|--------|--------|------------|--------|
|                                           |   | Preferred stock |    |   | Common stock |   |   | Paid-in |   |
|                                           |   | Shares               |    |   | Amount            |   |   | Shares  |   |   | Amount     |   |   | Capital    |   |
|                                           |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |
| Inception, July 22, 2005                       |   |                 | -       |   |              |   | -      |    |   |   | 5,930,300  |   |   |       | 59     |   |   |   | 22,426 |   |
| Sale of common stock for cash                  |   |                 | -       |   |              |   | -      |    |   |   | 320,000    |   |   |       | 3      |   |   |   | 31,997 |   |
| Common stock issued for real estate investment |   |                 | -       |   |              |   | -      |    |   |   | 1,900,000  |   |   |       | 19     |   |   |   | 189,981 |   |
| Contribution to capital                        |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | 6,560 |   |
| Net loss                                       |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Balance August 31, 2005                        |   |                 | -       |   |              |   | -      |    |   |   | 8,150,300  |   |   |       | 81     |   |   |   | 250,964 |   |
| Sale of common stock for cash                  |   |                 | -       |   |              |   | -      |    |   |   | 1,086,667  |   |   |       | 12     |   |   |   | 120,488 |   |
| Net loss                                       |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Balance, August 31, 2006                       |   |                 | -       |   |              |   | -      |    |   |   | 9,236,967  |   |   |       | 93     |   |   |   | 371,452 |   |
| Sale of common stock                           |   |                 | -       |   |              |   | -      |    |   |   | 4,670,060  |   |   |       | 46     |   |   |   | 161,614 |   |
| Net loss                                       |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Balance, August 31, 2007                       |   |                 | -       |   |              |   | -      |    |   |   | 13,907,027 |   |   |       | 139    |   |   |   | 533,066 |   |
| Sale of preferred stock                        |   |                 | 100,000 |   |              |   | 1      |    |   |   | -          |   |   |       | -      |   |   |   | 999 |   |
| Sale of common stock                           |   |                 | -       |   |              |   | -      |    |   |   | 2,295,704  |   |   |       | 23     |   |   |   | 413,149 |   |
| Common stock issued for consulting contracts   |   |                 | -       |   |              |   | -      |    |   |   | 2,965,000  |   |   |       | 30     |   |   |   | 977,745 |   |
| Cash portion of consulting contracts           |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Rescission of real estate purchase             |   |                 | -       |   |              |   | -      |    |   |   | (1,900,000 | )      |   |       | (19    | ) |   |   | (199,981 | ) |
| Amortization of deferred expenses:             |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Non-cash portion                               |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Cash portion                                   |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Stock subscription receivable:                 |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Payments received                              |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Interest accrued                               |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Net loss                                       |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Balance, August 31, 2008                       |   |                 | 100,000 |   |              |   | 1      |    |   |   | 17,267,731 |   |   |       | 173    |   |   |   | 1,724,978 |   |
| Sale of common stock for cash                  |   |                 | -       |   |              |   | -      |    |   |   | 20,000     |   |   |       | -      |   |   |   | 3,600 |   |
| Common stock issued for consulting contracts   |   |                 | -       |   |              |   | -      |    |   |   | 3,551,000  |   |   |       | 36     |   |   |   | 887,403 |   |
| Cash portion of consulting contracts           |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Amortization of deferred expenses:             |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Non-cash portion                               |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Cash portion                                   |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Stock subscription receivable:            |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Sold                                           |   |                 | -       |   |              |   | -      |    |   |   | 1,550,000  |   |   |       | 15     |   |   |   | 263,485 |   |
| Payments received                              |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Interest accrued                               |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Net loss                                       |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Balance, August 31, 2009                       |   |                 | 100,000 |   |              | $      | 1      |    |   |   | 22,388,731 |   |   | $          | 224    |   |   | $ | 2,879,466 |   |
|                                           |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   | (Continued) |   |

----

|                                           |   |         |     |   |     |   |      |        |   |   | Deficit       |   |   |   |       |
|------------------------------------------------|--------|--------------|----------|--------|----------|--------|-----------|-------------|--------|--------|---------------|--------|--------|--------|------------|
|                                           |   |         |     |   |     |   |      |        |   |   | Accumulated   |   |   |   |       |
|                                           |   |         |     |   |     |   |      |        |   |   | During        |   |   |   |       |
|                                           |   | Subscription |     |   | Deferred |   |      | Accumulated |   |   | Development   |   |   |   |       |
|                                           |   | Receivable   |     |   | Expenses |   |      | Deficit     |   |   | Stage         |   |   | Total  |       |
|                                           |   |         |     |   |     |   |      |        |   |   | (Restated     |   |   |   |       |
|                                           |   |         |     |   |     |   |      |        |   |   | Note 11) |   |   |   |       |
|                                           |   |         |     |   |     |   |      |        |   |   |          |   |   |   |       |
| Inception, July 22, 2005                       |   |         | -        |   |     |   | -         |        |   |   | (28,995       | )      |   |   | -          |   |   |   | (6,510 | ) |
| Sale of common stock for cash                  |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 32,000 |   |
| Common stock issued for real estate investment |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 190,000 |   |
| Contribution to capital                        |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 6,560 |   |
| Net loss                                       |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | (7,739     | ) |   |   | (7,739 | ) |
| Balance August 31, 2005                        |   |         | -        |   |     |   | -         |        |   |   | (28,995       | )      |   |   | (7,739     | ) |   |   | 214,311 |   |
| Sale of common stock for cash                  |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 120,500 |   |
| Net loss                                       |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | (80,825    | ) |   |   | (80,825 | ) |
| Balance, August 31, 2006                       |   |         | -        |   |     |   | -         |        |   |   | (28,995       | )      |   |   | (88,564    | ) |   |   | 253,986 |   |
| Sale of common stock                           |   |         | (81,590  | )      |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 80,070 |   |
| Net loss                                       |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | (95,813    | ) |   |   | (95,813 | ) |
| Balance, August 31, 2007                       |   |         | (81,590  | )      |     |   | -         |        |   |   | (28,995       | )      |   |   | (184,377   | ) |   |   | 238,243 |   |
| Sale of preferred stock                        |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 1,000 |   |
| Sale of common stock                           |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 413,172 |   |
| Common stock issued for consulting contracts   |   |         | -        |   |     |   | (977,775  | )           |   |   | -             |   |   |   | -          |   |   |   | - |   |
| Cash portion of consulting contracts           |   |         | -        |   |     |   | (85,000   | )           |   |   | -             |   |   |   | -          |   |   |   | (85,000 | ) |
| Rescission of real estate purchase             |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | (200,000 | ) |
| Amortization of deferred expenses:             |   |         |     |   |     |   |      |        |   |   |          |   |   |   |       |   |   |   |   |   |
| Non-cash portion                               |   |         | -        |   |     |   | 338,547   |        |   |   | -             |   |   |   | -          |   |   |   | 338,547 |   |
| Cash portion                                   |   |         | -        |   |     |   | 43,529    |        |   |   | -             |   |   |   | -          |   |   |   | 43,529 |   |
| Stock subscription receivable:                 |   |         |     |   |     |   |      |        |   |   |          |   |   |   |       |   |   |   |   |   |
| Payments received                              |   |         | 13,400   |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 13,400 |   |
| Interest accrued                               |   |         | (3,902   | )      |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | (3,902 | ) |
| Net loss                                       |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | (467,712   | ) |   |   | (467,712 | ) |
| Balance, August 31, 2008                       |   |         | (72,092  | )      |     |   | (680,699  | )           |   |   | (28,995       | )      |   |   | (652,089   | ) |   |   | 291,277 |   |
| Sale of common stock for cash                  |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 3,600 |   |
| Common stock issued for consulting contracts   |   |         | -        |   |     |   | (887,440  | )           |   |   | -             |   |   |   | -          |   |   |   | - |   |
| Cash portion of consulting contracts           |   |         | -        |   |     |   | (40,901   | )           |   |   | -             |   |   |   | -          |   |   |   | (40,901 | ) |
| Amortization of deferred expenses:             |   |         |     |   |     |   |      |        |   |   |          |   |   |   |       |   |   |   |   |   |
| Non-cash portion                               |   |         | -        |   |     |   | 1,252,861 |        |   |   | -             |   |   |   | -          |   |   |   | 1,252,861 |   |
| Cash portion                                   |   |         | -        |   |     |   | 82,371    |        |   |   | -             |   |   |   | -          |   |   |   | 82,371 |   |
| Stock subscription receivable:            |   |         |     |   |     |   |      |        |   |   |          |   |   |   |       |   |   |   |   |   |
| Sold                                           |   |         | (77,500  | )      |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 186,000 |   |
| Payments received                              |   |         | 1,168    |   |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | 1,168 |   |
| Interest accrued                               |   |         | (3,545   | )      |     |   | -         |        |   |   | -             |   |   |   | -          |   |   |   | (3,545 | ) |
| Net loss                                       |   |         | -        |   |     |   | -         |        |   |   | -             |   |   |   | (1,723,711 | ) |   |   | (1,723,711 | ) |
| Balance, August 31, 2009                       |   | $            | (151,969 | )      |     | $      | (273,808  | )           |   | $      | (28,995       | )      |   | $      | (2,375,800 | ) |   | $ | 49,120 |   |

----

|                                                  |   |                 |    |   |              |   |   |    |   |   |       |   |   | Additional |   |
|-------------------------------------------------------|--------|----------------------|---------|--------|-------------------|--------|--------|---------|--------|--------|------------|--------|--------|------------|--------|
|                                                  |   | Preferred stock |    |   | Common stock |   |   | Paid-in |   |
|                                                  |   | Shares               |    |   | Amount            |   |   | Shares  |   |   | Amount     |   |   | Capital    |   |
|                                                  |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |
| Balance August 31, 2009                               |   |                 | 100,000 |   |              | $      | 1      |    |   |   | 22,388,731 |   |   | $          | 224    |   |   | $ | 2,879,466 |   |
| Common stock issued for:                              |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Consulting contracts                                  |   |                 | -       |   |              |   | -      |    |   |   | 2,525,000  |   |   |       | 25     |   |   |   | 81,475 |   |
| Drilling program participation                        |   |                 | -       |   |              |   | -      |    |   |   | 100,000    |   |   |       | 1      |   |   |   | 5,999 |   |
| Loan extension                                        |   |                 | -       |   |              |   | -      |    |   |   | 700,000    |   |   |       | 7      |   |   |   | 13,993 |   |
| Amortization of deferred expenses                     |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Beneficial conversion feature of convertible debt     |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | 2,100 |   |
| Stock subscription receivable:                   |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Sold                                                  |   |                 | -       |   |              |   | -      |    |   |   | 14,000,000 |   |   |       | 140    |   |   |   | 284,860 |   |
| Payments received                                     |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Interest accrued                                      |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Net loss                                              |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Balance August 31, 2010                               |   |                 | 100,000 |   |              | $      | 1      |    |   |   | 39,713,731 |   |   | $          | 397    |   |   | $ | 3,267,893 |   |
| Amortization of deferred expenses                     |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Common stock issued for:                              |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Consulting contracts                                  |   |                 | -       |   |              |   | -      |    |   |   | 2,000,000  |   |   |       | 20     |   |   |   | 19,980 |   |
| Loan and extension fee                                |   |                 | -       |   |              |   | -      |    |   |   | 5,400,000  |   |   |       | 54     |   |   |   | 178,446 |   |
| Beneficial conversion feature of convertible debt     |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | 9,000 |   |
| Stock subscription receivable:                        |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
| Sold                                                  |   |                 | -       |   |              |   | -      |    |   |   | 43,000,000 |   |   |       | 430    |   |   |   | 171,570 |   |
| Cancelled                                             |   |                 | -       |   |              |   | -      |    |   |   | (4,250,000 | )      |   |       | (42    | ) |   |   | (147,294 | ) |
| Payments received                                     |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Interest accrued                                      |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Common stock cancelled for rescinded drilling program |   |                 | -       |   |              |   | -      |    |   |   | (100,000   | )      |   |       | (1     | ) |   |   | 1 |   |
| Net loss                                              |   |                 | -       |   |              |   | -      |    |   |   | -          |   |   |       | -      |   |   |   | - |   |
| Balance May 31, 2011                                  |   |                 | 100,000 |   |              | $      | 1      |    |   |   | 85,763,731 |   |   | $          | 858    |   |   | $ | 3,499,596 |   |
|                                                  |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   |   |   |   |
|                                                  |   |                 |    |   |              |   |   |    |   |   |       |   |   |       |   |   |   | (Continued) |   |

----

|                                                  |   |         |     |   |     |   |     |        |   |   | Deficit     |   |   |   |       |
|-------------------------------------------------------|--------|--------------|----------|--------|----------|--------|----------|-------------|--------|--------|-------------|--------|--------|--------|------------|
|                                                  |   |         |     |   |     |   |     |        |   |   | Accumulated |   |   |   |       |
|                                                  |   |         |     |   |     |   |     |        |   |   | During      |   |   |   |       |
|                                                  |   | Subscription |     |   | Deferred |   |     | Accumulated |   |   | Development |   |   |   |       |
|                                                  |   | Receivable   |     |   | Expenses |   |     | Deficit     |   |   | Stage       |   |   | Total  |       |
|                                                  |   |         |     |   |     |   |     |        |   |   |        |   |   |   |       |
| Balance, August 31, 2009                              |   | $            | (151,969 | )      |     | $      | (273,807 | )           |   | $      | (28,995     | )      |   | $      | (2,375,800 | ) |   | $ | 49,120 |   |
| Common stock issued for:                              |   |         |     |   |     |   |     |        |   |   |        |   |   |   |       |   |   |   |   |   |
| Consulting contracts                                  |   |         | -        |   |     |   | (81,500  | )           |   |   | -           |   |   |   | -          |   |   |   | - |   |
| Drilling program participation                        |   |         | -        |   |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | 6,000 |   |
| Loan extension                                        |   |         | -        |   |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | 14,000 |   |
| Amortization of deferred expenses                     |   |         | -        |   |     |   | 326,498  |        |   |   | -           |   |   |   | -          |   |   |   | 326,498 |   |
| Beneficial conversion feature of convertible debt     |   |         | -        |   |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | 2,100 |   |
| Stock subscription receivable:                        |   |         |     |   |     |   |     |        |   |   |        |   |   |   |       |   |   |   |   |   |
| Sold                                                  |   |         | (285,000 | )      |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | - |   |
| Payments received                                     |   |         | 21,239   |   |     |   |     |        |   |   |        |   |   |   |       |   |   |   | 21,239 |   |
| Interest accrued                                      |   |         | (6,610   | )      |     |   |     |        |   |   |        |   |   |   |       |   |   |   | (6,610 | ) |
| Net loss                                              |   |         | -        |   |     |   | -        |        |   |   | -           |   |   |   | (501,055   | ) |   |   | (501,055 | ) |
| Balance August 31, 2010                               |   |         | (422,340 | )      |     |   | (28,809  | )           |   |   | (28,995     | )      |   |   | (2,876,855 | ) |   |   | (88,708 | ) |
| Amortization of deferred expenses                     |   |         | -        |   |     |   | 100,809  |        |   |   | -           |   |   |   | -          |   |   |   | 100,809 |   |
| Common stock issued for:                              |   |         |     |   |     |   |     |        |   |   |        |   |   |   |       |   |   |   |   |   |
| Consulting contracts                                  |   |         | -        |   |     |   | (20,000  | )           |   |   | -           |   |   |   | -          |   |   |   | - |   |
| Loan and extension fee                                |   |         | -        |   |     |   | (156,000 | )           |   |   | -           |   |   |   | -          |   |   |   | 22,500 |   |
| Beneficial conversion feature of convertible debt     |   |         | -        |   |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | 9,000 |   |
| Stock subscription receivable:                        |   |         |     |   |     |   |     |        |   |   |        |   |   |   |       |   |   |   |   |   |
| Sold                                                  |   |         | (172,000 | )      |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | - |   |
| Cancelled                                             |   |         | 147,336  |   |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | - |   |
| Payments received                                     |   |         | 24,263   |   |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | 24,263 |   |
| Interest accrued                                      |   |         | (7,028   | )      |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | (7,028 | ) |
| Common stock cancelled for rescinded drilling program |   |         | -        |   |     |   | -        |        |   |   | -           |   |   |   | -          |   |   |   | - |   |
| Net loss                                              |   |         | -        |   |     |   | -        |        |   |   | -           |   |   |   | (187,953   | ) |   |   | (187,953 | ) |
| Balance May 31, 2011                                  |   | $            | (429,769 | )      |     | $      | (104,000 | )           |   | $      | (28,995     | )      |   | $      | (3,064,808 | ) |   | $ | (127,117 | ) |

----

|                                                                       |   |                        |     |   |         |   |     | From inception     |   |
|----------------------------------------------------------------------------|--------|-----------------------------|----------|--------|--------------|--------|----------|-------------------------|--------|
|                                                                       |   |                        |     |   |         |   |     | July 22, 2005 |   |
|                                                                       |   | Nine months ended |     |   | through      |   |
|                                                                       |   | May 31,                |     |   | May 31, |   |
|                                                                       |   | 2011                        |     |   | 2010         |   |     | 2011                    |   |
|                                                                       |   |                        |     |   |         |   |     |                    |   |
| Cash flows from operating activities                                       |   |                        |     |   |         |   |     |                    |   |
| Net loss                                                                   |   | $                           | (187,953 | )      |         | $      | (418,470 | )                       |   | $ | (3,064,808 | ) |
| Adjustment to reconcile net loss to net cash used in operating activities: |   |                        |     |   |         |   |     |                    |   |   |   |   |
| Depreciation and depletion                                                 |   |                        | -        |   |         |   | 713      |                    |   |   | 2,148 |   |
| Value of common shares issued for services and loan extension fees         |   |                        | 123,309  |   |         |   | 298,262  |                    |   |   | 2,241,215 |   |
| Loss on rescission of condominium purchase                                 |   |                        | -        |   |         |   | -        |                    |   |   | 15,000 |   |
| Interest accrued on stock subscription                                     |   |                        | (7,028   | )      |         |   | (4,197   | )                       |   |   | (21,085 | ) |
| Asset impairment                                                           |   |                        | -        |   |         |   | 18,676   |                    |   |   | 75,164 |   |
| Beneficial conversion feature of convertible note payable                  |   |                        | 5,250    |   |         |   | 630      |                    |   |   | 7,350 |   |
| Change in other assets and liablities:                                     |   |                        |     |   |         |   |     |                    |   |   |   |   |
| Accounts receivable                                                        |   |                        | 6,500    |   |         |   | (4,082   | )                       |   |   | (367 | ) |
| Prepaid expenses and other assets                                          |   |                        | 21,075   |   |         |   | 47,785   |                    |   |   | 49,392 |   |
| Accounts payable and accrued expenses                                      |   |                        | 6,252    |   |         |   | 32,041   |                    |   |   | (11,752 | ) |
| Net cash used in operations                                                |   |                        | (32,595  | )      |         |   | (28,642  | )                       |   |   | (707,743 | ) |
|                                                                       |   |                        |     |   |         |   |     |                    |   |   |   |   |
| Cash flows from investing activities                                       |   |                        |     |   |         |   |     |                    |   |   |   |   |
| Investment in real estate                                                  |   |                        | -        |   |         |   | -        |                    |   |   | (11,000 | ) |
| Oil and gas property expenditures                                          |   |                        | (45      | )      |         |   | (8,402   | )                       |   |   | (150,387 | ) |
| Proceeds from sale of undeveloped leasehold                                |   |                        | -        |   |         |   | -        |                    |   |   | 70,275 |   |
| Investment in rare earth and precious metals properties                    |   |                        | (3,890   | )      |         |   | -        |                    |   |   | (3,890 | ) |
| Investment in uranium properties                                           |   |                        | -        |   |         |   | -        |                    |   |   | (5,673 | ) |
| Net cash provided by (used in) investing activities                        |   |                        | (3,935   | )      |         |   | (8,402   | )                       |   |   | (100,675 | ) |
|                                                                       |   |                        |     |   |         |   |     |                    |   |   |   |   |
| Cash flows from financing activities                                       |   |                        |     |   |         |   |     |                    |   |   |   |   |
| Proceeds of stockholder loans                                              |   |                        | -        |   |         |   | -        |                    |   |   | 50 |   |
| Proceeds from subscription receivable                                      |   |                        | 24,262   |   |         |   | 18,369   |                    |   |   | 60,069 |   |
| Loan proceeds                                                              |   |                        | 18,000   |   |         |   | -        |                    |   |   | 164,000 |   |
| Loan repayment                                                             |   |                        | (6,000   | )      |         |   | -        |                    |   |   | (66,000 | ) |
| Proceeds from sale of common stock                                         |   |                        | -        |   |         |   | -        |                    |   |   | 649,342 |   |
| Proceeds from sale of preferred stock                                      |   |                        | -        |   |         |   | -        |                    |   |   | 1,000 |   |
| Net cash provided by (used in) financing activities                        |   |                        | 36,262   |   |         |   | 18,369   |                    |   |   | 808,461 |   |
|                                                                       |   |                        |     |   |         |   |     |                    |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                       |   |                        | (268     | )      |         |   | (18,675  | )                       |   |   | 43 |   |
| Cash and cash equivalents, beginning of period                             |   |                        | 311      |   |         |   | 18,680   |                    |   |   | - |   |
| Cash and cash equivalents, end of period                                   |   | $                           | 43       |   |         | $      | 5        |                    |   | $ | 43 |   |
|                                                                       |   |                        |     |   |         |   |     |                    |   |   |   |   |
|                                                                       |   |                        |     |   |         |   |     |                    |   | (Continued) |   |

----

|                                                      |   |                        |    |   |         |   |   | From inception     |   |
|-----------------------------------------------------------|--------|-----------------------------|---------|--------|--------------|--------|--------|-------------------------|--------|
|                                                      |   |                        |    |   |         |   |   | July 22, 2005 |   |
|                                                      |   | Nine months ended |    |   | through      |   |
|                                                      |   | May 31,                |    |   | May 31, |   |
|                                                      |   | 2011                        |    |   | 2010         |   |   | 2011                    |   |
|                                                      |   |                        |    |   |         |   |   |                    |   |
| Supplemental cash flow information                        |   |                        |    |   |         |   |   |                    |   |
| Cash paid for interest                                    |   | $                           | 6,100   |   |         | $      | 6,750  |                    |   | $ | 29,475 |   |
| Cash paid for income taxes                                |   |                        | -       |   |         |   | -      |                    |   |   | - |   |
|                                                      |   |                        |    |   |         |   |   |                    |   |   |   |   |
| Non-cash investing and financing activities:              |   |                        |    |   |         |   |   |                    |   |   |   |   |
| Issuance of common stock for real estate                  |   | $                           | -       |   |         | $      | -      |                    |   | $ | 190,000 |   |
| Contribution of stockholder loan to capital               |   |                        | -       |   |         |   | -      |                    |   |   | 6,560 |   |
| Disposition of real estate per stock rescission agreement |   |                        | -       |   |         |   | -      |                    |   |   | 200,000 |   |
| Common stock issued for participation in drilling program |   |                        | -       |   |         |   | 6,000  |                    |   |   | 6,000 |   |
| Common stock issued for stock subscription receivables    |   |                        | 172,000 |   |         |   | -      |                    |   |   | 615,922 |   |
| Accounts receivable exchanged for accounts payable        |   |                        | 14,578  |   |         |   | -      |                    |   |   | 14,578 |   |
| Drilling prepayment transferred to accounts receivable    |   |                        | 28,079  |   |         |   | -      |                    |   |   | 28,079 |   |
| Common stock cancelled for rescinded drilling program     |   |                        | 1,000   |   |         |   | -      |                    |   |   | 1,000 |   |
| Common stock and stock subscription receivables cancelled |   |                        | 147,336 |   |         |   | -      |                    |   |   | 147,336 |   |

----

----

| 1 | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|---|-------------------------------------------------------------|

----

----

----

----

----

----

| 2 | INVESTMENT IN ENERGY PROPERTIES |
|---|---------------------------------|

----

| 3 | CONVERTIBLE NOTES PAYABLE |
|---|---------------------------|

----

| 4 | DEBENTURE PAYABLE |
|---|-------------------|

| Face amount of the debenture                                         |   | $      | 18,000 |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|
| Unamortized balance of the intrinsic value of the conversion feature |   |   | (3,750 | )      |
| Carrying value of the debenture                                      |   | $      | 14,250 |   |

| 5 | STOCKHOLDERS’ EQUITY |
|---|----------------------------|

----

|                                                     |   | Shares |       |   | Cost   |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                     |   |   |       |   |   |   |
| Inception through August 31, 2010                        |   |   | 9,041,000  |   |   | $      | 1,793,740 |   |
| Expired option                                           |   |   | -          |   |   |   | 328,975 |   |
| Total, beginning of year                                 |   |   | 9,041,000  |   |   |   | 2,122,715 |   |
| New agreements during the nine months ended May 31, 2011 |   |   | 5,900,000  |   |   |   | 176,000 |   |
|                                                     |   |   | 14,941,000 |   |   | $      | 2,298,715 |   |

|                     |   | Balance |     |
|--------------------------|--------|---------|----------|
|                     |   |    |     |
| Balance, August 31, 2010 |   | $       | 28,809   |   |
| New agreements added     |   |    | 176,000  |   |
| Amortization             |   |    | (100,809 | ) |
| Balance, May 31, 2011    |   | $       | 104,000  |   |

----

| 6 | STOCK SUBSCRIPTION RECEIVABLE |
|---|-------------------------------|

|                |   |   |       |   | Original |   |    | Interest |   |   | Balance   |   |   | Balance   |    |
|---------------------|--------|--------|------------|--------|----------|--------|---------|----------|--------|--------|-----------|--------|--------|-----------|---------|
| Name                |   | Shares |       |   | Balance  |   |    | Rate     |   |   | 5/31/2011 |   |   | 8/31/2010 |    |
|                |   |   |       |   |     |   |    |     |   |   |      |   |   |      |    |
| Jacob Roth          |   |   | 41,700,000 |   |     | $      | 316,650 |     |   |   | 2         | %      |   | $         | 314,620 |   |   | $ | 391,749 |   |
| Frimet Taub         |   |   | 600,000    |   |     |   | 29,937  |     |   |   | 2         | %      |   |      | 29,937  |   |   |   | 29,937 |   |
|                |   |   |       |   |     |   |    |     |   |   |      |   |   |      | 344,557 |   |   |   | 421,686 |   |
| Accrued interest    |   |   |       |   |     |   |    |     |   |   |      |   |   |      | 5,212   |   |   |   | 654 |   |
| Related party total |   |   |       |   |     |   |    |     |   |   |      |   |   |      | 349,769 |   |   |   | 422,340 |   |
| Debt retirement     |   |   | 21,000,000 |   |     |   | 80,000  |     |   |   | 0         | %      |   |      | 80,000  |   |   |   | - |   |
|                |   |   |       |   |     |   |    |     |   |   |      |   |   | $         | 429,769 |   |   | $ | 422,340 |   |

| 7 | RELATED PARTY TRANSACTIONS |
|---|----------------------------|

----

| 8 | SUBSEQUENT EVENTS |
|---|-------------------|

----

| Item 2: | Management's Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------|

----

----

| ITEM 3: | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

| ITEM 4T: | CONTROLS AND PROCEDURES |
|----------|-------------------------|

----

| ITEM 1: | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 1A: | RISK FACTORS |
|----------|--------------|

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

| ITEM 3: | DEFAULTS UPON SENIOR SECURITIES. |
|---------|----------------------------------|

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

| ITEM 5: | OTHER INFORMATION. |
|---------|--------------------|

| ITEM 6: | EXHIBITS |
|---------|----------|

| Exhibit 31.1 |   | Certification pursuant to 18 U.S.C. Section 1350 Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------------|--------|------------------------------------------------------------------------------------------------|
|         |   |                                                                                           |
| Exhibit 32.1 |   | Certification pursuant to 18 U.S.C. Section 1350 Section 906 of the Sarbanes-Oxley Act of 2002 |

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|                      |                | ROYAL ENERGY RESOURCES, INC.           |
|---------------------------|---------------------|----------------------------------------|
|                      |                |                                   |
| Date:  July 12, 2011 |                |                                   |
|                      |                |                                   |
|                      | By:  /s/  | Jacob Roth                             |
|                      |                | President, Chief Executive Officer and |
|                      |                | Chief Financial Officer                |

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