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: May 31, 2009





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, NY  11211


(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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).  Yes  ̈ 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  ̈ No x





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: 19,238,731 shares of common stock outstanding
as of June 30, 2009.








EXPLANATORY
NOTE





We filed
our  Quarterly Report on Form 10-Q for the quarter ended May 31, 2009 on
July 13, 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 2008 (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;


·
            update
      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 INFORMATION
                4Item
      1:
                
                Financial
      Statements
                4Item
      2:
                
                Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                21Item
      3:
                
                Quantitative
      and Qualitative Disclosures About Market Risk
                23Item
      4T:
                
                Controls
      and Procedures
                23PART
      II - OTHER INFORMATION
                24Item
      1:
                
                Legal
      Proceedings
                24Item
      1A:
                
                Risk
      Factors
                24Item
      2:
                
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                24Item
      3:
                
                Defaults
      upon Senior Securities
                24Item
      4:
                
                Submission
      of Matters to a Vote of Security Holders
                24Item
      5:
                
                Other
      Information
                24Item
      6:
                
                Exhibits
                24


3


PART
I - FINANCIAL INFORMATION





ITEM
1:  FINANCIAL STATEMENTS





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Condensed
Balance Sheet


May
31, 2009 (unaudited) and August 31, 2008





May 31,
                        
                        
                        August 31,2009
                        
                        
                        2008(Restated
                        
                        
                        (RestatedNote 8)
                        
                        
                        Note 8)AssetsCurrent
      assetsCash
      and cash equivalents
                        
                        $
                        78,072
                        
                        
                        $
                        343,739Accounts
      receivable
                        
                        
                        726
                        
                        
                        
                        -Total
      current assets
                        
                        
                        78,798
                        
                        
                        
                        343,739Oil
      and gas properties, on full cost method:Proved
      properties
                        
                        
                        76,112
                        
                        
                        
                        63,097Undeveloped
      leasehold not being amortized
                        
                        
                        1,440
                        
                        
                        
                        18,05177,552
                        
                        
                        
                        81,148Other
      assetsPrepaid
      drilling costs
                        
                        
                        52,549
                        
                        
                        
                        55,914Investment
      in uranium properties
                        
                        
                        4,329
                        
                        
                        
                        3,379Deposits
                        
                        
                        1,040
                        
                        
                        
                        440Total
      other assets
                        
                        
                        57,918
                        
                        
                        
                        59,733Total
      assets
                        
                        $
                        214,268
                        
                        
                        $
                        484,620Liabilities
      and Stockholders' EquityCurrent
      liabilitiesAccounts
      payable
                        
                        $
                        3,500
                        
                        
                        $
                        53,343Note
      payable
                        
                        
                        90,000
                        
                        
                        
                        140,000Total
      current liabilities
                        
                        
                        93,500
                        
                        
                        
                        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;19,238,731
      and 17,267,731 shares issued and outstanding atFebruary
      28, 2009 and August 31, 2008, respectively
                        
                        
                        192
                        
                        
                        
                        173Additional
      paid-in capital
                        
                        
                        2,279,999
                        
                        
                        
                        1,724,978Deferred
      option and stock compensation
                        
                        
                        (59,960
                        )
                        
                        
                        (680,699
                        )Common
      stock subscription receivable
                        
                        
                        (73,610
                        )
                        
                        
                        (72,092
                        )Deficit
      accumulated during the development stage
                        
                        
                        (2,025,854
                        )
                        
                        
                        (681,084
                        )Total
      stockholders' equity
                        
                        
                        120,768
                        
                        
                        
                        291,277Total
      liabilities and stockholders' equity
                        
                        $
                        214,268
                        
                        
                        $
                        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 May 31, 2009 and 2008


(Unaudited)





2009
                  
                  
                  2008Sale
      of oil and gas leases
                  
                  $
                  -
                  
                  
                  $
                  -Oil
      and gas production
                  
                  
                  1,810
                  
                  
                  
                  -Total
      revenues
                  
                  
                  1,810
                  
                  
                  
                  -Cost
      of sales
                  
                  
                  1,623
                  
                  
                  
                  -Gross
      profit
                  
                  
                  187
                  
                  
                  
                  -Costs
      and expenses:Non-cash
      compensation
                  
                  
                  235,995
                  
                  
                  
                  95,892Other
      selling, general and administrative expense
                  
                  
                  48,125
                  
                  
                  
                  20,814Total
      costs and expenses
                  
                  
                  284,120
                  
                  
                  
                  116,706Loss
      from operations
                  
                  
                  (283,933
                  )
                  
                  
                  (116,706
                  )Other
      expenses (income):Loss
      on comodities trading
                  
                  
                  (2,568
                  )
                  
                  
                  -Loss
      on disposition of condominium
                  
                  
                  -
                  
                  
                  
                  15,000Interest
      income
                  
                  
                  (419
                  )
                  
                  
                  -Interest
      income - related party
                  
                  
                  (844
                  )
                  
                  
                  -Interest
      expense
                  
                  
                  3,500
                  
                  
                  
                  3,500(331
                  )
                  
                  
                  18,500Loss
      before income taxes
                  
                  
                  (283,602
                  )
                  
                  
                  (135,206
                  )Provision
      for income taxes
                  
                  
                  -
                  
                  
                  
                  -Net
      loss
                  
                  $
                  (283,602
                  )
                  
                  $
                  (135,206
                  )Net
      loss per share, basic and diluted
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.01
                  )Weighted
      average shares outstanding, basic and diluted
                  
                  
                  19,136,296
                  
                  
                  
                  15,957,778





See
accompanying notes to condensed financial statements.


5





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Condensed
Statements of Operations


Nine
Months Ended May 31, 2009 and 2008 and


from
inception (July 22, 2005) through May 31, 2009


(Unaudited)





Inception(July 22, 2005)ThroughNine Months Ended May 31,
                
                
                May 31,2009
                
                
                2008
                
                
                2009(Restated
                
                
                (Restated
                
                
                (RestatedNote 8)
                
                
                Note 8)
                
                
                Note 8)Sale
      of oil and gas leases
                
                $
                -
                
                
                $
                -
                
                
                $
                -Oil
      and gas production
                
                
                2,499
                
                
                
                -
                
                
                
                2,499Total
      revenues
                
                
                2,499
                
                
                
                -
                
                
                
                2,499Cost
      of sales
                
                
                4,612
                
                
                
                -
                
                
                
                4,754Gross
      profit
                
                
                (2,113
                )
                
                
                -
                
                
                
                (2,255
                )Costs
      and expenses:Non-cash
      compensation
                
                
                1,137,072
                
                
                
                95,892
                
                
                
                1,475,619Other
      selling, general and administrative expense
                
                
                173,913
                
                
                
                45,953
                
                
                
                468,948Total
      costs and expenses
                
                
                1,310,985
                
                
                
                141,845
                
                
                
                1,944,567Loss
      from operations
                
                
                (1,313,098
                )
                
                
                (141,845
                )
                
                
                (1,946,822
                )Other
      expenses (income):Loss
      on disposition by rescission agreement of condominium
                
                
                -
                
                
                
                15,000
                
                
                
                15,000Loss
      on comodities trading
                
                
                25,168
                
                
                
                -
                
                
                
                25,168Interest
      income
                
                
                (2,853
                )
                
                
                -
                
                
                
                (4,336
                )Interest
      income - related party
                
                
                (2,518
                )
                
                
                -
                
                
                
                (6,420
                )Interest
      expense
                
                
                11,875
                
                
                
                3,500
                
                
                
                20,62531,672
                
                
                
                18,500
                
                
                
                50,037Loss
      before income taxes
                
                
                (1,344,770
                )
                
                
                (160,345
                )
                
                
                (1,996,859
                )Provision
      for income taxes
                
                
                -
                
                
                
                -
                
                
                
                -Net
      loss
                
                $
                (1,344,770
                )
                
                $
                (160,345
                )
                
                $
                (1,996,859
                )Net
      loss per share, basic and diluted
                
                $
                (0.07
                )
                
                $
                (0.01
                )
                
                $
                (0.16
                )Weighted
      average shares outstanding, basic and diluted
                
                
                18,707,475
                
                
                
                14,590,611
                
                
                
                12,315,636





See
accompanying notes to condensed financial statements.


6





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Statements
of Stockholders' Equity


Inception
of Development Stage, July 22, 2005, through May 31, 2009





AdditionalPreferred stock
                  
                  
                  Common stock
                  
                  
                  Paid-inShares
                  
                  
                  Amount
                  
                  
                  Shares
                  
                  
                  Amount
                  
                  
                  CapitalInception,
      July 22, 2005
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  5,930,300
                  
                  
                  
                  59
                  
                  
                  
                  22,426Sale
      of common stock for cash
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  320,000
                  
                  
                  
                  3
                  
                  
                  
                  31,997Common
      stock issued for real estate investment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,900,000
                  
                  
                  
                  19
                  
                  
                  
                  189,981Contribution
      to capital
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  6,560Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Balance
      August 31, 2005
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  8,150,300
                  
                  
                  
                  81
                  
                  
                  
                  250,964Sale
      of common stock for cash
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,086,667
                  
                  
                  
                  11
                  
                  
                  
                  120,489Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Balance,
      August 31, 2006
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  9,236,967
                  
                  
                  
                  93
                  
                  
                  
                  371,452Sale
      of common stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4,670,060
                  
                  
                  
                  46
                  
                  
                  
                  161,614Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Balance,
      August 31, 2007
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  13,907,027
                  
                  
                  
                  139
                  
                  
                  
                  533,066Sale
      of preferred stock
                  
                  
                  100,000
                  
                  
                  
                  1
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  999Sale
      of common stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,295,704
                  
                  
                  
                  23
                  
                  
                  
                  413,149Common
      stock issued for consulting contracts
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,965,000
                  
                  
                  
                  30
                  
                  
                  
                  977,745Cash
      portion of consulting contracts
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Rescission
      of real estate purchase
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,900,000
                  )
                  
                  
                  (19
                  )
                  
                  
                  (199,981
                  )Amortization
      of prepaid consulting contracts: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
                  
                  
                  
                  1,724,978Stock
      subscription receivable:Payments
      received
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Interest
      accrued
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Common
      stock issued for consulting contracts
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,951,000
                  
                  
                  
                  19
                  
                  
                  
                  551,421Cash
      portion of consulting contracts
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Amortization
      of prepaid consulting contracts:Non-cash
      portion
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Cash
      portion
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Common
      stock sold for cash
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  20,000
                  
                  
                  
                  -
                  
                  
                  
                  3,600Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Balance,
      May 31, 2009
                  
                  
                  100,000
                  
                  
                  $
                  1
                  
                  
                  
                  19,238,731
                  
                  
                  $
                  192
                  
                  
                  $
                  2,279,999


(Continued)


See
accompanying notes to financial statements.


7





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Statements
of Stockholders' Equity, continued


Inception
of Development Stage, July 22, 2005, through May 31, 2009





DeficitAccumulatedDuringSubscription
                  
                  
                  Deferred
                  
                  
                  Accumulated
                  
                  
                  DevelopmentReceivable
                  
                  
                  Expenses
                  
                  
                  Deficit
                  
                  
                  Stage
                  
                  
                  Total(RestatedNote 8)Inception,
      July 22, 2005
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (28,995
                  )
                  
                  
                  -
                  
                  
                  
                  (6,510
                  )Sale
      of common stock for cash
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  32,000Common
      stock issued for real estate investment
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  190,000Contribution
      to capital
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  6,560Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (7,739
                  )
                  
                  
                  (7,739
                  )Balance
      August 31, 2005
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (28,995
                  )
                  
                  
                  (7,739
                  )
                  
                  
                  214,311Sale
      of common stock for cash
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  120,500Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (80,825
                  )
                  
                  
                  (80,825
                  )Balance,
      August 31, 2006
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (28,995
                  )
                  
                  
                  (88,564
                  )
                  
                  
                  253,986Sale
      of common stock
                  
                  
                  (81,590
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  80,070Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (95,813
                  )
                  
                  
                  (95,813
                  )Balance,
      August 31, 2007
                  
                  
                  (81,590
                  )
                  
                  
                  -
                  
                  
                  
                  (28,995
                  )
                  
                  
                  (184,377
                  )
                  
                  
                  238,243Sale
      of preferred stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,000Sale
      of common stock
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  413,172Common
      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 prepaid consulting contracts:Non-cash
      portion
                  
                  
                  -
                  
                  
                  
                  338,547
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  338,547Cash
      portion
                  
                  
                  -
                  
                  
                  
                  43,529
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  43,529Stock
      subscription receivable:Payments
      received
                  
                  
                  13,400
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  13,400Interest
      accrued
                  
                  
                  (3,902
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (3,902
                  )Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (467,712
                  )
                  
                  
                  (467,712
                  )Balance,
      August 31, 2008
                  
                  
                  (72,092
                  )
                  
                  
                  (680,699
                  )
                  
                  
                  (28,995
                  )
                  
                  
                  (652,089
                  )
                  
                  
                  291,277Stock
      subscription receivable:Payments
      received
                  
                  
                  1,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,000Interest
      accrued
                  
                  
                  (2,518
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (2,518
                  )Common
      stock issued for consulting contracts
                  
                  
                  -
                  
                  
                  
                  (551,440
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Cash
      portion of consulting contracts
                  
                  
                  -
                  
                  
                  
                  (40,900
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (40,900
                  )Amortization
      of prepaid consulting contracts:Non-cash
      portion
                  
                  
                  -
                  
                  
                  
                  1,137,072
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,137,072Cash
      portion
                  
                  
                  -
                  
                  
                  
                  76,007
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  76,007Common
      stock sold for cash
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  3,600Net
      loss
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,344,770
                  )
                  
                  
                  (1,344,770
                  )Balance,
      May 31, 2009
                  
                  $
                  (73,610
                  )
                  
                  $
                  (59,960
                  )
                  
                  $
                  (28,995
                  )
                  
                  $
                  (1,996,859
                  )
                  
                  $
                  120,768





See
accompanying notes to financial statements.


8





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)


Condensed
Statements of Cash Flows


Nine
Months Ended May 31, 2009 and 2008, and


from
inception (July 22, 2005) through May 31, 2009


(Unaudited)





From inceptionJuly 22, 2005throughNine months ended May 31,
                        
                        
                        May 31,2009
                        
                        
                        2008
                        
                        
                        2009(Restated
                        
                        
                        (Restated
                        
                        
                        (RestatedNote 8)
                        
                        
                        Note 8)
                        
                        
                        Note 8)Cash
      flows from operating activitiesNet
      loss
                        
                        $
                        (1,344,770
                        )
                        
                        $
                        (160,345
                        )
                        
                        $
                        (1,996,859
                        )Adjustment
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and depletion
                        
                        
                        783
                        
                        
                        
                        -
                        
                        
                        
                        783Value
      of common shares issued for services
                        
                        
                        1,137,072
                        
                        
                        
                        95,892
                        
                        
                        
                        1,475,619Loss
      on rescission of condominium purchase
                        
                        
                        -
                        
                        
                        
                        15,000
                        
                        
                        
                        15,000Interest
      accrued on stock subscription
                        
                        
                        (2,518
                        )
                        
                        
                        -
                        
                        
                        
                        (6,420
                        )Change
      in other assets and liablities:Accounts
      receivable
                        
                        
                        (726
                        )
                        
                        
                        -
                        
                        
                        
                        (726
                        )Prepaid
      expenses and other assets
                        
                        
                        34,507
                        
                        
                        
                        3,389
                        
                        
                        
                        (21,847
                        )Accounts
      payable
                        
                        
                        (49,843
                        )
                        
                        
                        (7,900
                        )
                        
                        
                        (51,971
                        )Net
      cash used in operations
                        
                        
                        (225,495
                        )
                        
                        
                        (53,964
                        )
                        
                        
                        (586,421
                        )Cash
      flows from investing activitiesInvestment
      in real estate
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (11,000
                        )Oil
      and gas property expenditures
                        
                        
                        (24,089
                        )
                        
                        
                        (75,673
                        )
                        
                        
                        (121,601
                        )Proceeds
      from sale of undeveloped leasehold
                        
                        
                        30,267
                        
                        
                        
                        5,626
                        
                        
                        
                        47,975Investment
      in uranium properties
                        
                        
                        (950
                        )
                        
                        
                        (3,379
                        )
                        
                        
                        (5,673
                        )Net
      cash used in investing activities
                        
                        
                        5,228
                        
                        
                        
                        (73,426
                        )
                        
                        
                        (90,299
                        )Cash
      flows from financing activitiesProceeds
      of stockholder loans
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        50Proceeds
      from subscription receivable
                        
                        
                        1,000
                        
                        
                        
                        10,400
                        
                        
                        
                        14,400Loan
      proceeds (repayment)
                        
                        
                        (50,000
                        )
                        
                        
                        140,000
                        
                        
                        
                        90,000Proceeds
      from sale of common stock
                        
                        
                        3,600
                        
                        
                        
                        309,012
                        
                        
                        
                        649,342Proceeds
      from sale of preferred stock
                        
                        
                        -
                        
                        
                        
                        1,000
                        
                        
                        
                        1,000Net
      cash provided by financing activities
                        
                        
                        (45,400
                        )
                        
                        
                        460,412
                        
                        
                        
                        754,792Net
      increase (decrease) in cash and cash equivalents
                        
                        
                        (265,667
                        )
                        
                        
                        333,022
                        
                        
                        
                        78,072Cash and cash
      equivalents, beginning of period
                        
                        
                        343,739
                        
                        
                        
                        7,611
                        
                        
                        
                        -Cash and cash
      equivalents, end of period
                        
                        $
                        78,072
                        
                        
                        $
                        340,633
                        
                        
                        $
                        78,072Supplemental
      cash flow informationCash
      paid for interest
                        
                        $
                        11,875
                        
                        
                        $
                        -
                        
                        
                        $
                        20,625Cash
      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 rescission agreement
                        
                        
                        -
                        
                        
                        
                        200,000
                        
                        
                        
                        200,000





See
accompanying notes to condensed financial statements.


9





ROYAL
ENERGY RESOURCES, INC.


(A
Development Stage Company)





NOTES TO
FINANCIAL STATEMENTS





May 31,
2009


(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.


10





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 has advanced additional funds to participate in three re-works
during the current quarter.  Two wells began initial sales in November 2008
and a third well will be 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 previously acquired 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, which has been in the development stage since its
inception, March 22, 1999, has accumulated a net loss of $2,025,854 ($28,995 in
a prior development stage) through May 31, 2009, and incurred losses of
$1,344,770 for the nine 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 ($90,000 balance at May 31, 2009) with a note
payable and raised $413,172 from the sale of its common stock during fiscal
2008.  However, energy prices are currently much lower and 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.


11





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.


12


Revenue
recognition





Revenue
from the sale of oil and gas leases is recognized in accordance with the
provisions of full cost 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 123, "Accounting for Stock
Based compensation" (SFAS 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 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 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 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.





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 May 31, 2009.  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 May 31, 2009.  Amortization in the amount of $783 was recorded during
the nine months ended May 31, 2009, based on initial
production.


13





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 a consultant to
the Company.





In
accordance with the impairment provisions of Statement of Financial Accounting
Standards (SFAS) 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 May 31,
2009.





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.





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 May 31, 2009 and August 31, 2008, there were no natural gas
imbalances.


14


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 a
consultant.  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
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 128,
"Earnings per Share," which established new standards for computing and
presenting earnings per share. SFAS 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 May 31, 2009 and 2008, there were no common stock
equivalents. Accordingly, basic and diluted earnings per share are the same for
all periods presented.





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.


15





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 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 19,
“Financial Accounting and Reporting by Oil and Gas Producing Companies.” 
SFAS 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 May 31, 2009 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.





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.


16


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 May 31,
2009and
August 31, 2008:





May 31,
                  
                  
                  August 31,2009
                  
                  
                  2008Leasehold
      cost
                  
                  $
                  4,933
                  
                  
                  $
                  4,933Intangible
      development cost
                  
                  
                  49,883
                  
                  
                  
                  40,932Lease
      equipment
                  
                  
                  32,353
                  
                  
                  
                  17,232Total
                  
                  
                  87,169
                  
                  
                  
                  63,097Accumulated
      depreciation and depletion
                  
                  
                  (11,057
                  )
                  
                  
                  -76,112
                  
                  
                  
                  63,097Undeveloped
      leasehold cost not being amortized
                  
                  
                  1,440
                  
                  
                  
                  18,051$
                  77,552
                  
                  
                  $
                  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 10,000 acres and 12,000 acres in Crook, Banner,
Weston, Goshen, Niobrara, Converse, Campbell, Freemont, Laramie, Sublette and
Platt Counties, Wyoming as of May 31, 2009 and August 31, 2008,
respectively.  In addition, the Company holds the lease for uranium rights
on approximately 3,500 acres in Wyoming as of May 31, 2009 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.





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.


17





Prepaid
drilling cost includes a balance of $52,549 and $55,914 in prepaid costs for the
initial three wells in Washington County, Oklahoma and three additional wells to
be re-worked as of May 31, 2009and 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 has been extended to September 5,
2009.  The loan has a balance of $90,000 at May 31, 2009.





4
            INCOME
      TAXES





RER has
not recorded a deferred tax benefit or expense for all prior periods through May
31, 2009, 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 nine months ended May 31, 2009 and 2008 as follows:





2009
                  
                  
                  2008"Normally
      expected" income tax benefit
                  
                  $
                  457,200
                  
                  
                  $
                  54,500State
      income taxes net of federal benefit
                  
                  
                  53,800
                  
                  
                  
                  6,400Valuation
      allowance
                  
                  
                  (511,000
                  )
                  
                  
                  (60,900
                  )Actual
      income tax expense
                  
                  $
                  -
                  
                  
                  $
                  -





RER has
available unused net operating loss carryforwards of approximately $2,023,000
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 May 31,
2009 and August 31, 2008, 19,238,731 and 17,267,731 shares were issued and
outstanding, respectively.





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.


18


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, which 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.  During fiscal 2009, contracts with a total value
of $668,340 were issued which included issuance of 2,426,000 shares of common
stock and cash of $40,900 to be paid.  The agreements cover periods ranging
from 1 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 is
approximately $1,655,115.  As of May 31, 2009, the un-amortized portion of
these agreements amounts to approximately $59,960 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 May 31, 2009 the Company is owed $73,610, 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 with our first oil and gas operations in
2007.  Previously 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 nine months ended May 31, 2009, we included $30,267 in
sales with cost of sales of $2,094 (net $28,173) 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.  Of this amount, $17,898
has eliminated the balance in undeveloped leasehold cost not being amortized and
$10,275 has increased the accumulated depreciation, depletion and amortization
of the proved properties.  These changes were effective prior to the
quarter ended May 31, 2009.  The carryover effect from the period 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:


19





As OriginallyReported
                        
                        
                        Adjustment
                        
                        
                        As RestatedNine
      months ended May 31, 2009Balance sheetInvestment
      in oil and gas properties, net
                        
                        $
                        86,386
                        
                        
                        $
                        (86,386
                        )
                        
                        $
                        -Investment
      in oil and gas leases
                        
                        
                        35,160
                        
                        
                        
                        (35,160
                        )
                        
                        
                        -Oil
      and gas properties, on the full cost method:Proved
      properties
                        
                        
                        -
                        
                        
                        
                        86,386
                        
                        
                        
                        76,112(10,275
                        )1Undeveloped
      leasehold not being amortized
                        
                        
                        -
                        
                        
                        
                        35,160
                        
                        
                        
                        1,440(15,821
                        )(17,898
                        )(1
                        )Deficit
      accumulated during development stage
                        
                        
                        (1,981,860
                        )
                        
                        
                        (15,821
                        )
                        
                        
                        (2,025,854
                        )(28,173
                        )Statements of operationsSales
      of oil and gas leases
                        
                        
                        30,267
                        
                        
                        
                        (30,267
                        )
                        
                        
                        -Cost
      of sales
                        
                        
                        6,706
                        
                        
                        
                        (2,094
                        )
                        
                        
                        4,612Net
      loss
                        
                        
                        (1,316,597
                        )
                        
                        
                        (28,173
                        )
                        
                        
                        (1,344,770
                        )Net
      loss per share, basic and diluted
                        
                        $
                        (0.06
                        )
                        
                        $
                        -
                        
                        
                        $
                        (0.06
                        )Statements of cash flowsNet
      loss
                        
                        
                        (1,316,597
                        )
                        
                        
                        (28,173
                        )
                        
                        
                        (1,344,770
                        )Investment
      in oil and gas leases
                        
                        
                        (1,288
                        )
                        
                        
                        1,288
                        
                        
                        
                        -Proceeds
      from sale of undeveloped leasehold
                        
                        
                        -
                        
                        
                        
                        30,267
                        
                        
                        
                        30,267Oil
      and gas property expenditures
                        
                        
                        (20,707
                        )
                        
                        
                        (3,382
                        )
                        
                        
                        (24,089
                        )





As OriginallyReported
                      
                      
                      Adjustment
                      
                      
                      As RestatedNine
      months ended May 31, 2008Statements of operationsSales
      of oil and gas leases
                      
                      
                      5,626
                      
                      
                      
                      (5,626
                      )
                      
                      
                      -Cost
      of sales
                      
                      
                      449
                      
                      
                      
                      (449
                      )
                      
                      
                      -Net
      loss
                      
                      
                      (155,168
                      )
                      
                      
                      (5,177
                      )
                      
                      
                      (160,345
                      )Net
      loss per share, basic and diluted
                      
                      $
                      (0.01
                      )
                      
                      $
                      -
                      
                      
                      $
                      (0.01
                      )Statements of cash flowsNet
      loss
                      
                      
                      (155,168
                      )
                      
                      
                      (5,177
                      )
                      
                      
                      (160,345
                      )Investment
      in oil and gas leases
                      
                      
                      4,538
                      
                      
                      
                      (4,538
                      )
                      
                      
                      -Proceeds
      from sale of undeveloped leasehold
                      
                      
                      -
                      
                      
                      
                      5,626
                      
                      
                      
                      5,626Oil
      and gas property expenditures
                      
                      
                      (75,673
                      )
                      
                      
                      -
                      
                      
                      
                      (75,673
                      )Prepaid
      expenses
                      
                      
                      -700
                      
                      
                      
                      4,089
                      
                      
                      
                      3,389


20


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 10,000 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.  The
Company had sales of $30,267 and $5,626 during the nine months ended May 31,
2009 and 2008, respectively.
 
 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.  An additional $30,000 was advanced to
participate in three additional workover prospects during March
2009.
 
 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 May 31, 2009, consist of our cash balance of $78,072 and
accounts receivable of $726.  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.
  21
 
 COMPARISON
OF THREE MONTHS ENDED MAY 31, 2009 AND 2008
 
 We had
revenue from oil and gas production of $1,810 during the three months ended May
31, 2009.  We had no revenues during the three month period in fiscal
2008.
 
 Non-cash
compensation amounted to $235,995 in fiscal 2009 as compared to $95,892 in
fiscal 2008.  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 in fiscal 2009, selling, general and administrative
expenses amounted to $48,125 as compared to $20,814 in the year earlier
period.  Increases are primarily due to the increase in cash consulting
fees and higher office expenses.
 
 During
the three-month period in fiscal 2009, we recognized a gain of $2,568 from
commodities trading, recognized interest expense of $3,500 and recorded interest
income in the amount of $1,263 ($844 from a related party).  During the
same period in 2008, we recognized a loss on disposition of a condominium of
$15,000 and had interest expense of $3,500.
 
 COMPARISON
OF NINE MONTHS ENDED MAY 31, 2009 AND 2008
 
 During
the nine-month period in fiscal 2009 we had total revenues of $2,499 with none
in the comparable fiscal 2008 period.  During the fiscal 2009 period, our
revenues were from our initial oil production.
 
 Non-cash
compensation amounted to $1,137,072 in fiscal 2009 as compared to $95,892 in
fiscal 2008.  Non-cash compensation is from the amortization of the
calculated value of common shares issued for consulting agreements.  (Note
5).
 
 During
the fiscal 2009 period, selling, general and administrative expenses amounted to
$173,913 as compared to $45,953 in the year earlier period.  Increases are
primarily due to the increase in cash consulting fees ($101,537), increases in
professional fees associated with public filing requirements ($10,984) and
higher rent and office expenses ($21,258).
 
 During
the fiscal 2009 period, we recognized a loss of $25,168 from commodities
trading, recognized interest expense of $11,875 and recorded interest income in
the amount of $5,371 ($2,518 from a related party).  During the same period
in 2008, we recognized a loss on disposition of a condominium of $15,000 and had
interest expense of $3,500.
 
 OFF-BALANCE
SHEET ARRANGEMENTS
 
 None.
  22
 
 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 May 31, 2009.  Based on that review and evaluation, which
included inquiries made to certain consultants 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 May 31, 2009, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
  23
  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
 
 During
the three months ended May 31, 2009, the Company issued 124,000 shares of its
common stock, valued at $26,040 to extend a consulting service agreement and a
loan extension 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
2002
 
 Exhibit
      32
                Certification
      pursuant to 18 U.S.C. Section 1350
 Section
      906 of the Sarbanes-Oxley Act of
2002
  24
  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
  25