UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                     Washington, D. C. 20549
                           FORM 10K

                             (Mark One)
         [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934

                   For the Year Ended December 31, 2008
                                 or

        [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934

                   Commission File No. 000-24778

                    TEXAS VANGUARD OIL COMPANY
	(Exact name of registrant as specified in its charter)

     Texas	                                           74-2075344
(State or other jurisdiction of                       (IRS Employer
incorporation or organization)                      Identification No.)

    9811 Anderson Mill Rd., Suite 202, Austin, Texas  78750
         (Address of Principal Executive Offices)

Registrant telephone number, including area code: (512) 331-6781

Securities Registered pursuant to Section 12(b) of the Exchange Act:
                          None

Securities registered pursuant to Section 12(g) of the Exchange Act:
            Common Stock, par value $.05 per share

Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.  Yes [  ] No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. [  ]

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 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] or No [ ].

Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]

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 definition of large accelerated file, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act.

	[   ] Large accelerated filer	[   ] Accelerated filer
	[   ] Non-accelerated filer	[ X ] 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 [  ] or No [X]

The aggregate market value of the voting  common equity held by non-affiliates
of the registrant, based on that days average bid and asked price on the
Over-the-Counter Bulletin Board, as of June 30, 2008 (the last business day of
the registrants most recently completed second fiscal quarter) was $4,148,714.

The number of shares of the registrants common stock as of March 1, 2009,
was 1,416,587.

	DOCUMENTS INCORPORATED BY REFERENCE:

The registrants definitive proxy statement regarding the election of directors
at the registrants 2008 Annual Stockholders' Meeting filed or to be filed with
the Commission on or before April 30, 2009, has been incorporated by reference
in Part III of this report.





                                PART I


ITEM  1.  BUSINESS

General

   Texas Vanguard Oil Company (the "Company" or "Registrant") was incorporated
under  the laws of the state of Texas on December 4, 1979. The business of the
Company  is  to  engage  in the  acquisition,  exploration,  development,  and
operation of onshore oil and gas  properties in the United States, principally
in  Texas.  The Company also engages in oil and natural gas exploration,
development and production in New Mexico, Oklahoma, Nebraska and Wyoming.
Generally, the Company acquires operated working interests  in producing oil
 and natural  gas properties which it further develops.

   The executive offices of the Company are located at 9811 Anderson Mill Rd.,
Suite 202, Austin, Texas 78750 and its telephone number is (512) 331-6781.

Markets for Oil and Gas

   The market for the Company's primary products, oil and gas, depends upon a
number of factors, including the availability of other domestic production,
crude oil imports, the proximity and size of oil and gas pipelines and general
fluctuations in the supply and demand for oil and gas. At present, the Company
sells all of its production to traditional industry purchasers, such as
pipeline and crude oil companies, who have the facilities to transport the
oil and gas from the well site. The Company has recorded revenues in excess
of 10% of total revenue from  DCP Midstream (21% in 2008 and 23% in 2007)
and Plains Marketing (52% in 2008 and 49% in 2007). The Company does not
believe that the loss of a major purchaser would have a materially adverse
effect on the Company because oil production can be sold to  other oil
purchasers at a comparable price. Oil sales are made under a written contract
generally not more than one year in length. The nature of the Company's
business is not seasonal except to the extent that adverse weather conditions
could affect oil and gas exploration and production activities. The Company
currently has no intention of refining or marketing its own oil and gas.
Since the Company engages independent contractors for the drilling of any
wells, it does not plan to own any significant amount of drilling equipment.
The Company does not contemplate any material product research and development,
any material acquisition of plants or equipment, or any material changes in
its number of employees in the near future.

Competition

   The oil and gas industry is highly competitive in all aspects. The Company
competes with major oil companies, numerous independent oil and gas producers,
individual proprietors, and investment programs. Many of these competitors
possess financial and personnel resources substantially in excess of those which
are available to the Company and may, therefore, be able to pay greater amounts
for desirable leases and to define, evaluate, bid for, and purchase a greater
number of potential producing prospects than the Company's own resources permit.
The Company's ability to generate resources will depend not only on its ability
to develop existing properties, but also on its ability to identify and acquire
proven and unproven acreage and prospects for future exploration.

Environmental Matters

   The Company's operations are subject to numerous federal, state and local
laws and regulations controlling the discharge of materials into the environment
or otherwise relating to the protection of the environment. Such matters have
not had a material effect on operations of the Company to date, but the Company
cannot predict whether such matters will have any material effect on its capital
expenditures, earnings or competitive position in the future.

Regulation

  The production and sale of crude oil and natural gas are currently subject
to extensive regulation of both federal and state authorities. At the federal
level  there are price regulations and income tax laws. At the state level,
there are severance taxes, proration of production, spacing of wells,
prevention and clean-up of pollution and permits to drill and produce oil
and gas. Although compliance with their laws and regulations has not had a
materially adverse effect on the Company's operations, the Company cannot
predict whether its future operations will be adversely affected thereby.

Employees

  The Company's officers actively manage the Company's activities. There are
no employment contracts with any officers. At December 31, 2008, the Company
had two full-time salaried employees. From time to time the Company engages
independent petroleum engineers, geologists and landmen on a fee basis.
Both William Watson and Linda Watson are directors of other companies that have
oil and gas interests. Due to this situation a conflict of interest may arise.
However, there have been no such conflicts in the past five years.

ITEM 2. PROPERTIES

  The Company owns no significant properties other than oil and gas properties.
It leases approximately 2,000 square feet of space for its executive offices at
9811 Anderson Mill Rd., Suite 202, Austin, Texas 78750. The Company currently
has a month-to-month lease with a company owned by the Chairman of the Company
for these  facilities.  The rent for these facilities is $2,200 per month.

Well Activity

   During 2008, the Company participated in the completion of one gas producer
which had been started in 2007. The Company also participated in the drilling
of two wells. One well was successfully completed as an oil producer and the
other well was scheduled to be completed as an oil producer in early 2009.The
Company also acquired interest in seven producing wells, six of which are oil
wells and one is a gas well. In addition, the Company acquired additional
interest in 17 wells which the Company operates. All of the Company's oil and
gas working and royalty interests, reserves and activities are located onshore
in the continental United States. The following table sets forth the drilling
and acquisition activity of the Company, for the years ended December 31, 2006,
2007 and 2008.

Fiscal years         Oil                      Gas                   Dry
  ended
December 31,   Gross    Net            Gross        Net      Gross       Net

2006            39      2.54              7        0.42        1        0.1
2007            49      2.80              4        0.04        0        0
2008            17      1.30              9        0.46        0        0

(1)   A gross well is a well in which the Company has an interest.

(2)   A net well is made up of 100% of the working interest in a well. If the
      Company has a 12.5% working interest in a well, .125 is shown in the net
      well column.

(3)   A dry well is a well found to be incapable of producing oil or gas in
      sufficient quantities to justify completion of the well.

(4)   In 2006, the Company participated in the drilling of four new wells.
      Two were completed as oil wells, one as a gas well and one was plugged.

(5)   In 2007, the Company participated in the drilling of two wells. One
      well was completed as an oil producer and one was waiting for a pipeline
      connection at yearend, then completed as a gas producer in early 2008.

   The Company is not obligated to provide a fixed and determinable quantity of
oil or gas in the future under existing contracts or agreements.

Significant Properties

   Over the past two years, the Company has made investments in proven oil
and gas properties that in the aggregate have been significant to the Company.
None  of the  individual properties  has cost  more  than 15%  of the average
balance in oil and gas properties at the time of purchase.  These investments
have been made in different fields and areas, primarily in south, central and
west Texas. As of December 31, 2008, the Company does not have any single
property that is significant enough to materially affect its operations.

   As of December 31, 2008, the Company has pledged its interest in certain
properties  and  well  equipment  against a line of credit.   None of the
individual properties  are significant.

Productive Wells and Acreage

   The following table sets forth by a county the Company's gross and net
productive wells and developed acreage as of December 31, 2008. All counties
are in Texas unless otherwise noted.

                       Producing Wells (a)                    Developed
                       Oil            Gas                     Acreage (a)
County          Gross   Net     Gross        Net          Gross           Net

Andrews           1      .04     ---         ---          80.00           3.00
Bastrop (b)      84    65.23      47       40.20       3,208.46       2,657.76
Bee               5      .31      12        1.20         685.70          60.92
Burleson          2     1.56     ---         ---         320.00         210.91
Chaves (c)      ---      ---       1         .50         160.00          80.00
Crane (b)        12    11.00       1         .02         160.00         109.99
Crockett        ---      ---       2        2.00         160.00         160.00
Eastland (b)    ---      ---       4         .09         122.00           1.30
Eddy (c)          4      .88       1         .11         440.00          65.50
Fayette (b)      17    12.47       1         .63       3,136.39       1,541.29
Garza (b)         3      .05     ---         ---          30.00            .47
Grimes            1     1.00     ---         ---         652.85         652.85
Haskell (f)     ---      ---       1         .13         640.00          83.39
Hemphill        ---      ---       1         .13         700.00          87.50
Hidalgo         ---      ---       3         .34         457.86          23.39
Kent (b)         27      .67     ---         ---       1,411.65          29.49
Kimball (d)       1      .05     ---         ---          40.00           2.00
Lea (b)(c)        3      .25       1         .07         574.45          65.87
Lee (b)         112    92.60       5        4.55       2,953.40       2,190.09
Lipscomb          1      .03     ---         ---          80.00           2.50
Martin            4     3.82     ---         ---         320.19         305.74
Midland           3      .14     ---         ---         240.00          11.33
Nolan (b)         1      .03     ---         ---          40.00           1.25
Parker (b)      ---      ---       1         .01         136.91            .83
Schleicher        2      .50     ---         ---          80.00          20.00
Ward (b)          1      .03       1         .13         720.00          19.20
Washington (b)    3      .21     ---         ---       1,032.92         103.29
Weston (e)        3      .94     ---         ---         120.00          37.42
Wilson            1      .95     ---         ---          80.00          76.00
Woodward (f)      1      .01     ---         ---         640.00           3.32
             ------   -------  -----       -----       --------       --------
                292   192.77      82       50.11      19,422.78       8,606.60

(a)   A gross well is a well in which the Company owns either a working
      interest or a royalty interest. A net well is the fractional interest
      owned by the Company. Gross acres are the total acres in a lease. Net
      acres are the gross acres multiplied by the Company's interest.
(b)   The Company owns overriding royalty interest in these counties.
(c)   Chaves, Eddy and Lea Counties are located in New Mexico.
(d)   Kimball County is located in Nebraska.
(e)   Weston County is located in Wyoming.
(f)   Haskell and Woodward Counties are located in Oklahoma.

Reserve Quantity Information

   For information required by Statement of Financial Accounting Standards No.
69, "Disclosures About Oil and Gas Producing Activities," see the "Supplemental
Oil and Gas Information" section included in Item 7. This section also includes
estimates of proven oil and gas reserves.

OIL AND GAS STATISTICS

  The following summarizes the net oil and gas production, average sales prices
and production costs per unit for the years ended December 31, 2008, 2007 and
2006.


                                             2008       2007      2006
  Oil:
     Production volume (barrels)            56,467     61,293    60,763
     Average sales price per barrel        $103.66     $68.04    $64.77
  Gas:
     Production volume (MCF)               345,512    359,969   385,798
     Average sales price per MCF           $  9.36     $ 7.24    $ 6.94

  Average production costs per
     equivalent barrel                     $ 38.12     $34.24    $28.07

   The worldwide crude oil prices of 2008 continue to fluctuate in 2009.
The Company cannot predict how prices will vary during 2009 and what
effect they will ultimately have on the Company.

UNDEVELOPED ACREAGE

   The following table sets forth by county the Company's gross and net
undeveloped acreage as of December 31, 2008.  All counties are in Texas
unless otherwise noted.

           County               Gross                Net

          Andrews               384.00              192.00
          Bastrop             2,306.18            1,827.94
          Crane                 593.64              563.61
          Crosby              1,118.77              559.38
          Eastland              199.30                2.37
          Eddy (a)              480.00               65.00
          Fayette             1,772.64              354.06
          Garza               2,771.10              548.51
          Kent                4,037.44            1,471.31
          Kimble                549.60               54.96
          Lea (a)               840.00              321.56
          Lee                 1,930.11            1,615.33
          Midland               133.33                9.11
          Weston (b)            840.00              379.75
          Wilson                129.51              123.03
                             ---------            --------
                             18,085.62            8,087.92
                             =========            ========

Of the 8,087.92 net undeveloped acres under lease, 8,032.97 net acres
are being held by production.

a) Eddy and Lea Counties are located in New Mexico
b) Weston County is located in Wyoming.

ITEM 3. LEGAL PROCEEDINGS

   The Company knows of no material litigation pending, threatening or
contemplated, or unsatisfied judgments against it, or any other proceeding in
which  the Company is a party. The Company knows of no material legal actions
pending or threatening or judgments entered against any officers on the board
of directors of the Company in their capacity as such.

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

   No matters were submitted to a vote of the security holders during the
quarter ended December 31, 2008.

                               PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED
        STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

   The Company's common stock is quoted on the OTC Bulletin Board with the
symbol (TVOC.OB). The range of high and low sales price for each quarterly
period during the past two years is as follows:

                                           Sales Price
                                     High                Low
      Fiscal 2008

        First Quarter              12.00              10.73
        Second Quarter             15.83               8.25
        Third Quarter              13.98               8.00
        Fourth Quarter             10.30               6.05

     Fiscal 2007

        First Quarter               8.75               7.00
        Second Quarter             10.01               7.00
        Third Quarter              15.00               8.10
        Fourth Quarter             12.00               8.50



   At December 31, 2008, the approximate number of holders of record of the
Company's common stock was 424. The Company has not paid any dividends and
has no plans to do so in the immediate future. The Company issued no equity
securities in 2008. The Company has no equity compensation plans for its
directors, officers or employees.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

ANALYSIS OF FINANCIAL CONDITION

During the years ended December 31, 2008 cash increased by $2,709,422
while cash increased for the year ended December 31, 2007 by $1,225,131.
The cash flow from operating activities in 2008 was approximately $3,831,542,
an increase of $1,778,471 from 2007. The cash flow from operating activities
in 2007 was approximately $2,043,061, an increase of $419,684 from 2006.
The significant use of cash, other than for operating expenses,
has been investments in oil and gas properties. Investments in oil and
gas properties were $1,063,256 and $810,951 in 2008 and 2007,
respectively. As of December 31, 2008, the Company had a cash balance of
$7,142,159, and notes payable of $150,000 as compared to the December 31,
2007, cash balance of $4,432,737, and notes payable of $150,000.

During the last two years, the Companys investment in producing
oil and gas properties was provided by cash flow from operating
activities, sales of other oil and gas properties, and from borrowings
on notes payable to banks. The Company sells selected properties when
it is more economical to sell rather than produce them.

Working capital at December 31, 2008, increased to 9.84 to 1 from 6.27 to 1
at December 31, 2007.  The Company continued its policy of making strategic
investments in  producing oil and gas properties in the same or similar fields
to  properties  already  operated by the Company, which are primarily financed
with short-term notes payable and cash from operations.

LIQUIDITY AND CAPITAL RESOURCES

   During the current fiscal year, the Companys liquidity has remained strong
enough to meet its short-term cash needs. The sources of liquidity and capital
resources are generated from cash on hand, cash provided by operations and from
credit available from financial institutions. Management believes the Company
will be able to meet its current operating needs through internally generated
cash from operations. Management believes that oil and gas  property investing
activities in 2009 can be financed through cash on hand, cash  from  operating
activities, and bank borrowings. The Company anticipates continued investments
in proven oil and gas properties in 2009 when they can be purchased  at prices
that will provide a short payback period. If bank credit is not available, the
Company may not be able to continue  its  policy  of continued  investment  in
strategic oil and gas  properties.  The Company cannot predict how oil and gas
prices will fluctuate during 2009 and what effect they will ultimately have on
the Company, but management believes that the Company will be able to generate
sufficient cash from  operations  to service  its bank  debt and  provide  for
maintaining current  production of its oil and gas properties. The Company had
no significant commitments for capital expenditures at December 31, 2008.

   At the end of 2008, the Company was holding a substantial cash reserve.
In the first half of 2008, commodity prices dramatically increased which
affected the Company ability to purchase properties that met its
parameters and criteria. However, if the low commodity prices at the end
of 2008 continue, it may bring a number of operated properties to the market
which would meet the Company requirements.  The Company will continue to
review the market for opportunities to purchase operated properties,
non-operated interests and participate in drilling projects that meet its
criteria.

   As of December 31, 2008, the Company had a $5,000,000 line of credit secured
by producing oil and gas properties and well equipment owned by the Company.
The line credit matures on May 16, 2009. The Company also maintains a
$1,000,000 line of credit secured by a certificate of deposit. The line of
credit matures on April 27, 2009 (see note 2 of notes to financial statements
for further explanation).

RESERVE ESTIMATES

At the end of 2008, the Companys oil reserves were 358,119 barrels of oil,
down 40% from the prior year.  The Companys gas reserves were 2,330,534 MCF
of gas, down 31% from the prior year.  These declines in reserves are
primarily due to lower commodity prices, the natural decline of production
and higher operating costs.

	Estimates of oil and gas reserves, by necessity, are projections based
on geologic and engineering data, and there are uncertainties inherent in the
interpretation of such data as well as the projection of future rates of
production and the timing of development expenditures. Estimates of economically
recoverable oil and gas reserves and of future net cash flows depend upon a
number of variable factors and assumptions, such as future production, oil
and gas prices, operating costs, severance taxes, development costs and
workover costs, all of which may vary considerably from actual results.
Any significant variance in the assumptions could materially affect the
estimated quantity and value of the reserves.  Moreover, there can be no
assurance that our reserves will ultimately be produced or that any
undeveloped reserves will be developed.  For these reasons, estimates of
the economically recoverable quantities of oil and gas and estimates of
the future net cash flows expected therefrom may vary substantially.
Actual production, revenue and expenditures with respect to our reserves
will likely vary from estimates, and such variances may be material.
The estimated discounted future net cash flows from proved reserves are
generally based on prices and costs as of the date of the estimate, while
actual future prices and costs may be materially higher or lower.

ANALYSIS OF RESULTS OF OPERATIONS

  Oil and gas sales revenue increased in 2008 and 2007 by 32% and 3%,
respectively. The Companys total revenue for the fiscal year ended
December 31, 2008, was $9,744,676 as compared to $7,403,987 as of
December 31, 2007.

  In 2007, oil production volume increased by 1% at the same time as the
average price per barrel increased by 5% to $68.04. Also, in 2007, the gas
production volume decreased by 7% at the same time as the average price per
MCF increased by 4% to $7.24. In 2008, oil production volume decreased by 8%
at the same time as the average price per barrel increased by 52% to $103.66.
Also, in 2008, the gas production volume decreased by 4% while the average
price per MCF increased by 29% to $9.36. The fluctuation in oil and gas
prices is solely attributable to changes in market prices.

   Oil and gas production expenses increased in 2008 and 2007 by 5% and 18%,
respectively. The increased production costs for 2008 is largely associated
with an increase in overall field expenses while the increased production
costs for 2007 is largely associated with an increase in workover activity
as compared to the prior year, an increase in overall field expenses,
and an increased participation in non-operated properties and the costs
associated therewith.

   The Company participated in the drilling of 2 wells in both 2008 and 2007,
respectively, and the costs associated therewith were capitalized.

    In 2008, interest expense decreased 19% over 2007 due to a reduction of
interest rates on outstanding balances. In 2007, interest expense decreased by
79% in 2007 over 2006 due to lower average outstanding balances.

   Depreciation, depletion and amortization varies from year to year because of
changes in reserve estimates, changes in quantities of oil and gas produced,
changes in price of oil and gas sold, as well as the  acquisition, discovery or
sale of producing properties. Depletion increased 47% in 2008 as compared to
a 1% increase in depletion in 2007.

  Total general and administrative expenses increased $77,995 in 2008 while
total general and administrative expenses decreased $55,993 in 2007.

    In 2008 and 2007, the Company provided an allowance of $105,318 and
$141,576 respectively, for trade accounts receivable that were deemed
uncollectible and thus classified as doubtful accounts.

   In 2008 and 2007, the Company recognized approximately $250,763 and $201,745,
respectively, for the impairment of value of oil and gas properties due to
less than expected production performance of specific wells and for wells that
were plugged and abandoned.

   Inflation is not anticipated to have a significant impact on the Company's
operations.

CONTRACTUAL OBLIGATIONS OF COMPANY

The Companys contractual obligations as of December 31, 2008 are as follows:

Contractual Obligations:         2009   Thereafter    Total

          Debt Obligations   $ 150,000     ---      $150,000
                               =======  =========   ========



FORWARD-LOOKING STATEMENTS

This annual report contains various forward-looking statements within
the meaning of the Section 27A of the Securities Exchange Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended.  All statements, other than statements of historical facts,
included in the Form 10-K  that address activities, events or developments
of the Company are forward-looking statements and represent managements
expectations or beliefs concerning future events, and may be signified by
the words expect, estimate, believe, anticipate, predict or other
similar expressions.  Forward-looking statements appear throughout this
Form 10-K with respect to, among other things: estimates of future oil and
gas production; estimates of future oil and gas prices; estimates of oil and
gas reserves; future drilling and operations; future capital expenditures;
future net cash flows; our future financial condition or results of operations;
and our business strategy and other plans and objectives for future operations.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.  Accordingly, such forward-looking statements
do not purport to be predictions of future events or circumstances and
may not be realized.  For these reasons, you should not place undue reliance
on forward-looking statements.  We undertake no obligation to publicly update
or revise them.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company does not engage in hedging activities and does not use commodity
futures nor forward contracts in its cash management functions.

Oil and Natural Gas Prices

Our financial condition, results of operations and capital resources are
highly dependent upon the prevailing market prices of, and demand for,
oil and natural gas. These commodity prices are subject to wide fluctuations
and market uncertainties due to a variety of factors that are beyond our
control. We cannot predict future oil and natural gas prices with any
degree of certainty. Sustained declines in oil and natural gas prices may
adversely affect our financial condition and results of operations, and
may also reduce the amount of net oil and natural gas reserves that we
can produce economically.



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



                    INDEPENDENT AUDITORS' REPORT





The Board of Directors
Texas Vanguard Oil Company:


We have audited the accompanying balance sheets of Texas Vanguard Oil Company
(the Company) as of December 31, 2008 and 2007, and the related statements of
earnings, stockholders' equity and  cash flows  for the years ended December
31, 2008 and 2007. These financial statements  are  the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our  audits in accordance  with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material  misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Companys internal
control over financial reporting.  Accordingly, we express no such opinion.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating  the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.

In  our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Texas Vanguard Oil Company as
of  December 31, 2008 and 2007, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.


Padgett, Stratemann & Co. L.L.P.
Certified Public Accountants
Austin, Texas
March 20, 2009



                        TEXAS VANGUARD OIL COMPANY

                                 Balance Sheets

                          December 31, 2008 and 2007

                                    ASSETS
                                                          2008          2007
Current assets:
    Cash (including certificates of deposit of
       $1,250,000, pledged, in 2008 and 2007,
       respectively)                                $  7,142,159  $ 4,432,737
    Trade accounts receivable, net of allowance
       for doubtful accounts of $105,318 and
       $141,576 in 2008 and 2007, respectively           122,301      128,326
     Prepaid expense                                       8,550          ---
     Prepaid federal income tax                            1,895      263,329
                                                       ----------   ---------
            Total current assets                       7,274,905    4,824,392
                                                       ----------   ---------
Oil and gas properties, partially pledged,
    successful efforts method of accounting:
       Proven properties                               7,062,204    6,264,719
       Unproven properties                               149,812      151,412
Office furniture and equipment                           223,753      230,353
                                                       ---------    ---------
                                                       7,435,769    6,646,484
Less accumulated depreciation, depletion and
    amortization                                      (3,450,714)  (2,973,268)
                                                       ---------    ---------
                                                       3,985,055    3,673,216
                                                       ---------    ---------
Other assets                                               1,000        1,000
                                                       ---------    ---------
TOTAL ASSETS                                        $ 11,260,960  $ 8,498,608
                                                       =========    =========

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Trade accounts payable                          $    417,954  $   502,021
    Taxes payable                                         56,062       42,575
    Asset retirement obligation, current portion         115,294       74,544
    Notes payable                                        150,000      150,000
                                                       ---------    ---------
            Total current liabilities                    739,310      769,140
                                                       ---------    ---------
Deferred federal income tax liability                    199,694      329,329
Asset retirement obligation, less current portion        332,049      190,254
                                                       ---------    ---------
            Total Liabilities                          1,271,053    1,288,723
                                                       ---------    ---------
Commitments

Stockholders' equity:
    Common stock, par value $.05; authorized
    12,500,000 shares; 1,416,587 issued and
    outstanding in 2008 and 2007, respectively            70,828       70,828
    Additional paid-in capital                         1,888,528    1,888,528
    Retained earnings                                  8,030,551    5,250,529
                                                       ---------    ---------
            Total stockholders' equity                 9,989,907    7,209,885
                                                       ---------    ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $ 11,260,960  $ 8,498,608
                                                       =========    =========

See accompanying notes to financial statements.

                        TEXAS VANGUARD OIL COMPANY
                         Statements of Earnings

                Years ended December 31, 2008 and 2007

                                            2008        2007

Revenues:
    Oil and gas sales                $  9,135,376 $ 6,927,891
    Well operation fees                   122,420     126,892
    Other, net                            408,432     255,159
    Interest income                        78,448      94,045
                                        ---------   ---------
       Total revenues                   9,744,676   7,403,987
                                        ---------   ---------
Expenses:
  Production cost                       4,347,275   4,152,951
  Depreciation, depletion
    and amortization                      559,518     380,559
  Interest expense                          7,863       9,671
  General and administrative              587,439     509,444
  Impairment in value of
    oil and gas property                  250,763     201,745
  Doubtful accounts expense                   ---     141,576
                                        ---------   ---------
       Total expenses                   5,752,858   5,395,946
                                        ---------   ---------
  Earnings before income tax            3,991,818   2,008,041

Federal and State taxes:
  Provision for federal income tax      1,287,344     601,469
  Deferred federal income tax
    (benefit)                            (129,635)        ---
  Provision for state margin tax           54,087      52,876
                                         --------   ---------

Net earnings                          $ 2,780,022 $ 1,353,696
                                        =========   =========
Weighted average number of
    shares outstanding                  1,416,587   1,416,587
                                        =========   =========

Basic and diluted earnings
    per share                         $   1.96    $    .96
                                        =========   =========

See accompanying notes to financial statements.

                             TEXAS VANGUARD OIL COMPANY
                         Statements of Stockholders' Equity

                    Years ended December 31, 2008 and 2007

                                                                        Total
                               Common Stock     Additional              Stock-
                             Shares     Amount    Paid-In    Retained   holders
                                                  Capital    Earnings   Equity


Balances at Dec. 31, 2006  1,416,587  $70,828  $1,888,528  $3,896,833 $5,856,189

   Net earnings                  ---      ---         ---   1,353,696  1,353,696
                            --------- --------  ---------   --------- ----------
Balances at Dec. 31, 2007  1,416,587  $70,828  $1,888,528  $5,250,529 $7,209,885

   Net earnings                  ---      ---         ---   2,780,022  2,780,022
                            --------- --------  ---------   --------- ----------
Balances at Dec. 31, 2008  1,416,587  $70,828  $1,888,528  $8,030,551 $9,989,907
                           ========= ========= ==========  ========== ==========


See accompanying notes to financial statements.

                           TEXAS VANGUARD OIL COMPANY

                            Statements of Cash Flows

                Years ended December 31, 2008 and 2007

                                               2008         2007

Cash flows from operating activities:
 Net earnings                            $ 2,780,022  $ 1,353,696
  Adjustments to reconcile net earnings
   to cash provided by operating
   activities:
    Depreciation, depletion
      and amortization                       559,518      380,559
    Impairment in value of oil and
      gas property                           250,763      201,745
    Doubtful accounts expense                    ---      141,576
  Changes in assets and liabilities:
    (Increase) decrease in receivables         6,025      (59,929)
    Increase (decrease) in payables
       and accrued expenses                  111,965      143,743
    (Increase) decrease in prepaid taxes     261,434     (118,329)
    Increase (decrease) in deferred
       federal income tax                   (129,635)         ---
    (Increase) decrease in prepaid
       expense                                (8,550)         ---
                                           ---------    ---------
Net cash provided by
  operating activities                     3,831,542    2,043,061
                                           ---------    ---------
Cash flows from investing activities:
Additions to oil and gas properties       (1,063,256)    (810,951)
Purchases of equipment                       (58,864)         ---
                                            ---------    ---------
   Net cash used in investing activities  (1,122,120)    (810,951)
                                            ---------    ---------
Cash flows from financing activities:
Repayments of notes payable                     ---       (6,979)
                                           ---------    ---------
   Net cash used in
     financing activities                        ---      (6,979)
                                           ---------    ---------
   Net increase in cash                    2,709,422    1,225,131

   Cash and cash equivalents at
     beginning of year                     4,432,737    3,207,606
                                           ---------    ---------
   Cash and cash equivalents at
     end of year                         $ 7,142,159  $ 4,432,737
                                          ==========   ==========
Supplemental disclosure of
  cash flow information:
   Interest paid                         $     7,863  $     9,671
                                          ==========   ==========

   Cash paid for income taxes            $ 1,068,485  $   821,301
                                          ==========   ==========

See accompanying notes to financial statements.


                             TEXAS VANGUARD OIL COMPANY

                           Notes to Financial Statements

                          December 31, 2008 and 2007


(1) Significant Accounting Policies

Description of Business - Texas  Vanguard Oil Company  (the Company) engages in
the acquisition, exploration, development, and operation of onshore oil and gas
properties  in  the United  States,  principally  in Texas.   The  Company owns
interests in producing properties and undeveloped  oil and gas leases in Texas,
Wyoming and New Mexico.  The Company sells all of its production to traditional
industry  purchasers  who have the facilities to transport the oil and gas from
the well site.

Oil and Gas Properties - The Company follows the "successful efforts" method of
accounting  for oil and gas exploration and production operations. Accordingly,
costs incurred  in  the acquisition  and exploratory  drilling  of oil and gas
properties are initially capitalized and  either subsequently  expensed if the
properties are determined not  to have  proved  reserves, or reclassified as a
proven property if proved reserves are discovered. Costs of drilling development
wells are capitalized. Geological,  geophysical, carrying and production costs
are charged to expense as incurred.

Financial Accounting Standards Board (FASB), Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, requires that long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. It establishes guidelines for determining
recoverability based on future net cash flows from the use of the asset and
for the measurement of the impairment loss. Impairment loss under SFAS No. 144
is calculated as the difference between the carrying amount of the asset and
its fair value. Any impairment loss is recorded in the current period in
which the recognition criteria are first applied and met. Under the successful
efforts method of accounting for oil and gas operations, the Company
periodically assesses its proved properties for impairments by comparing the
aggregate net book carrying amount of all proved properties with their
aggregate future net cash flows. The statement requires that the impairment
review be performed on the lowest level of asset groupings for which there
are identifiable cash flows.

The Company performs a periodic review for impairment of proved properties.
The Company determines if impairment has occurred through either adverse
changes or as a result of its periodic review for impairment. Upon
abandonment of properties, the reserves are deemed fully depleted and any
unamortized costs are recorded in the statement of income under impairment
expense. Upon the sale of oil and gas reserves in place, costs less
accumulated amortization of such property are removed from the accounts
and resulting gain or loss on sale is reflected in operations.

Impairment of unproved properties is assessed periodically and any
impairment in value is currently charged to expense. Loss is recognized
to the extent that such impairment is indicated. When an entire interest
in an unproved property is sold, gain or loss is recognized, taking into
consideration any recorded impairment.

Impairment is measured on discounted cash flows utilizing a discount rate
appropriate for risks associated with the related properties or based on
fair market values. Impairment and abandonment losses of $250,763 and
$201,745 were recorded in 2008 and 2007, respectively.

Depreciation, depletion and amortization of proved oil and gas property costs,
including  related equipment and facilities, are provided using the units-of-
production method on a property by property basis.

Office Furniture and Equipment - Office furniture and equipment is stated at
cost.  Depreciation is computed using the straight-line method, based on the
following estimated useful lives:

          Office furniture and equipment         7 years
          Automotive equipment                   5 years

Accounts Receivable - The Company provides for uncollectible accounts using
the allowance method of accounting for bad debts. Under this method of
accounting, a provision for uncollectible accounts is charged to earnings.
The allowance account is increased or decreased based on past collection
history and managements evaluation of accounts receivable. All amounts
considered uncollectible are charged against the allowance and recoveries
are added to the allowance.

Federal Income taxes - The Company uses the "asset  and liability method" of
income tax accounting which bases the  amount  of current  and  future taxes
payable on the events recognized in the financial statements and on tax laws
existing at the balance  sheet date.   The effect on deferred tax assets and
liabilities  of a  change in tax rates is recognized in income in the period
that includes enactment date.

Cash and Cash Equivalents - The Company considers cash and cash equivalents to
consist of demand deposits and certificates of deposit.

Concentration of Credit Risk -  The  Company  sells all  of  its production
to traditional industry purchasers. Oil sales are made under a written
contract, generally not more than one year in length. The Company has recorded
revenues in excess of 10% of total revenue from two purchasers in 2008 and two
purchasers in 2007 as follows: 2008 - 52%, 21% and 2007 - 49%, 23%. The
Company does not believe the loss of these purchasers would have a materially
adverse effect on its operations as it could sell its production to other
gathering companies.

The Company maintains cash in depository institutions that are guaranteed by
the Federal Deposit Insurance Corporation (FDIC). Effective October 14, 2008
the FDIC ruled that all non-interest bearing deposit accounts at an FDIC
insured institution are fully insured for the entire amount in the deposit
account. This unlimited insurance coverage is temporary and will remain in
effect for participating institutions until December 31, 2009.  In addition,
interest bearing accounts are insured up to at least $250,000 per account.
At December 31, 2008 cash in one interest bearing account exceeded the FDIC
limits. At December 31, 2007 cash in banks exceeded the $100,000 FDIC limit.
The Company has not experienced any losses on deposits.

Use of Estimates - 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.
The most significant estimates pertain to proved oil and gas reserve volumes
and the future development costs.  Actual results could differ from those
estimates.


(2) Notes Payable and Long-term Debt

The Company had notes payable to banks as follows at December 31:

                                                            2008          2007

Line of credit with a bank in the amount of
  $5,000,000. Interest payable monthly at
  prime plus .5%, secured by oil and gas
  properties.  The line of credit was scheduled
  to mature on February 15, 2009. Subsequent to
  December 31, 2008, the note was extended until
  May 16, 2009 with the same terms.                  $       ---    $      ---

Line of credit with a bank in the amount of
  $1,000,000. Interest payable monthly at 4.50%,
  secured by $1,000,000 in certificates of deposit.
  The line of credit matures on April 27, 2009.          150,000           ---

Line of credit with a bank in the amount of
  $1,000,000. Interest payable monthly at 6.50%,
  secured by $1,000,000 in certificates of deposit.
  The line of credit matured on April 27, 2008.               ---      150,000


                                                        ---------    ---------
    Total debt                                            150,000      150,000
Less current installments                                (150,000)    (150,000)
                                                        ---------    ---------
Long-term debt, excluding current installments       $        ---  $       ---
                                                        =========    =========


As of December 31, 2008 and 2007, respectively, the Company had no long term
debt.

(3) Related Party Transactions

The Company and an entity owned by the Chairman of the Company have an
agreement whereby the latter provides the Company general corporate
management services. The affiliated company received $240,000 and $234,000
as compensation for performance of those services during the years ended
December 31, 2008 and 2007, respectively. Effective January 1, 2009,
the agreement was continued with terms of $20,500 per month through December
31, 2009.

The Company leases office space from a company owned by the Chairman
of the Company under a month-to-month operating lease. Rent expense
incurred under this lease was $25,800 and $25,200 for the years
ended December 31, 2008 and 2007, respectively.

Certain officers and directors of the Company own small interests
in a number of the properties that the Company has interests in as well
as other similar properties in which the Company does not have an interest.
For the years ended December 31, 2008 and 2007 these individuals
received $110,638 and $60,187, respectively.

During the years ended December 31, 2008 and 2007, a Director of the
Company received $69,000 and $67,200, respectively for engineering
consultant work.

The Company purchases materials and services from two businesses
in which the Chairman of the Company owns an interest. These purchases
represent less than 10% of the Company's total oil field purchases.

(4) Federal Income Taxes

The federal income tax expense for 2008 and 2007 does not differ from
the expected tax expense by applying the U.S. Federal corporate income tax
rate of 34% to earnings before income taxes.  The provision for income taxes
for the year ended December 31, 2008 and 2007 consists of:

                                                2008        2007

Current tax expense                        $1,287,344   $ 601,469
Deferred tax expense (benefit)               (129,635)        ---
                                            _________   _________
                                           $1,157,709   $ 601,469
                                            =========   =========


The tax effects of temporary differences that give rise to the deferred tax
assets and liabilities at December 31, 2008 and 2007 is presented below:

                                                             2008       2007

   Deferred tax liability:
     Office furniture and equipment and oil
      and gas property, due to differences in
      depreciation and abandonment                    $ (199,694)  $ (329,329)
                                                        ---------   ----------
   Total deferred tax liability                       $ (199,694)  $ (329,329)
                                                        =========   ==========


The Company has no accumulated losses for Federal income tax purposes as of
December 31, 2008 and 2007, which may be carried forward and used to
reduce taxable income in future years.

We adopted the provisions of FASB Interpretation (FIN) 48, Accounting
for Uncertainty in Income Taxes, an interpretation of Statement of
Financial Accounting Standards (SFAS) 109 on January 1, 2007. FIN 48
clarifies the accounting for uncertainty in income taxes recognized
in an entity financial statements and prescribes a recognition
threshold and measurement attribute for financial statement disclosure
of tax positions taken or expected to be taken on a tax return. As a
result of our implementation of FIN 48 at the time of adoption and
December 31, 2008, the Company did not recognize a liability for uncertain
tax positions. As a result, the only differences between our financial
statements and our income tax returns relate to normal timing differences
such as depreciation, depletion and amortization, which are recorded as
deferred taxes on our consolidated balance sheets. We do not expect our
unrecognized tax benefits to change significantly over the next 12 months.
The tax years 2001 through 2008 remain open to examination by the taxing
jurisdictions in which we file income tax returns.


(5) Fair Value of Financial Instruments

Based on the borrowing rates currently available to the Company for bank loans
with  similar  terms and  average  maturities, the fair value of notes payable
approximates market value at December 31, 2008 and 2007.

(6) Asset Retirement Obligation

In June 2001, the FASB issued FAS 143,Accounting for Asset Retirement
Obligations. FAS 143 requires that an asset retirement obligation (ARO)
associated with the retirement of a tangible long-lived asset be recognized
as a liability in the period in which it is incurred or becomes determinable
(as defined by the standard), with an associated increase in the carrying
amount of the related long-lived asset.  The cost of the tangible asset,
including the initially recognized asset retirement cost, is depreciated
over the useful life of the asset.  The ARO is recorded at fair value, and
accretion expense will be recognized over time as the discounted liability
is accreted to its expected settlement value.  The fair value of the ARO
is measured using expected future cash outflows discounted at the Companys
credit-adjusted risk-free interest rate.  The provisions of this statement apply
to legal obligations associated with the retirement of long-lived assets that
result from the acquisition, development, and operation of a long-lived asset.


           					               2008 	  2007
      Asset retirement obligation
        Beginning of year	                 $ 264,798  $ 215,867
        Liabilities incurred during the period    18,003     17,333
        Settlements                                  ---        ---
        Accretion expense		              11,349     11,349
        Revisions in estimated cash flow         153,193     20,249
                                                 -------    --------
	Asset retirement obligation
	  End of year                            $ 447,343  $ 264,798
                                                 =======    =======




                      TEXAS VANGUARD OIL COMPANY

                 SUPPLEMENTAL OIL AND GAS INFORMATION

             Years ended December 31, 2008 and 2007
                             (Unaudited)

Reserve Quantity Information  (Unaudited)

The following reserve related information is based on estimates prepared by
an independent third party petroleum engineer in 2008 and 2007. Reserve
estimates are inherently imprecise and are continually subject  to  revisions
based on  production  history, results of additional exploration and
development, price of oil and gas and other factors. All of the Companys oil
and gas reserves are located in the United States.

                             2008                   2007
                        Oil        Gas         Oil         Gas
                       BBLS        MCF        BBLS         MCF

Proved developed
reserves:
Beginning of year    595,907    3,386,477    605,039     3,633,393
Revisions of
 previous
estimates           (187,065)    (781,243)    19,026         9,867
Extensions
 and Discoveries         938       37,596      1,339         8,549
Purchase of
 minerals in place     4,806       33,216     31,796        94,637
Sale of minerals         ---          ---        ---           ---
Production           (56,467)    (345,512)   (61,293)     (359,969)
                   ---------    ---------    --------     ---------
End of year          358,119    2,330,534    595,907     3,386,477
                   =========    =========    ========    =========
Proved developed
   reserves:
Beginning of year    595,907    3,386,477    605,039     3,633,393
End of year          358,119    2,330,534    595,907     3,386,477

Standardized Measure of Discounted Future Net Cash Flows (Unaudited)

The following is a standardized measure of discounted future net cash flows and
changes therein relating to proved  oil and gas reserves. Future net cash flows
were computed using year-end prices and costs and relate to existing proved oil
and gas reserves in which the enterprise has  mineral  interests.  The Company
cannot predict  price  fluctuations, which may  occur in the future. Future
income tax expenses were provided  after  estimated  utilization of any
available Federal income tax loss carryforwards.

                                             December 31,
                                         2008           2007

Future cash inflows                 $ 28,021,930  $  81,740,550
Future production
  and development costs              (17,164,290)   (38,201,930)
Future income tax expenses            (1,977,217)   (12,888,188)
                                     ------------   ------------
     Future net cash flows             8,880,423     30,650,432

10% annual discount for
  estimated timing of cash flows      (2,885,625)   (12,485,618)
                                     ------------   ------------
Standardized measure of
  discounted future net cash flows  $  5,994,798  $  18,164,814
                                    ============   ============

                              TEXAS VANGUARD OIL COMPANY

                    SUPPLEMENTAL OIL AND GAS INFORMATION, CONTINUED
                                   (Unaudited)

The following are the principal sources of change in the standardized measure
of discounted future net cash flows:

                                                2008         2007
Changes:
Sale of oil and gas produced, net of
 production costs                       $  4,788,101  $ 2,774,940
Net changes in prices and production
 costs                                    (2,455,554)   1,442,368
Purchase of minerals in place                 13,866      180,217
Extensions and discoveries                     9,337        9,399
Sales                                            ---          ---
Revisions of previous quantity estimates  (2,158,077)     107,560
Accretion of discount                      1,816,481    1,304,718
Other                                    (14,184,170)    (701,565)
                                           ----------   ----------
    Net changes                          (12,170,016)   5,117,637

Beginning balance - standardized measure
 of discounted future net cash flows      18,164,814   13,047,177
                                          ----------   ----------
Ending balance - standardized measure
 of discounted future net cash flows    $  5,994,798  $18,164,814
                                          ==========   ==========

The Company has not filed with or included in reports to any Federal authority
or agency other than the Securities and Exchange Commission any estimates of
total proved net oil and gas reserves.

Capitalized Costs Relating to Oil and Gas Producing Activities

                                            Years ended December 31,
                                               2008         2007

Unproven oil and gas properties
    (including wells in progress)        $   149,812  $   151,412

Proven oil and gas properties              7,062,204    6,264,719

Accumulated depletion and amortization    (3,342,078)  (2,832,789)
                                          ----------   ----------
   Net capitalized costs                 $ 3,869,938  $ 3,583,342
                                          ==========   ==========

Costs Incurred in Oil and Gas Property
 Acquisition, Exploration and Development Activities

                                         Years ended December 31,
                                               2008       2007

Acquisition of properties - unproven    $       ---   $     ---
Acquisition of properties - proven        1,063,256     810,951
Exploration costs                               ---         ---
Development costs                               ---         ---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Companys reports
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Commissions rules and forms and that such
information is accumulated and communicated to the Companys management,
including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow for timely decisions regarding required disclosure.
In designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired
control objectives. Management is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

As required by Commission Rules 13a-15(e) and 15d-15(e), the Company
carried out an evaluation, under the supervision and with the participation
of the Companys management, including the Companys Chief Executive Officer
and the Chief Financial Officer, of the effectiveness of the design and
operation of the Companys disclosure controls and procedures as of the end
of the quarter covered by this Report.  Based on the foregoing, the Companys
Chief Executive Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures were effective at the reasonable
assurance level.

There has been no change in the Companys internal control over financial
reporting during the Companys most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Companys internal
control over financial reporting.

MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate
internal control over financial reporting.  Internal control over financial
reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles.

Our evaluation of internal control over financial reporting includes using
the COSO framework, an integrated framework for the evaluation of internal
controls issued by the Committee of Sponsoring Organizations of the Treadway
Commission, to identify the risks and control objectives related to the
evaluation of our control environment.

Based on our evaluation under the frameworks described above, our management
has concluded that our internal control over financial reporting was
effective as of December 31, 2008.

This annual report does not include an attestation report of the Companys
registered public accounting firm regarding internal control over financial
reporting.  Managements report was not subject to attestation requirements
by the Companys registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only managements report in this annual report.

ITEM 9B. OTHER INFORMATION

Not applicable.


                                    PART III

Items 10, 11, 12 and 13 constituting Part III of Form 10-K have been omitted
from this annual report pursuant to the provisions of Instruction G(3) to Form
10-K, as the Company will file a definitive proxy statement pursuant to
Regulation 14A under the Securities Exchange Act of 1934 within 120 days after
the close of its fiscal year.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit-Related Fees.

On November 6, 2007, the audit committee of Texas Vanguard Oil Company
approved a mutual agreement with the Companys independent auditor,
Sprouse & Anderson, L.L.P., to terminate Sprouse & Andersons engagement
as the Companys independent auditor and to engage Padgett, Stratemann
& Co., L.L.P. as the Companys new auditor.  Sprouse & Anderson merged
with the firm of Padgett, Stratemann & Co., L.L.P. and thus agreed to
resign as the Companys auditor.  At the same time, the Companys audit
committee approved the engagement of Padgett, Stratemann & Co., L.L.P.
as the new auditor and expects to maintain a continuity of auditing
experience and personnel.

The aggregate fees billed to the Company by Padgett, Stratemann & Co. L.L.P.
for the audit of Texas Vanguard Oil Company annual financial statements included
in the Form 10-K and for the review of the financial statements included in
its quarterly reports on Form 10-Q for the fiscal year ended December 31,
2008 totaled $35,500. The aggregate fees billed to the Company by
Sprouse & Anderson, L.L.P. and Padgett, Stratemann & Co., L.L.P.  for
the audit of Texas Vanguard Oil Companys annual financial statements
included in the Form 10-KSB and for the review of the financial statements
included in its quarterly reports on Form 10-QSB for the fiscal year ended
December 31, 2007 totaled $30,000.

Tax Fees.

Tax services for the fiscal years ended December 31, 2008 and 2007 were
not provided by Sprouse & Anderson, L.L.P. or Padgett, Stratemann
& Co. L.L.P.

All Other Fees.

For the fiscal year ended December 31, 2008 the fees billed to the Company
by Padgett, Stratemann & Co., L.L.P. for other services totaled $1,750. The
Company engaged Padgett, Stratemann & Co., L.L.P. to perform a review of the
Companys SOX documentation.  There were no fees for other services paid to
Padgett, Stratemann & Co., L.L.P. for the fiscal year ended December 31, 2007.

It is the audit committees policy to pre-approve all services provided by
Sprouse & Anderson, L.L.P. and Padgett, Stratemann & Co. L.L.P. All services
provided by Padgett, Stratemann & Co., L.L.P. during the year ended
December 31, 2008 were pre-approved by the audit committee. All services
provided by Sprouse & Anderson, L.L.P. and Padgett, Stratemann & Co. L.L.P.
during the year ended December 31, 2007 were pre-approved by the audit
committee.

                              PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1). Financial Statements.

Independent Auditors' Report, Balance Sheets at December 31, 2008 and 2007 and
the related Statements of Earnings, Stockholders' Equity, and Cash Flows for
each of the years in the two-year period ended December 31, 2008, and notes
to financial statements are included in Item 8.

(a)(2) Financial Statement Schedules

Not applicable.

(a)(3). Exhibits

Number    Description of Document

3*     Copies of Articles of Incorporation and Bylaws - Incorporated by
       reference to Exhibits 4a and 4b to Registration Statement No. 2-66693
       filed by registrant on Form S-2.

3.1*   Articles of Amendment to authorize capitalization of common stock,
       previously filed as exhibits to Form 8-K dated May 27, 1983.

3.2*   Certificate of Amendment dated February 20, 1990 of Articles of
       Incorporation and Articles of Amendment dated February 16, 1990 to the
       Articles of Incorporation. Filed as Exhibit to 1989 Form 10-K.

10.1   Management agreement between Texas Vanguard Oil Company and Robert
       Watson Inc. dated January 1, 2008.

31.1   Rule 13a-14(a)/15d-14(a) Certification

32.1   18 U.S.C. Section 1350 Certification

* Incorporated by reference.

(b).  Reports of Form 8-K.

      None filed during the quarter ended December 31, 2008.

(c).  Separate financial statements of subsidiaries.

      Not applicable.



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                       TEXAS VANGUARD OIL COMPANY



                                       By: William G. Watson
                                           William G. Watson, President
                                           March 27, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.




William G. Watson                          Robert L. Patterson
William G. Watson, President,              Robert L. Patterson, Director
Director, Chief Executive                  March 27, 2009
Officer and Chief Financial
Officer
March 27, 2009

Linda R. Watson                             Teresa N. Nuckols
Linda R. Watson, Director                   Teresa N. Nuckols, Secretary
and Chairman of the Board                   March 27, 2009
March 27, 2009


THIS PAGE IS NOT PART OF OUR ANNUAL REPORT ON FORM 10-K.


OFFICERS AND DIRECTORS                CORPORATE INFORMATION

Linda R. Watson                       CORPORATE OFFICE
Chairman of the Board                 9811 Anderson Mill Road, Suite 202
and Director                          Austin, Texas 78750

William G. Watson                     INDEPENDENT ACCOUNTANTS
President, Chief Executive            Padgett, Stratemann & Co., L.L.P.
Officer, Chief Financial              Austin, Texas
Officer, and Director
                                      TRANSFER AGENT
Teresa Nuckols                        For stock certificate transfers, address
Secretary                              change or lost certificates:
                                      Computershare Trust Company, Inc.
Robert L. Patterson                   P.O. Box 43070
Director                              Providence, Rhode Island 02940

                                      COMMON STOCK
                                      Quoted on OTC Bulletin Board
                                      Symbol: TVOC.OB

                                      CORPORATE GOVERNANCE
                                      The Company has adopted a Code of Ethics
                                      for its executive officers, directors and
                                      employees which is available upon request,
                                      free of charge from:
                                      Investor Relations
                                      9811 Anderson Mill Road, Suite 202
                                      Austin, Texas 78750

                                      2008 Annual Shareholders Meeting
                                      June 4, 2009, at 10:00 A.M. CST
                                      Holiday Inn Northwest
                                      8901 Business Park Drive
                                      Austin, TX 78759