UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 10-K
                                    ---------


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

                   For the fiscal year ended December 31, 2010

                                       Or

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

         For the transition period from _________ to _____________


                       Commission file number: 333-151398

                           GULFSTAR ENERGY CORPORATION
                           ---------------------------

             (Exact name of registrant as specified in its charter)


            Colorado                                02-0511381
----------------------------------           ------------------------
 State or other jurisdiction of                  I.R.S. Employer
  incorporation or organization                 Identification No.

                600 17th Street Suite 2800 Denver, Colorado 80202
 ------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

               Registrant's telephone number, including area code:
                             303-260-6492

           Securities registered pursuant to Section 12(b) of the Act:

 Title of each class registered             Name of each exchange
                                             on which registered
----------------------------------        ------------------------
         Not Applicable                        Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:
                                  Common Stock
                                  ------------
                                (Title of class)




<PAGE>



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 Section 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| No |_|

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Website, 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 if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (ss.  229.405 of this chapter) 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.

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
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_]

Indicate by check mark whether the  Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|

The  aggregate  market  value of  voting  stock  held by  non-affiliates  of the
registrant  was $0 as of June 30, 2010,  since the common stock of the Gulfstar
Energy does not trade on any of the markets.

There were 17,494,087 shares outstanding of the registrant's  Common Stock as of
April 13, 2011.





<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                                     <C>

                                                                                                        Page

                                TABLE OF CONTENTS

                                                   PART I


ITEM 1                  Business                                                                         1
ITEM 1 A.               Risk Factors                                                                    10
ITEM 1 B.               Unresolved Staff Comments                                                       18
ITEM 2                  Properties                                                                      18
ITEM 3                  Legal Proceedings                                                               19
ITEM 4                  Removed and Reserved                                                            19

                                                  PART II

ITEM 5                  Market for Registrant's Common Equity, Related Stockholder Matters and
                        Issuer Purchases of Equity Securities                                           20
ITEM 6                  Selected Financial Data                                                         22
ITEM 7                  Management's Discussion and Analysis of Financial Condition and Results of
                        Operations                                                                      32
ITEM 7 A.               Quantitative and Qualitative Disclosures About Market Risk                      33
ITEM 8                  Financial Statements and Supplementary Data                                     30
ITEM 9                  Changes in and Disagreements with Accountants on Accounting and Financial
                        Disclosure                                                                      54
ITEM 9 A.               Controls and Procedures                                                         55
ITEM 9B                 Other Information                                                               56

                                                  PART III

ITEM 10                 Directors, Executive Officers, and Corporate Governance                         57
ITEM 11                 Executive Compensation                                                          60
ITEM 12                 Security Ownership of Certain Beneficial Owners and Management and Related
                        Stockholder Matters                                                             64
ITEM 13                 Certain Relationships and Related Transactions, and Director Independence       66
ITEM 14                 Principal Accounting Fees and Services                                          67

                                                  PART IV

ITEM 15                 Exhibits, Financial Statement Schedules                                         68
SIGNATURES                                                                                              69

</TABLE>


<PAGE>

                           FORWARD LOOKING STATEMENTS

This  document   includes   forward-looking   statements,   including,   without
limitation,  statements  relating to Gulfstar  Energy  Corporation  ("Gulfstar")
plans,  strategies,  objectives,   expectations,   intentions  and  adequacy  of
resources.  These  forward-looking  statements  involve known and unknown risks,
uncertainties,  and other  factors  that may cause  Gulfstar's  actual  results,
performance or achievements to be materially  different from any future results,
performance  or  achievements   expressed  or  implied  by  the  forward-looking
statements.  These factors  include,  among others,  the  following:  ability of
Gulfstar  to  implement  its  business  strategy;  ability to obtain  additional
financing;  Gulfstar's limited operating history; unknown liabilities associated
with future  acquisitions;  ability to manage growth;  significant  competition;
ability to attract and retain talented employees; future government regulations;
and other  factors  described in this Annual  Report on Form 10-K or in other of
Gulfstar's filings with the Securities and Exchange  Commission (SEC).  Gulfstar
is under no  obligation,  to  publicly  update  or  revise  any  forward-looking
statements, whether as a result of new information, future events or otherwise.

For further information about these and other risks,  uncertainties and factors,
please  review  the  disclosure  included  in this  report  under  Item 1A "Risk
Factors."


                                     PART I

ITEM 1.  BUSINESS


General

The  following  is a  summary  of  some  of the  information  contained  in this
document. Unless the context requires otherwise,  references in this document to
"We," Us," or the "Company" are to Gulfstar Energy Corporation.

Description of Business

History of Gulfstar Energy Corporation
--------------------------------------

CellTouch,  Inc., now known as Gulfstar Energy Corporation,  was incorporated in
Colorado  on August 11, 2004 and  changed  its name to Bedrock  Energy,  Inc. on
October 18, 2007.  On September  21, 2004,  CellTouch,  Inc. and  Enviromart.com
Corporation  were merged under the laws of the State of Colorado  and  CellTouch
Inc. became the surviving entity.  Activities through December 31, 2009 included
the raising of equity capital and the formation of a business plan to merge with
or acquire and develop assets from a company in the oil and gas industry.

On May 5, 2010,  the Board of  Directors  of the  Company  and a majority of the
Company's  stockholders  approved a reverse  split of the  Company's  issued and
outstanding common stock on May 5, 2010 on a 1 for 8 basis. In addition,  on May
5, 2010,  the Company filed an Amendment to its Articles of  Incorporation  with
the Secretary of State of Colorado to change its name from Bedrock Energy,  Inc.
to Gulfstar Energy Corporation.

                                       1
<PAGE>




Gulfstar Energy Group, LLC Reverse Recapitalization and Talon Energy Corporation
--------------------------------------------------------------------------------
Acquisition
-----------

On May 5, 2010, the Company  entered into Share Exchange  Agreement  (Agreement)
with Talon Energy  Corporation  (Talon).  Talon is a Florida  Company engaged in
management and capital activities in the oil and gas industry. On June 24, 2010,
the  Agreement  was  replaced  by a  Revised  and  Amended  Share  Exchange  and
Acquisition  Agreement  providing  essentially  the same terms and requiring and
contemplating  the delivery of a Share Exchange  Agreement for 58.3% of Gulfstar
Energy Group LLC and closing  thereon and delivery of an  Acquisition  Agreement
for 41.7% of Gulfstar  Energy Group LLC. The Agreement  provided for the Company
to issue 3,509,530  restricted shares of its common stock to the shareholders of
Talon in  exchange  for the issued and  outstanding  shares of Talon.  After the
exchange  of such shares the  Company  owned 100% of the issued and  outstanding
stock of Talon.

On June 24,  2010,  the Company  entered  into and  completed  a Share  Exchange
Agreement  with Jason Sharp and Timothy  Sharp,  officers  and  shareholders  of
Gulfstar Energy Group,  LLC ("Gulfstar  LLC"), a Mississippi  Limited  Liability
Company, for 58.3% of Gulfstar,  LLC, for 11,659,659 shares of restricted common
stock of the Company.

The Share Exchange  Agreement with Gulfstar LLC, provides for the acquisition of
the  remaining  outstanding  interests  of the  Gulfstar  LLC,  but requires the
effectiveness  of a  Registration  Statement  filed  with  SEC to  register  the
remaining shares of common stock for offering to the individual interest holders
of Gulfstar  LLC.  The Company at the time of this filing has not  acquired  the
remaining 41.6% of Gulfstar LLC.

As a result, the Company now owns 58.4% of Gulfstar LLC and 100% of Talon.

The accounting rules for recapitalizations require Gulfstar LLC to be treated as
the acquirer, and accordingly, financial information prior to June 30, 2010 only
includes Gulfstar LLC. The financial  information of Gulfstar Energy Corporation
and Talon after June 30, 2010 is consolidated with Gulfstar LLC.

Company Overview

The Company,  through its subsidiaries as described below, is currently focusing
its  operational  efforts,  initially,  on the operation  and  management of its
pipeline gas gathering  system and  management of existing oil and gas wells and
intends  to be  involved  in oil and gas  operation  exploration. The  Company
intends to leverage its assets to develop  energy  prospects for its own account
or co-venture with other  companies  which can benefit from an association  with
the Company's pipelines and management.

The  Company's  strategic  focus in this area is on lower  risk  profile  income
producing oil and gas assets that have sizable developmental  drilling potential
with  multiple  pay zones.  The Company  intends to focus its  initial  pipeline
development  efforts on private producers of constrained and shut-in natural gas
assets in Western Kentucky. The Company intends to provide producers in its area
with a  turnkey  solution  of  access to an  additional  developmental  drilling
partner,  midstream management, and to provide an economical downstream solution
to move existing production towards liquidity.

The Company needs substantial  additional capital to support its proposed future
operations.  There are currently  minimal revenues and limited committed sources
for  additional  funding.  No  representation  can be made  that  funds  will be
available  when needed.  In the event funds  cannot be raised when  needed,  the
Company  may not be able to carry  out its  business  plan,  may  never  achieve
projected  levels of sales or royalty  income,  and could fail in  business as a
result of these uncertainties.

                                       2
<PAGE>





Gulfstar LLC
------------

Gulfstar  LLC,  the  Company's  58.4%  owned  subsidiary,  operates  in  Western
Kentucky.  During the year ended December 31, 2010, it completed construction of
its gas gathering  pipeline system that includes  approximately 16 miles of main
pipeline.  The  pipeline  transports  natural  gas to a gas plant  and  includes
approximately  5 miles of feeder  lines,  which are  connected  to 18  producing
wells. During the second half of 2010, Gulfstar LLC started transporting limited
quantities of gas.

In addition to the management and operation of the pipeline, Gulfstar LLC serves
as a  manager  and  operator  of  approximately  20  wells.  Gulfstar  LLC holds
overriding  royalty  interests  of  approximately  12.5%  in the  wells  and has
financed  these wells through  offering a 100% working  interest in the wells in
exchange for contribution of funds to drill the wells.

The Pipeline

Gulfstar LLC's  pipeline is located in the Illinois  Basin of Western  Kentucky.
This  area is known  for its oil  production  in the  early to mid 1900s and its
non-conventional  shale gas. Shale gas is considered an "unconventional"  source
of natural gas due to the insufficient permeability of shale formations. Because
of this low permeability,  shale deposits require fracturing in order to release
the oil and gas supplies.  Recent  technology  developments,  such as horizontal
drilling and hydraulic  fracturing,  have made the drilling for gas in this area
possible and economical.

In addition to the current 18 producing  wells  connected  to the gas  gathering
pipeline  system that  includes a total of  approximately  21 miles of pipeline,
Gulfstar LLC has  identified  up to 50  additional  wells that are available for
connection to the pipeline from other independent owners in the area.

The  pipeline  has a  throughput  capacity  of 18  Million  Cubic  Feet  per Day
(MMcf/d.)  During the year ended December 31, 2010, the pipeline  transported an
average of 119 Mcf/d of gas.  Currently,  the pipeline is not  operating at full
capacity.

With  approximately  300 shut in  wells  within  3.5  miles  of  Gulfstar  LLC's
pipelines,  Gulfstar  LLC  believes it is  positioned  to be the most viable gas
gatherer in the area.  Gulfstar LLC intends to contract for existing shut-in gas
production  between 45% to 55% of market price,  and  subsequently  sell the gas
downstream at market price for its own account.

The pipeline operations  transport the gas to a burner tip processing plant near
Bowling Green, KY where it is sold pursuant to a gas purchase agreement.

During the fourth quarter of 2010, Gulfstar LLC began drilling a horizontal well
located in Warren  County,  KY with total costs of  $287,024 as of December  31,
2010.  Gulfstar LLC owns a working  interest of 58.4% and a net revenue interest
of 43.8% and Gulfstar LLC anticipates  completion of this well during the second
quarter of 2011. After completion, this well will be connected to the pipeline.


                                       3
<PAGE>




There are a large number of companies and individuals engaged in the exploration
for minerals and oil and gas; accordingly, there is a high degree of competition
for desirable properties.  Almost all of the competing companies and individuals
engaged have substantially  greater technical and financial  resources than does
the Company.

Oil and Gas Property Management

Gulfstar  LLC is the  manager  and  operator  of  approximately  20 wells in the
Illinois Basin in Western Kentucky. Of these 20 wells, 18 wells are connected to
the pipeline that is operated by Gulfstar LLC.  Gulfstar LLC managed to date the
drilling of the 20 wells of which 15 wells  produce only high BTU content gas, 2
wells  produce both gas and oil and 3 wells  produce only oil.  Based on initial
well production, the Company believes further developmental work on its existing
wells is required to achieve desired gas production rates.

            Chart Production Type of Wells

                           Oil               Gas               Total
                           ---               ---               -----
                           5                  17               20

Gulfstar LLC holds overriding  royalty  interests of approximately  12.5% in the
wells.  Gulfstar  LLC has  financed  the cost of  these  wells  through  working
interest holders and does not hold any working interest in the wells.

            Location          Gross Producing Wells      Net Producing Wells
             --------         ---------------------      -------------------
            Kentucky                        20            3 (12.5% Royalty)

As part of its services provided in management of the wells, Gulfstar LLC offers
working interests in the properties on behalf of the  leaseholders.  Using these
funds,  Gulfstar LLC pays for the costs incurred in the construction,  reworking
and development of the wells.

Gulfstar  LLC has  approximately  9,000  acres  under an 87.5%  net  lease  with
approximately  10,000 acres under option.  Under its proposed  drilling program,
Gulfstar LLC has:

            Location                   Gross Acres             Net Acres
           ---------                  -----------              ---------
            Kentucky                        9,232              8,078 (87.5%)

*There are approximately 3,925 acres held by production.

Competition

Gulfstar  LLC  competes for market  growth with other  natural  gas-transmission
companies  in the  Illinois  Basin  region  and with other  companies  providing
natural  gas-storage   services.   In  addition,   Gulfstar  LLC  faces  growing
competition from third-party  gathering  companies that build gathering lines to
allow producers to make direct connections to competing pipeline systems.

Other Oil and Gas Opportunities
-------------------------------

On February 12, 2009, the Company,  through leases,  acquired a 100% net revenue
interest in 240 acres in Morgan County Colorado,  which is located approximately
forty  five  miles  north of  Denver,  Colorado  and lies in what is called  the
Denver,  Julesberg Basin (DJ Basin). The DJ Basin is the predominant  geological
structure in Northern  Colorado.  The shallow "J" and "D" sand formations of the
DJ Basin  constitutes  a common  source of oil and gas.  The  acreage  in Morgan
County has forty (40) acre drilling and spacing units for the  production of oil
and gas from the "D" and "J" sand formations.

The acreage  contained within these leases have a 10-year "primary term" (2018),
but  may be  extended  if  drilling  operations  are in  progress,  or if  other
conditions  are met.  The term of the lease can  continue  as long as the lessee
produces oil and gas in paying quantities during the term of the lease.

                                       4
<PAGE>





The Morgan County acreage lies a short distance from the western  portion of the
prolific  Niobrara  Beecher Island  natural gas trend and deeper  Lansing-Kansas
City oil production.  Nearby fields include the Frenchman Creek prospect area in
Phillips County,  Colorado  containing  multiple Niobrara structures which could
yield up to 20 billion cubic feet (Bcf) gross of natural gas resource potential,
the DeNova Field, which has produced greater than 30 Bcf of natural gas to date,
and the Republican and Mildred Fields,  which have produced  greater than 62 Bcf
of natural gas.

Currently, the Company has not taken any action to develop this opportunity.

On October 18, 2010, the Company entered into a Letter of Intent with Timberline
Production Company,  LLC of Casper, WY to purchase 100% of the working interests
in and assets connected to oil and gas leases located in the Greasewood Field in
Niobrara  County,  WY  for  cash  of  $75  Million.  In  conjunction  with  this
transaction,  the Company revised its engagement with Maxim Group LLC to provide
gross  proceeds  of up to $100  Million  from a proposed  private  placement  of
Company  equity  and/or  convertible  debt.  The  precise  terms of the  private
placement will be negotiated  between Maxim Group LLC,  potential  investors and
the Company.  At the time of this filing,  these proposed  transactions have not
been finalized or closed.

Further,  on January 19, 2011, the Company signed a Letter Agreement with Wright
Capital  Corporation  to pursue a proposed  financing of up to $90 Million to be
used to assist the Company in the  proposed  purchase of  Timberline  Production
Company's  100% working  interest in and assets  connected to oil and gas leases
and for the further  development of the Company's existing pipeline structure in
Kentucky.  The  definitive  terms of the proposed  transaction  is subject to an
agreement between Wright Capital Corporation and the Company.

Talon
-----

As of June 30, 2010, Talon, a Florida corporation, was engaged in management and
capital  activities in the oil and gas industry and provided the capabilities to
identify  potential oil and gas  opportunities.  Robert McCann and Steve Warner,
officers and  directors  of Talon and who are now officers and  directors of the
Company,  have brought  years of  experience  to the Company with the ability to
raise capital for operations and possible acquisitions by the Company as well as
their experience with public companies.

As of December 31, 2010,  Talon has merged its  operations  into the Company and
both Robert McCann and Steve Warner are now working for the Company.

The Markets

Natural Gas Supply and Demand:

The National  Petroleum  council  estimates  the U.S.  demand for natural gas to
increase from 22 trillion cubic feet (TCF) in 1998 to over 31 TCF by 2015.  This
nearly 50% increase in demand for natural gas, coupled with constrained supplies
from conventional  sources and storage  facilities,  suggests a need for new gas
sources.  Although conventional gas sources such as high permeability sandstones
supply  about 60% of the U.S.  demand (13 TCF in 1998),  projections  indicate a
flat to declining  supply through year 2015. The shortfall in  conventional  gas
supply is expected to be taken up by  production  from  un-conventional  sources
such as tight gas sandstones/shales, associated gas, and coal bed methane.

                                       5
<PAGE>




Oil and Gas:

The  availability  of a ready market for oil and gas  discovered,  if any,  will
depend on numerous factors beyond the Company's control, including the proximity
and capacity of  refineries,  pipelines,  and the effect of state  regulation of
production and of federal  regulations of products sold in interstate  commerce,
and recent  intrastate  sales.  The market price of oil and gas are volatile and
beyond the Company's control. The market for natural gas is also unsettled,  and
gas prices have increased  dramatically in the past four years with  substantial
fluctuation, seasonally and annually.

There  generally are only a limited  number of gas  transmission  companies with
existing  pipelines  in the  vicinity of a gas well or wells.  In the event that
producing gas properties are not subject to purchase  contracts or that any such
contracts  terminate  and  other  parties  do not  purchase  the  Company's  gas
production,  there is no  assurance  that the Company will be able to enter into
purchase  contracts  with any  transmission  companies  or other  purchasers  of
natural  gas and there  can be no  assurance  regarding  the  price  which  such
purchasers  would be  willing  to pay for such gas.  There  presently  exists an
oversupply  of gas in the  certain  areas  of the  marketplace  due to  pipeline
capacity,  the extent and duration of which is not known.  Such  oversupply  may
result in restrictions of purchases by principal gas pipeline purchasers.

Global Oil Supply and Demand:  World demand for oil has fluctuated wildly in the
past year.

While  there has been much  growth in demand  from  Asia,  due mainly to rapidly
growing economies in China and India, there has been a decline in oil demand due
to the  worldwide  recession.  In  2004,  China  passed  Japan  as  the  world's
second-largest  consumer of oil. It used an average of 6.63  million  barrels of
oil every day,  which is about twice what it produces.  Its oil imports  doubled
between  1999 and 2004.  China's  demand  for oil is  expected  to  continue  to
increase each year. If that happens, China will surpass the United States as the
world's  largest  consumer  of oil by 2015.  Similarly,  India's  oil  needs are
expected to grow by four to seven percent a year.

Up to this  point,  the  world's oil  producers  have been able to meet  demand.
However,  should demand increase  substantially,  or production decrease for any
reason,  there  could be a  significant  spike in the price of oil and  possible
shortages.  The London-based Oil Depletion  Analysis Centre recently  released a
study that predicted tight oil supplies through the rest of this decade, even if
all of the new major oil recovery projects  scheduled to come on stream over the
next six years meet their targets.  The only way to avoid it, the study said, is
for demand to drop sharply, which it did in the last half of 2008.

Increasing Supply:  There are two ways to increase oil supply:  getting more oil
out of existing  wells and finding new sources.  Extraction  from existing wells
has been getting  steadily more  efficient;  according to The Economist,  "A few
decades ago, the average oil recovery rate from  reservoirs  was 20%;  thanks to
remarkable  advances  in  technology,  this has risen to about 35%," with future
increases  expected.  Methods  for  recovering  oil from shale are  notable  for
continuing to improve. Furthermore new sources, including the continental shelf,
continue to be opened for exploration.

                                       6
<PAGE>




Areas of Interest and Property:  We will  consider the  following  criteria when
evaluating whether to acquire an oil and gas prospect:

1)            Proximity to existing production;
2)            Target zone is less than 4,000 feet in depth;
3)            Location in a known producing region;
4)            Whether there is well control data from nearby drill sites;
5)            Favorable geologic evaluations by local geologists of production
              potential;
6)            Reasonable cost of acquisition;
7)            Term of lease and drilling commitment, if any; and
8)            Reasonable drilling cost estimates.

Upon selecting a lease for purchase,  a geochemical  survey of the property will
be initiated.

COMPETITION, MARKETS, REGULATION AND TAXATION

Competition:  There are a large number of companies and  individuals  engaged in
the  exploration  for  minerals  and oil and gas;  accordingly,  there is a high
degree of competition for desirable properties. Most of the domestic natural gas
reserves are concentrated in larger U.S. based companies.  Many of the companies
and individuals so engaged have  substantially  greater  technical and financial
resources than us.

Markets:  The  availability  of a ready market for oil and gas  discovered  will
depend on numerous factors beyond the control of us, including the proximity and
capacity  of  refineries,  pipelines,  and the  effect  of state  regulation  of
production and of federal  regulations of products sold in interstate  commerce,
and recent  intrastate  sales.  The market price of oil and gas are volatile and
beyond our control with substantial fluctuation, seasonally and annually.

There  generally are only a limited  number of gas  transmission  companies with
existing  pipelines  in the  vicinity of a gas well or wells.  In the event that
producing gas properties are not subject to purchase  contracts or that any such
contracts terminate and other parties do not purchase our gas production,  there
is no assurance  that we will be able to enter into purchase  contracts with any
transmission  companies or other  purchasers  of natural gas and there can be no
assurance  regarding the price which such purchasers would be willing to pay for
such gas.  There  presently  exists an oversupply of gas in the certain areas of
the  marketplace due to pipeline  capacity,  the extent and duration of which is
not known.  Such oversupply may result in restrictions of purchases by principal
gas pipeline purchasers.

Governmental Regulations:  Regulation of Oil and Natural Gas Production. Our oil
and natural gas exploration,  production and related operations, when developed,
are subject to extensive  rules and regulations  promulgated by federal,  state,
tribal and local authorities and agencies.  For example, some states in which we
may operate require permits for drilling operations,  drilling bonds and reports
concerning  operations and impose other requirements relating to the exploration
and  production  of oil and natural gas.  Such states may also have  statutes or
regulations  addressing  conservation  matters,  including  provisions  for  the
unitization or pooling of oil and natural gas properties,  the  establishment of
maximum rates of production from wells, and the regulation of spacing,  plugging
and  abandonment  of such  wells.  Failure  to  comply  with any such  rules and
regulations can result in substantial  penalties.  The regulatory  burden on the
oil and gas industry  will most likely  increase our cost of doing  business and
may  affect  our  profitability.   Although  we  believe  we  are  currently  in
substantial  compliance with all applicable laws and  regulations,  because such
rules and regulations are frequently amended or reinterpreted,  we are unable to
predict  the future  cost or impact of  complying  with such  laws.  Significant
expenditures  may be required to comply with  governmental  laws and regulations
and may have a material adverse effect on our financial condition and results of
operations.

                                       7
<PAGE>





Federal  Regulation  of Natural Gas: The Federal  Energy  Regulatory  Commission
("FERC")  regulates  interstate  natural  gas  transportation  rates and service
conditions,  which may affect the  marketing  of natural gas  produced by us, as
well as the  revenues  that may be received by us for sales of such  production.
Since the  mid-1980s,  FERC has issued a series of orders,  culminating in Order
Nos. 636, 636-A and 636-B ("Order  636"),  that have  significantly  altered the
marketing and  transportation  of natural gas.  Order 636 mandated a fundamental
restructuring of interstate pipeline sales and transportation service, including
the unbundling by interstate pipelines of the sale, transportation,  storage and
other  components of the city-gate  sales  services  such  pipelines  previously
performed.  One of  FERC's  purposes  in  issuing  the  order  was  to  increase
competition  within all phases of the natural gas  industry.  The United  States
Court of Appeals for the District of Columbia  Circuit  largely upheld Order 636
and the  Supreme  Court has  declined  to hear the  appeal  from that  decision.
Generally,  Order 636 has  eliminated or  substantially  reduced the  interstate
pipelines'  traditional role as wholesalers of natural gas in favor of providing
only  storage  and  transportation  service,  and  has  substantially  increased
competition and volatility in natural gas markets.

The price we may receive  from the sale of oil and  natural gas liquids  will be
affected by the cost of transporting  products to markets.  Effective January 1,
1995,  FERC  implemented   regulations   establishing  an  indexing  system  for
transportation rates for oil pipelines, which, generally, would index such rates
to inflation,  subject to certain conditions and limitations. We are not able to
predict with certainty the effect,  if any, of these regulations on our intended
operations. However, the regulations may increase transportation costs or reduce
well head prices for oil and natural gas liquids.

Compliance with Environmental  Laws and Regulations:  Our operations are subject
to local, state and federal laws and regulations governing environmental quality
and pollution control.  To date our compliance with these regulations has had no
material effect on our operations,  capital,  earnings, or competitive position,
and the cost of such  compliance has not been material.  We are unable to assess
or predict at this time what effect additional  regulations or legislation could
have on our activities.

Effect of Changing Industry  Conditions on Drilling Activity:  Lower oil and gas
prices have caused a decline in drilling activity in the U.S. from time to time.
However, such reduced activity has also resulted in a decline in drilling costs,
lease  acquisition  costs and equipment  costs,  and an improvement in the terms
under which drilling prospects are generally  available.  We cannot predict what
oil and gas prices will be in the future and what effect  those  prices may have
on  drilling  activities  in general,  or on its  ability to  generate  economic
drilling prospects and to raise the necessary funds with which to drill them.

Regulation  and Pricing of Natural  Gas:  Our  operations  may be subject to the
jurisdiction of the Federal Energy Regulatory  Commission (FERC) with respect to
the sale of natural gas for resale in interstate and intrastate commerce.  State
regulatory  agencies  may  exercise or attempt to exercise  similar  powers with
respect to intrastate  sales of gas.  Because of its complexity and broad scope,
the  price  impact  of  future  legislation  on the  operation  of us  cannot be
determined at this time.

State  Regulations:  Our  production  of oil and gas, if any, will be subject to
regulation by state regulatory authorities in the states in which we may produce
oil and gas. In general,  these regulatory authorities are empowered to make and
enforce  regulations to prevent waste of oil and gas and to protect  correlative
rights and  opportunities  to produce oil and gas as between  owners of a common
reservoir.  Some regulatory  authorities may also regulate the amount of oil and
gas produced by assigning allowable rates of production.

                                       8
<PAGE>





Proposed  Legislation:  A number of legislative proposals have been and probably
will continue to be introduced  in Congress and in the  legislatures  of various
states, which, if enacted,  would significantly affect the petroleum industries.
Such proposals and executive actions involve, among other things, the imposition
of land use controls such as prohibiting  drilling activities on certain federal
and state lands in roadless  wilderness  areas. At present,  it is impossible to
predict  what  proposals,  if any,  will  actually be enacted by Congress or the
various state  legislatures  and what effect,  if any, such proposals will have.
However, the establishment of numerous National Monuments by executive order has
had the effect of precluding  drilling  across vast areas of the Rocky  Mountain
West.

Environmental  Laws: Oil and gas exploration  and  development are  specifically
subject  to  existing   federal  and  state  laws  and   regulations   governing
environmental  quality and  pollution  control.  Such laws and  regulations  may
substantially increase the costs of exploring for, developing,  or producing oil
and gas and may prevent or delay the  commencement  or  continuation  of a given
operation.

All of our  operations  involving the  exploration  for or the production of any
minerals are subject to existing laws and  regulations  relating to  exploration
procedures,  safety  precautions,   employee  health  and  safety,  air  quality
standards,  pollution of stream and fresh water sources,  odor, noise, dust, and
other  environmental  protection  controls  adopted by federal,  state and local
governmental  authorities as well as the right of adjoining  property owners. We
may be required to prepare  and present to federal,  state or local  authorities
data  pertaining  to the effect or impact that any proposed  exploration  for or
production of minerals may have upon the environment.  All requirements  imposed
by  any  such  authorities  may  be  costly,  time  consuming,   and  may  delay
commencement or continuation of exploration or production operations.

It may be anticipated that future legislation will  significantly  emphasize the
protection of the environment, and that, as a consequence, our activities may be
more closely  regulated to further the cause of environmental  protection.  Such
legislation,  as well as future  interpretation  of existing  laws,  may require
substantial  increases  in  equipment  and  operating  costs  to us and  delays,
interruptions, or a termination of operations, the extent to which cannot now be
predicted.

External  Growth  Strategy:  Oil and gas  production  companies  are  subject to
international  competition,  particularly as businesses in this industry becomes
more global in nature.

As a result  of these  and  other  factors  affecting  industry  today,  such as
deregulation,  capital market  intervention,  and new  developments  in recovery
technologies,  small businesses and large corporations are being forced to adapt
quickly to such transformations in order to thrive or even merely survive.

Many private  company  managers have  concluded that it is timely and prudent to
look at being acquired by a properly  capitalized  strategic partner in order to
remain  competitive  in this type of economic  environment.  This new  strategic
alliance  could  come  from  a  publicly  traded  company  or a  privately  held
competitor with greater access to equity or debt capital,  or one that possesses
enhanced  advertising  and marketing  capabilities,  and has capital  intensive,
expansive product engineering, and sales and support capabilities.

For these and other reasons, there has been significant energy involving mergers
and  acquisitions  in the oil and gas  industries  at present.  Many large firms
involved in this industry have  established  corporate  growth  strategies  that
consistently include acquisitions. These experienced buyers search for companies
that fit  their  well-defined  acquisition  criteria,  often  attempting  to buy
companies that are not actively for sale, seeking to generate exponential growth
through the purchase of complimentary businesses.

                                       9
<PAGE>





Production  companies are obvious  targets of interest  partly because they have
established  revenue streams and are compatible with our core revenue generating
business  model.  Service  related  businesses,  such as  drillers,  are also of
interest  because  they will allow us to control our  recompletion  and drilling
schedules on our leased  acreage.  Therefore,  during the coming  months,  in an
effort to broaden our revenue generating  capabilities,  we plan to aggressively
explore and pursue these types of strategic acquisition opportunities.

Title to Properties:

The Company has s Bureau of Land Management  ("BLM")  interest of  approximately
240 gross/net acres located in Morgan County, Colorado.

Our prospects  are subject to royalty,  overriding  royalty and other  interests
customary in the industry, liens incident to agreements, current taxes and other
burdens,  minor  encumbrances,  easements and restrictions.  Although we are not
aware of any material title defects or disputes with respect to its  undeveloped
acreage,  to the extent such  defects or disputes  exist,  we would suffer title
failures.

Gulfstar  LLC has  approximately  9,000  acres  under an 87.5%  net  lease  with
approximately  10,000 acres under option.  Under its proposed  drilling program,
Gulfstar LLC has:

            Location                   Gross Acres               Net Acres
            ---------                  -----------               ---------
            Kentucky                        9,232                8,078 (87.5%)

*There are approximately 3,925 acres held by production.

Backlog of Orders:  We currently have no orders for sales at this time.

Government Contracts:  We have no government contracts.

Company Sponsored Research and Development:  We are not conducting any research.

Number  of  Persons  Employed:  As of  December  31,  2010,  Gulfstar  LLC had 8
full-time employees in Kentucky and Gulfstar had 2 employees.


ITEM 1A.  RISK FACTORS
----------------------

                           FORWARD LOOKING STATEMENTS

This  document   includes   forward-looking   statements,   including,   without
limitation,  statements  relating to Gulfstar's plans,  strategies,  objectives,
expectations,  intentions  and  adequacy  of  resources.  These  forward-looking
statements  involve known and unknown  risks,  uncertainties,  and other factors
that may cause  Gulfstar's  actual  results,  performance or  achievements to be
materially  different  from any  future  results,  performance  or  achievements
expressed or implied by the forward-looking  statements.  These factors include,
among  others,  the  following:  ability of Gulfstar to  implement  its business
strategy;  ability to obtain additional financing;  Gulfstar's limited operating
history;  unknown liabilities  associated with future  acquisitions;  ability to
manage growth;  significant competition;  ability to attract and retain talented
employees;  and future  government  regulations;  and other factors described in
this  Annual  Report  on Form  10-K or in other  of  Gulfstar  filings  with the
Securities and Exchange Commission. Gulfstar is under no obligation, to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information, future events or otherwise.


                                       10
<PAGE>





                                  RISK FACTORS

                          GENERAL BUSINESS RISK FACTORS

Our business is a  development  stage  company  that is unproven  and  therefore
--------------------------------------------------------------------------------
risky.
-----

Potential   investors  should  be  made  aware  of  the  risk  and  difficulties
encountered  by a new enterprise in the energy  business,  especially in view of
the intense competition from existing businesses in the industry.

We  have  a  lack  of  revenue  history  and  investors  cannot  view  our  past
--------------------------------------------------------------------------------
performance.
-----------

We have had no revenues  prior to June of 2010.  We are not  profitable  and the
business  effort is considered to be in an early  development  stage. We must be
regarded  as a new or  development  venture  with all of the  unforeseen  costs,
expenses, problems, risks and difficulties to which such ventures are subject.

We can give no assurance of success or profitability to our investors.
---------------------------------------------------------------------

There  is no  assurance  that we  will  ever  operate  profitably.  There  is no
assurance that we will generate revenues or profits, or that the market price of
our common stock will be increased thereby.

We may have a shortage of working  capital in the future which could  jeopardize
--------------------------------------------------------------------------------
our ability to carry out our business plan.
------------------------------------------

Our  capital  needs  consist  primarily  of  costs  related  to  developing  gas
production on our leases,  additional  pipeline  infrastructure  and general and
administrative  expenses.  Our needs could exceed several million dollars in the
next twelve months. Such funds are not currently committed,  and we have cash at
December 31, 2010 of $65,799.

We have  limited  funds  and such  funds  may not be  adequate  to carry out the
business  plan in the energy  business.  Our ultimate  success  depends upon our
ability to raise additional capital. We need additional capital,  but we have no
assurance  that funds will be available  from any source or, if available,  that
they can be obtained on terms  acceptable to us. If not available,  our business
may fail.

During the period  January 1, 2011 through  March 28, 2011,  the Company  issued
509,001 shares of its  restricted  common stock in exchange for cash of $763,501
in order to support operations. The shares were sold at $1.50 per share.

Our  officers and  directors  may have  conflicts  of interest  which may not be
--------------------------------------------------------------------------------
resolved favorably to us.
------------------------

Certain  conflicts  of  interest  may  exist  between  us and our  officers  and
directors.  Our Officers and Directors  have other  business  interests to which
they devote  their  attention  and may be expected to continue to do so although
management  time should be devoted to our  business.  As a result,  conflicts of
interest may arise that can be resolved  only through  exercise of such judgment
as is consistent with fiduciary duties to us.

                                       11
<PAGE>




We may in the future  issue more shares of common stock which could cause a loss
--------------------------------------------------------------------------------
of control by our present management and current stockholders.
-------------------------------------------------------------

We may issue  further  shares of common stock as  consideration  for the cash or
assets or services out of our authorized  but unissued  common stock that would,
upon  issuance,  represent  a  majority  of the  voting  power and equity of our
Company.  The result of such an  issuance  would be those new  stockholders  and
management  would  control our Company,  and persons  unknown  could replace our
management at this time.  Such an occurrence  would result in a greatly  reduced
percentage of ownership of our Company by our current shareholders,  which could
present significant risks to investors.

We are not diversified and we will be dependent on only one business.
--------------------------------------------------------------------

Because of the limited financial  resources that we have, it is unlikely that we
will be able to diversify our  operations.  Our probable  inability to diversify
our activities into more than one area will subject us to economic  fluctuations
within the energy industry and therefore  increase the risks associated with our
operations due to lack of diversification.

We will depend upon management.
------------------------------

We currently have three individuals who are serving as our officers.  We will be
heavily dependent upon their skills,  talents, and abilities, as well as several
consultants  to us, to implement our business plan. Because  investors will not
be able to  manage  our  business,  they  should  critically  assess  all of the
information concerning our officers and directors.

Our  officers  and  directors  may have  conflicts  of interests as to corporate
--------------------------------------------------------------------------------
opportunities which we may not be able or allowed to participate in.
-------------------------------------------------------------------

Presently  there is no requirement  contained in our Articles of  Incorporation,
Bylaws,  or minutes  which  requires  officers and  directors of our business to
disclose  to us  business  opportunities  which  come to  their  attention.  Our
officers and directors do,  however,  have a fiduciary  duty of loyalty to us to
disclose to us any  business  opportunities  which come to their  attention,  in
their  capacity as an officer and/or  director or otherwise.  Excluded from this
duty  would  be  opportunities   which  the  person  learns  about  through  his
involvement as an officer and director of another company.  We have no intention
of merging with or acquiring any business  opportunity or mineral  interest from
any affiliate or officer or director.

              RISK FACTORS RELATING TO OUR COMPANY AND OUR BUSINESS

Specifically, the investor should consider, among others, the following risks:

Our business, the oil and gas business, has numerous risks which could render us
--------------------------------------------------------------------------------
unsuccessful.
------------

The  search for new oil and gas  reserves  frequently  results  in  unprofitable
efforts,  not only from dry holes, but also from wells which, though productive,
will not produce oil or gas in  sufficient  quantities to return a profit on the
costs  incurred.  There is no  assurance we will find or produce oil or gas from
any of the undeveloped  acreage farmed out to us or which may be acquired by us,
nor are there any  assurances  that if we ever obtain any  production it will be
profitable.

                                       12
<PAGE>




We have  substantial  competitors who have an advantage over us in resources and
--------------------------------------------------------------------------------
management.
----------

We are and will continue to be an  insignificant  participant in the oil and gas
business.   Most  of  our  competitors  have  significantly   greater  financial
resources,   technical  expertise  and  managerial  capabilities  than  us  and,
consequently,  we will  be at a  competitive  disadvantage  in  identifying  and
developing  or  exploring  suitable  prospects.   Competitor's  resources  could
overwhelm  our  restricted  efforts to acquire and explore oil and gas prospects
and cause failure of our business plan.

We will be subject to all of the market forces in the energy  business,  many of
which could pose a significant risk to our operations.

The marketing of natural gas and oil which may be produced by our prospects will
be affected by a number of factors beyond our control. These factors include the
extent  of  the  supply  of  oil or gas  in  the  market,  the  availability  of
competitive fuels, crude oil imports, the world-wide political situation,  price
regulation,  and other factors.  Recently, there have been dramatic fluctuations
in oil prices.  Any  significant  decrease  in the market  prices of oil and gas
could materially affect our profitability of oil and gas activities.

There  generally are only a limited  number of gas  transmission  companies with
existing  pipelines  in the  vicinity of a gas well or wells.  In the event that
producing gas properties are not subject to purchase  contracts or that any such
contracts terminate and other parties do not purchase our gas production,  there
is  assurance  that we will be able to enter into  purchase  contracts  with any
transmission  companies or other  purchasers  of natural gas and there can be no
assurance  regarding the price which such purchasers would be willing to pay for
such gas. There may, on occasion,  be an oversupply of gas in the marketplace or
in  pipelines  the  extent  and  duration  may  affect  prices  adversely.  Such
oversupply may result in reductions of purchases and prices paid to producers by
principal gas pipeline purchasers.

Our business is subject to significant weather interruptions.
------------------------------------------------------------

Our  activities  may  be  subject  to  periodic  interruptions  due  to  weather
conditions.  Weather-imposed  restrictions  during  certain times of the year on
roads accessing  properties  could adversely  affect our ability to benefit from
production on such  properties or could increase the costs of drilling new wells
because of delays.

We will have significant  additional  financing  requirements to fund our future
--------------------------------------------------------------------------------
activities.
----------

If we find oil and gas reserves to exist on a prospect we will need  substantial
additional  financing to fund the necessary  exploration and  development  work.
Furthermore,  if the  results  of that  exploration  and  development  work  are
successful, we will need substantial additional funds for continued development.
We currently do not have sufficient  funds to conduct such work and,  therefore,
we will  need to  obtain  the  necessary  funds  either  through  debt or equity
financing, some form of cost-sharing arrangement with others, or the sale of all
or part of the  property.  There is no assurance  that we will be  successful in
obtaining any financing.  These various  financing  alternatives  may dilute the
interest of our shareholders and/or reduce our interest in the properties.

                                       13
<PAGE>




We are subject to significant operating hazards and uninsured risk in the energy
--------------------------------------------------------------------------------
industry.
--------

Our  proposed  operations  will be subject to all of the  operating  hazards and
risks  normally  incident to exploring,  drilling for and producing oil and gas,
such as encountering unusual or unexpected  formations and pressures,  blowouts,
environmental  pollution and personal injury. We will maintain general liability
insurance but we have not obtained insurance against such things as blowouts and
pollution  risks  because  of the  prohibitive  expense.  Should we  sustain  an
uninsured loss or liability,  or a loss in excess of policy limits,  our ability
to operate may be materially adversely affected.

We are  subject  to Federal  Income Tax laws and  changes  therein  which  could
--------------------------------------------------------------------------------
adversely impact us.
-------------------

Federal  income  tax  laws  are of  particular  significance  to the oil and gas
industry in which we intend to engage.  Legislation has eroded various  benefits
of oil and gas producers and subsequent  legislation  could continue this trend.
Congress is  continually  considering  proposals  with respect to Federal income
taxation which could have a material adverse effect on our future operations and
on our ability to obtain  risk  capital  which our  industry  has  traditionally
attracted from taxpayers in high tax brackets.

We are subject to substantial government regulation in the energy industry which
--------------------------------------------------------------------------------
could adversely impact us.
-------------------------

The  production  and sale of oil and gas are subject to  regulation by state and
federal authorities, the spacing of wells and the prevention of waste. There are
both  federal  and  state  laws  regarding   environmental  controls  which  may
necessitate   significant   capital  outlays,   resulting  in  extended  delays,
materially  affect our earnings  potential and cause material  changes in the in
our proposed business. We cannot predict what legislation, if any, may be passed
by  Congress  or  state  legislatures  in the  future,  or the  effect  of  such
legislation,  if any, on us. Such  regulations may have a significant  affect on
our operating results.

We believe investors should consider certain negative aspects of our operations.
--------------------------------------------------------------------------------

Dry  Holes:   We  may  expend   substantial   funds  acquiring  and  potentially
participating  in  exploring  properties  which  we  later  determine  not to be
productive. All funds so expended will be a total loss to us.

Technical  Assistance:  We will find it necessary to employ technical assistance
in the operation of our business.  As of the date of this Annual Report, we have
not contracted for any technical assistance.  When we need it such assistance it
is likely to be available at compensation levels we would be able to pay.

Uncertainty  of Title:  We will attempt to acquire leases or interests in leases
by option,  lease, farmout or by purchase.  The validity of title to oil and gas
property depends upon numerous  circumstances and factual matters (many of which
are not  discoverable  of record or by other  readily  available  means)  and is
subject to many uncertainties of existing law and our application.  We intend to
obtain an oil and gas attorney's  opinion of valid title before any  significant
expenditure upon a lease.

Government Regulations:  The area of exploration of natural resources has become
significantly  regulated by state and federal  governmental  agencies,  and such
regulation  could  have an adverse  effect on our  operations.  Compliance  with
statutes and regulations  governing the oil and gas industry could significantly
increase the capital expenditures necessary to develop our prospects.

                                       14
<PAGE>





Nature of our  Business:  Our  business  is  highly  speculative,  involves  the
commitment  of  high-risk  capital,  and exposes us to  potentially  substantial
losses. In addition,  we will be in direct competition with other  organizations
which are significantly better financed and staffed than we are.

General Economic and Other  Conditions:  Our business may be adversely  affected
from time to time by such matters as changes in general economic, industrial and
international conditions; changes in taxes; oil and gas prices and costs; excess
supplies and other factors of a general nature.

We will experience substantial competition for supplies in the energy industry.
--------------------------------------------------------------------------------

We will be required to compete with a large number of entities which are larger,
have  greater  resources  and more  extensive  operating  histories  than we do.
Shortages  of  supplies  may  result  from  this  competition  and will  lead to
increased  costs and delays in  operations  which  will have a material  adverse
effect on us.

We will be subject to many factors beyond our control.
-----------------------------------------------------

The acquisition,  exploration,  development,  production and sale of oil and gas
are subject to many factors which are outside our control. These factors include
general economic conditions, proximities to pipelines, oil import quotas, supply
and price of other fuels and the  regulation  of  transportation  by federal and
state governmental authorities.

We  anticipate  substantial  competition  in our effort to  explore  oil and gas
properties and may have difficulty in putting together drilling participants and
getting prospects drilled and explored.  Established companies have an advantage
over us  because  of  substantially  greater  resources  to devote  to  property
acquisition  and to obtain  drilling rigs,  equipment and  personnel.  If we are
unable to compete for capital,  participation  and drilling rigs,  equipment and
personnel, our business will be adversely affected.

We have agreed to  indemnification  of officers and  directors as is provided by
--------------------------------------------------------------------------------
Colorado Revised Statute.
-------------------------

Colorado  Revised  Statutes  provide for the  indemnification  of our directors,
officers, employees, and agents, under certain circumstances, against attorney's
fees and other expenses  incurred by them in any litigation to which they become
a party arising from their association with or on activities our behalf. We will
also bear the expenses of such  litigation for any of our  directors,  officers,
employees,  or agents, upon such person's promise to repay us therefore if it is
ultimately  determined  that any such  person  shall not have been  entitled  to
indemnification.   This  indemnification  policy  could  result  in  substantial
expenditures by us that we will be unable to recoup.

Our directors' liability to us and shareholders is limited

Colorado Revised  Statutes  exclude personal  liability of our directors and our
stockholders for monetary damages for breach of fiduciary duty except in certain
specified circumstances.  Accordingly, we will have a much more limited right of
action against our directors than  otherwise  would be the case.  This provision
does not affect the liability of any director under federal or applicable  state
securities laws.

                                       15
<PAGE>




We may depend upon outside  advisors,  who may not be  available  on  reasonable
--------------------------------------------------------------------------------
terms and as needed.
-------------------

To supplement the business  experience of our officers and directors,  we may be
required to employ accountants,  technical experts,  appraisers,  attorneys,  or
other consultants or advisors. Our Officers and Directors without any input from
stockholders  will make the  selection  of any such  advisors.  Furthermore,  we
anticipate  that such persons will be engaged on an "as needed"  basis without a
continuing  fiduciary  or other  obligation  to us. In the event we  consider it
necessary  to hire  outside  advisors,  we may  elect  to hire  persons  who are
affiliates, if they are able to provide the required services.


                        RISK FACTORS RELATED TO OUR STOCK

The regulation of penny stocks by SEC and FINRA may  discourage the  tradability
--------------------------------------------------------------------------------
of our securities.
-----------------

We are a "penny stock"  company.  None of our securities  currently trade in any
market and, if ever  available for trading,  will be subject to a Securities and
Exchange  Commission rule that imposes special sales practice  requirements upon
broker-dealers  who sell such  securities  to  persons  other  than  established
customers  or  accredited  investors.  For  purposes  of the  rule,  the  phrase
"accredited  investors"  means,  in general terms,  institutions  with assets in
excess of $5,000,000,  or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds  $200,000 (or that, when combined with a
spouse's income,  exceeds $300,000).  For transactions  covered by the rule, the
broker-dealer  must make a special  suitability  determination for the purchaser
and receive the purchaser's  written  agreement to the transaction  prior to the
sale.  Effectively,  this  discourages  broker-dealers  from executing trades in
penny stocks.

In addition,  the  Securities  and Exchange  Commission  has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3,  15g-4,  15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules will further affect the ability of owners of shares to sell our securities
in any  market  that  might  develop  for them  because  it  imposes  additional
regulatory burdens on penny stock transactions.

Shareholders  should  be  aware  that,  according  to  Securities  and  Exchange
Commission,  the  market  for penny  stocks has  suffered  in recent  years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the  security  by one or a few  broker-dealers  that are  often  related  to the
promoter or issuer; (ii) manipulation of prices through prearranged  matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices   involving   high-pressure   sales  tactics  and  unrealistic   price
projections  by  inexperienced  sales persons;  (iv)  excessive and  undisclosed
bid-ask  differentials  and  markups  by  selling  broker-dealers;  and  (v) the
wholesale dumping of the same securities by promoters and  broker-dealers  after
prices  have been  manipulated  to a desired  consequent  investor  losses.  Our
management is aware of the abuses that have occurred  historically  in the penny
stock  market.  Although  we do not  expect to be in a position  to dictate  the
behavior  of the market or of  broker-dealers  who  participate  in the  market,
management  will strive within the confines of practical  limitations to prevent
the described patterns from being established with respect to our securities.

                                       16
<PAGE>




We will pay no foreseeable dividends in the future.
---------------------------------------------------

We have not paid dividends on our common stock and do not anticipate paying such
dividends in the foreseeable future.

No public  market  exists  for our common  stock at this  time,  and there is no
--------------------------------------------------------------------------------
assurance of a future market.
----------------------------

There is no public  market for our common  stock,  and no assurance can be given
that a market will develop or that a shareholder  ever will be able to liquidate
his  investment  without  considerable  delay,  if at all.  If a  market  should
develop,  the price may be highly  volatile.  Factors such as those discussed in
the "Risk Factors"  section may have a significant  impact upon the market price
of shares.

Rule 144 sales in the future may have a depressive effect on our stock price.
----------------------------------------------------------------------------

All of the  outstanding  shares of common  stock held by our  present  officers,
directors,  and affiliate  stockholders are "restricted  securities"  within the
meaning of Rule 144 under the Securities Act of 1933, as amended.  As restricted
Shares,  these shares may be resold only  pursuant to an effective  registration
statement or under the requirements of Rule 144 or other  applicable  exemptions
from  registration  under  the  Act  and  as  required  under  applicable  state
securities  laws.  Rule 144  provides  in  essence  that a  person  who has held
restricted  securities for six months, under certain conditions,  may sell every
three months, in brokerage transactions, a number of shares that does not exceed
the  greater of 1.0% of a  company's  outstanding  common  stock or the  average
weekly trading volume during the four calendar weeks prior to the sale. There is
no  limit  on  the  amount  of  restricted  securities  that  may be  sold  by a
non-affiliate after the owner has held the restricted securities for a period of
two years.  A sale under Rule 144 or under any other  exemption from the Act, if
available,  or pursuant to subsequent  registration of shares of common stock of
present stockholders,  may have a depressive effect upon the price of the common
stock in any market that may develop.

Our investors may suffer future  dilution due to issuances of shares for various
--------------------------------------------------------------------------------
considerations in the future.
----------------------------

There may be  substantial  dilution  to our  shareholders  as a result of future
decisions of the Board to issue shares  without  shareholder  approval for cash,
services, or acquisitions.

                                       17
<PAGE>




Our stock  will in all  likelihood  be thinly  traded and as a result you may be
--------------------------------------------------------------------------------
unable  to sell at or near ask  prices or at all if you need to  liquidate  your
--------------------------------------------------------------------------------
shares.
------

The  shares  of  our  common  stock,  if  listed,  may be  thinly-traded  on the
Over-the-Counter  Market,  meaning  that the  number of  persons  interested  in
purchasing  our  common  shares at or near ask  prices at any given  time may be
relatively small or non-existent.  This situation is attributable to a number of
factors,  including  the fact that we are a small  company  which is  relatively
unknown to stock analysts, stock brokers,  institutional investors and others in
the investment  community that generate or influence sales volume, and that even
if we came to the attention of such  persons,  they tend to be  risk-averse  and
would be reluctant to follow an  unproven,  early stage  company such as ours or
purchase or recommend the purchase of any of our  Securities  until such time as
we became more seasoned and viable.  As a  consequence,  there may be periods of
several  days or more when  trading  activity  in our  Securities  is minimal or
non-existent,  as  compared  to a seasoned  issuer  which has a large and steady
volume of trading activity that will generally support  continuous sales without
an adverse effect on Securities  price.  We cannot give you any assurance that a
broader or more active  public  trading  market for our common  Securities  will
develop or be sustained,  or that any trading  levels will be sustained.  Due to
these  conditions,  we can give investors no assurance that they will be able to
sell  their  shares  at or near  ask  prices  or at all if they  need  money  or
otherwise desire to liquidate their securities of our Company.


Our business is highly speculative and the investment is therefore risky.
------------------------------------------------------------------------

Due to  the  speculative  nature  of  our  business,  it is  probable  that  the
investment  in shares  will  result in a total loss to the  investor.  Investors
should  be  able to  financially  bear  the  loss of  their  entire  investment.
Investment should,  therefore, be limited to that portion of discretionary funds
not needed  for normal  living  purposes  or for  reserves  for  disability  and
retirement.

ITEM 1B. UNRESOLVED STAFF COMMENTS
----------------------------------

Not required for smaller reporting registrants.

ITEM 2.  PROPERTIES
-------------------

The  Company's  headquarters  are located at 600 17th Street  Suite 2800 Denver,
Colorado  80202.  The Company  leases a virtual office space at a rate of $1,499
per month that  includes  secretarial  and support  services  and the lease will
expire in May 2011.  Total rent  expense  under this lease was $2,998 and $0 for
the years ended December 31, 2010 and 2009 respectively.

The Company  also shares an office  space in West Palm  Beach,  Florida  with an
officer and director of the Company at no cost to the Company.

Gulfstar LLC's headquarters and operations are located in Morgantown,  Kentucky.
During April 2009, Gulfstar LLC entered into a lease agreement with an unrelated
third party for a building.  The lease agreement  requires  monthly  payments of
$750 and expires April 2012.  Total rent expense under this lease was $9,000 and
$6,000 for the years ended December 31, 2010 and 2009, respectively.

DESCRIPTION OF PROPERTIES/ASSETS/OIL AND GAS PROSPECTS

(a)       Real Estate:               None.
(b)       Title to properties:       None.


                                       18
<PAGE>



(c)       Oil and Gas Prospects:

         Gulfstar  LLC has  approximately  9,000  acres under an 87.5% net lease
         with  approximately  10,000  acres  under  option.  Under its  proposed
         drilling program, Gulfstar LLC has:

                       Location                   Gross Acres       Net Acres
                       ---------                 -----------        ---------
                       Kentucky                        9,232       8,078 (87.5%)

         *There are approximately 3,925 acres held by production.


Horizontal Well - During the fourth quarter of 2010, Gulfstar LLC began drilling
a horizontal  well located in Warren County,  KY with total costs of $287,024 as
of December  31, 2010.  Gulfstar LLC owns a working  interest of 58.4% and a net
revenue  interest of 43.8% and Gulfstar LLC anticipates  completion of this well
during the second quarter of 2011. After completion, this well will be connected
to the pipeline.

         On February 12, 2009,  the Company bid upon and acquired a lease of 240
         acres  in  Morgan  County,  Colorado  at the  BLM  auction  located  in
         Lakewood,  Colorado.  The  interest  of the  Company  is  100%  in this
         prospect.

     (d) Patents:  None.


ITEM 3.  LEGAL PROCEEDINGS
--------------------------

In March 2010, the Company settled certain environmental  litigation,  which was
in process at December 31, 2009. As a result of the settlement,  the Company was
required to pay $70,000 during the year ended December 31, 2010. This amount was
paid by the  Company  during the second  quarter of 2010 and was in  addition to
$100,000,  which was paid during the year ended December 31, 2009. Additionally,
the Company  received  $230,000 from a consultant  contracted by the Company for
services provided related to the environmental  litigation.  The income from the
settlement  with the  consultant was recognized as other income during the first
quarter of 2010 and is included in the consolidated  statement of operations for
the year ended December 31, 2010.

In  February,  2009,  the Company  received  two Notices of  Violation  from the
Commonwealth  of Kentucky's  Energy and  Environment  Cabinet  ("Cabinet")  as a
result of the  Company's  failure  to obtain  appropriate  permits in advance of
certain  construction  activities  and  for  "causing  or  contributing  to  the
pollution  of the waters of the  Commonwealth  of  Kentucky"  during  2007.  The
Company neither admitted to nor denied the alleged violations but accepted civil
responsibility  for the violations on May 6, 2010. As a result of the settlement
of the  dispute,  the  Company  agreed to pay a civil  penalty of $60,000 to the
Commonwealth  of  Kentucky  by way of 12  equal  monthly  installment  payments,
beginning  in  May  of  2010.   The  Company   recorded  a  $60,000   General  &
Administration  Expense  during the  second  quarter  of 2010 to  recognize  the
settlement  with  the  Cabinet  and as of  December  31,  2010,  $15,000  of the
liability remains unpaid.

ITEM 4.  (REMOVED AND RESERVED)
-------------------------------

                                       19
<PAGE>





                                     PART II


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


Market Information

There is no public trading market for the common stock at this time.

Holders

There are  approximately  796 holders of record of Gulfstar's common stock as of
December 31, 2010.

Dividend Policy

Holders of Gulfstar's common stock are entitled to receive such dividends as may
be declared by Gulfstar's board of directors.  Gulfstar has not declared or paid
any dividends on Gulfstar's  common shares and it does not plan on declaring any
dividends in the near future.  Gulfstar  currently  intends to use all available
funds to finance the operation and expansion of its business.

Recent Sales of Unregistered Securities


The Company made the following unregistered sales of its securities from January
1, 2010 through June 30, 2010. The Company in May 2010, effected a reverse split
of its common  stock on a 1 new share for every 8 old shares.  On June 30, 2010,
the Company  completed its acquisition of Gulfstar Energy Group,  LLC, which was
accounted  for as a reverse  re-capitalization  of the Company.  At December 31,
2010, the Company had outstanding 494,753  unregistered shares that are included
as  part  of the  "reclassification  of  shares"  reported  in the  consolidated
statements of  stockholders'  equity for the year end December 31, 2010.  Shares
included below are post the reverse stock split.

This table shows all  issuances of  unregistered  shares of the Company prior to
from January 1, 2010 to June 30, 2010.

<TABLE>
<CAPTION>
<S>                                                                  <C>                        <C>


                                                                                                CLASS OF
  DATE OF SALE       TITLE OF SECURITIES     NO. OF SHARES           CONSIDERATION              PURCHASER
  -------------      -------------------     --------------          -------------              ---------
     2/16/10            Common Shares            5,000            $4,000 in services        Former Officer &
                                                                                                Director
     2/16/10            Common Shares            5,000            $4,000 in services            Director
     2/16/10            Common Shares            7,500         Payment of $4,650 in debt    Former Officer &
     2/16/10            Common Shares            7,500         Payment of $4,650 in debt        Director
     2/25/10            Common Shares           12,500            $10,000 in services           Business
     6/30/10            Common Shares            2,500          Payment of $2,000 loan      Former Officer &
     6/30/10            Common Shares            2,500          Payment of $2,000 loan          Director
     6/30/10            Common Shares           52,500            $42,000 in services       Former Officer &
     6/30/10            Common Shares           52,500            $42,000 in services           Director

</TABLE>

                                       20

<PAGE>



<TABLE>
<CAPTION>
<S>                                                                  <C>                        <C>

                                                                                                CLASS OF
  DATE OF SALE       TITLE OF SECURITIES     NO. OF SHARES           CONSIDERATION              PURCHASER
  ------------       -------------------     -------------           -------------              ---------
     6/24/10            Common Shares           729,310           $21,879 in services        Affiliate of an
                                                                                            Officer & Director
     6/24/10            Common Shares           10,000             $300 in services             Business
                                                                                                Associate
     6/24/10            Common Shares           30,000             $900 in services             Business
                                                                                                Associate
     6/30/10            Common Shares           100,000           $3,000 in services            Director
     6/30/10            Common Shares         11,659,659       Exchange for 58.3% equity     Equity Members
                                                             in Gulfstar Energy Group, LLC
     6/30/10            Common Shares          3,509,530     Exchange for 100% issued and     Talon Energy
                                                                     Outstanding              Corporation

</TABLE>

Exemption From Registration Claimed

All of the above sales by the Company of its  unregistered  securities were made
by the Company in reliance upon Section 4(2) of the  Securities  Act of 1933, as
amended (the "1933 Act"). All of the individuals  and/or entities that purchased
the unregistered  securities were primarily existing shareholders,  known to the
Company and its management, through pre-existing business relationships, as long
standing business associates and employees.  All purchasers were provided access
to all material information, which they requested, and all information necessary
to verify such information and were afforded access to management of the Company
in  connection  with  their  purchases.   All  purchasers  of  the  unregistered
securities  acquired such  securities  for investment and not with a view toward
distribution,  acknowledging  such intent to the Company.  All  certificates  or
agreements  representing such securities that were issued contained  restrictive
legends,   prohibiting  further  transfer  of  the  certificates  or  agreements
representing  such  securities,  without  such  securities  either  being  first
registered  or  otherwise  exempt from  registration  in any  further  resale or
disposition.

The Company made the following unregistered sales of its securities from July 1,
2010 to December 31, 2010 under Rule 506 of  Regulation  D of the  Securities
Act of 1933.

<TABLE>
<CAPTION>
<S>                                                                                      <C>


                             TITLE OF
     DATE OF SALE           SECURITIES       NO. OF SHARES         CONSIDERATION         CLASS OF PURCHASER
     ------------           ----------       -------------         -------------         ------------------
  August 2010 through      Common Shares        304,334              $456,500           Business Associates
   December 31, 2010

</TABLE>

                                       21

<PAGE>




Exemption From Registration Claimed

All of the above sales by the Company of its  unregistered  securities were made
by the Company in reliance upon Rule 506 of Regulation D of the  Securities  Act
of 1933, as amended (the "1933 Act").  All of the  individuals  and/or  entities
that purchased the unregistered securities were primarily existing shareholders,
known  to  the  Company  and  its  management,   through  pre-existing  business
relationships,  as  long  standing  business  associates.  All  purchasers  were
provided  access to all  material  information,  which they  requested,  and all
information  necessary to verify such  information  and were afforded  access to
management of the Company in connection with their purchases.  All purchasers of
the unregistered securities acquired such securities for investment and not with
a view  toward  distribution,  acknowledging  such  intent to the  Company.  All
certificates  or  agreements  representing  such  securities  that  were  issued
contained restrictive legends,  prohibiting further transfer of the certificates
or agreements representing such securities, without such securities either being
first registered or otherwise exempt from  registration in any further resale or
disposition.

Issuer Purchases of Equity Securities

The Company did not  repurchase  any shares of its common  stock during the year
ended December 31, 2010.

ITEM 6.  SELECTED FINANCIAL DATA
--------------------------------

Not applicable.

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

The  following  discussion  should  be  read in  conjunction  with  our  audited
financial  statements and notes thereto included herein. In connection with, and
because we desire to take  advantage  of, the "safe  harbor"  provisions  of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange  Commission.  Forward-looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and  contingencies,  many of which are beyond our control and many
of which,  with  respect to future  business  decisions,  are subject to change.
These  uncertainties and contingencies can affect actual results and could cause
actual results to differ  materially from those expressed in any forward looking
statements  made by, or on our behalf.  We  disclaim  any  obligation  to update
forward-looking statements.

PLAN OF OPERATIONS

The Company is currently  focusing its  operational  efforts on the operation of
its pipeline gas gathering  system and  management of existing oil and gas wells
and intends to be involved in oil and gas operation  exploration and development
drilling. The Company intends to leverage its assets to develop energy prospects
for its own account or co-venture with other companies which can benefit from an
association with the Company's pipelines and management.

                                       22
<PAGE>




The  Company's  strategic  focus in this area is on lower  risk  profile  income
producing oil and gas assets that have sizable developmental  drilling potential
with  multiple  pay zones.  The Company  intends to focus its  initial  pipeline
development  efforts on private producers of constrained and shut-in natural gas
assets in Western Kentucky. The Company intends to provide producers in its area
with a  turnkey  solution  of  access to an  additional  developmental  drilling
partner,  midstream management, and to provide an economical downstream solution
to move existing production towards liquidity.

On May 5, 2010, the Company entered into a Share Exchange  Agreement with Talon.
On June 24,  2010,  the Share  Exchange  Agreement  with Talon was replaced by a
similar Revised and Amended Share  Acquisition  Agreement  between Talon and the
Company and in conjunction with a June 24, 2010 Share Exchange Agreement between
the Company and Gulfstar LLC, a privately  held  Mississippi  Limited  Liability
Company,  for 58.3% of the outstanding  equity interests of Gulfstar LLC, and an
Acquisition  Agreement  between  the  Company  and  Gulfstar  LLC to acquire the
remaining 41.7% of the outstanding equity interests of Gulfstar LLC. The Revised
and Amended Share Acquisition  Agreement and Share Exchange  Agreement were both
effective as of June 30, 2010. At December 31, 2010,  the Company owned 58.4% of
Gulfstar LLC with a non-controlling interest of 41.6%.

During  the second  half of 2010,  Gulfstar  LLC  started  transporting  limited
quantities of gas via its pipeline  system.  In addition to the  management  and
operation  of the  pipeline,  Gulfstar LLC operates as a manager and operator of
approximately  20  natural  gas wells.  Gulfstar  LLC holds  overriding  royalty
interests of approximately  12.5% in the wells.  Gulfstar LLC has financed these
wells  through  offering a 100%  working  interest in the wells in exchange  for
contribution of funds to drill the wells and therefore does not hold any working
interest in the wells.

On October 18, 2010, the Company entered into a Letter of Intent with Timberline
Production Company,  LLC of Casper, WY to purchase 100% of the working interests
in and assets connected to oil and gas leases located in the Greasewood Field in
Niobrara  County,  WY  for  cash  of  $75  Million.  In  conjunction  with  this
transaction,  the Company revised its engagement with Maxim Group LLC to provide
gross  proceeds  of up to $100  Million  from a proposed  private  placement  of
Company  equity  and/or  convertible  debt.  The  precise  terms of the  private
placement will be negotiated  between Maxim Group LLC,  potential  investors and
the Company.

On January 19, 2011, the Company  signed a Letter  Agreement with Wright Capital
Corporation  to pursue a proposed  financing  of up to $90 Million to be used to
assist the Company in the proposed purchase of Timberline  Production  Company's
100% working  interest in and assets connected to oil and gas leases and for the
further  development of the Company's  existing pipeline  structure in Kentucky.
The  definitive  terms of the proposed  transaction  are subject to an agreement
between Wright Capital Corporation and the Company.

The Company  will need  substantial  additional  capital to support its proposed
future operations and as such is aggressively seeking this capital. Nonetheless,
there  are  currently   minimal  revenues  and  limited  committed  sources  for
additional  funds as of date hereof.  No  representation  is made that any funds
will be available when needed.  In the event funds cannot be raised when needed,
the Company may not be able to carry out its business  plan,  may never  achieve
projected  levels of sales or royalty  income,  and could fail in  business as a
result of these uncertainties.

                                       23
<PAGE>




RESULTS OF OPERATIONS
--------------------

For the Year Ended  December  31, 2010  Compared to the Year Ended  December 31,
2009

During the year ended December 31, 2010, the Company  recognized  total revenues
of $86,990 from the  transportation of gas through its pipeline and $14,287 from
the royalties in connection  with its well  management  services.  Cost of sales
during the year ended  December  31,  2010 were  $36,842,  resulting  in a gross
profit of $64,435.  During the year ended December 31, 2009, the Company did not
recognize any revenue from its operating activities.

During the year ended  December 31, 2010, the Company  incurred total  operating
expenses of $1,919,775  compared to $596,198  during the year ended December 31,
2009.  The increase of  $1,323,577  was a result of  increases in the  Company's
operational  activities due to completing the construction of the pipeline,  but
also a  result  of  the  Company's  increased  accounting  and  legal  costs  in
connection with the Company's  acquisition of Gulfstar LLC and Talon. During the
year ended December 31, 2010, the Company incurred professional fees of $282,071
consisting of both legal and accounting fees. In addition, during the year ended
December 31, 2010, the Company  incurred  officers'  compensation of $96,000 and
expenses and costs in connection with the operation of the pipeline of $192,294.

During the year ended  December 31, 2010, we recognized a net loss of $1,272,302
compared to $755,650  during the year ended  December 31, 2009.  The increase of
$516,652 was a result of the $1,323,577 increase in operating  expenses,  offset
by the $64,435 increase in gross profit,  the $393,231  increase in other income
and  an  allocation  of  $349,259  in  losses  attributable  to  non-controlling
interests.

LIQUIDITY
---------

At December 31, 2010,  we had total  current  assets of $133,112  consisting  of
$65,799 in cash and cash equivalents, $33,653 in accounts receivable and $33,660
in prepaids  and other assets.  At December 31, 2010,  we had total current
liabilities of $1,808,353 consisting of $936,418 in accounts payable, $15,000 in
litigation  settlement  payment,  $33,477 in oil and gas proceeds due to others,
$488,380 in accrued expenses and liabilities and $335,078 loan payable due to an
affiliate of the Company.

At December 31, 2010,  we had a working  capital  deficit of  $1,675,241  and an
accumulated deficit of $4,332,703.

During the year ended  December  31,  2010,  we used net cash of  $1,435,740  in
operational  activities and during the year ended December 31, 2009, we received
net cash of $390,453 from operational activities.

During the year ended  December 31, 2010, we recognized a net loss of $1,272,302
which was adjusted for non-cash activity of a net loss of $349,259  attributable
to the non-controlling  interest of Gulfstar LLC, $82,325 due to conversion of a
note  receivable  to  compensation,  $331,565  from the  issuances of equity for
services and $154,776 in  depreciation  expense.  During the year ended December
31, 2009, we  recognized a net loss of $755,650  which was adjusted for non-cash
activity of $15,295 in depreciation expense.

During the year ended  December 31, 2010,  the Company used funds of $863,521 in
its investing activities that included  expenditures of $587,924 in construction
of the  pipeline,  $1,500  for  intangible  assets,  $74,050  for  property  and
equipment, $287,024 for drilling of oil and gas properties, $76,977 in cash from
the acquisition of Talon and receipt of $10,000 from a note receivable.

                                       24
<PAGE>





During the year ended  December 31, 2009,  the Company  used  $3,090,484  in its
investing activities that included expenditures of $2,916,368 in construction of
the pipeline, $49,774 for property and equipment, $114,342 for intangible assets
and $10,000 in the issuance of a note receivable.

During the year ended  December 31, 2010,  the Company  received  $1,784,621 net
proceeds  from its  financing  activities  that  included  $1,481,890  in equity
contributions and $335,078 in proceeds from a short term loan.

During the year ended  December 31, 2009,  the Company  received  $2,822,904 net
proceeds  from its  financing  activities  that  included  $2,914,540  in equity
contributions and $91,636 paid out in equity redemptions.

In March 2010, the Company settled certain environmental  litigation,  which was
in process at December 31, 2009. As a result of the settlement,  the Company was
required to pay $70,000 during the year ended December 31, 2010. This amount was
paid by the  Company  during the second  quarter of 2010 and was in  addition to
$100,000,  which was paid during the year ended December 31, 2009. Additionally,
the Company  received  $230,000 from a consultant  contracted by the Company for
services provided that related to the environmental litigation.  The income from
the  settlement  with the  consultant  was recognized as other income during the
first  quarter  of  2010  and is  included  in  the  consolidated  statement  of
operations for the year ended December 31, 2010.

During the year ended  December 31, 2010,  the Company  issued 304,334 shares of
its  restricted  common  shares in  exchange  for cash of  $445,110  in order to
support operations.  The shares were sold at $1.50 per share and are included in
the $1,324,360 in equity  contributions  received during the year ended December
31, 2010.

During the period  January 1, 2011 through  March 28, 2011,  the Company  issued
509,001 shares of its  restricted  common stock in exchange for cash of $763,501
in order to support operations. The shares were sold at $1.50 per share.
Note Payable

During  the year  ended  December  31,  2010,  the  Company  borrowed a total of
$335,078  from an  affiliate of a  member-manager  of Gulfstar LLC and a greater
than  5%  shareholder  of  the  Company  and in  exchange  issued  an  unsecured
promissory  note  dated  November  30,  2010  that is due in  full on or  before
December  31, 2011.  Interest is accrued  at the rate of one
percent (1.0%) per annum.  As of December 31, 2010, the Company owes $335,078 on
the promissory note. Accrued interest of $279 is included in accrued liabilities
on the consolidated balance at December 31, 2010

The Company holds overriding royalty interests in various wells in Kentucky. The
Company  syndicated the financing of these wells through offering a 100% working
interest in the wells in exchange for  contribution of funds to drill the wells.
As part of the transaction,  the Company retained approximately 12.5% overriding
royalty interests in the wells and also agreed to provide management services on
behalf of the working  interest owners in the wells.  This income from the wells
earned by the Company is reported as royalty income.

As part of the management services provided,  the Company collects the royalties
generated from the wells on behalf of the working  interest  owners and pays the
various costs and expenses  incurred on behalf of the wells. The Company records
no costs or expenses  relative to these wells on its consolidated  statements of
operations.  The excess of the  royalties  collected by the Company on behalf of
the working  interest owners were recorded as oil and gas proceeds due to others
on the  consolidated  balance  sheets of the  Company.  At December 31, 2010 and
2009,  the Company owed oil and gas proceeds to working  interest  owners in the
amount of $33,477 and $0, respectively.

                                       25
<PAGE>





Also, as part of the management  services  provided,  the Company  collected the
contributions  from the working  interest owners to drill the wells and paid the
various costs and expenses incurred on behalf of the wells. The Company recorded
no costs or expenses  relative to these wells on its consolidated  statements of
operations.  The excess of the contributions collected from the working interest
owners  over and above the costs or  expenses  incurred on behalf of these wells
were reported as deposits on the consolidated  balance sheets of the Company. At
December 31, 2010 and 2009, the Company had deposits due to the working interest
owners in the amounts of $0 and $503,224, respectively.

The Gulfstar LLC operating  agreement  provides a priority  preference as to any
future  cash  distributions  paid by  Gulfstar  LLC to the  owners of its equity
interests.  As such, fifty percent (50%) of all cash distributions shall be paid
first to the non-controlling equity interests until such time they have received
in full their capital contributions.  After which time, cash distributions shall
be paid in proportion to the percentage of all equity interests.  As of December
31,  2010,  Gulfstar  LLC  has  not  repaid  any of the  non-controlling  equity
interests capital contributions.

Capital Resources

We have only common stock as our capital resource.

We have no material  commitments for capital  expenditures within the next year,
however if operations are commenced,  substantial  capital will be needed to pay
for participation, investigation, exploration, acquisition and working capital.

Need for Additional Financing

We do not have capital  sufficient to meet our cash needs.  We will have to seek
loans or equity placements to cover such cash needs and therefore the Company:

On October 18, 2010, the Company entered into a Letter of Intent with Timberline
Production Company,  LLC of Casper, WY to purchase 100% of the working interests
in and assets connected to oil and gas leases located in the Greasewood Field in
Niobrara  County,  WY  for  cash  of  $75  Million.  In  conjunction  with  this
transaction,  the Company revised its engagement with Maxim Group LLC to provide
gross  proceeds  of up to $100  Million  from a proposed  private  placement  of
Company  equity  and/or  convertible  debt.  The  precise  terms of the  private
placement will be negotiated  between Maxim Group LLC,  potential  investors and
the Company.

Further,  on January 19, 2011, the Company signed a Letter Agreement with Wright
Capital  Corporation  to pursue a proposed  financing of up to $90 Million to be
used to assist the Company in the  proposed  purchase of  Timberline  Production
Company's  100% working  interest in and assets  connected to oil and gas leases
and for the further  development of the Company's existing pipeline structure in
Kentucky.  The definitive  terms of the proposed  transaction  are subject to an
agreement between Wright Capital Corporation and the Company.

No commitments to provide  additional  funds have been made by our management or
other stockholders.  Accordingly,  there can be no assurance that any additional
funds will be  available  to us to allow it to cover our expenses as they may be
incurred.

Going Concern

The Company's  financial  statements  for the year ended  December 31, 2010 have
been prepared on a going concern basis,  which  contemplates  the realization of
assets and the settlement of liabilities and commitments in the normal course of
business.  The  Company  reported an  accumulated  deficit of  $4,332,703  as of
December 31, 2010.  The Company  recognized a net loss of $1,272,302  during the
year ended  December  31,  2010.  At December  31,  2010,  the Company had total
current  assets of $133,112 and total current  liabilities  of $1,808,353  for a
working capital deficit of $1,675,241.  This condition raises  substantial doubt
about the Company's ability to continue as a going concern.

                                       26
<PAGE>




Management is actively  pursuing  additional  financing and revenue solutions as
stated elsewhere in this report. During the period January 1, 2011 through March
28, 2011, the Company  issued  509,001 shares of its restricted  common stock in
exchange  for cash of $763,501 in order to support  operations.  The shares were
sold at $1.50 per share.

CRITICAL ACCOUNTING POLICIES

Gulfstar  has  identified  the  policies  below  as  critical  to  its  business
operations and the understanding of results from operations.  The impact and any
associated risks related to these policies on the Company's business  operations
is  discussed  throughout  Management's  Discussion  and  Analysis of  Financial
Conditions  and Results of  Operations  where such  policies  affect  Gulfstar's
reported  and  expected  financial  results.  For a detailed  discussion  on the
application of these and other accounting  policies,  see Note 1 in the Notes to
the Financial  Statements for the years ended  December 31, 2010 and 2009.  Note
that Gulfstar's preparation of this document requires Gulfstar to make estimates
and  assumptions  that affect the  reported  amounts of assets and  liabilities,
disclosure  of  contingent  assets  and  liabilities  at the date of  Gulfstar's
financial statements,  and the reported amounts of expenses during the reporting
periods.  There can be no  assurance  that actual  results  will not differ from
those estimates.

Principles of Consolidation

The  accompanying  consolidated  balance  sheet as of December  31, 2009 and the
consolidated  statement of operations and cash flows for the year ended December
31, 2009 and for the period from  (inception) May 19, 2006 through June 30, 2010
include only the accounts of Gulfstar LLC. The accompanying  balance sheet as of
December 31, 2010 and the  consolidated  statement of operations  and cash flows
for the period beginning July 1, 2010 (date of acquisition) through December 31,
2010  include the  accounts of Gulfstar  Energy  Corporation,  Gulfstar  LLC and
Talon.  All  significant  inter-company  balances  and  transactions  have  been
eliminated during consolidation.

Reclassification

Certain amounts  previously  reported have been  reclassified in connection with
the reverse recapitalization and to conform to current presentation.

Revenue Recognition

The Company recognizes revenue from its pipeline activities upon shipment of the
gas  to  its  customers.  Royalty  revenue  is  recognized  from  the  Company's
well-management activities in the period of delivery.

Accounts Receivable

Accounts  receivable  are stated at their cost less any  allowance  for doubtful
accounts.  The  allowance  for  doubtful  accounts is based on the  management's
assessment of the  collectability of specific customer accounts and the aging of
the  accounts  receivable.  If  there  is  deterioration  in a major  customer's
creditworthiness   or  if  actual   defaults  are  higher  than  the  historical
experience,  the management's  estimates of the recoverability of amounts due to
the Company could be adversely affected.  Based on the management's  assessment,
there is no reserve recorded as of December 31, 2010.

Non-controlling Interest

The non-controlling  interest is related to Gulfstar LLC, which is consolidated,
but not wholly owned by the Company.  At December  31, 2010,  the Company  owned
58.4% of the equity interest of Gulfstar LLC and therefore,  the non-controlling
interest of 41.6% was $1,287,173.

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 been  determined  that such  properties  are  impaired.  As properties
become  evaluated,  the  related  costs  transfer  to proved oil and natural gas
properties  using full cost  accounting.  None of the  capitalized  costs in the
amount of $276,533  were  included in the  amortization  base as of December 31,
2010 nor did the Company  expense any  capitalized  costs during the years ended
December 31, 2010 and 2009.  The Company does not have  significant  oil and gas
producing  activities  and  its oil and gas  properties  are  unevaluated  as of
December 31, 2010.

                                       27
<PAGE>





Management  capitalizes  additions  to  property  and  equipment  including  its
pipeline.  Expenditures  for  repairs  and  maintenance  are charged to expense.
Property  and  equipment  are carried at cost.  Adjustment  of the asset and the
related  accumulated  depreciation  accounts are made for property and equipment
retirements  and  disposals,  with the  resulting  gain or loss  included in the
consolidated statements of operations.

The Company has capitalized internal costs of approximately  $25,800 and $10,500
for the years ended December 31, 2010 and 2009  respectively.  Such  capitalized
costs  include  benefits  of  individuals  directly  involved  in the  Company's
construction  of its pipeline  based on the  percentage of their time devoted to
such activities.

In accordance  with  authoritative  guidance on accounting for the impairment of
disposal of long-lived assets, as set forth in Topic 360 of the ASC, 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 events
occurred  during  the years  ended  December  31,  2010 and 2009  that  would be
indicative of possible impairment.

Goodwill

In accordance with generally accepted accounting principles,  goodwill cannot be
amortized,  however, it must be tested annually for impairment.  This impairment
test is calculated at the reporting unit level. The goodwill impairment test has
two steps.  The first  identifies  potential  impairments  by comparing the fair
value of a reporting unit with its book value,  including goodwill.  If the fair
value of the  reporting  unit  exceeds  the  carrying  amount,  goodwill  is not
impaired and the second step is not necessary. If the carrying value exceeds the
fair value, the second step calculates the possible impairment loss by comparing
the implied  fair value of goodwill  with the  carrying  amount.  If the implied
goodwill is less than the carrying amount, a write-down is recorded.  Management
tests goodwill each year for impairment, or when facts or circumstances indicate
impairment has occurred.  No facts or  circumstances  were noted during the year
ended December 31, 2010, which would be indicative of possible impairment.

Significant Customer

The Company's  pipeline  construction was finished during the first half of 2010
and is currently delivering natural gas to one manufacturing customer located in
Kentucky.

Income Taxes

Gulfstar LLC is a limited  liability  company,  which is not a tax paying entity
for Federal income tax purposes.  Its pro rata shares of income,  losses and tax
credits is passed  through to its members  and  reported by its members on their
individual  income  tax  returns.  Thus,  since the  consolidated  statement  of
operations  for the year ended  December 31, 2009 and for the period  January 1,
2010  through  June 30, 2010  include the  accounts  of  Gulfstar  LLC only,  no
provision for federal income taxes or for deferred taxes has been determined for
these periods. Therefore, the Company has determined only for the period July 1,
2010 through  December 31, 2010 any provision for income taxes or deferred taxes
and this  determination  has been based upon the  accounts  of  Gulfstar  Energy
Corporation and Talon including the pro rata loss of Gulfstar LLC passed through
and reportable by Gulfstar Energy Corporation.

                                       28
<PAGE>





The Company  accounts for income taxes under the liability  method as prescribed
by  ASC  authoritative  guidance.   Deferred  tax  liabilities  and  assets  are
determined based on the difference between the financial statement and tax bases
of assets and  liabilities  using enacted rates  expected to be in effect during
the year in which the basis difference  reverses.  The realizability of deferred
tax assets are evaluated  quarterly and a valuation  allowance is provided if it
is more  likely  than not that the  deferred  tax  assets  will not give rise to
future  benefits  in the  Company's  income  tax  returns.  The  primary  timing
differences between financial and tax reporting arise from federal net operating
loss  carryforwards,  amortization  of start up  costs,  and accrual to cash
conversions that is used for income tax purposes.

The Company  assessed the  likelihood of utilization of the deferred tax assets,
in light of recent and expected  continuing  losses. As a result of this review,
the deferred tax asset of $758,227 has been fully reserved at December 31, 2010.
As of December 31, 2010,  the Company had net operating loss  carryforwards  for
income tax and financial reporting purposes of approximately $1,132,511 expiring
in the years 2019 through 2030.

The Company has adopted ASC guidance  regarding  accounting  for  uncertainty in
income  taxes.  This  guidance  clarifies  the  accounting  for income  taxes by
prescribing the minimum recognition threshold an income tax position is required
to meet before being  recognized in the financial  statements and applies to all
income tax  positions.  Each income tax  position  is assessed  using a two step
process.  A determination is first made as to whether it is more likely than not
that the income tax position will be  sustained,  based upon  technical  merits,
upon  examination  by the taxing  authorities.  If the income  tax  position  is
expected to meet the more likely than not criteria,  the benefit recorded in the
financial  statements  equals the largest amount that is greater than 50% likely
to be realized upon its ultimate settlement.  At December 31, 2010 there were no
uncertain tax positions that required accrual.

None of the Company's  federal or state income tax returns are  currently  under
examination  by the  Internal  Revenue  Service  or state  authorities.  However
calendar  years 2007 and later  remain  subject to  examination  by the Internal
Revenue Service and respective states.

Business Combinations

The Company  accounts for  acquisitions in accordance with guidance found in ASC
805, Business  Combinations.  The guidance,  effective January 1, 2009, requires
consideration  given,  including contingent  consideration,  assets acquired and
liabilities  assumed to be valued at their fair market values at the acquisition
date.  The  guidance  further   provides  that:  (1)  in-process   research  and
development  will be  recorded at fair value as an  indefinite-lived  intangible
assets;  (2)  acquisition  costs will  generally  be expensed as  incurred,  (3)
restructuring  costs  associated with a business  combination  will generally be
expensed  subsequent to the  acquisition  date;  and (4) changes in deferred tax
asset  valuations  and  income  tax  uncertainties  after the  acquisition  date
generally will affect income tax expense.

ASC 805  requires  that any excess of  purchase  price over fair value of assets
acquired,   including  identifiable   intangibles  and  liabilities  assumed  be
recognized as goodwill. In accordance with ASC 805, any excess off fair value of
acquired  net  assets,   including  identifiable  intangible  assets,  over  the
acquisition consideration results in a bargain purchase gain. Prior to recording
a gain,  the  acquiring  entity must  reassess  whether all acquired  assets and
assumed   liabilities   have  been   identified   and   recognized  and  perform
re-measurements  to verify that the  consideration  paid,  assets  acquired  and
liabilities assumed have been properly valued.

                                       29

<PAGE>


Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 167,  "Amendments to FASB  Interpretation
No.  46(R)",  which amends the  consolidation  guidance  applicable  to variable
interest   entities,   later   codified   under  ASC  810.   It   replaces   the
quantitative-based  risks and rewards  calculation  for  determining  whether an
enterprise  is the primary  beneficiary  in a variable  interest  entity with an
approach  that is primarily  qualitative  and requires  ongoing  assessments  of
whether an enterprise is the primary  beneficiary of a variable interest entity.
This  standard  also  requires  additional  disclosures  about  an  enterprise's
involvement in variable interest entities.  This standard is effective for us in
our interim and annual reporting periods beginning on and after January 1, 2010.
Earlier  application  is  prohibited.  Adoption of this  guidance did not have a
significant impact on the determination or reporting of our financial results.

In  January  2010,  the  FASB  issued   Accounting   Standards  Update  2010-02,
Consolidation  (Topic 810):  Accounting and Reporting for Decreases in Ownership
of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the
scope of current US GAAP. It clarifies  the decrease in ownership  provisions of
Subtopic  810-10 and removes the  potential  conflict  between  guidance in that
Subtopic and asset derecognition and gain or loss recognition  guidance that may
exist in other US GAAP.  An  entity  will be  required  to  follow  the  amended
guidance  beginning in the period that it first adopts FAS 160 (now  included in
Subtopic  810-10).  For those  entities  that have already  adopted FAS 160, the
amendments  are  effective  at the  beginning  of the  first  interim  or annual
reporting period ending on or after December 15, 2009. The adoption did not have
a material impact on the Company's Consolidated Financial Statements.

In January 2010, the FASB issued ASU 2010-06,  "Improving Disclosures about Fair
Value Measurements".  This update requires additional disclosure within the roll
forward  of  activity  for assets and  liabilities  measured  at fair value on a
recurring basis,  including  transfers of assets and liabilities between Level 1
and  Level 2 of the  fair  value  hierarchy  and the  separate  presentation  of
purchases,  sales,  issuances and settlements of assets and  liabilities  within
Level 3 of the fair value hierarchy.  In addition,  the update requires enhanced
disclosures  of the  valuation  techniques  and  inputs  used in the fair  value
measurements  within  Levels  2 and  3.  The  new  disclosure  requirements  are
effective  for  interim and annual  periods  beginning  after 15 December  2009,
except for the  disclosure of purchases,  sales,  issuances and  settlements  of
Level 3 measurements. Those disclosures are effective for fiscal years beginning
after 15 December 2010. As ASU 2010-06 only requires enhanced  disclosures,  the
Company  does not expect  that the  adoption of this update will have a material
effect on its financial statements.


                                       30
<PAGE>

In  February  2010,  the  FASB  issued  Accounting   Standards  Update  2010-09,
Subsequent Events (Topic 855):  Amendments to Certain Recognition and Disclosure
Requirements. ASU 2010-09 removes the requirement for an SEC filer to disclose a
date  through  which  subsequent  events have been  evaluated in both issued and
revised financial  statements.  Revised financial  statements  include financial
statements revised as a result of either correction of an error or retrospective
application  of U.S.  GAAP.  The  FASB  also  clarified  that  if the  financial
statements  have been  revised,  then an entity that is not an SEC filer  should
disclose both the date that the financial statements were issued or available to
be issued and the date the revised financial statements were issued or available
to be issued. The FASB believes these amendments remove potential conflicts with
the SEC's literature.  In addition, the amendments in the ASU requires an entity
that is a conduit bond obligor for conduit debt  securities that are traded in a
public market to evaluate  subsequent events through the date of issuance of its
financial  statements  and must disclose such date. All of the amendments in the
ASU were effective  upon issuance  (February 24, 2010) except for the use of the
issued date for conduit debt  obligors.  That amendment is effective for interim
or annual  periods  ending after June 15, 2010.  The  guidance,  except for that
related  to  conduit  debt  obligations,  has  been  adopted  and did not have a
material impact on the Company's Consolidated Financial Statements.

In December 2010, the FASB issued ASU 2010-28,  Intangibles--Goodwill  and Other
(Topic  350):  When  to  Perform  Step 2 of the  Goodwill  Impairment  Test  for
Reporting  Units with Zero or Negative  Carrying  Amounts ("ASU  2010-28").  ASU
2010-28 modifies Step 1 of the goodwill impairment test for reporting units with
zero or negative  carrying amounts and requires the company to perform Step 2 if
it is more likely than not that a goodwill  impairment may exist. ASU 2010-28 is
effective  for fiscal years and interim  periods  within those years,  beginning
after December 15, 2010. Early adoption is not permitted. The Company will adopt
these standards on January 1, 2011 and is currently  assessing the impact on its
condensed consolidated  financial statements.  Under the guidance any impairment
recorded  upon  adoption  is  recorded  as  a  cumulative-effect  adjustment  to
beginning retained earnings in the period of adoption.

In December 2010, the FASB issued ASU No. 2010-29,  Business Combinations (Topic
805)--Disclosure   of   Supplementary   Pro  Forma   Information   for  Business
Combinations  ("ASU  2010-29").   This  standard  update  clarifies  that,  when
presenting  comparative  financial  statements,  SEC registrants should disclose
revenue  and  earnings  of the  combined  entity as though  the  current  period
business  combinations  had occurred as of the beginning of the comparable prior
annual reporting period only. The update also expands the supplemental pro forma
disclosures  to include a  description  of the  nature  and amount of  material,
nonrecurring  pro  forma  adjustments  directly  attributable  to  the  business
combination included in the reported pro forma revenue and earnings. ASU 2010-29
is effective  prospectively  for material  (either on an individual or aggregate
basis) business  combinations entered into in fiscal years beginning on or after
December  15,  2010 with early  adoption  permitted.  ASU  2010-29 is  therefore
effective  for  acquisitions  made after  January 1,  2011.  We expect  that ASU
2010-29 may impact our disclosures for any future business combinations, but the
effect will depend on acquisitions that may be made in the future.

                                       31
<PAGE>







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

Not required for smaller reporting companies.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

The audited financial statements of the Company for the years ended December 31,
2010 and 2009, at the end of the document.



                                       32
<PAGE>



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

Larry O'Donnell,  CPA, PC formerly the independent  registered public accountant
for Gulfstar  Energy  Corporation  was  dismissed as the  Company's  independent
registered public accountant on July 8, 2010.

Effective  December 14, 2010, the Public  Accounting  Oversight  Board ("PCAOB")
revoked  Larry  O'Donnell,  CPA,  P.C.'s  registration  as a  registered  public
accountant.

On July 9, 2010,  the Board of Directors of the Company  approved the engagement
of new  auditors,  UHY LLP, of Sterling  Heights,  Michigan to be the  Company's
independent  registered  public  accountant.  At the  time,  no audit  committee
existed, other than the members of the Board of Directors.

The action to engage new auditors was approved by the Board of Directors. At the
time of this action no audit  committee  existed,  other than the members of the
Board of Directors.

In  connection  with audit of fiscal years ended  December 31, 2009 and 2008 and
the cumulative  period of January 1, 2010 through March 31, 2010 and through the
date of termination of the accountants,  no disagreements  exist with the former
independent  registered public accountant on any matter of accounting principles
or practices,  financial statement disclosure,  internal control assessment,  or
auditing  scope  of  procedure,  which  disagreements  if  not  resolved  to the
satisfaction of the former  accountant  would have caused them to make reference
in connection with their report to the subject of the disagreement(s).

The Independent Auditor Report by Larry O'Donnell,  CPA, PC for the fiscal years
ended  December  31,  2009 and 2008,  contained  an  opinion  which  included  a
paragraph discussing  uncertainties  related to continuation of the Company as a
going concern.

                                       54
<PAGE>




ITEM 9A. CONTROLS AND PROCEDURES
--------------------------------

Disclosures Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e)  under the  Securities  Exchange Act of
1934,  as  amended  (the  "Exchange  Act"))  that are  designed  to ensure  that
information  required to be disclosed in our reports  under the Exchange Act, is
recorded,  processed,  summarized and reported within the time periods  required
under  the  SEC's  rules and forms  and that the  information  is  gathered  and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Chief Financial Officer (Principal Financial Officer), as
appropriate, to allow for timely decisions regarding required disclosure.

As  required  by SEC Rule  15d-15(b),  our  Chief  Executive  Officer  and Chief
Financial  Officer  for  the  year  ended  December  31,  2010,  carried  out an
evaluation  under the supervision and with the  participation of our management,
of the effectiveness of the design and operation of our disclosure  controls and
procedures  pursuant  to  Exchange  Act Rule  15d-14 as of the end of the period
covered by this report. Based on the foregoing  evaluation,  our Chief Executive
Officer and Chief  Financial  Officer have concluded that our internal  controls
over financial  reporting are  ineffective  in timely  alerting them to material
information  required to be included in our  periodic  SEC filings and to ensure
that  information  required  to be  disclosed  in our  periodic  SEC  filings is
accumulated and  communicated  to our management,  including our Chief Executive
Officer  and  Chief  Financial  Officer,  to allow  timely  decisions  regarding
required disclosure.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.

Our management is responsible for establishing and maintaining adequate internal
control over financial  reporting for the company in accordance  with as defined
in Rules  13a-15(f) and 15d-15(f)  under the Exchange Act. Our internal  control
over financial  reporting is 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 internal control over financial  reporting includes
those policies and procedures that:

(1)  pertain  to  the  maintenance  of  records  that,  in  reasonable   detail,
     accurately  and fairly reflect the  transactions  and  dispositions  of our
     assets;

(2)  provide reasonable assurance that transactions are recorded as necessary to
     permit  preparation  of financial  statements in accordance  with generally
     accepted accounting principles,  and that our receipts and expenditures are
     being made only in accordance  with  authorizations  of our  management and
     directors; and

(3)  provide reasonable  assurance  regarding  prevention or timely detection of
     unauthorized acquisition,  use or disposition of our assets that could have
     a material effect on our financial statements.

                                       55
<PAGE>




We  have  identified  certain  material  weaknesses  in  internal  control  over
financial reporting relating to a shortage of accounting and reporting personnel
due to limited  financial  resources  and the size of our  Company,  as detailed
below:

(1)      The  Company  currently  does  not  have,  but  is in  the  process  of
         developing  formally  documented  accounting  policies and  procedures,
         which  includes  establishing  a  well-defined  process  for  financial
         reporting.  In January of 2011, we have hired an outside  consultant to
         assist us with the financial reporting function. After documentation of
         our accounting policies and procedures takes place, we plan to focus on
         performing and documenting tests of our internal controls on an ongoing
         basis throughout the year.

(2)      Management has identified the need to perform  account  reconciliations
         on a monthly  and  quarterly  basis to ensure  that  misstatements  are
         prevented   and  detected  on  a  timely   basis.   We  believe   these
         reconciliations  are critical to ensuring the accuracy of our financial
         reporting.

(3)      Due to the limited size of our accounting department, we currently lack
         the resources to handle complex accounting transaction. We believe this
         deficiency  could lead to errors in the  presentation and disclosure of
         financial information in our annual, quarterly, and other filings.

(4)      As is the case with many companies of similar size, we currently a lack
         of  segregation  of  duties  in the  accounting  department.  Until our
         operations   expand  and   additional   cash  flow  is  generated  from
         operations,  a complete  segregation  of duties  within our  accounting
         function will not be possible.

Considering  the nature and extent of our  current  operations  and any risks or
errors in financial reporting under current operations and the fact that we have
been a small  business with limited  employees,  such items caused a weakness in
internal controls involving the areas disclosed above.

After  January 1, 2011,  the Company  engaged a certified  public  accountant to
ensure that our financial  statements and disclosures are prepared in accordance
with accounting  principles  generally accepted in the United States of America.
Due to  financial  restraints,  the  Company  has not taken any other  action to
resolve such weaknesses.

We have  concluded  that our internal  controls over  financial  reporting  were
ineffective  as of December  31,  2010,  due to the  existence  of the  material
weaknesses noted above that we have yet to fully remediate.

This  annual  report  does not include an  attestation  report of the  Company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the Company's
registered  public accounting firm pursuant to permanent rules of the Securities
and Exchange  Commission  that permit the Company to provide  only  management's
report in this annual report.

There  was no change in our  internal  control  over  financial  reporting  that
occurred  during the fiscal year ended  December 31, 2010,  that has  materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.

ITEM 9B.  OTHER INFORMATION
---------------------------

Not applicable.

                                       56
<PAGE>




                                    PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
----------------------------------------------------------------

The following table sets forth  information as to persons who currently serve as
Gulfstar's directors or executive officers,  including their ages as of December
31, 2010.

<TABLE>
<CAPTION>
<S>                                                    <C>                          <C>

            Name                       Age                      Position                      Term
---------------------------- ------------------------- ---------------------------- -------------------------
Robert McCann                           50             President, CEO, Chairman              Annual
                                                       and Director

Stephen Warner                          71             Chief   Financial   Officer           Annual
                                                       Secretary and Director

Jason Sharp                             38             Vice President and Director           Annual

                                                       Manager of Gulfstar, LLC

W. Edward Nichols                       68             Director                              Annual

William Young                           62             Director                              Annual

</TABLE>

Gulfstar  officers are elected by the board of  directors  at the first  meeting
after each annual meeting of Gulfstar  shareholders  and hold office until their
successors are duly elected and qualified under Gulfstar's bylaws.

The directors named above will serve until the next annual meeting of Gulfstar's
stockholders.  Thereafter,  directors  will be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions at the pleasure
of  the  board  of  directors  absent  any  employment  agreement.  There  is no
arrangement or understanding  between the directors and officers of Gulfstar and
any other  person  pursuant  to which any  director  or officer  was or is to be
selected as a director or officer.

Biographical Information

Robert McCann, President, Chief Executive Officer and Director

Mr. McCann, age 50, earned his Bachelor of Science degree in Finance from Wagner
College in 1981.  From 1981 through 1984, he worked with the investment  banking
firm of Donaldson, Lufkin and Jenrette. In 1984 Mr. McCann moved into the Public
Finance sector serving as the Treasurer for the City of West Palm Beach.  During
his tenure there until in 1986,  he was  instrumental  in raising  funds for the
city in sewer,  water,  parking General Obligation Bonds, while managing a fixed
income  portfolio  and acting as the custodian of the  retirement  funds for the
firefighters, police, and general employees pension funds. Returning back to the
private sector in 1991, Mr. McCann  assisted in raising in funds for private and
public companies,  often working with them in multiple areas such as mergers and
acquisitions  and capital  restructuring  as the  Managing  Partner at Continuum
Capital Partners, Inc. until 2003. Mr. McCann founded Maxim TEP in January 2004,
where he has served as Founder and Vice  Chairman  and the largest  shareholder.
Maxim  has  raised   funding   for  both  oil  and  gas   assets  and   pipeline
infrastructure.  Maxim has subsequently merged with Conquest Petroleum, a public
corporation.  Mr. McCann was appointed  the  President,  CEO and Director of the
Company on May 5, 2010.

                                       57
<PAGE>





Stephen J. Warner, Chief Financial Officer, Secretary and Director

Mr.  Warner,  age 71, was a co-founder  of Crossbow  Ventures a venture  capital
management company in West Palm Beach, Florida. Steve served as President, Chief
Executive  Officer,  and  co-founder of Merrill Lynch Venture  Capital,  Inc. In
addition,  Steve served on the internal investment  committees for the selection
of venture capital, leveraged buyout, research and development, real estate, oil
& gas and equipment leasing investments for Merrill Lynch executives.  Steve has
also served as a U.S. Government  consultant to evaluate the American Enterprise
Funds,  established  by the U.S.  Congress  to promote the  development  of free
enterprise and  entrepreneurship in Eastern Europe. For the past five years, Mr.
Warner has served on Boards of Directors for both public and private  companies.
Those public companies include Rock Energy Resources,  Dyadic  International and
AOI  Medical.  Private  boards  have  included  Chairman  of Maxim  TEP,  Search
Transport  Industries  Inc. and UCT Coatings Inc. Mr. Warner received a Bachelor
of Science degree from  Massachusetts  Institute of Technology  (MIT) and an MBA
from the Wharton School of Business, University of Pennsylvania.  Mr. Warner was
appointed an officer and director of the Company on May 5, 2010.

Jason Sharp, Vice President, Chairman and Director

Jason Sharp, age 38, holds a Masters degree in Statistics from the University of
Tennessee and a Masters degree in Business Administration from Mississippi State
University.  Jason has served as Chief  Financial  Officer for  Gulfstar  Energy
Group,  a start-up  project where Jason helped develop the business plan and all
financial budgets and projections for a natural gas pipeline gathering system in
Butler County,  KY. Jason completed one-off  financial  analysis on the project,
created a private placement  vehicle for raising start-up  capital,  created and
reviewed  key gas purchase and sales  contracts,  while  serving on the board of
this natural gas Company.

For  the  period  of  2001 to 2005 he  worked  as a  Professor  in the  Business
Department at Mississippi State University,  Meridian,  Mississippi Campus where
he specialized in business planning and forecasting.  Jason also recently served
as Vice President - Chief  Management  Accountant  with Indymac Bank,  Pasadena,
California,  where  he was  responsible  for  financial  control  of over 65% of
expenses for this 10,000 employee financial services Company.

Mr. Sharp was appointed an officer and director of the Company on June 24, 2010.

William F. Young, Director

William Young, age 62, served four years in the U.S. Navy 1968-72,  and spent 12
Years in Transportation  Management with Roadway Express 1972-1983. For the past
27 Years he has been a Wholesale Oil  Distributor and is currently the President
of Georgia Energy and Engineering  Incorporated  which concentrates on wholesale
lubricants,  gasoline,  jet fuel, diesel and propane.  Mr. Young was appointed a
director of the Company on June 24, 2010.  Mr.  Young has been  appointed to the
Company's audit committee.

W. Edward Nichols:   Director

Mr. Nichols,  age 68, is currently a practicing  attorney with Nichols & Nichols
in Denver,  Colorado. He is authorized to practice in the states of Colorado and
Kansas,  the United  States  Federal  Courts,  and  Supreme  Court of the United
States.  He is also  Managing  Director of Nichols & Company  LLC, a  management
consulting  firm and has worked as a private  investment  banker and  consultant
with venture  capital  companies in the U.S. and Europe.  Mr. Nichols grew up in
the oil patch and has owned and  operated  gas  processing  plants in Kansas and
Wyoming.  He has also  co-owned and operated oil  drilling,  production  and gas
gathering companies in Kansas.

                                       58
<PAGE>





Mr. Nichols served as the Chief  Executive  Officer and President of the Company
from  August 11, 2004  through  May 5, 2010.  He has served as a director of the
Company  since 2004.  Mr.  Nichols has been  appointed  to the  Company's  audit
committee.

Key Employee

Timothy Sharp, President and Manager of Gulfstar LLC

Mr.  Timothy  Sharp is the founder of Gulfstar LLC and he manages the day to day
operations of the wells and the pipeline.

Tim,  age 57, has over 25 years in the  petroleum  business.  He received a B.A.
from the  University  of  Minnesota  in  Business  Administration.  Tim has been
involved in the  implementation of numerous gas  transportation  lines including
Allen County Gas,  Burkesville Gas Company,  Cajun Gas Co-op,  Cumberland Valley
Gas,  G-Go Oil and Gas, and SETCO.  Tim also serves as president of Indian Gold,
LLC and operating  manager and director of Magnolia Lake Estates,  both of which
are real estate development companies in Mississippi.

Committees of the Board of Directors

Gulfstar is managed under the direction of its board of directors.

Executive Committee

The Company does not have a separate executive  committee.  The Board as a whole
functions as the Executive Committee for Gulfstar.

Audit Committee

The Company's Board of Directors,  in December 2010,  appointed Messrs.  Nichols
and Young to serve as the Company's Audit Committee. At the time of this filing,
the Audit Committee does not have a charter and does not have a member that is a
financial expert.

Previous "Blank Check" or "Shell" Company Involvement

Management of Gulfstar has not been involved in prior private  "blank-check"  or
"shell" companies.

Conflicts of Interest - General.
-------------------------------

Our directors and officers are, or may become,  in their individual  capacities,
officers,  directors,  controlling shareholder and/or partners of other entities
engaged in a variety of businesses.  Thus,  there exist  potential  conflicts of
interest   including,   among  other  things,   time,  efforts  and  corporation
opportunity,  involved in participation with such other business entities. While
each  officer  and  director of our  business is engaged in business  activities
outside of our business,  the amount of time they devote to our business will be
up to approximately 40 hours per week.

                                       59
<PAGE>




Conflicts of Interest - Corporate Opportunities
-----------------------------------------------

Presently no requirement contained in our Articles of Incorporation,  Bylaws, or
minutes which requires  officers and directors of our business to disclose to us
business opportunities which come to their attention. Our officers and directors
do,  however,  have a  fiduciary  duty of  loyalty to us to  disclose  to us any
business  opportunities  which come to their attention,  in their capacity as an
officer  and/or  director  or  otherwise.  Excluded  from  this  duty  would  be
opportunities  which the person  learns  about  through  his  involvement  as an
officer and director of another company. We have no intention of merging with or
acquiring  an  affiliate,  associate  person or  business  opportunity  from any
affiliate or any client of any such person.

ITEM 11.  EXECUTIVE COMPENSATION
--------------------------------

The  following  table sets forth the  compensation  paid to  officers  and board
members during the fiscal years ended December 31, 2010 and 2009. The table sets
forth this information for Gulfstar,  including salary, bonus, and certain other
compensation to the Board members and named executive  officers for the past two
fiscal  years and  includes  all Board  Members and  Officers as of December 31,
2010.

<TABLE>
<CAPTION>
<S>                                                              <C>          <C>            <C>           <C>


                      SUMMARY EXECUTIVES COMPENSATION TABLE

                                                                 Non-equity   Non-qualified
                                                                  incentive     deferred
                                               Stock    Option      plan      compensation   All other
                              Salary   Bonus   awards   awards   compensation   earnings     compensation  Total
Name & Position      Year      ($)      ($)      ($)    ($)          ($)           ($)          ($)         ($)

Robert McCann,        2010    81,879     0        0        0          0             0            0        81,879
President & CEO (1)   2009      0        0        0        0          0             0            0           0

Stephen J. Warner,    2010    36,000     0        0        0          0             0            0        36,000
CFO (2)               2009      0        0        0        0          0             0            0           0

James Sharp, Vice     2010   107,000     0        0        0          0             0            0        107,000
President (3)         2009      0        0        0        0          0             0            0           0

Timothy Sharp,
President of
Gulfstar Energy       2010  260,781      0        0        0          0             0            0       260,781
Group, LLC (4)        2009      0        0        0        0          0             0            0           0

Edward Nichols (5)    2010      0        0     49,000      0          0             0            0        49,000
                      2009      0        0     12,500      0          0             0            0        12,500

Herbert Sears (6)     2010      0        0     46,000      0          0             0            0        46,000
                      2009      0        0      5,000      0          0             0            0         5,000

Ronald Bleckiki,      2010      0        0        0        0          0             0            0           0
Vice President (7)    2009      0        0     15,000      0          0             0            0        15,000

</TABLE>


                                       60

<PAGE>




(1)  Mr. McCann was appointed the President and Chief  Executive  Officer on May
     5, 2010.  During the year ended  December 31, 2010, Mr. McCann was not paid
     his  salary  rather it has been  accrued  until such time the  Company  has
     adequate  cash reserves to pay his salary.  During the year ended  December
     31,  2010,  Safe Harbor  Equity  Partners,  LLC, of which Mr.  McCann, the
     Company's CEO is an affiliate of, was issued  729,310  shares of restricted
     common stock for services.

(2)  Mr. Warner was appointed the Chief Financial Officer on May 5, 2010. During
     the year ended December 31, 2010, Mr. McCann was not paid his salary rather
     it has been accrued  until such time the Company has adequate cash reserves
     to pay his salary.

(3)  Mr. James Sharp was appointed  Vice  President on June 24, 2010.  Mr. Sharp
     compensated through the Company's subsidiary, Gulfstar LLC.

(4)  Mr.  Timothy Sharp is the President of Gulfstar LLC.  During the year ended
     December 31, 2010,  Mr.  Timothy  Sharp  received a salary of $260,781 from
     GulfStar LLC.

(5)  Mr. Nichols resigned as the President and Chief Executive Officer on May 5,
     2010.  During the year ended  December 31, 2010,  Mr.  Nichols was issued a
     total of 157,500 shares of restricted common stock for his services,  as an
     officer and director.  During the year ended December 31, 2009, Mr. Nichols
     was issued 31,250  shares of its common stock for  services.  The shares of
     common  stock were valued  based upon the price that the Company  sells its
     commons stock and the value of the shares it issued in connection  with its
     recent acquisitions.

(6)  Mr. Sears resigned as the Company's Chief Financial Officer on May 5, 2010.
     During the year ended December 31, 2010, Mr. Sears was issued 57,500 shares
     for his services as an officer and director. During the year ended December
     31, 2009,  Mr. Sears was issued  12,500  shares of common stock in exchange
     for  services.  The shares of common stock were valued based upon the price
     that the  Company  sells its  commons  stock and the value of the shares it
     issued in connection with its recent acquisitions.

(7)  Mr.  Bleckiki  served as the  Company's  Vice-President  from March 1, 2009
     through  December 1, 2009.  During the year ended  December 31,  2009,  the
     Company issued Mr. Bleckicki  37,500 shares of its restricted  common stock
     in return for  services.  The shares of common stock were valued based upon
     the price that the Company was selling it common stock at the time.

Employment  Agreements  and  Termination  of  Employment  and  Change-In-Control
Arrangements

Effective July 1, 2010, Mr. Robert McCann is employed under a 2 year contract at
$120,000 per year,  plus  participation  in Employee  Stock Option Plans and any
Bonus Plans.  His salary will  increase to $264,000  after the  completion of at
least $2,000,000 in financing.

Effective  July 1, 2010,  Mr. Stephen Warner is employed under a 2 year contract
at $72,000 per year, plus  participation  in Employee Stock Option Plans and any
Bonus Plans.  His salary will increase to $120,000 per year after the completion
of at least $2,000,000 in financing

Effective  July 1, 2010,  Mr. Jason Sharp is employed under a 2 year contract at
$180,000 per year,  plus  participation  in Employee  Stock Option Plans and any
Bonus Plans.  His salary will increase to $216,000 per year after the completion
of at least $2,000,000 in financing.

Effective July 1, 2010, Mr. Timothy Sharp is employed under a 2 year contract at
$300,000 per year,  plus  participation  in Employee  Stock Option Plans and any
Bonus Plans for the 60%  Subsidiary  Gulfstar  Energy Group LLC. His salary will
increase  to  $360,000  per year after the  completion  at least  $2,000,000  in
financing.

The Employment Agreements provided for termination by Gulfstar for cause upon 30
days written notice with cause being defined as:

(i)  Conviction of a felony,  a crime or moral turpitude or commission of an act
     of embezzlement or fraud against the Company;

(ii) Deliberate dishonesty of the Executive resulting in damages to the Company;

(iii) Dereliction of duty, misfeasance or malfeasance; and

(iv) Any breach of Executive of the agreement or any other agreement between the
     Executive and the Company.

                                       61
<PAGE>





The  employment  agreements  provide for the  executive  to  terminate  for Good
reason.  The Executive  must give written notice to the Company of his intent to
terminate  for Good Reason and offer the Company 30 days in which to resolve the
circumstances  giving rise to the notice.  If such event or circumstances  shall
remain  unremedied,  the Executive may then  terminate his  employment  for Good
Reason by further written notice effective  immediately.  Good Reason is defined
as: the breach by the Company of any material provision of this Agreement or the
failure of the Company,  its directors or officers while acting on behalf of the
Company,   to  comply  with  all  applicable  laws  and  government   rules  and
regulations.

The Company has no pension,  health, annuity,  bonus, insurance,  stock options,
profit  sharing or similar  benefit plans;  however,  the Company may adopt such
plans in the future.  There are  presently no personal  benefits  available  for
directors, officers, or employees of the Company.

Compensation Committee Interlocks and Insider Participation

The  Gulfstar  board  of  directors  in its  entirety  acts as the  compensation
committee for Gulfstar.


                              Director Compensation

The following table sets forth certain information concerning  compensation paid
to our directors for services as directors,  but not including  compensation for
services as officers  reported in the "Summary  Executives  Compensation  Table"
during the year ended December 31, 2010:


<TABLE>
<CAPTION>
<S>                                                                          <C>             <C>              <C>

                          Fees                                 Non-equity    Non-qualified
                          earned                               incentive        deferred
          Name            or paid                                 plan        compensation      All other
                           in cash   Stock       Option       compensation      earnings      compensation      Total
                             ($)     awards ($)  awards ($)       ($)             ($)              ($)           ($)
------------------------- ---------- ----------- ----------- --------------- --------------- ---------------- -----------

Robert McCann (1)           $ -0-      $ -0-       $ -0-         $ -0-           $ -0-          $ 81,879       $81,879

Stephen Warner (2)          $ -0-      $ -0-       $ -0-         $ -0-           $ -0-          $ 36,000       $36,000

Jason Sharp (3)             $ -0-      $ -0-       $ -0-         $ -0-           $ -0-          $107,000       $107,000

William Young (4)           $ -0-      $ -0-       $ -0-         $ -0-           $ -0-            $ -0-         $ -0-

W. Edward  Nichols (5)      $ -0-      $ -0-       $ -0-         $ -0-           $ -0-          $ 49,000       $49,000

Herbert T. Sears(6)         $ -0-      $ -0-       $ -0-         $ -0-           $ -0-          $ 46,000       $ 46,000


</TABLE>


                                       62

<PAGE>




(1)      Mr. McCann was appointed a director and Chief Executive  Officer on May
         5, 2010.  During the year ended  December 31, 2010,  Mr. McCann was not
         paid his salary for his services as an officer of the Company rather it
         has been accrued until such time the Company has adequate cash reserves
         to pay his salary.During the year ended  December 31,  2010,  Safe
         Harbor  Equity  Partners,  LLC, of which Mr.  McCann , the Company's
         CEO is an affiliate of, was issued  729,310  shares of restricted
         common stock for services.
(2)      Mr. Warner was appointed a director the Chief Financial  Officer on May
         5, 2010.  During the year ended  December 31, 2010,  Mr. Warner was not
         paid his salary for his services as an officer of the Company rather it
         has been accrued until such time the Company has adequate cash reserves
         to pay his salary.
(3)      Mr. James Sharp was  appointed  Vice  President  and a director on June
         24,  2010.  Mr. Sharp  receives  compensation  for his services as an
         officer through the Company's subsidiary Gulfstar LLC.
(4)      Mr. Young was appointed a director of the Company on May 5, 2010.
(5)      Mr. Nichols  resigned as the President and Chief  Executive  Officer on
         May 5, 2010.  During the year ended  December 31, 2010, Mr. Nichols was
         issued a total of 157,500  shares of  restricted  common  stock for his
         services,  as an officer and director.  The shares of common stock were
         valued  based upon the price that the Company  sells its commons  stock
         and the value of the  shares it issued in  connection  with its  recent
         acquisitions.
(6)      Mr.  Sears  resigned as the  Company's  Chief  Financial  Officer and a
         director of the Company on May 5, 2010.  During the year ended December
         31,  2010,  Mr. Sears was issued  57,500  shares for his services as an
         officer and director. The shares of common stock were valued based upon
         the price that the Company sells its commons stock and the value of the
         shares it issued in connection with its recent acquisitions.

All of our  officers  and/or  directors  will  continue  to be  active  in other
companies.  All officers and directors  have retained the right to conduct their
own independent business interests.

It is  possible  that  situations  may arise in the  future  where the  personal
interests of the officers and directors may conflict  with our  interests.  Such
conflicts could include  determining  what portion of their working time will be
spent on our business and what portion on other business  interest.  To the best
ability and in the best judgment of our officers and directors, any conflicts of
interest  between us and the personal  interests  of our officers and  directors
will be  resolved  in a fair  manner  which  will  protect  our  interests.  Any
transactions  between us and entities affiliated with our officers and directors
will be on terms  which are fair and  equitable  to us.  Our Board of  Directors
intends to continually review all corporate  opportunities to further attempt to
safeguard against conflicts of interest between their business interests and our
interests.

We have no  intention of merging  with or  acquiring  an  affiliate,  associated
person or  business  opportunity  from any  affiliate  or any client of any such
person.

Limitation on Liability and Indemnification

The Colorado  Business  Corporation  Act  requires us to indemnify  officers and
directors  for any  expenses  incurred by any officer or director in  connection
with any actions or proceedings,  whether civil,  criminal,  administrative,  or
investigative,  brought  against such officer or director  because of his or her
status as an officer or director, to the extent that the director or officer has
been  successful  on the  merits  or  otherwise  in  defense  of the  action  or
proceeding.  The Colorado  Business  Corporation  Act permits a  corporation  to
indemnify an officer or director,  even in the absence of an agreement to do so,
for  expenses  incurred  in  connection  with any action or  proceeding  if such
officer  or  director  acted in good  faith  and in a manner  in which he or she
reasonably believed to be in or not opposed to the best interests of us and such
indemnification is authorized by the stockholders,  by a quorum of disinterested
directors,  by independent  legal counsel in a written  opinion  authorized by a
majority vote of a quorum of directors consisting of disinterested directors, or
by independent  legal counsel in a written opinion if a quorum of  disinterested
directors cannot be obtained.

                                       63
<PAGE>




The Colorado Business Corporation Act prohibits indemnification of a director or
officer if a final  adjudication  establishes  that the  officer's or director's
acts or omissions involved intentional misconduct, fraud, or a knowing violation
of the law and were  material  to the cause of  action.  Despite  the  foregoing
limitations on indemnification, the Colorado Business Corporation Act may permit
an officer or  director to apply to the court for  approval  of  indemnification
even if the  officer or  director  is  adjudged  to have  committed  intentional
misconduct, fraud, or a knowing violation of the law.

The Colorado  Business  Corporation  Act also provides that  indemnification  of
directors is not permitted for the unlawful payment of distributions, except for
those directors registering their dissent to the payment of the distribution.

According to our bylaws,  we are  authorized  to indemnify  our directors to the
fullest  extent  authorized  under  Colorado  Law  subject to certain  specified
limitations.

Insofar as indemnification  for liabilities  arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and persons controlling
us pursuant to the foregoing  provisions  or otherwise,  we are advised that, in
the opinion of the Securities and Exchange  Commission,  such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.

                      EQUITY COMPENSATION PLAN INFORMATION

The Company has not established an equity  compensation  plan or Incentive Stock
Option Plan.



ITEM 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
--------------------------------------------------------------------------------
RELATED STOCKHOLDER MATTERS.
---------------------------


The  following  table  sets forth  information  with  respect to the  beneficial
ownership of the Company's outstanding common stock by:

o    each person who is known by the Company to be the beneficial  owner of five
     percent (5%) or more of Gulfstar's common stock;

o    the Company's chief executive officer,  its other executive  officers,  and
     each director as identified in the  "Management--  Executive  Compensation"
     section; and

o    all of the Company's directors and executive officers as a group.

Beneficial  ownership  is  determined  in  accordance  with  the  rules  of  the
Securities and Exchange  Commission and generally  includes voting or investment
power with respect to securities.  Shares of common stock and options,  warrants
and convertible  securities that are currently exercisable or convertible within
60 days of the date of this document  into shares of the Company's  common stock
are deemed to be outstanding and to be beneficially  owned by the person holding
the options, warrants or convertible securities for the purpose of computing the
percentage  ownership of the person,  but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.

The information below is based on the number of shares of Company's common stock
that  Gulfstar  believes was  beneficially  owned by each person or entity as of
December 31, 2010.

                                       64
<PAGE>






<TABLE>
<CAPTION>
<S>                                                                      <C>


 Title of Class     Name and Address of Beneficial       Amount and      Percent of Class(1)
                                Owner                     Nature of
                                                      Beneficial Owner
----------------- ----------------------------------- ------------------ ---------------------
 Common shares    Jason Sharp, Vice President                 2,000,000         11.77%
                  and Director

 Common shares    Timothy Sharp, CEO of Gulfstar LLC          9,659,659         56.87%

 Common shares    Robert McCann, CEO and Director (2)         1,718,750         10.11%

 Common shares    Stephen Warner, CFO and Director(3)           750,000         4.41%

 Common shares    W. Edward Nichols Director (3)                283,574         1.66%

                  William F. Young,                                   0           0%
 Common shares    Director
                                                      ------------------ ---------------------
                  All Officers and Directors as a
                  group (5 individuals)                       4,752,324         27.97%


</TABLE>

(1)  Based on  16,985,086  shares of common  stock  issued  and  outstanding  on
     December 31, 2010.

(2)  Mr. McCann holds 1,525,000 shares directly and 193,750 shares  beneficially
     through the Robert McCann Trust.

(3)  Mr. Warner holds 750,000 shares  beneficially  through the Warner  Lakeside
     Trust.

(4)  Mr. Nichols owns 269,002 shares of common stock  directly,  2,200 shares of
     common stock jointly with his wife and 12,372 shares  indirectly though his
     wife

     Rule  13d-3  under  the  Securities   Exchange  Act  of  1934  governs  the
     determination  of beneficial  ownership of  securities.  That rule provides
     that a beneficial  owner of a security  includes any person who directly or
     indirectly has or shares voting power and/or  investment power with respect
     to such  security.  Rule 13d-3 also provides  that a beneficial  owner of a
     security  includes  any  person  who has the  right to  acquire  beneficial
     ownership  of such  security  within  sixty  days,  including  through  the
     exercise of any option, warrant or conversion of a security. Any securities
     not outstanding  which are subject to such options,  warrants or conversion
     privileges  are deemed to be  outstanding  for the purpose of computing the
     percentage  of  outstanding  securities  of the class owned by such person.
     Those  securities  are not  deemed to be  outstanding  for the  purpose  of
     computing the  percentage of the class owned by any other person.  Included
     in this table are only those  derivative  securities  with exercise  prices
     that Gulfstar believes have a reasonable likelihood of being "in the money"
     within the next sixty days.


                                       65
<PAGE>




                      EQUITY COMPENSATION PLAN INFORMATION

The Company has not established an equity  compensation  plan or Incentive Stock
Option Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------

During the year ended  December 31, 2010,  the Company  entered into  Employment
Agreements with Messrs.  McCann,  Warner and Sharp officers and directors of the
Company. In addition,  the Company has entered into an Employment Agreement with
Mr. Timothy Sharp, a majority  shareholder in the Company.  These agreements are
described in detail under "Executive Compensation."

During the years ended  December 31, 2010 and December 31, 2009,  the  following
officers and directors  received stock as part of the  acquisitions of Talon and
Gulfstar LLC:

           Name                        Number of Shares
---------------------------- ----- --------------------------
Robert McCann                              1,943,750
Stephen Warner                               750,000
Jason Sharp                                2,000,000
Timothy Sharp                              9,659,659

As part of the acquisition of Talon, Safe Harbor Equity Partners,  LLC, of which
Mr.  McCann,  the Company's CEO is an affiliate of, was issued 729,310 shares of
the Company's common stock for services.

During the year ended December 31, 2010, Barren River Partners LLC, an affiliate
of Mr.  Timothy  Sharp,  a greater  than 5%  shareholder  of the  Company  and a
member-manager  of Gulfstar  LLC advanced  Gulfstar LLC funds of $335,078.  Such
funds are due by December 31, 2011.


During the year ended December 31, 2010, the Company made issuance of its common
stock for the services and debt to the following:

<TABLE>
<CAPTION>
<S>                                                                      <C>

                Name                           Number of Shares                  Reason
------------------------------------- ---- ------------------------- --- ------------------------
Edward Nichols,
Director and Former Officer                         10,000                   Debt of $6,649
Edward Nichols,
Director and Former Officer                        157,500                  $49,000 Services
Herbert Sears,                                      10,000                   Debt of $6,649
Herbert Sears                                       57,500                  $46,000 Services

</TABLE>

During the year ended December 31, 2009, the Company made issuance of its common
stock as follows:

<TABLE>
<CAPTION>
<S>                                                                            <C>

                   Name                          Number of Shares              $ Value of Shares
                   ----                          ----------------              -----------------
W. Edward Nichols,
Director and Former Officer                           31,250                        $12,500
Herbert T. Sears,
Former Officer and Director                           12,500                        $5,000
Ron Blekicki,
Former Officer and Director                           37,500                        $15,000

</TABLE>

                                       66
<PAGE>






ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
-----------------------------------------------

UHY LLP is our current  independent  registered  public accounting firm. UHY LLP
personnel  work under the direct control of UHY LLP partners and are leased from
wholly-owned  subsidiaries  of UHY  Advisors,  Inc. in an  alternative  practice
structure.

We were billed by UHY LLP  $120,980  and $0 during the years ended  December 31,
2010 and 2009,  respectively,  for  professional  services,  which  include fees
associated with the annual audit of the  consolidated  financial  statements and
review of our  quarterly  reports on Form 10-Q and other SEC filings.  UHY LLP's
fees include  audit work for Gulfstar LLC the years ended  December 31, 2009 and
2008, prior to the reverse recapitalization.

<TABLE>
<CAPTION>
<S>                                                                           <C>


                                                               Year Ended December 31,
                                                        2010                             2009
                                            -----------------------------     ----------------------------
Audit Fees                                            $38,760                             $0

Audit-related Fees                                    $68,690                             $0


Tax Fees                                              $0                             $0

All Other Fees                                        $13,530                             $0

                                            -----------------------------     ----------------------------
Total Fees                                            $120,980                            $0
</TABLE>

Audit  Committee  Pre-Approval  Policy and  Permissible  Non-Audit  Services  of
Independent Public Accounting Firm

Our Audit Committee  pre-approves all audit and permissible  non-audit  services
provided by our independent  registered  public  accounting firm. These services
may include audit  services,  audit-related  services,  tax services,  and other
services.  Pre-approval  is  generally  provided  for up to one  year,  and  any
pre-approval  is detailed as to the  particular  service or category of services
and is generally subject to a specific budget. The engagement of our independent
registered  public  accounting  firm was  approved  by our  Board of  Directors,
functioning as our Audit  Committee,  prior to the start of providing  quarterly
and annual services related to the year ended December 31, 2010.


                                       67
<PAGE>

                                     PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
-------------------------------------------------

The  following  is a complete  list of exhibits  filed as part of this Form 10K.
Exhibit  number  corresponds  to the numbers in the Exhibit table of Item 601 of
Regulation S-K.

<TABLE>
<CAPTION>
<S>              <C>

(a)      Audited financial statements for years ended December 31, 2010 and 2009


(b)               Exhibit No.                                   Description
                  -----------                                   -----------

                 2.1            Revised and Amended Share Purchase and Exchange Agreement by and between
                                Bedrock Energy, Inc. and Talon Energy Corporation (1)

                 2.2            Acquisition Agreement, dated as of June 23,2010, by and among Gulfstar
                                Energy Corporation and Gulfstar Energy Group, LLC on behalf of certain
                                investment holders (10

                 2.3            Share Exchange Agreement, dated June 23, 2010 by and between Gulfstar Energy
                                Corporation, Jason Sharp and Timothy Sharp and Gulfstar Energy, LLC (1)

                 2.4            Assignment of Interest in Gulfstar Energy Group, LLC Consent of Manager,

                 3.3(ii)        Operating Agreement of Gulfstar Energy Group, LLC (1)

                 10.1           Employment Agreement - Robert McCann, dated June 23, 2010 (1)

                 10.2           Employment Agreement - Stephen J. Warner, dated June 23, 2010 (1)

                 10.3           Employment Agreement - Jason Sharp, dated June 23, 2010 (1)

                 31.1           Certification of Chief Executive Officer pursuant to Section 302 of the
                                Sarbanes-Oxley Act (2)

                 31.2           Certification of Chief Financial Officer pursuant to Section 302 of the
                                Sarbanes-Oxley Act (2)

                 32.1           Certification of Principal Executive Officer pursuant to Section 906 of the
                                Sarbanes-Oxley Act (2)

                 32.2           Certification of Principal Financial Officer pursuant to Section 906 of the
                                Sarbanes-Oxley Act (2)
</TABLE>

(1)  Incorporated by reference from the exhibits to the Company's Current Report
     on Form 8-K filed with the Securities and Exchange  Commission on August 5,
     2010.

(2)  Filed Herewith.

                                       68

<PAGE>

         UHY LLP
Certified Public Accountants
12900 Hall Road, Suite 510
Sterling Heights, MI 48313-1153

Telephone  586-254-8141
Fax  586-254-9406
Web  www.uhy-us.com


         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To The Board of Directors and
Shareholders of Gulfstar Energy Corporation

We have audited the accompanying  consolidated balance sheets of Gulfstar Energy
Corporation  and  Subsidiaries  as of December 31, 2010 and 2009 and the related
consolidated  statements of operations,  shareholders' equity and cash flows for
each of the years then ended.  These consolidated  financial  statements are the
responsibility of the company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted my audit in  accordance  with the  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
consolidated 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 company's  internal  control
over financial reporting. Accordingly, we express no such includes examining, on
a  test  basis,   evidence   supporting  the  amounts  and  disclosures  in  the
consolidation financial statements, assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the financial  position of Gulfstar Energy  Corporation and
Subsidiaries  as of  December  31,  2010 and  2009,  and the  results  of their
operations  and their cash flows for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

As  described  in  Note  3  to  the  consolidated   financial  statements,   the
accompanying  consolidated financial statements have been prepared assuming that
the Company will continue as a going  concern.  The Company's  recurring  losses
from  operations,   accumulated   deficit  and  working  capital  deficit  raise
substantial doubt about its ability to continue as a going concern. Management's
plans  concerning these matters are also discussed in Note 3 to the consolidated
financial statements.  The consolidated  financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ UHY LLP
Sterling Heights, Michigan
April 22, 2011


                                      33



<PAGE>
<TABLE>
<CAPTION>

                           GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                                  (FORMERLY BEDROCK ENERGY, INC)
                               (A Company in the Development Stage)
                                    CONSOLIDATED BALANCE SHEETS
                                                                                      December 31,
                                                                       -------------------------------------
                                                                               2010                 2009
ASSETS
                                                                       ---------------      ----------------
<S>                                                                 <C>                 <C>

Cash and cash equivalents                                           $           65,799  $           705,622
Accounts receivable:
   Pipeline receivable                                                          11,446                    -
   Joint interest operations                                                    22,207                    -
Prepaids and other assets                                                       33,660                    -
Note receivable                                                                      -               10,000
                                                                       ---------------      ----------------
   Total current assets                                                        133,112              715,622
                                                                       ---------------      ----------------
Property and equipment
   Non oil and gas properties                                                  180,954              106,904
   Pipeline                                                                  4,119,885            3,531,961
   Oil and gas properties                                                      287,024                    -
Accumulated depreciation                                                      (183,549)             (28,773)
                                                                       ---------------      ----------------
   Net property and equipment                                                4,404,314            3,610,092
                                                                       ---------------      ----------------
Note receivable, related party                                                       -               82,325
Goodwill                                                                       368,369                    -
Intangible assets                                                              170,874              169,374
                                                                       ---------------      ----------------
  Total other assets                                                           539,243              251,699
                                                                       ---------------      ----------------
   Total assets                                                     $        5,076,669  $         4,577,413
                                                                       ================     ================

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable                                                    $          936,418  $           842,149
Litigation settlement payable                                                   15,000               70,000
Oil and gas proceeds due to others                                              33,477                    -
Deposits                                                                             -              503,224
Loan payable, related party                                                    335,078                    -
Accrued liabilities                                                            488,380               30,655
                                                                       ---------------      ----------------
   Total current liabilities                                                 1,808,353            1,446,028
                                                                       ---------------      ----------------
Commitments and Contingencies

STOCKHOLDERS' EQUITY
Preferred shares, no par value, 100,000,000 shares authorized;
    no shares issued and outstanding                                                 -                    -
Common shares, $0.001 par value, 200,000,000 shares authorized;
    16,985,086 and 11,659,659 shares issued and outstanding
    at December 31, 2010 and December 31, 2009, respectively                    16,985               11,660
Additional paid-in capital                                                   6,296,861            6,180,126
Accumulated deficit                                                         (4,332,703)          (3,060,401)
                                                                       ---------------      ----------------
     Stockholders' equity before non-controlling interest                    1,981,143            3,131,385
Non-controlling interest                                                     1,287,173                    -
                                                                       ---------------      ----------------
   Total stockholders' equity                                                3,268,316            3,131,385
                                                                       ---------------      ----------------
   Total liabilities and stockholders' equity                       $        5,076,669  $         4,577,413
                                                                       ================     ================

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


                                       34
<PAGE>

<TABLE>
<CAPTION>

                          GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                                 (FORMERLY BEDROCK ENERGY, INC)
                              (A Company in the Development Stage)
                              CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                                                  Period from
                                                                                                                 May 19, 2006
                                                                  Years Ended December 31,                   (Inception) through
                                                        -----------------------------------------------
                                                                2010                      2009                 December 31, 2010
                                                        ---------------------      --------------------     ------------------------
<S>                                                 <C>                        <C>                      <C>

Net revenues                                        $                101,277   $                     -  $                   101,277
Cost of revenues                                                      36,842                         -                       36,842
                                                        ---------------------      --------------------     ------------------------

Gross profit                                                          64,435                         -                       64,435
                                                        ---------------------      --------------------     ------------------------

Operating expenses:
 General and administrative expenses                               1,919,775                   596,198                    4,755,747
                                                        ---------------------      --------------------     ------------------------
             Total operating expenses                              1,919,775                   596,198                    4,755,747
                                                        ---------------------      --------------------     ------------------------

Loss from operations                                              (1,855,340)                 (596,198)                  (4,691,312)
                                                        ---------------------      --------------------     ------------------------

Other income (expense)
 Interest income                                                       3,926                       764                        5,347
 Interest expense                                                       (279)                        -                         (279)
 Other income                                                        230,132                     9,784                      243,260
 Other expense                                                             -                  (170,000)                    (238,978)
                                                        ---------------------      --------------------     ------------------------
           Total other income (expense)                              233,779                  (159,452)                       9,350
                                                        ---------------------      --------------------     ------------------------

Loss before income taxes                                          (1,621,561)                 (755,650)                  (4,681,962)
Income taxes                                                               -                         -                            -
                                                        ---------------------      --------------------     ------------------------

Net loss                                                          (1,621,561)                 (755,650)                  (4,681,962)
Less: net loss attributable to the
 non-controlling interest                                            349,259                         -                      349,259
                                                        ---------------------      --------------------     ------------------------

Net loss attributable to
 Common Stockholders                                $             (1,272,302)  $              (755,650) $                (4,332,703)
                                                        =====================      ====================     ========================

Basic and diluted net loss
 per common share                                   $                  (0.09)  $                 (0.06)
                                                        =====================      ====================

Weighted average number of
 common shares outstanding                                        14,244,250                11,659,659
                                                        =====================      ====================

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                       35

<PAGE>

<TABLE>
<CAPTION>

                                  GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                                         (FORMERLY BEDROCK ENERGY, INC)
                                      (A Company in the Development Stage)
                                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                Preferred Shares        Common Shares      Additional                  Total Gulfstar    Non-con-     Total Share
                 No Par Value        $.001 Par Value        Paid-in       Accumulated   Shareholders'    trolling        holders'
              Shares       Amount    Shares      Amount      Capital        Deficit        Equity         Interest        Equity
                --------------------------------------------------------------------------------------------------------------------
<S>             <C>    <C>      <C>           <C>          <C>            <C>           <C>           <C>          <C>

BALANCES,
   January
     1, 2009        -  $     -  $ 11,659,659  $    11,660       3,357,222  $(2,304,751) $  1,064,131  $         -  $    1,064,131
   Issuance of
     shares         -        -                                  2,914,540            -     2,914,540            -       2,914,540
   Redemption
     of shares      -        -             -            -         (91,636)           -       (91,636)           -         (91,636)
   Net loss         -        -             -            -               -     (755,650)     (755,650)           -        (755,650)
                ------   ------   -----------  -----------  --------------  -----------  ------------  -----------  --------------
BALANCES,
   December
   31, 2009         -        -    11,659,659       11,660       6,180,126   (3,060,401)    3,131,385            -       3,131,385
   Issuance of
    shares
    relating to
    acquisition
    of Talon
    Energy
    Corporation     -        -     3,509,530        3,509         101,776            -       105,285            -         105,285
  Recapitaliza-
    tion of
    shares          -        -     1,511,563        1,512          20,686            -        22,198            -          22,198
  Non-controll-
    ing
    interest
    relating to
    acquisition
    of Gulfstar
    Energy
    Group LLC       -        -             -            -      (1,444,281)           -    (1,444,281)   1,444,281               -
   Issuance of
    shares, net
    of costs        -        -       304,334          304         445,110            -       445,414            -         445,414
   Members cash
    contribu-
    tions,
    net of
    costs           -        -             -            -         879,250            -       879,250            -         879,250
   Non-cash
    members'
    contribu-
    tions           -        -             -            -         306,345            -       306,345            -         306,345
   Adjustment
    to non-
    controlling
    interest
    due to
    subsidiary
    equity
    changes         -        -             -            -        (192,151)           -      (192,151)     192,151               -
   Net loss         -        -             -            -               -   (1,272,302)   (1,272,302)    (349,259)     (1,621,561)
                ------   ------   -----------  -----------  --------------  -----------  ------------  -----------  --------------
BALANCES,
 December
 31, 2010           -      $ -    16,985,086     $ 16,985     $ 6,296,861  $(4,332,703)  $ 1,981,143   $1,287,173     $ 3,268,316
                ======   ======   ===========  ===========  ==============  ===========  ============  ===========  ==============

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


                                       36
<PAGE>

<TABLE>
<CAPTION>

                          GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                                 (FORMERLY BEDROCK ENERGY, INC)
                              (A Company in the Development Stage)
                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                                 Period From
                                                                                                                 May 19, 2006
                                                                         Years Ended December 31,            (Inception) through
                                                                  ----------------------------------------
                                                                         2010                 2009            December 31, 2010
                                                                  -------------------   ------------------  ----------------------
<S>                                                             <C>                   <C>                  <C>

OPERATING ACTIVITIES

Net loss attributable to common stockholders                    $         (1,272,302) $          (755,650) $           (4,332,703)
Adjustments to reconcile net loss to net cash
 flows provided by (used in) operating activities:
  Non-controlling interest                                                  (349,259)                   -                (349,259)
  Conversion of related party note receivable to compensation                 82,325                    -                  82,325
  Non-cash issuance of equity for services                                   331,565                    -                 331,565
  Depreciation                                                               154,776               15,295                 183,549
  Changes in:                                                                                                                   -
    Accounts receivable                                                      (33,653)                   -                 (33,653)
    Prepaids and other assets                                                (33,660)                   -                 (33,660)
    Accounts payable and accrued liabilities                                 209,215              797,120               1,082,019
    Litigation settlement payable                                            (55,000)              70,000                  15,000
    Oil and gas proceeds due to others                                        33,477                                       33,477
    Deposits                                                                (503,224)             263,688                       -
                                                                  -------------------   ------------------  ----------------------

Net cash provided by (used in) operating activities                       (1,435,740)             390,453              (3,021,340)
                                                                  -------------------   ------------------  ----------------------

INVESTING ACTIVITIES
Expenditures for non oil & gas property and equipment                        (74,050)             (49,774)               (180,954)
Expenditures for oil and gas properties                                     (287,024)                   -                (287,024)
Expenditures for pipeline                                                   (587,924)          (2,916,368)             (4,119,885)
Acquisition of Talon Energy Corporation, cash acquired                        76,977                    -                  76,977
Expenditures for intangible assets                                            (1,500)            (114,342)               (170,874)
Issuance of related party note receivable                                          -                    -                 (82,325)
Net activity under note receivable                                            10,000              (10,000)                      -
                                                                  -------------------   ------------------  ----------------------

Net cash used in investing activities                                       (863,521)          (3,090,484)             (4,764,085)
                                                                  -------------------   ------------------  ----------------------

FINANCING ACTIVITIES
Issuance of shares and member contributions                                1,324,360            2,914,540               7,657,782
Redemption of shares                                                               -              (91,636)               (141,636)
Proceeds from related party loan payable                                     335,078                    -                 335,078
                                                                  -------------------   ------------------  ----------------------

Net cash provided by financing activities                                  1,659,438            2,822,904               7,851,224
                                                                  -------------------   ------------------  ----------------------

NET CHANGE IN CASH                                                          (639,823)             122,873                  65,799

CASH, Beginning                                                              705,622              582,749                       -
                                                                  -------------------   ------------------  ----------------------

CASH, Ending                                                    $             65,799  $           705,622  $               65,799
                                                                  ===================   ==================  ======================

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


                                       37

<PAGE>



                  GULFSTAR ENERGY CORPORATION AND SUBSIDIARIES
                         (Formerly Bedrock Energy, Inc.)
                      (A Company in the Development Stage)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Organization

Bedrock Energy,  Inc. was incorporated in Colorado on August 11, 2004 and on May
5, 2010 its name was changed to Gulfstar Energy Corporation ("Company").

On May 5, 2010, the Company  entered into a Share Exchange  Agreement with Talon
Energy Corporation  ("Talon").  Talon is a Florida company engaged in management
activities in the oil and gas  industry.  On June 24, 2010,  the Share  Exchange
Agreement  with  Talon was  replaced  by a similar  Revised  and  Amended  Share
Acquisition  Agreement  between Talon and the Company and in conjunction  with a
June 24, 2010 Share Exchange  Agreement  between the Company and Gulfstar Energy
Group,  LLC ("Gulfstar  LLC"), a privately held  Mississippi  Limited  Liability
Company,  for 58.3% of the outstanding  equity interests of Gulfstar LLC, and an
Acquisition  Agreement  between  the  Company  and  Gulfstar  LLC to acquire the
remaining 41.7% of the outstanding equity interests of Gulfstar LLC. The Revised
and Amended Share Acquisition  Agreement and Share Exchange  Agreement were both
effective as of June 30, 2010.

The Revised and Amended Share Acquisition  Agreement with Talon provided for the
Company  to  issue  3,509,530  restricted  shares  of its  common  stock  to the
shareholders  of Talon in  exchange  for the  issued and  outstanding  shares of
Talon.  After the  exchange of such shares the Company  owned 100% of the issued
and outstanding shares of Talon.

The Share Exchange  Agreement  between the Company and Gulfstar LLC provided for
Jason Sharp and Timothy Sharp, officers and members of Gulfstar LLC, to exchange
their  58.3%  of  Gulfstar  LLC  outstanding  equity  interests  for  11,659,659
restricted shares of common stock of the Company.

The Gulfstar LLC exchange was  accounted  for as a reverse  recapitalization  in
which Gulfstar LLC was determined to be the acquirer for accounting purposes.

The June 24, 2010  Acquisition  Agreement  between the Company and  Gulfstar LLC
provides for the acquisition of the remaining  outstanding  equity  interests of
Gulfstar LLC, but requires the  effectiveness of a Registration  Statement filed
with the Securities and Exchange  Commission to register the remaining shares of
common stock offered by the Company to the individual equity interest holders of
Gulfstar LLC.  Therefore,  as of December 31, 2010,  the remaining  41.6% equity
interests of Gulfstar LLC have not been acquired by the Company.

Gulfstar LLC built and currently  operates a 16-mile natural gas pipeline supply
system in Western  Kentucky for the  transportation  of natural gas and provides
management  services for the operation of 20 wells in Kentucky of which it holds
overriding  royalty interest of  approximately  12.5%and holds mineral rights on
approximately  9,000  acres of leased  land.  The  pipeline  has become the main
operation of the Company while the Company  continues to manage the existing oil
and  gas   wells.   Geographically,   the   Company   is   focused  on  oil  and
non-conventional  shale gas in the Illinois Basin of Western  Kentucky while its
strategy is to concentrate  on lower risk profile  income  producing oil and gas
assets that have sizable  developmental  drilling  potential  with  multiple pay
zones.  The Company  intends to enhance its  Pipeline  development  efforts with
private  producers  of  constrained  and  shut-in  natural gas assets in Western
Kentucky. As such, the Company will provide producers in its area with a turnkey
solution to move existing production towards liquidity.

                                       38
<PAGE>




Principles of Consolidation

The  accompanying  consolidated  balance  sheet as of December  31, 2009 and the
consolidated  statement of operations and cash flows for the year ended December
31, 2009 and for the period from  (inception) May 19, 2006 through June 30, 2010
include only the accounts of Gulfstar LLC. The accompanying  balance sheet as of
December 31, 2010 and the  consolidated  statement of operations  and cash flows
for the period beginning July 1, 2010 (date of acquisition) through December 31,
2010  include the  accounts of Gulfstar  Energy  Corporation,  Gulfstar  LLC and
Talon.  All  significant  inter-company  balances  and  transactions  have  been
eliminated during consolidation.

Reclassification

Certain amounts  previously  reported have been  reclassified in connection with
the reverse recapitalization and to conform to current presentation.

Development Stage

The Company, through its subsidiaries, is currently focusing on the operation of
its pipeline  system and  management of existing oil and gas wells.  Significant
additional efforts,  and funding,  neither of which is assured, are required for
the Company to achieve its intended  normalized  operating level.  Substantially
all of the  Company's  efforts are devoted to the  establishment  of  sufficient
resources  and  revenue  producing  assets  in  order  to  achieve  its  overall
operational  goals.  Though planned  principal  operations  have  commenced,  no
significant revenue has been realized from the Company's to-date activities. The
consolidated  statements of  operations  are shown  inclusive of all  cumulative
revenue and expense  activity since the inception  date of the Company,  May 19,
2006, while the Company is in the development stage.

Non-controlling Interest

The non-controlling  interest is related to Gulfstar LLC, which is consolidated,
but not wholly owned by the Company.  At December  31, 2010,  the Company  owned
58.4% of the equity interest of Gulfstar LLC and therefore,  the non-controlling
interest of 41.6% was $1,287,171.

Income Taxes

Gulfstar LLC is a limited  liability  company,  which is not a tax paying entity
for Federal income tax purposes.  Its pro rata shares of income,  losses and tax
credits is passed  through to its members  and  reported by its members on their
individual  income  tax  returns.  Thus,  since the  consolidated  statement  of
operations  for the year ended  December 31, 2009 and for the period  January 1,
2010  through  June 30, 2010  include the  accounts  of  Gulfstar  LLC,  only no
provision for federal income taxes or for deferred taxes has been determined for
these periods. Therefore, the Company has determined only for the period July 1,
2010 through  December 31, 2010 any provision for income taxes or deferred taxes
and this  determination  has been based upon the  accounts  of  Gulfstar  Energy
Corporation and Talon including the pro rata loss of Gulfstar LLC passed through
and reportable by Gulfstar Energy Corporation.

                                       39
<PAGE>




The Company  accounts for income taxes under the liability  method as prescribed
by  ASC  authoritative  guidance.   Deferred  tax  liabilities  and  assets  are
determined based on the difference between the financial statement and tax bases
of assets and  liabilities  using enacted rates  expected to be in effect during
the year in which the basis difference  reverses.  The realizability of deferred
tax assets are evaluated  quarterly and a valuation  allowance is provided if it
is more  likely  than not that the  deferred  tax  assets  will not give rise to
future  benefits  in the  Company's  income  tax  returns.  The  primary  timing
differences between financial and tax reporting arise from federal net operating
loss  carryforwards,  amortization  of start up  costs,  and accrual to cash
conversions that is used for income tax purposes.

The Company  assessed the  likelihood of utilization of the deferred tax assets,
in light of recent and expected  continuing  losses. As a result of this review,
the deferred tax asset of $758,227 has been fully reserved at December 31, 2010.
As of December 31, 2010,  the Company had net operating loss  carryforwards  for
income tax and financial reporting purposes of approximately $1,132,511 expiring
in the years 2019 through 2030.

The Company has adopted ASC guidance  regarding  accounting  for  uncertainty in
income  taxes.  This  guidance  clarifies  the  accounting  for income  taxes by
prescribing the minimum recognition threshold an income tax position is required
to meet before being  recognized in the financial  statements and applies to all
income tax  positions.  Each income tax  position  is assessed  using a two step
process.  A determination is first made as to whether it is more likely than not
that the income tax position will be  sustained,  based upon  technical  merits,
upon  examination  by the taxing  authorities.  If the income  tax  position  is
expected to meet the more likely than not criteria,  the benefit recorded in the
financial  statements  equals the largest amount that is greater than 50% likely
to be realized upon its ultimate settlement.  At December 31, 2010 there were no
uncertain tax positions that required accrual.

None of the Company's  federal or state income tax returns are  currently  under
examination  by the  Internal  Revenue  Service  or state  authorities.  However
calendar  years 2007 and later  remain  subject to  examination  by the Internal
Revenue Service and respective states.

Business Combinations

The Company  accounts for  acquisitions in accordance with guidance found in ASC
805, Business  Combinations.  The guidance,  effective January 1, 2009, requires
consideration  given,  including contingent  consideration,  assets acquired and
liabilities  assumed to be valued at their fair market values at the acquisition
date.  The  guidance  further   provides  that:  (1)  in-process   research  and
development  will be  recorded at fair value as an  indefinite-lived  intangible
assets;  (2)  acquisition  costs will  generally  be expensed as  incurred,  (3)
restructuring  costs  associated with a business  combination  will generally be
expensed  subsequent to the  acquisition  date;  and (4) changes in deferred tax
asset  valuations  and  income  tax  uncertainties  after the  acquisition  date
generally will affect income tax expense.

ASC 805  requires  that any excess of  purchase  price over fair value of assets
acquired,   including  identifiable   intangibles  and  liabilities  assumed  be
recognized as goodwill. In accordance with ASC 805, any excess off fair value of
acquired  net  assets,   including  identifiable  intangible  assets,  over  the
acquisition consideration results in a bargain purchase gain. Prior to recording
a gain,  the  acquiring  entity must  reassess  whether all acquired  assets and
assumed   liabilities   have  been   identified   and   recognized  and  perform
re-measurements  to verify that the  consideration  paid,  assets  acquired  and
liabilities assumed have been properly valued.

Loss Per Share

Loss per share requires  presentation  of both basic and diluted loss per common
share. Common share equivalents, if used, would consist of any options, warrants
and  contingent  shares,  and  would not be  included  in the  weighted  average
calculation  since their effect would be anti-dilutive due to the net losses. As
of December 31, 2010 and 2009, the Company had outstanding no options,  warrants
or contingent shares.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  in the United States of America  requires  management to
make  estimates and  assumptions  that affect the reported  amount of assets and
liabilities and disclosures 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,
and such differences may be material to the financial statements.

                                       40
<PAGE>




Concentration of Credit Risk

The Company,  from time to time during the periods covered by these consolidated
financial  statements,  may have bank balances in excess of its insured  limits.
Management has deemed this a normal business risk.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company  considers all cash and
highly liquid  investments with initial maturities of three months or less to be
cash equivalents.

Accounts Receivable

Accounts  receivable  are stated at their cost less any  allowance  for doubtful
accounts.  The  allowance  for  doubtful  accounts is based on the  management's
assessment of the  collectibility of specific customer accounts and the aging of
the  accounts  receivable.  If  there  is  deterioration  in a major  customer's
creditworthiness   or  if  actual   defaults  are  higher  than  the  historical
experience,  the management's  estimates of the recoverability of amounts due to
the Company could be adversely affected.  Based on the management's  assessment,
there is no reserves recorded as of December 31, 2010.

Revenue Recognition

The Company recognizes revenue from its Pipeline activities upon shipment of the
gas  to  its  customers.  Royalty  revenue  is  recognized  from  the  Company's
well-management activities in the period of delivery.

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 been  determined  that such  properties  are  impaired.  As properties
become  evaluated,  the  related  costs  transfer  to proved oil and natural gas
properties  using full cost  accounting.  None of the  capitalized  costs in the
amount of $276,533  were  included in the  amortization  base as of December 31,
2010 nor did the Company  expense any  capitalized  costs during the years ended
December 31, 2010 and 2009.  The Company does not have  significant  oil and gas
producing  activities as of December 31, 2010 and its oil and gas properties are
still in the drilling phase and have not been evaluated.

Management  capitalizes  additions  to  property  and  equipment  including  its
pipeline.  Expenditures  for  repairs  and  maintenance  are charged to expense.
Property  and  equipment  are carried at cost.  Adjustment  of the asset and the
related  accumulated  depreciation  accounts are made for property and equipment
retirements  and  disposals,  with the  resulting  gain or loss  included in the
consolidated statements of operations.

                                       41
<PAGE>




The Company has capitalized internal costs of approximately  $25,800 and $10,500
for the years ended December 31, 2010 and 2009  respectively.  Such  capitalized
costs  include  benefits  of  individuals  directly  involved  in the  Company's
construction  of its pipeline  based on the  percentage of their time devoted to
such activities.

In accordance  with  authoritative  guidance on accounting for the impairment of
disposal of long-lived assets, as set forth in Topic 360 of the ASC, 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 events
occurred  during  the years  ended  December  31,  2010 and 2009  that  would be
indicative of possible impairment.

Goodwill

In accordance with generally accepted accounting principles,  goodwill cannot be
amortized,  however, it must be tested annually for impairment.  This impairment
test is calculated at the reporting unit level. The goodwill impairment test has
two steps.  The first  identifies  potential  impairments  by comparing the fair
value of a reporting unit with its book value,  including goodwill.  If the fair
value of the  reporting  unit  exceeds  the  carrying  amount,  goodwill  is not
impaired and the second step is not necessary. If the carrying value exceeds the
fair value, the second step calculates the possible impairment loss by comparing
the implied  fair value of goodwill  with the  carrying  amount.  If the implied
goodwill is less than the carrying amount, a write-down is recorded.  Management
tests goodwill each year for impairment, or when facts or circumstances indicate
impairment has occurred.  No facts or  circumstances  were noted during the year
ended December 31, 2010, which would be indicative of possible impairment.

Intangible Assets

Intangible assets consist of right of way deposits, which are contracts allowing
the Company to install  pipeline on private land. The rights exist  indefinitely
and  therefore,  no  amortization  has been recorded.  Management  evaluates the
assets  for  impairment  whenever  events or  circumstances  indicate a possible
impairment.

Significant Customer

The Company's  pipeline  construction was finished during the first half of 2010
and is currently delivering natural gas to one manufacturing customer located in
Kentucky.

Depreciation

For  financial  reporting  purposes,  depreciation  of property and equipment is
computed  using the  straight-line  method over the  estimated  useful  lives of
assets at  acquisition.  For  income tax  reporting  purposes,  depreciation  of
property  and  equipment is computed  using the  straight-line  and  accelerated
methods over the estimated useful lives of assets at acquisition.

                                      42
<PAGE>




Other Comprehensive Income

The Company has no material components of other comprehensive  income (loss) and
accordingly, net loss is equal to comprehensive loss in all periods.

Share-Based Compensation

The Company  accounts  for  share-based  payment  accruals  under  authoritative
guidance on stock  compensation  as set forth in Topic 718 of the  Codification.
The guidance requires all share-based payments to employees, including grants of
employee  stock option,  to be recognized in the financial  statements  based on
their fair values.

Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 167,  "Amendments to FASB  Interpretation
No.  46(R)",  which amends the  consolidation  guidance  applicable  to variable
interest   entities,   later   codified   under  ASC  810.   It   replaces   the
quantitative-based  risks and rewards  calculation  for  determining  whether an
enterprise  is the primary  beneficiary  in a variable  interest  entity with an
approach  that is primarily  qualitative  and requires  ongoing  assessments  of
whether an enterprise is the primary  beneficiary of a variable interest entity.
This  standard  also  requires  additional  disclosures  about  an  enterprise's
involvement in variable interest entities.  This standard is effective for us in
our interim and annual reporting periods beginning on and after January 1, 2010.
Earlier  application  is  prohibited.  Adoption of this  guidance did not have a
significant impact on the determination or reporting of our financial results.

In  January  2010,  the  FASB  issued   Accounting   Standards  Update  2010-02,
Consolidation  (Topic 810):  Accounting and Reporting for Decreases in Ownership
of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the
scope of current US GAAP. It clarifies  the decrease in ownership  provisions of
Subtopic  810-10 and removes the  potential  conflict  between  guidance in that
Subtopic and asset derecognition and gain or loss recognition  guidance that may
exist in other US GAAP.  An  entity  will be  required  to  follow  the  amended
guidance  beginning in the period that it first adopts FAS 160 (now  included in
Subtopic  810-10).  For those  entities  that have already  adopted FAS 160, the
amendments  are  effective  at the  beginning  of the  first  interim  or annual
reporting period ending on or after December 15, 2009. The adoption did not have
a material impact on the Company's Consolidated Financial Statements.

In January 2010, the FASB issued ASU 2010-06,  "Improving Disclosures about Fair
Value Measurements".  This update requires additional disclosure within the roll
forward  of  activity  for assets and  liabilities  measured  at fair value on a
recurring basis,  including  transfers of assets and liabilities between Level 1
and  Level 2 of the  fair  value  hierarchy  and the  separate  presentation  of
purchases,  sales,  issuances and settlements of assets and  liabilities  within
Level 3 of the fair value hierarchy.  In addition,  the update requires enhanced
disclosures  of the  valuation  techniques  and  inputs  used in the fair  value
measurements  within  Levels  2 and  3.  The  new  disclosure  requirements  are
effective  for  interim and annual  periods  beginning  after 15 December  2009,
except for the  disclosure of purchases,  sales,  issuances and  settlements  of
Level 3 measurements. Those disclosures are effective for fiscal years beginning
after 15 December 2010. As ASU 2010-06 only requires enhanced  disclosures,  the
Company  does not expect  that the  adoption of this update will have a material
effect on its financial statements.

                                      43
<PAGE>

In  February  2010,  the  FASB  issued  Accounting   Standards  Update  2010-09,
Subsequent Events (Topic 855):  Amendments to Certain Recognition and Disclosure
Requirements. ASU 2010-09 removes the requirement for an SEC filer to disclose a
date  through  which  subsequent  events have been  evaluated in both issued and
revised financial  statements.  Revised financial  statements  include financial
statements revised as a result of either correction of an error or retrospective
application  of U.S.  GAAP.  The  FASB  also  clarified  that  if the  financial
statements  have been  revised,  then an entity that is not an SEC filer  should
disclose both the date that the financial statements were issued or available to
be issued and the date the revised financial statements were issued or available
to be issued. The FASB believes these amendments remove potential conflicts with
the SEC's literature.  In addition, the amendments in the ASU requires an entity
that is a conduit bond obligor for conduit debt  securities that are traded in a
public market to evaluate  subsequent events through the date of issuance of its
financial  statements  and must disclose such date. All of the amendments in the
ASU were effective  upon issuance  (February 24, 2010) except for the use of the
issued date for conduit debt  obligors.  That amendment is effective for interim
or annual  periods  ending after June 15, 2010.  The  guidance,  except for that
related  to  conduit  debt  obligations,  has  been  adopted  and did not have a
material impact on the Company's Consolidated Financial Statements.

In December 2010, the FASB issued ASU 2010-28,  Intangibles--Goodwill  and Other
(Topic  350):  When  to  Perform  Step 2 of the  Goodwill  Impairment  Test  for
Reporting  Units with Zero or Negative  Carrying  Amounts ("ASU  2010-28").  ASU
2010-28 modifies Step 1 of the goodwill impairment test for reporting units with
zero or negative  carrying amounts and requires the company to perform Step 2 if
it is more likely than not that a goodwill  impairment may exist. ASU 2010-28 is
effective  for fiscal years and interim  periods  within those years,  beginning
after December 15, 2010. Early adoption is not permitted. The Company will adopt
these standards on January 1, 2011 and is currently  assessing the impact on its
condensed consolidated  financial statements.  Under the guidance any impairment
recorded  upon  adoption  is  recorded  as  a  cumulative-effect  adjustment  to
beginning retained earnings in the period of adoption.

In December 2010, the FASB issued ASU No. 2010-29,  Business Combinations (Topic
805)--Disclosure   of   Supplementary   Pro  Forma   Information   for  Business
Combinations  ("ASU  2010-29").   This  standard  update  clarifies  that,  when
presenting  comparative  financial  statements,  SEC registrants should disclose
revenue  and  earnings  of the  combined  entity as though  the  current  period
business  combinations  had occurred as of the beginning of the comparable prior
annual reporting period only. The update also expands the supplemental pro forma
disclosures  to include a  description  of the  nature  and amount of  material,
nonrecurring  pro  forma  adjustments  directly  attributable  to  the  business
combination included in the reported pro forma revenue and earnings. ASU 2010-29
is effective  prospectively  for material  (either on an individual or aggregate
basis) business  combinations entered into in fiscal years beginning on or after
December  15,  2010 with early  adoption  permitted.  ASU  2010-29 is  therefore
effective  for  acquisitions  made after  January 1,  2011.  We expect  that ASU
2010-29 may impact our disclosures for any future business combinations, but the
effect will depend on acquisitions that may be made in the future.

Subsequent Events

The Company  evaluates events and transactions  after the balance sheet date but
before the financial  statements are filed with the U.S. Securities and Exchange
Commission.

NOTE 2 - SIGNIFICANT ACQUISITIONS

Effective June 30, 2010, the Company acquired 100% of the issued and outstanding
stock of Talon. Talon provides  management  services in the oil and gas industry
and the ability to obtain capital.  As a result of the acquisition,  the Company
has been able to use this management experience as well as the ability to obtain
capital for the  acquisitions  and  development of oil and gas  properties.  The
acquisition  was  accounted  for using the purchase  method in  accordance  with
guidance provided in Topic 805 of the Codification.

The following  table presents the allocation of the purchase price to the assets
acquired and liabilities assumed, based on their fair values at June 30, 2010:


                                      44
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                        <C>               <C>




                  Purchase price

                  Accrued liabilities in excess of cash                    $263,083
                    3,509,530 shares of the Company common
                      Stock valued at $.03 per share                       $105,286
                                                                           --------

                  Total consideration                                                        $368,369
                                                                                             ========

                  Allocation of purchase price
                    Goodwill                                               $368,369
                                                                           --------

                  Net assets acquired                                                        $368,369
                                                                                             ========
</TABLE>

Goodwill  associated  with the  above  transaction  is not  amortizable  for tax
purposes.

Subsequent to June 30, 2010, Talon had no revenues or expenses.  Gulfstar had no
revenues  but incurred  expenses  totaling  $400,629,  which are included in the
consolidated  statement of operations  for the year ended December 31, 2010. The
unaudited pro forma condensed combined results of operations are presented below
as though the acquisitions of Talon and Gulfstar LLC (reverse recapitalization)
occurred on January 1, 2009.

                                                            Revenue    Net Loss


     Year ended December 31, 2010 - as reported            $101,277   $1,272,302

     Year ended December 31, 2010 - pro forma              $101,277   $1,556,960

     Year ended December 31, 2009 - as reported            $      0   $  755,560

     Year ended December 31, 2009 - pro forma              $      0   $  891,380


NOTE 3 - GOING CONCERN AND MANAGEMENTS' PLAN

As shown in the accompanying consolidated financial statements,  the Company has
recognized  a net loss of  $1,272,302  for the year ended  December 31, 2010 and
reported an accumulated deficit of $4,332,703. At December 31, 2010, the Company
had total current assets of $133,112 and total current liabilities of $1,808,353
for a working capital deficient of $1,675,241.

To the extent the Company's  operations are not sufficient to fund the Company's
capital  requirements;  the Company will attempt to enter into a revolving  loan
agreement with a financial  institution or attempt to raise capital  through the
sale of additional capital stock or through the issuance of debt. At the present
time,  the Company does not have a revolving  loan  agreement with any financial
institution nor can the Company provide  assurance that it will be able to enter
into any such  agreement  in the future or be able to raise  funds  through  the
further issuance of debt or equity in the Company.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern, however, the above conditions
raise  substantial  doubt about the Company's ability to do so. The Consolidated
financial  statements  do not include  any  adjustment  to reflect the  possible
future effect on the  recoverability and classification of assets or the amounts
and  classifications of liabilities that may result should the Company be unable
to continue as a going concern.
                                      45
<PAGE>


NOTE 4 - RELATED PARTY TRANSACTIONS

Note Receivable

At December 31, 2009, the Company was owed $82,325 from an officer. The note was
non-interest  bearing,  unsecured  and due no later  than two  years  after  the
completion of the pipeline,  which was  completed  during the second  quarter of
2010.  During second  quarter of 2010 and prior to the  acquisition  of Gulfstar
LLC, the note receivable was written-off as compensation expense.

Oil and Gas Proceeds due to Others

As  described  in Note 6, the  Company  owed  oil and gas  proceeds  to  working
interest owners of $33,477 and $0 as of December 31, 2009, respectively.

Deposits

As described  in Note 6, the Company had deposits in excess of expenses  related
to drilling  joint  ventures of $0 and $503,224 as of December 31, 2010 and 2009
respectively.

Note Payable

During  the year  ended  December  31,  2010,  the  Company  borrowed a total of
$335,078  from an  affiliate of a  member-manager  of Gulfstar LLC and a greater
than  5%  shareholder  of  the  Company  and in  exchange  issued  an  unsecured
promissory  note  dated  November  30,  2010  that is due in  full on or  before
December  31,  2011.  Interest is accrued at the rate of one percent  (1.0%) per
annum.  As of December 31, 2010,  the Company  owes  $335,078 on the  promissory
note.  Accrued  interest  of $279 is  included  in  accrued  liabilities  on the
consolidated balance as of December 31, 2010.

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following at:

<TABLE>
<CAPTION>
<S>                                               <C>                          <C>

                                                    December 31, 2010          December 31, 2009
                                                    -----------------          -----------------
Pipeline                                                  $   4,119,885             $3,531,961
Oil and Gas Properties (in process)                             287,024                      -
Office Equipment                                                 27,014                 12,964
Vehicles                                                        103,940                 93,940
                                                              ---------               --------
Land
    Total Property & Equipment                                4,587,863              3,638,865
Less Accumulated Depreciation                                 (183,549)               (28,773)
                                                              ---------               --------
     Net Property & Equipment                     $           4,404,314             $3,610,092
                                                  =====================             ==========
</TABLE>

Depreciation expense was $154,776 and $15,295, respectively, for the years ended
December 31, 2010 and 2009.

                                      46
<PAGE>




NOTE 6 - DRILLING VENTURES

The Company holds overriding royalty interests in various wells in Kentucky. The
Company  syndicated the financing of these wells through offering a 100% working
interest in the wells in exchange for  contribution of funds to drill the wells.
As part of the transaction,  the Company retained approximately 12.5% overriding
royalty interests in the wells and also agreed to provide management services on
behalf of the working  interest owners in the wells.  This income from the wells
earned by the Company is reported as royalty  income and  reflected  in Note 9 -
Information on business segments.

As part of the management services provided,  the Company collects the royalties
generated from the wells on behalf of the working  interest  owners and pays the
various costs and expenses  incurred on behalf of the wells. The Company records
no costs or expenses  relative to these wells on its consolidated  statements of
operations.  The excess of the  royalties  collected by the Company on behalf of
the working interest owners were recorded as oil and gas proceeds due to others
on the  consolidated  balance  sheets of the  Company.  At December 31, 2010 and
2009,  the Company owed oil and gas proceeds to working  interest  owners in the
amount of $33,477 and $0, respectively.

Also, as part of the management  services  provided,  the Company  collected the
contributions  from the working  interest owners to drill the wells and paid the
various costs and expenses incurred on behalf of the wells. The Company recorded
no costs or expenses  relative to these wells on its consolidated  statements of
operations.  The excess of the contributions collected from the working interest
owners  over and above the costs or  expenses  incurred on behalf of these wells
were reported as deposits on the consolidated  balance sheets of the Company. At
December 31, 2010 and 2009, the Company had deposits due to the working interest
owners in the amounts of $0 and $503,224, respectively.

NOTE 7- LITIGATION SETTLEMENT PAYMENT

In March 2010, the Company settled certain environmental  litigation,  which was
in process at December 31, 2009. As a result of the settlement,  the Company was
required to pay $70,000 during the year ended December 31, 2010. This amount was
paid by the Company  during the second quarter of 2010, in addition to $100,000,
which was paid during the year ended  December 31, 2009.  As a result,  $170,000
was recorded as other expense in the  consolidated  statement of operations  for
the year ended December 31, 2009.  Additionally,  the Company received  $230,000
from a consultant contracted by the Company for services provided related to the
environmental litigation. The income from the settlement with the consultant was
recognized  as other income  during the first quarter of 2010 and is included in
the consolidated statement of operations for the year ended December 31, 2010.

In  February,  2009,  the Company  received  two Notices of  Violation  from the
Commonwealth  of Kentucky's  Energy and  Environment  Cabinet  ("Cabinet")  as a
result of the  Company's  failure  to obtain  appropriate  permits in advance of
certain  construction  activities  and  for  "causing  or  contributing  to  the
pollution  of the waters of the  Commonwealth  of  Kentucky"  during  2007.  The
Company neither admitted to nor denied the alleged violations but accepted civil
responsibility  for the violations on May 6, 2010. As a result of the settlement
of the  dispute,  the  Company  agreed to pay a civil  penalty of $60,000 to the
Commonwealth  of  Kentucky  by way of 12  equal  monthly  installment  payments,
beginning  in  May  of  2010.   The  Company   recorded  a  $60,000   General  &
Administration  Expense  during the  second  quarter  of 2010 to  recognize  the
settlement  with  the  Cabinet  and as of  December  31,  2010,  $15,000  of the
liability remains unpaid and is accrued.

                                      47
<PAGE>





NOTE 8 - INFORMATION ON BUSINESS SEGMENTS

The Company operates in three business segments:  Pipeline, Oil and Gas Property
Management, and Exploration and Production.

Pipeline

Gulfstar  LLC has built and  currently  operates a 16-mile  nature gas  pipeline
located in Western Kentucky for the  transportation of natural gas. The pipeline
operations  transport gas to a burner tip processing  plant located near Bowling
Green, Kentucky where it is sold pursuant to a gas purchase agreement.  Pipeline
revenue is recognized upon delivery of the gas to its customer. The pipeline has
a throughput capacity of 18 Million Cubic Feet per day (MMcf/d). The pipeline is
currently  not operating at full  capacity as it  transported  an average of 119
Mcf/d of gas during December 31, 2010.

Oil and Gas Property Management

Gulfstar  LLC is the  manager  and  operator  of 20 wells in  Western  Kentucky.
Gulfstar  LLC  offers  working  interests  in the  properties  on  behalf of the
leaseholders.  Using these funds,  Gulfstar  LLC pays for the costs  incurred in
drilling,  reworking  and  development  of the  wells.  Gulfstar  LLC  holds  an
overriding  royalty interest of approximately  12.5% and holds mineral rights on
approximately  9,000 acres of leased land.  Gulfstar collects revenues on behalf
of the working interest  holders and distributes each working interest  holders'
share of revenue  when  collected.  A  receivable  is  recorded  for oil and gas
revenue  when earned and a related  payable due to interest  holders is recorded
net of the 12.5% revenue interest and direct costs due to Gulfstar LLC.

Exploration and Production

During the fourth quarter of 2010, Gulfstar LLC began drilling a horizontal well
located in Warren County,  Kentucky with total  capitalized costs of $287,024 as
of December  31,2 010.  Gulfstar LLC owns a working  interest of 58.4% and a net
revenue  interest of 43.8% in this well and anticipates  completion of this well
during the second quarter of 2011. After completion,  the well will be connected
to the Gulfstar LLC's pipeline for delivery of gas.

In addition, during the year ended December 31, 2010, the Company acquired Talon
and $368,369 of the  purchase  price was  allocated to goodwill.  The owners and
management of Talon have significant experience in oil and gas exploration.

                                      48
<PAGE>




The  following  data is presented for the Company's  three  operating  segments:
Pipeline  activities,  Royalty Income  activities and exploration and production
activities.

<TABLE>
<CAPTION>
<S>                                              <C>                              <C>

                                                                 Years Ended December 31,
                                                 ---------------------------------------------------------
                                                           2010                            2009
                                                           ----                            ----
Net Revenues
   Pipeline Activities                                   $86,990                            $0
   Royalty Income Activities                              14,287                             0
   E&P Activities                                              0                             0
                                                 -------------------------        ------------------------
   Total Net Revenues                                    101,277                             0
Operating Income (Loss)
   Pipeline Activities                                  (142,146)                            0
   Royalty Income                                         14,287                             0
   E&P Activities                                              0                             0
   Corporate Expenses                                 (1,919,775)                     (596,198)
                                                 -------------------------        ------------------------
Total Operating Loss                                  (1,651,678)                     (596,198)
                                                 -------------------------        ------------------------
Other Income (Expense)                                   233,779                      (159,452)
                                                 -------------------------        ------------------------
Pre-Tax Loss                                         $(1,621,561)                    $(755,650)
                                                 =========================        ========================


</TABLE>


<TABLE>
<CAPTION>
<S>                                                     <C>                             <C>

                                                                       December 31,
                                                 ---------------------------------------------------------

                                                           2010                            2009
                                                           ----                            ----
Total Assets
   Pipeline Activities                                  $4,213,513                      $3,903,733
   Royalty Income Activities                                 3,758                         503,224
   E&P Activities                                          706,893                             0
   Corporate                                               152,505                         170,456
                                                         ---------                       ---------
Total Assets                                            $5,076,669                      $4,577,413

</TABLE>

                                      49
<PAGE>

NOTE 9 - STOCKHOLDERS' EQUITY

Preferred Shares

The Company is authorized to issue 100,000,000  shares of no par value preferred
stock.  As of December 31, 2010 and 2009,  the Company has no shares  issued and
outstanding.

Common Shares

The Company is  authorized  to issue  200,000,000  shares of $.001 voting common
stock.  At December 31, 2010 there were a total of  16,985,086  shares of common
stock  issued and  outstanding.  On May 5, 2010,  the Board of  Directors of the
Company authorized a one share for eight share reverse stock split, effective on
May 5, 2010. All share references have been adjusted for the reverse split.


NOTE 10- INCOME TAXES

Information  pertaining  to the  Company's  income  before  income  taxes  is as
follows.  Gulfstar LLC is a limited liability company, which is not a tax paying
entity for Federal  income tax purposes,  thus, no provision for federal  income
taxes or deferred  taxes has been  determined  for the year ended  December  31,
2009.




<TABLE>
<CAPTION>
<S>                                                         <C>                         <C>


                                                                       Year ended December 31,
                                                                    2010                       2009
                                                            ---------------------       -------------------

Net loss attributable to common stockholders                $1,272,302                     $  -
                                                            =====================       ===================

There is no  provision  (benefit)  for federal  income taxes for the years ended
December 31, 2010 and 2009.

                                                                      Year ended December 31,
                                                                  2010                        2009
                                                          ----------------------       -------------------
      Provision (benefit) for income taxes
             Current                                      $   -                         $  -
             Deferred                                        (758,227)                     -
             Valuation Allowance                              758,227                      -
                                                          ----------------------       -------------------
      Total provision (benefit) for income taxes          $  -                          $  -

                                                          ======================       ===================

</TABLE>
                                      50
<PAGE>

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes  and income  tax  purposes.  Significant  components  of the  Company's
deferred tax assets are as follows:

<TABLE>
<CAPTION>
<S>                                                         <C>                        <C>


                                                                      Year ended December 31,
                                                                   2010                      2009
                                                            --------------------       ------------------
      Current:
                  Accounts payable and accruals             $    54,199                 $           -
                  Deferred compensation                         137,912                             -
      Long-term:
                  Net operating loss carryforwards              385,054                             -
                  Amortization and deprecation                  181,062                             -
                                                            --------------------       ------------------
                  Total deferred tax assets                     758,227                             -
                  Valuation Allowance                          (758,227)                            -
                                                            --------------------       ------------------
      Total deferred tax asset net of valuation allowance
                                                            $          -                $           -
                                                            ====================       ==================
</TABLE>

The  effective  tax rate before  income taxes varies from the current  statutory
federal income tax rate as follows:

<TABLE>
<CAPTION>
<S>                                                         <C>                        <C>


                                                                      Year ended December 31,
                                                                   2010                      2009
                                                            --------------------       -----------------
            Statutory rate                                                34.00%             -%
            Deferred tax assets from acquisitions                         26.40%             -%
            Valuation allowance from acquisitions                        (26.40)%            -%
            Valuation allowance                                          (34.00)%            -%
                                                            --------------------       -----------------
                     Effective rate                                        0.00%             -%
                                                            ====================       =================
</TABLE>


                                      51
<PAGE>






As of December 31, 2010,  the Company had net operating loss  carryforwards  for
income  tax  purposes  from  Gulfstar   Energy   Corporation  of   approximately
$1,132,511.  Such loss  carryforwards  expire beginning in 2019 through 2030, if
not utilized,  and may be subject to certain utilization  limitation provided by
the Internal Revenue Code.

Under  current  accounting  guidance,  the Company  reviewed its  uncertain  tax
positions and determined there was no reserve needed.

The Company  files  federal  income tax returns in the United  States as well as
various state and local tax jurisdictions  with varying statutes of limitations.
The 2007 through  2010 tax years  generally  remain  subject to  examination  by
federal,  and most state tax authorities and no income tax returns are currently
under examination by such jurisdictions.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Operating Leases

During April 2009, the Company entered into an agreement with an unrelated third
party to lease a building. The lease agreement requires monthly payments of $750
and  expires  April  2012.  Total rent  expense  under this lease was $9,000 and
$6,000 for the years ended December 31, 2010 and 2009.

In  addition,  the  Company  leases an office  space in  Colorado at the rate of
$1,499 per month and the lease  expires May 2011.  Total rent expense under this
lease  was  $2,998  and $0 for the  years  ended  December  31,  2010  and  2009
respectively.

The  following  is a  schedule  of  minimum  future  rental  payments  under the
operating leases described above:

            Year Ending December 31,                 Amount
                                                     ------
                      2011                            $16,495
                      2012                              3,000
                                                        -----
                                                      $19,495

Litigation

The Company is involved in legal  proceedings  and  litigation  in the  ordinary
course of business.  In the opinion of  management,  the outcome of such matters
will not have a material adverse effect on the Company's  financial  position or
results of operations.

                                      52
<PAGE>

NOTE 12 - LETTER OF INTENT

On October 18, 2010, the Company entered into a Letter of Intent with Timberline
Production Company,  LLC of Casper, WY to purchase 100% of the working interests
in and assets connected to oil and gas leases located in the Greasewood Field in
Niobrara  County,  WY  for  cash  of  $75  Million.  In  conjunction  with  this
transaction,  the Company revised its engagement with Maxim Group LLC to provide
gross  proceeds  of up to $100  Million  from a proposed  private  placement  of
Company  equity  and/or  convertible  debt.  The  precise  terms of the  private
placement will be negotiated  between Maxim Group LLC,  potential  investors and
the Company.

NOTE 13 - GULFSTAR LLC CASH DISTRIBUTIONS

The Gulfstar LLC operating  agreement  provides a priority  preference as to any
future  cash  distributions  paid by  Gulfstar  LLC to the  owners of its equity
interests. As such, fifty percent (50%) of all cash distributions shall be paid
first to the non-controlling equity interests until such time they have received
in full their capital contributions.  After which time, cash distributions shall
be paid in proportion to the percentage of all equity interests.  As of December
31,  2011.  Gulfstar  LLC  has  not  repaid  any of the  non-controlling  equity
interests capital contributions.


NOTE 14-- SUBSEQUENT EVENTS

During the period  January 1, 2011 through  March 28, 2011,  the Company  issued
509,001 shares of its  restricted  common stock in exchange for cash of $763,501
in order to support operations. The shares were sold at $1.50 per share.

On January 19, 2011, the Company  signed a Letter  Agreement with Wright Capital
Corporation  to pursue a proposed  financing  of up to $90 Million to be used to
assist the Company in the proposed purchase of Timberline  Production  Company's
100% working  interest in oil and gas leases and for the further  development of
the Company's existing pipeline  structure in Kentucky.  The definitive terms of
the proposed  transaction  are subject to an agreement  between  Wright  Capital
Corporation and the Company.


On March 24,  2011,  the Company and  Gulfstar  LLC approved an amendment to the
Acquisition  Agreement  between  the Company and  Gulfstar  LLC  relative to the
Company's acquisition of the remaining 41.6% of the outstanding equity interests
of Gulfstar  LLC. As such,  the Company has until  September  30, 2011 to file a
Registration  Statement with the Securities and Exchange  Commission to register
these  shares of common  stock  offered by the  Company  to the equity  interest
holders of Gulfstar  LLC and until  December  31, 2011 for the  Registration  to
become effective.

                                      53

<PAGE>




                               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.


                           Gulfstar Energy Corporation

Dated: April 22, 2011
                                         By:  /s/ Robert McCann
                                              ----------------------------------
                                                  Robert McCann
                                                  President, Chief Executive
                                                  Officer and Chairman


                                          By:  /s/ Stephen Warner
                                               ---------------------------------
                                                   Stephen Warner
                                                   Chief Financial Officer,
                                                   Secretary and Director



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.

Dated: April 22, 2011
                                    Gulfstar Energy Corporation

                                 ----------------------------------



                                      By: /s/ Robert McCann
                                         ---------------------
                                          Robert McCann
                                          President, Chief Executive
                                          Officer and Chairman


                                       By: /s/ Stephen Warner
                                          ------------------
                                          Stephen Warner
                                          Chief Financial Officer,
                                          Secretary and Director


                                       By: /s/ Edward Nichols
                                          ------------------
                                           Edward Nichols, Director


                                       By:/s/ William Young
                                          -----------------
                                          William Young, Director


                                       By:/s/ Jason Sharp
                                          ---------------
                                          Jason Sharp, Vice President
                                          and Director


                                       69