UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





x
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
fiscal year ended December 31,
2009





 ̈
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT





For the
transition period from _________ to ________





Commission
file number:333-151960





Savoy
      Energy Corporation(Exact
      name of Company as specified in its
charter)




Nevada
                26-0429687(State
      or other jurisdiction of incorporation or
                  organization)
                (I.R.S.
      Employer Identification No.)11200
      Westheimer, Suite 900
                  Houston,
      TX
                77042(Address
      of principal executive offices)
                (Zip
      Code)Company’s
      telephone number:  713-243-8788Securities
      registered under Section 12(b) of the
                  Exchange
      Act:Title
      of each class
                Name
      of each exchange on which registeredNone
                not
      applicableSecurities
      registered under Section 12(g) of the
                  Exchange
      Act:Title
      of each class
                Name
      of each exchange on which registeredNone
                not
      applicable





Indicate
by check mark if the Company is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.Yes ̈Nox




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




Check
whether the Issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.YesxNo ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of Company’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.YesxNo ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§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 o   No
o




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




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




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




State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant's most recently completed second fiscal
quarter.  $629,880 (based on 20,996,000 at $0.03 per
share)




Indicate
the number of shares outstanding of each of the Company’s classes of common
stock, as of the latest practicable date.53,646,000 shares as of
March 23, 2010.









TABLE
OF CONTENTS





PagePART
      IItem
      1.
                Business
                3Item
      1A.
                Risk
      Factors
                12Item
      1B.
                Unresolved
      Staff Comments
                12Item
      2.
                Properties
                12Item
      3.
                Legal
      Proceedings
                12Item
      4.
                Submission
      of Matters to a Vote of Security Holders
                13PART
      IIItem
      5.
                Market
      for Company’s Common Equity and Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                13Item
      6.
                Selected
      Financial Data
                15Item
      7.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                15Item
      7A.
                Quantitative
      and Qualitative Disclosures About Market Risk
                18Item
      8.
                Financial
      Statements and Supplementary Data
                18Item
      9.
                Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
                18Item
      9A(T).
                Controls
      and Procedures
                18Item
      9B.
                Other
      Information
                19PART
      IIIItem
      10.
                Directors,
      Executive Officers and Corporate Governance
                20Item
      11.
                Executive
      Compensation
                21Item
      12.
                Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                24Item
      13.
                Certain
      Relationships and Related Transactions, and Director
      Independence
                24Item
      14.
                Principal
      Accountant Fees and Services
                25PART
      IVItem
      15.
                Exhibits,
      Financial Statement Schedules
                25




2





PART I


Item
1.   Business





Background





We were
incorporated as “Arthur Kaplan Cosmetics, Inc.” on June 25, 2007, in the State
of Nevada. We subsequently changed our name to Savoy Energy
Corporation.  Our principal offices are located at 11200 Westheimer,
Suite 900, Houston, TX 77042 and our telephone number is (713)
243-8788.





On March
31, 2009, we entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Plantation Exploration, Inc., a privately held Texas
corporation (“Plantation Exploration”), and Plantation Exploration Acquisition,
Inc. (“Acquisition Sub”), our newly formed wholly-owned Nevada subsidiary. In
connection with the closing of this merger transaction, Acquisition Sub merged
with and into Plantation Exploration (the “Merger”) on April 2, 2009, with
the filing of articles of merger with the Texas secretary of
state.  As a result of the Merger, Plantation Acquisition no longer
exists and Plantation Exploration became our wholly-owned
subsidiary.





Subsequently,
on April 3, 2009, we merged with another wholly-owned subsidiary of our company,
known as Savoy Energy Corporation, in a short-form merger transaction under
Nevada law and, in connection with this short form merger, changed our name to
Savoy Energy Corporation.





Our
Business





The
United States is a major producer and importer of oil, which is then refined
into gasoline, kerosene, heating oil and other products. To keep up with
domestic consumption, oil companies must constantly look for new sources of
petroleum, as well as improve the production of existing
wells.




While
crude oil prices are currently somewhat depressed compared to recent years, it
still represents the core of the U.S.’s energy industry. The U.S. public,
government, and oil companies are all seeking ways to meet the demand for oil
without increasing our dependence on foreign oil. The oil that we sell is
drilled domestically, providing a cost-efficient and convenient product supply
for large oil companies who distribute nationally.





We are in
the process of performing recompletion and workover activities on wells in
Texas.  We re-enter and bring back into production wells that have
been previously drilled and subsequently abandoned for a variety of reasons.
Most often the wells we pursue were drilled and abandoned by large oil companies
because of uneconomical production rates.




Bringing
a well back into production involves drilling into the wellhead and cleaning out
the pipe, which lines the previously drilled hole. We often utilize acid to
remove the sludge, which has built up and solidified in the pipe, and to
decrease the viscosity of the oil, allowing it to flow more freely. Depending
upon the condition of the well, we can either drill directly through bridge
plugs that sit in the wellbore, or we can drill laterally into the wellbore. The
initial production of a well that we re-enter is often higher than when the well
was abandoned because pressure in the well has built up over time and aids in
pushing oil to the surface.





3




We have
retained Forrest A. Garb & Associates, a petroleum consulting firm
specializing in geological analyses of oil wells, as an independent contractor.
They evaluate abandoned wells and provide seismic and geological analyses of the
wells, and counsel us in our decisions regarding which wells we should pursue.
Based upon their recommendations, as well as the knowledge and experience of our
executive officers, we will pursue an oil lease with the landowner who holds the
property containing a sought-after well. Upon securing a lease, which generally
provides that the landowner receives 25% of the revenue generated by the well,
we begin the reclamation process. We currently hold leases, as well as title and
right-of-way access, on four wells in Texas, all of which are currently
producing crude oil. These wells are referred to as:  Ali-O No.1,
Rozella Kifer and Zavadil No.1.  Three other parties hold fractional
interests in these wells also. Each has a Well Interest (“WI”), which reflects
the overall “ownership” of the well, but not the percentage of revenue because
operational expenses have not been allowed for. Each party is also entitled to a
Net Revenue Interest (“NRI”), or a percentage of the net revenues of a given
well. Interests held by us are shown in the table below:





WI %
                  
                  
                  NRI %Ali-O
                  Savoy
                  
                  
                  52.50
                  %
                  
                  
                  46.75
                  %Rozella
      Kifer
                  Savoy
                  
                  
                  52.50
                  %
                  
                  
                  40.75
                  %Zavadil
                  Savoy
                  
                  
                  46.00
                  %
                  
                  
                  33.91
                  %Glass
                  Savoy
                  
                  
                  2.75
                  %
                  
                  
                  2.065





We have
also identified 48 other wells, ten that are producing and 34 that have been
shut in but have seismic or other data indicating that they are favorable
candidates for recompletion and workover.  We hope to acquire these
potential assets in the next twelve months.





We
presently use Lucas Energy, Inc. as operator to conduct field operations. This
allows us to pursue our business plan without the overhead costs of employees,
and the logistical concerns of scheduling, insurance, and human resources. Lucas
Energy, Inc. is a working interest partner in the Ali-O, Rozella Kifer and
Zavadil and conducts all of the field operations associated
with  these three wells, including drilling, pumping, and transporting
to our customers. Our agreement with   Lucas Energy, Inc. is by
operating agreement. The Glass 59 #2 Well is operated by Bright &
Co.





Currently,
we sell all of the oil we produce to Gulfmark Energy, an oil broker who in turn
sells oil to Royal Dutch Shell, one of the world’s largest oil companies. The
price at which they purchase our oil is based upon the previous month’s open
market crude oil prices, and is reset monthly accordingly. Thus, while we are
susceptible to large trends in crude oil prices, we are not vulnerable to daily
fluctuations.





Our
offices are located at 11200 Westheimer, Suite 900, Houston
TX 77042.




Oil
Drilling





The
creation and life of a well can be divided up into five segments: Planning,
Drilling, Completion, Production, and Abandonment.





Planning





Geologists
use seismic surveys to search for geological structures that may form oil
reservoirs. The classic method includes making underground explosion nearby and
observing the seismic response that provides information about the geological
structures underground. However, passive methods that extract information from
naturally-occurring seismic waves are also utilized.  Other
instruments such as gravimeters and magnetometers are also sometimes used in the
search for petroleum. When extracting crude oil, it normally starts by drilling
wells into the underground reservoir. When an oil well has been tapped, a
geologist, known on the rig as the "mudlogger," will note its presence.
Historically, in the U.S., some oil fields existed where the oil rose naturally
to the surface, but most of these fields have long since been used up, except
certain places in Alaska. Often many wells, called multilateral wells, are
drilled into the same reservoir, to ensure that the extraction rate will be
economically viable. Also, secondary wells may be used to pump water, steam,
acids or various gas mixtures into the reservoir to raise or maintain the
reservoir pressure, and so maintain an economic extraction rate.




4




Drilling





An oil
well is created by drilling a hole 5 to 36 inches in diameter into the earth
with a drilling rig which rotates a drill string with a bit attached. The drill
bit, aided by the weight of thick walled pipes called "drill collars" above it,
cuts into the rock. There are different types of drillbits, some cause the rock
to fail by compressive failure. Others shear slices off the rock as the bit
turns. Drilling fluid is pumped down the inside of the drill pipe and exits at
the drill bit in order to cool the bit, lift rock cuttings to the surface, and
prevent bore destabilization. The pipe or drill string to which the bit is
attached is gradually lengthened as the well gets deeper by screwing in
additional 30-foot (10 m) sections of pipe at the surface.





After the
hole is drilled, sections of steel tubing, or casing, slightly smaller in
diameter than the borehole, are placed in the hole. Cement may be placed between
the outside of the casing and the borehole. The casing provides structural
integrity to the newly drilled wellbore in addition to isolating potentially
dangerous high pressure zones from each other and from the surface.





With
these zones safely isolated and the formation protected by the casing, the well
can be drilled deeper (into potentially more-unstable and violent formations)
with a smaller bit, and also cased with a smaller size casing. Modern wells
often have 2-5 sets of subsequently smaller hole sizes drilled inside one
another, each cemented with casing.





This
process is all facilitated by a drilling rig which contains all necessary
equipment to circulate the drilling fluid, hoist and turn the pipe, control
downhole pressures, remove cuttings from the drilling fluid, and generate onsite
power for these operations.





Completion





After
drilling and casing the well, it must be “completed.” Completion is the process
by which the well is prepared to produce oil or gas.  In a cased-hole
completion, small holes called perforations are made in the portion of the
casing which passed through the production zone, to provide a path for the oil
to flow from the surrounding rock into the production tubing. In open hole
completion, often “sand screens” or a “gravel pack” is installed in the last
drilled, uncased reservoir section. These maintain structural integrity of the
wellbore in the absence of casing, while still allowing flow from the reservoir
into the wellbore. Screens also control the migration of formation sands into
production pipes and surface equipment, which can cause significant
problems.





After a
flow path is made, acids and fracturing fluids are pumped into the well to
fracture, clean, or otherwise prepare and stimulate the reservoir rock to
optimally release oil into the wellbore. Finally, the area above the reservoir
section of the well is packed off inside the casing, and connected to the
surface via a smaller diameter pipe called tubing. This arrangement provides a
redundant barrier to oil leaks as well as allowing damaged sections to be
replaced. Also, the smaller diameter of the tubing draws oil at an increased
velocity in order to overcome the hydrostatic effects of heavy fluids such as
water. In many wells, the natural pressure of the subsurface reservoir is high
enough for the oil to flow to the surface. However, this is not always the case,
especially in depleted fields where the pressures have been lowered by other
producing wells, or in low permeability oil reservoirs. Installing a small
diameter tubing may be enough to help the production, but artificial lift
methods may also be needed. Common solutions include downhole pumps, gas lift,
or surface pump jacks. Many new systems in the last ten years have been
introduced for well completion, including all in one systems that have cut
completion costs and improved production, especially in the case of horizontal
wells.


Production





The
production stage is the most important stage of a well's life, when the oil is
produced. By this time, the oil rigs and workover rigs used to drill and
complete the well have moved off the wellbore, and the top is usually outfitted
with a collection of valves called a production tree. These valves regulate
pressures, control flows, and allow access to the wellbore in case further
completion work is needed. From the outlet valve of the production tree, the
flow can be connected to a distribution network of pipelines and tanks to supply
the product to refineries or oil export terminals.  As long as the
pressure in the reservoir remains high enough, the production tree is all that
is required to produce the well. If the pressure is depleted and it is
considered economically viable, one of the artificial lift methods mentioned
above can be employed.





5




Workovers
are often necessary in older wells, which may need smaller diameter tubing,
scale or paraffin removal, acid matrix jobs, or completing new zones of interest
in a shallower reservoir. Such remedial work can be performed using workover
rigs – also known as pulling
units to pull and replace tubing, or by the use of a well intervention
technique called coiled tubing. Enhanced recovery methods such as water
flooding, steam flooding, or CO2 flooding
may be used to increase reservoir pressure and provide a push to move oil out of
the reservoir. Such methods require the use of injection wells (often chosen
from old production wells in a carefully determined pattern), and are used when
facing problems with reservoir pressure depletion, high oil viscosity, or can
even be employed early in a field's life. In certain cases – depending on the
reservoir's geomechanics – reservoir engineers may determine that ultimate
recoverable oil may be increased by applying a water flooding strategy early in
the field's development rather than later.





Abandonment





When a
well no longer produces or produces so poorly that it is a liability, it is
abandoned. In this process, tubing is removed from the well and sections of
wellbore are filled with cement to isolate oil and water zones from each other,
as well as the surface. Completely filling the wellbore with cement is costly
and unnecessary. The surface around the wellhead is then excavated, and the
wellhead and casing are cut off, a cap is welded in place and then
buried.





The
production from an oil well declines over time as oil is extracted. The point at
which the well no longer makes a profit and is plugged and abandoned is called
the Economic Limit. The equation to determine the economic limit contains four
factors, namely: (1) taxes, (2) operating cost, (3) oil price, and (4) royalty.
Because of differences in operating costs, different companies may have
different Economic Limits for a given well.





At the
Economic Limit for large oil companies there often is still a significant amount
of unrecoverable oil left in the reservoir. They might be tempted to defer
physical abandonment for a period of time, hoping that the oil price will go up
or that new supplemental recovery techniques will be perfected. However, lease
provisions and governmental regulations usually require quick abandonment;
liability and tax concerns also may favor abandonment.





Oil
Well Re-entry and Workovers





Workover
activities include one or more of a variety of remedial operations on a
producing well to try to increase production.  These operations
include:





Sand Cleanout Operations are
performed to remove the buildup of sand in the wellbore.  In wells
that produce from loosely consolidated sandstone formations, a certain amount of
sand is usually produced with oil. Although some of this sand will be produced
at the surface, most of it will accumulate at the bottom of the hole. Continued
accumulation of the sand in the wellbore will eventually cut the oil-producing
rate and may even halt production altogether. When this problem, known as
sanding, occurs, a service rig equipped with a sand pump on a wire line is
called to the scene. The sand pump is a special tool which removes the sand from
the wellbore.




Repairing Casings - Casings
can be damaged by corrosion, abrasion, pressure, or other forces that create
holes or splits. A packer is run down the well to locate the hole in the casing.
Fluid is pumped into the casing above the packer. A loss of pressure indicates a
hole in the casing. The following are the principal methods for repairing
casing:




·      Squeeze
cementing.


·      Patching
a liner.


·      Replacing
casing.


·      Adding
a liner.


·      Opening
collapsed casing.




Sidetracking is the workover
term for drilling a directional hole to bypass an obstruction in the well that
cannot be removed or damage to the well, such as collapsed casing, that cannot
be repaired. Sidetracking is also done to deepen a well or to relocate the
bottom of the well in a more productive zone, which is horizontally removed from
the original well. To sidetrack, a hole (called a window) is made in the casing
above the obstruction. The well is then plugged with cement below the window.
Special drill tools, such as a whipstock, bent housing, or bent sub are used to
drill off at an angle from the main well. This new hole is completed in the same
manner as any well after a casing is set.




6




Plug-back places a cement
plug at one or more locations in a well to shut off flow from below the plug.
Plug-back is also used before abandoning a well or before sidetracking is done.
There are two methods for placing a cement plug in a well:




1.              Plug-back
using tubing.


2.              Plug-back
using a dump bailer




Acidizing -Acid treatments
have been applied to wells in oil and gas bearing rock formations for many
years. Acidizing is probably the most widely used workover and stimulation
practice in the oil industry.  By dissolving acid soluble components
within underground rock formations, or removing material at the wellbore face,
the rate of flow of oil may be significantly increased.  A number of
different acids are used in conventional acidizing treatments, the most common
are:




·               Hydrochloric,
HCl


·               Hydrofluoric,
HF


·               Acetic,
CH3COOH


·               Formic,
HCOOH


·               Sulfamic,
H2NSO3H


·               Chloroacetic,
ClCH2COOH




These
acids differ in their characteristics. Choice of the acid and any additives
fora
given situation depends on the underground reservoir characteristics and the
specific intention of the treatment. The majority of acidizing treatments
carried out utilize hydrochloric acid (HCl).




Oil
Industry in the United States




The
oil/energy industry is extremely large. According to the Department of Energy
(“DOE”), fossil fuels (including coal, oil, and natural gas) make up more than
85% of the energy consumed in the U.S. as of 2008, with oil supplying 40% of
U.S. energy needs.  There are two major sectors within the oil
industry, upstream and downstream.  Upstream refers to the
exploration and production of oil and gas.  Many analysts look at
upstream expenditures from previous quarters to estimate future industry trends.
For example, a decline in upstream expenditures usually trickles down to other
areas such as transportation and marketing.  Downstream refers to oil
and gas operations after the production phase and through to the point of
sale.  It is the commercial side of the business, such as gas stations
or the delivery of oil for heat.





Oil
Price:  Determining Factors





The
Organization of Petroleum Exporting Countries (“OPEC”) is an intergovernmental
organization consisting of 11 member countries dedicated to the stability and
prosperity of the petroleum market. OPEC membership is open to any country that
is a substantial exporter of oil and that shares the ideals of the
organization. Output quotas placed by OPEC can send huge shocks throughout the
energy markets. When OPEC meets to determine oil supply for the coming months,
the price of oil can fluctuate wildly.





The oil
industry is easily influenced by economic and political
conditions.  If a country is in a recession, fewer products are
being manufactured, not as many people drive to work, take vacations,
etc.  All of these variables factor into less energy
use.  Oil and gas prices fluctuate on a minute by minute basis. Many
factors determine the price of oil, but supply and demand are the chief deciding
factors. Demand typically does not fluctuate too much (except in the case of
recession), but supply shocks can occur for a number of
reasons.





Recompletion
and Workover Industry





Recompletion
and workover operations on oil wells have become more common due to continuing
trends of rising petroleum demand and new technology that enables up to 50% of
the reserves in a well to be drained before the well is capped. While current
demand and prices are down, the industry is focused more on the longer term
trend of increasing demand. The Associated Press reported in 2005 that, in
California, wells that are 45 years old are being put back into production, with
many wells in Los Angeles having been shut down after only 20 or 25% of the oil
was extracted.  Jerome R. Corsi, Ph.D., co-author of Black Gold Stranglehold: The Myth of
Scarcity and the Politics of Oil, states that,
"The decision to uncap California oil wells proves that U.S. oil production did
not peak because we ran out of domestic oil," and that "Much oil in the U.S. has
been kept in the ground awaiting new technology and higher prices.”





7




John
Martini, CEO of the California Independent Petroleum Association, told World Net
Daily in 2005 that many wells are being opened up because new technology permits
companies to drill anywhere from 100 to 1,000 feet deeper with economically
productive results. "Oil production is like any other industrial process," Mr.
Martini noted, "in that new technology lets you work smarter and more
efficiently.”  Another factor Martini cited was that the continued
higher price of crude oil "puts in place a new set of dynamics, where smaller
and smaller companies can come in and open up the capped wells profitably...In
many cases, the infrastructure is already in place, so putting these wells back
into production will not cause an unseemly impact on the landscape." While the
price of crude oil has dropped significantly over the past year, industry
leaders are confident that it will rebound.





Competition





We
compete with a number of established drillers and distributors who specialize in
recompletion and workover projects in Texas and sell crude oil to large oil
companies. These companies enjoy brand recognition which exceeds that of our
brand name. We compete with several drillers and distributors who have
significantly greater financial, distribution, advertising, and marketing
resources than we do, including:





·
            Southern
      Plains Oil Corp is an independent oil company focused on the workover and
      enhancement of known oil production in Texas and Oklahoma.  They
      have recovery programs in Oklahoma, such as their Big Sky Unit, and plan
      to produce the  more than 1.3 million barrels of proven
      recoverable oil from their wells.  Workover activities have also
      been scheduled for the company's Great Plains project, consisting of 45
      wells located in Wichita County,
Texas.




·
            Consolidated
      Oil & Gas specializes in reentry well projects throughout Texas and
      the Gulf Coast region.


·
            Freestone
      Resources is an East Texas based oil and gas company currently active in
      Texas and New Mexico. In addition to oil and gas lease acquisitions and
      petroleum waste disposal, they perform development activities including
      recompletions, developmental drilling, and utilize emerging technologies
      and products specifically in the area of well
  treatment.


·
            Wentworth
      Energy is an independent exploration and production company focused on
      developing North American oil and natural gas reserves. They own a
      27,557-acre mineral block in east central Freestone County and west
      central Anderson County in the active East Texas Basin.  They
      recently announced the recompletion of the Shiloh #3 well, and are also
      evaluating the Rodessa zone in existing wellbores on their Anderson
      County, Texas acreage for possible
recompletion.


·
            Tradestar
      Resources Corporation is an independent energy company that is engaged in
      the exploration, development, exploitation and acquisition of on-shore oil
      and natural gas properties in conventional producing areas of the United
      States.  They conduct their primary operations in Texas and
      focus on enhancement opportunities such as infill drilling, recompletions,
      secondary recovery projects, repairs and equipment
  changes.


·
            Maranatha
      is our contract operator. They specialize in oil well workovers, and
      perform similar contract operator work for three other public companies
      and one private company. Maranatha also holds leases on twelve wells of
      their own, performing their own operations work and producing crude oil
      for sale to large oil companies.


·
            Lucas
      Energy is an independent company engaged in re-entry and workover projects
      in Texas similar to ours. They hold leases on 46 wells, and have a
      fractional interest in all four of our
wells.





We
compete primarily on the basis of our ability to deliver quality crude oil, and
our relationships with contract operators and large oil companies. We believe
that our success will depend upon our ability to remain competitive in our
industry. The failure to compete successfully in the future could result in a
material deterioration of customer loyalty and our image and could have a
material adverse effect on our business.





Intellectual
Property





We do not
currently have any intellectual property.





8




Regulatory
Matters





Overview





We are
required to abide by complex federal, state and local laws and regulations that
cover the oil and gas industry in the United States.  In Texas, the
Railroad Commission of Texas (“RCT”) has primary regulatory jurisdiction over
oil and natural gas industry, pipeline transporters, natural gas & hazardous
liquid pipeline industry, and the LP-gas industry. While we are required to
abide by these statutes and regulations, the implementation of these compliance
activities currently rests with our contract operator. If we begin acting as our
own operator, we will become responsible for ensuring compliance with these laws
and regulations. Prior to becoming our own operator, we would also be required
to post a bond with the Texas Oil and Gas Association, to ensure our compliance
and remediation in the event of our non-compliance. We may also be required to
obtain work permits and perform remediation work for any physical disturbance to
the land in order to comply with RCT regulations. Currently, we have not
experienced any difficulty with compliance to any laws or regulations which
affect our business. While our planned exploration program budgets for
regulatory compliance, there is a risk that new regulations could increase our
costs of doing business, prevent us from carrying out our extraction program,
and make compliance with new regulations unduly burdensome.





Set forth
below is a review of the regulatory issues that affect our
business:


Transportation




Our sales
of crude oil are affected by the availability, terms and cost of transportation.
The transportation of oil in common carrier pipelines is also subject to rate
regulation. The Federal Energy Regulatory Commission, or the FERC, regulates
interstate oil pipeline transportation rates under the Interstate Commerce Act.
In general, interstate oil pipeline rates must be cost-based, although
settlement rates agreed to by all shippers are permitted and market-based rates
may be permitted in certain circumstances. Effective January 1, 1995, the FERC
implemented regulations establishing an indexing system (based on inflation) for
transportation rates for oil that allowed for an increase or decrease in the
cost of transporting oil to the purchaser. A review of these regulations by the
FERC in 2000 was successfully challenged on appeal by an association of oil
pipelines. On remand, the FERC in February 2003 increased the index slightly,
effective July 2001. Intrastate oil pipeline transportation rates are subject to
regulation by state regulatory commissions. The basis for intrastate oil
pipeline regulation, and the degree of regulatory oversight and scrutiny given
to intrastate oil pipeline rates, varies from state to state. Insofar as
effective interstate and intrastate rates are equally applicable to all
comparable shippers, we believe that the regulation of oil transportation rates
will not affect our operations in any way that is of material difference from
those of our competitors.




Production





The
production of oil and natural gas is subject to regulation under a wide range of
local, state and federal statutes, rules, orders and regulations. Federal, state
and local statutes and regulations require permits for drilling operations,
drilling bonds and reports concerning operations. Federal, state and local
statutes and regulations require permits for drilling operations, drilling bonds
and reports concerning operations. Some states have regulations governing
conservation matters, including provisions for the unitization or pooling of oil
and natural gas properties, the establishment of maximum allowable rates of
production from oil and natural gas wells, the regulation of well spacing, and
plugging and abandonment of wells. The effect of these regulations is to limit
the amount of oil and natural gas that we can produce from our wells and to
limit the number of wells or the locations at which we can drill, although we
can apply for exceptions to such regulations or to have reductions in well
spacing. Moreover, each state generally imposes a production or severance tax
with respect to the production and sale of oil, natural gas and natural gas
liquids within its jurisdiction.





The
failure to comply with these rules and regulations can result in substantial
penalties. Our competitors in the oil and natural gas industry are subject to
the same regulatory requirements and restrictions that affect our
operations.





Environmental
Laws





We are
required to abide by complex federal, state and local laws and regulations that
cover environmental issues in the oil and gas industry in the United
States.  We are subject to the laws and regulations of the Texas
Commission on Environmental Quality as well as the RCT. These laws and
regulations generally require us to take precautions in our operations against
environmental contamination, and to restore sites to their prior condition when
we abandon a well. These tasks are currently performed by our contract operator,
and the costs are part of the fee we pay them to perform this work for
us.





9




Set forth
below is a review of the environmental issues that affect our
business:





General





Our
operations are subject to stringent and complex federal, state and local laws
and regulations governing environmental protection as well as the discharge of
materials into the environment. These laws and regulations may, among other
things:





§
            require
      the acquisition of various permits before drilling
    commences;





§
            restrict
      the types, quantities and concentration of various substances that can be
      released into the environment in connection with oil and natural gas
      drilling and production activities;





§
            limit
      or prohibit drilling activities on certain lands lying within wilderness,
      wetlands and other protected areas;
and





§
            require
      remedial measures to mitigate pollution from former and ongoing
      operations, such as requirements to close pits and plug abandoned
      wells.





These
laws and regulations may also restrict the rate of oil and natural gas
production below the rate that would otherwise be possible. The regulatory
burden on the oil and gas industry increases the cost of doing business in the
industry and consequently affects profitability. Additionally, Congress and
federal and state agencies frequently revise environmental laws and regulations,
and any changes that result in more stringent and costly waste handling,
disposal and cleanup requirements for the oil and gas industry could have a
significant impact on our operating costs.





The
following is a summary of some of the existing laws, rules and regulations to
which our business operations are subject.





Waste
Handling





The
Resource Conservation and Recovery Act, or RCRA, and comparable state statutes,
regulate the generation, transportation, treatment, storage, disposal and
cleanup of hazardous and non-hazardous wastes. Under the auspices of the federal
Environmental Protection Agency, or EPA, the individual states administer some
or all of the provisions of RCRA, sometimes in conjunction with their own, more
stringent requirements. Drilling fluids, produced waters and most of the other
wastes associated with the exploration, development and production of crude oil
or natural gas are currently regulated under RCRA or state non-hazardous waste
provisions. Releases or spills of these regulated materials may result in
remediation liabilities under these statutes. It is possible that certain oil
and natural gas exploration and production wastes now classified as
non-hazardous could be classified as hazardous wastes in the future. Any such
change could result in an increase in our costs to manage and dispose of wastes,
which could have a material adverse effect on our results of operations and
financial position.





Comprehensive Environmental
Response, Compensation, and Liability Act





The
Comprehensive Environmental Response, Compensation, and Liability Act, or
CERCLA, also known as the Superfund Law, imposes joint and several liability,
without regard to fault or legality of conduct, on classes of persons who are
considered to be responsible for the release of a hazardous substance into the
environment. These persons include the current or former owner or operator of
the site where the release occurred and anyone who disposed or arranged for the
disposal of a hazardous substance released at the site. Under CERCLA, such
persons may be subject to joint and several liability for the costs of cleaning
up the hazardous substances that have been released into the environment, for
damages to natural resources and for the costs of certain health studies. In
addition, it is not uncommon for neighboring landowners and other third parties
to file claims for personal injury and property damage allegedly caused by the
hazardous substances released into the environment.





10




In the
course of our operations, we may generate wastes that may fall within CERCLA’s
definition of hazardous substances. Further, we currently own, lease or operate
properties that have been used for oil and natural gas exploration and
production for many years. Hazardous substances or petroleum may have been
released on, at or under the properties owned, leased or operated by us, or on,
at or under other locations, including off-site locations, where such hazardous
substances or other wastes have been taken for disposal. In addition, some of
our properties have been operated by third parties or by previous owners or
operators whose handling, treatment and disposal of hazardous substances,
petroleum, or other materials or wastes were not under our control. These
properties and the substances or materials disposed or released on, at or under
them may be subject to CERCLA, RCRA or analogous or other state laws. Under such
laws, we could be required to remove previously disposed substances and wastes
or released petroleum, remediate contaminated property or perform remedial
plugging or pit closure operations to prevent future contamination.




Water
Discharges





The
Federal Water Pollution Control Act, or the Clean Water Act, and analogous state
laws, impose restrictions and strict controls with respect to the discharge of
pollutants, including spills and leaks of oil and other substances into waters
of the United States or state waters. Under these laws, the discharge of
pollutants into regulated waters is prohibited except in accordance with the
terms of a permit issued by EPA or an analogous state agency. Federal and state
regulatory agencies can impose administrative, civil and criminal penalties for
non-compliance with discharge permits or other requirements of the Clean Water
Act and analogous state laws and regulations.





The Oil
Pollution Act of 1990, or OPA, which amends and augments the Clean Water Act,
establishes strict liability for owners and operators of facilities that are the
site of a release of oil into waters of the United States. In addition, OPA and
regulations promulgated pursuant thereto impose a variety of regulations on
responsible parties related to the prevention of oil spills and liability for
damages resulting from such spills. OPA also requires certain oil and natural
gas operators to develop, implement and maintain facility response plans,
conduct annual spill training for certain employees and provide varying degrees
of financial assurance.




Air
Emissions





The
Federal Clean Air Act and comparable state laws regulate emissions of various
air pollutants through air emissions permitting programs and the imposition of
other requirements. In addition, EPA has developed and continues to develop
stringent regulations governing emissions of toxic air pollutants at specified
sources. Federal and state regulatory agencies can impose administrative, civil
and criminal penalties for non-compliance with air permits or other requirements
of the Federal Clean Air Act and associated state laws and regulations. Oil and
gas operations may in certain circumstances and locations be subject to permits
and restrictions under these statutes for emissions of air pollutants, including
volatile organic compounds, nitrous oxides, and hydrogen sulfide.





National Environmental
Policy Act





Oil and
natural gas exploration and production activities on federal lands are subject
to the National Environmental Policy Act, or NEPA. NEPA requires federal
agencies, including the Department of Interior, to evaluate major agency actions
that have the potential to significantly impact the environment. In the course
of such evaluations, an agency will prepare an Environmental Assessment that
assesses the potential direct, indirect and cumulative impacts of a proposed
project and, if necessary, will prepare a more detailed Environmental Impact
Statement that may be made available for public review and comment. All of our
current exploration and production activities, as well as proposed exploration
and development plans, on federal lands require governmental permits that are
subject to the requirements of NEPA. This process has the potential to delay the
development of oil and natural gas projects.





Endangered Species, Wetlands
and Damages to Natural Resources





Various
state and federal statutes prohibit certain actions that adversely affect
endangered or threatened species and their habitat, migratory birds, wetlands,
and natural resources. These statutes include the Endangered Species Act, the
Migratory Bird Treaty Act, the Clean Water Act and CERCLA. Where takings of or
harm to species or damages to wetlands, habitat, or natural resources occur or
may occur, government entities or at times private parties may act to prevent
oil and gas exploration or production or seek damages to species, habitat, or
natural resources resulting from filling or construction or releases of oil,
wastes, hazardous substances or other regulated materials.




11




OSHA and Other Laws and
Regulations





We are
subject to the requirements of the federal Occupational Safety and Health Act
(OSHA) and comparable state statutes. The OSHA hazard communication standard,
the Emergency Planning and Community Right to Know Act and similar state
statutes require that we organize and/or disclose information about hazardous
materials stored, used or produced in our operations.





Recent
studies have indicated that emissions of certain gases may be contributing to
warming of the Earth’s atmosphere. In response to these studies, many nations
have agreed to limit emissions of “greenhouse gases” pursuant to the United
Nations Framework Convention on Climate Change, also known as the “Kyoto
Protocol.” Methane, a primary component of natural gas, and carbon dioxide, a
byproduct of the burning of oil and natural gas, and refined petroleum products,
are “greenhouse gases” regulated by the Kyoto Protocol. Although the United
States is not participating in the Kyoto Protocol, several states have adopted
legislation and regulations to reduce emissions of greenhouse gases.
Restrictions on emissions of methane or carbon dioxide that may be imposed in
various states could adversely affect our operations and demand for our
products. Additionally, the U.S. Supreme Court has ruled, in Massachusetts, et
al. v. EPA, that the U.S. Environmental Protection Agency abused its discretion
under the Clean Air Act by refusing to regulate carbon dioxide emissions from
mobile sources. This Supreme Court decision could result in federal regulation
of carbon dioxide emissions and other greenhouse gases, and may affect the
outcome of other climate change lawsuits pending in U.S. federal courts in a
manner unfavorable to our industry. Currently, our operations are not adversely
impacted by existing state and local climate change initiatives and, at this
time, it is not possible to accurately estimate how potential future laws or
regulations addressing greenhouse gas emissions would impact our
business.





Private
Lawsuits





In
addition to claims arising under state and federal statutes, where a release or
spill of hazardous substances, oil and gas or oil and gas wastes have occurred,
private parties or landowners may bring lawsuits against oil and gas companies
under state law. The plaintiffs may seek property damages, personal injury
damages, remediation costs or injunctions to require remediation or restoration
of contaminated property, soil, groundwater or surface water. In some cases, oil
and gas operations are located near populated areas and emissions or accidental
releases could affect the surrounding properties and population.





Item
1A.   Risk Factors.





A smaller
reporting company is not required to provide the information required by this
Item.





Item
1B.   Unresolved Staff Comments





A smaller
reporting company is not required to provide the information required by this
Item.





Item
2.   Properties





We
maintain our corporate office at 11200 Westheimer, Suite 900, Houston, TX
77042.  We have no materially important physical
properties.




Item
3.   Legal Proceedings





Panos
Industries, LLC v. Savoy Energy Corporation, et. al., District Court, Clark
County, Nevada Case # A-10-612340-C.





On March
19, 2010, this action was filed in the above-entitled Court seeking damages “...in
excess of $150,000” based upon monies which the Plaintiff claims were advanced
by Plaintiff on behalf of the Company.  This action is in its very
early stages and as of this date the Company has not been served with the
Summons and Complaint and has therefore not filed any Answer to the Complaint.
While the outcome of this matter cannot be predicted, the Company specifically
denies that it is indebted to Plaintiff and believes that any claims purportedly
asserted in the lawsuit are without merit.  The Company further
believes that it has meritorious claims against Plaintiff which arose in
connection with the merger of the Company’s predecessor (Arthur Kaplan
Cosmetics, Inc.) with Plantation Exploration, Inc. and in connection with the
aftermath of the merger.  The Company intends to vigorously defend any
claims asserted by the Plaintiff and to aggressively prosecute its claims
against the Plaintiff.  Even if the Company is ultimately successful
in defending this action, it will incur legal fees and other expenses in
connection with such defense, the amount of which cannot be predicted at this
time.  Such expenses could have a material impact on the Company’s
future operating results and have an adverse impact on the Company’s funds
available for its operations.




12




Item
4.   Submission of Matters to a Vote of Security
Holders





No
matters were submitted to a vote of the Company's shareholders during the fiscal
year ended December 31, 2009.




PART II





Item
5.    Market for Company’s Common Equity and Related
Stockholder Matters and Issuer Purchases of Equity Securities





Market
Information





Our
common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
sponsored by FINRA. The OTCBB is a network of security dealers who buy and sell
stock. The dealers are connected by a computer network that provides information
on current "bids" and "asks", as well as volume information. Our shares are
quoted on the OTCBB under the symbol “SNVP.OB.”





The
following table sets forth the range of high and low bid quotations for our
common stock for each of the periods indicated as reported by the OTCBB. These
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.





Fiscal
      Year Ending December 31, 2009Quarter
      Ended
                        
                        High
      $
                        
                        
                        Low
      $December
      31, 2009
                        
                        
                        0.418
                        
                        
                        
                        0.065September
      30, 2009
                        
                        
                        0.53
                        
                        
                        
                        .0.13June
      30, 2009
                        
                        
                        0.49
                        
                        
                        
                        0.0675March
      31, 2009
                        
                        
                        0.1125
                        
                        
                        
                        0.065




Fiscal
      Year Ending December 31, 2008Quarter
      Ended
                              
                              High
      $
                              
                              
                              Low
      $December
      31, 2008
                              
                              
                              0.50
                              
                              
                              
                              0.18September
      30, 2008
                              
                              
                              n/a
                              
                              
                              
                              n/aJune
      30, 2008
                              
                              
                              n/a
                              
                              
                              
                              n/aMarch
      31, 2008
                              
                              
                              n/a
                              
                              
                              
                              n/a


Penny
Stock





The SEC
has adopted rules that regulate broker-dealer practices in connection with
transactions in penny stocks. Penny stocks are generally equity securities with
a market price of less than $5.00, other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system. The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure document prepared by the SEC, that: (a) contains a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) contains a description of the
broker's or dealer's duties to the customer and of the rights and remedies
available to the customer with respect to a violation of such duties or other
requirements of the securities laws; (c) contains a brief, clear, narrative
description of a dealer market, including bid and ask prices for penny stocks
and the significance of the spread between the bid and ask price; (d) contains a
toll-free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in
penny stocks; and (f) contains such other information and is in such form,
including language, type size and format, as the SEC shall require by rule or
regulation.




13




The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, the customer with (a) bid and offer quotations for the penny stock; (b)
the compensation of the broker-dealer and its salesperson in the transaction;
(c) the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market for
such stock; and (d) a monthly account statement showing the market value of each
penny stock held in the customer's account.





In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement as to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement.





These
disclosure requirements may have the effect of reducing the trading activity for
our common stock. Therefore, stockholders may have difficulty selling our
securities.





Holders
of Our Common Stock





As of
December 31, 2009, we had 31,296,000 shares of our common stock issued and
outstanding, held by approximately 14 shareholders of record.





Dividends





The
Company has not declared, or paid, any cash dividends since inception and does
not anticipate declaring or paying a cash dividend for the foreseeable
future.





Nevada
law prohibits our board from declaring or paying a dividend where, after giving
effect to such a dividend, (i) we would not be able to pay our debts as they
came due in the ordinary course of our business, or (ii) our total assets would
be less than the sum of our total liabilities plus the amount that would be
needed, if the corporation were to be dissolved at the time of distribution, to
satisfy the rights of any creditors or preferred stockholders.





Recent
Sales of Unregistered Securities





On April
14, 2009, the Company issued 2,000,000 shares (8,000,000 shares post a 4 for 1
forward split effective June 3, 2009) to Arthur Bertagnolli in connection with
the merger of Plantation Exploration, Inc. and the Company.





On June
11, 2009, the Company issued 249,000 shares (996,000 shares post a 4 for 1
forward split effective June 3, 2009) to The James J. Cerna Revocable Trust in
exchange for services valued at $49,800.





On
November 6, 2009, the Company issued 400,000 shares to Arthur Bertagnolli in
exchange for services valued at $80,000.





On
November 6, 2009, the Company issued 100,000 shares to Raymond A. Crabbe in
exchange for services as a director of the Company valued at
$20,000.





On
November 6, 2009, the Company issued 100,000 shares to William F. Howell in
exchange for services as a director of the Company valued at
$20,000.





On
November 6, 2009, the Company issued 100,000 shares to Charles J. Jacobus in
exchange for services as a director of the Company valued at
$20,000.





On
November 6, 2009, the Company issued 100,000 shares to Roderic Salazar in
exchange for services valued at $20,000.





On
November 6, 2009, the Company issued 1,000,000 shares to Excelsus Capital
Partners, LLC (shares were mistakenly issued in the name of Craig Cardillo, a
principal of Excelsus Capital Partners, LLC) in exchange for services valued at
$200,000.





14




On
December 18, 2009, the Company issued 500,000 shares to The RLB 2006 Irrevocable
Trust in exchange for an interest in a well valued at $350,000.





On
January 26, 2010, the Company issued 1,000,000 shares to Excelsus Capital
Partners, LLC for services rendered.





On
February 1, 2010, the Company issued 800,000 shares to Rio Sterling Holdings,
LLC for repayment of the Company's note payable with a face amount of
$12,500.00.





On
February 1, 2010, the Company issued 800,000 shares to Barclay Lyons,
LLC for repayment of the Company's note payable with a face amount of
$12,500.00.





On
February 1, 2010, the Company issued 1,250,000 shares to Tombstone Capital,
LLC for repayment of the Company's note payable with a face amount of
$12,500.00





On March
4, 2010, the Company issued 10,000,000 shares to Arthur Bertagnolli in exchange
for services rendered.





On March
4, 2010, the Company issued 2,000,000 shares to Excelsus Capital Partners, LLC
for services rendered.





On March
4, 2010, the Company issued 3,000,000 shares to Excelsus Consulting, LLC for
services rendered.





On March
4, 2010, the Company issued 500,000 shares to Robert L. B. Diener, LLC for
services rendered.





On March
18, 2010, the Company issued 1,500,000 shares to Rio Sterling Holdings,
LLC for repayment for Company's note payable with a face amount of
$10,000.00.





On March
18, 2010, the Company issued 1,500,000 shares to Barclay Lyons, LLC for
repayment for Company's note payable with a face amount of
$10,000.00.





Securities
Authorized for Issuance under Equity Compensation Plans





We do not
have any equity compensation plans.




Item
6.   Selected Financial Data





A smaller
reporting company is not required to provide the information required by this
Item.





Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations





Forward-Looking
Statements





Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions. We intend such forward-looking statements to be covered by the
safe-harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and are including this statement for
purposes of complying with those safe-harbor provisions. Forward-looking
statements are based on current expectations and assumptions that are subject to
risks and uncertainties which may cause actual results to differ materially from
the forward-looking statements. Our ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse affect on our operations and future prospects on a
consolidated basis include, but are not limited to: changes in economic
conditions, legislative/regulatory changes, availability of capital, interest
rates, competition, and generally accepted accounting principles. These risks
and uncertainties should also be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements. We
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
Further information concerning our business, including additional factors that
could materially affect our financial results, is included herein and in our
other filings with the SEC.


15


Plan
of Operation
 
 Overview
 
 We are in
the business of re-entering, re-completing, extracting oil, and selling oil from
previously drilled wells in the United States. Our plan of operations is to
economically extract a significant amount of the “left-behind” oil from
previously drilled sites.
 
 We
currently hold leases on and are producing oil from three wells: Ali-O No.1,
Rozella Kifer, Zavadil No.1. We also own a 2.75% working interest in the
producing Glass 59 #2 well.  We will continue our workover efforts on these
wells, and seek to duplicate our successful efforts with other wells. We have
retained Forrest A. Garb & Associates, a petroleum consulting firm
specializing in geological analyses of oil wells, to work with us to locate and
screen a number of abandoned oil wells prospects for viability.  Our
evaluations include an assessment of production potential of each well using
geological evaluations including the use of seismic data as available.  In
addition to the four wells that we are currently have in operation, we have also
already identified 34 other wells as targets for acquisition: six that are
producing and 28 that have been abandoned but have seismic or other data
indicating that they are favorable candidates for recompletion or
workover.
 
 Once we
have determined which wells have the greatest production potential and are most
likely to respond to our workover efforts, we will then pursue acquiring
interests in those wells. We will then engage in workover operations as with our
previous wells, primarily through horizontal drilling and acidization. We hope
to extract and sell crude oil through a third party purchaser.
 
 Our
strategy is to concentrate on existing low maintenance production, exploit low
risk sidetrack drilling opportunities as and when identified, and use the
accumulated information and results to advance operations.
 
 Large oil
companies with high overhead costs require high production rates for wells to be
economically viable. Our small size and lower overhead allows profitably
extraction of oil at low production rates. Our goal is to turn wells rendered
uneconomical and abandoned by large companies into profitable ones.
 
 We
continue to find ways to reduce expenses and increase efficiency. Recently,
decisions were made to convert all applicable wells to operate on electricity.
Electricity is cheaper as an energy source and also electric motors have lower
maintenance expenses than gas-operated engines. To further this end, plans were
made to install the “Jack Shaft Reducer” on our Rozella Kifer Well. The Jack
Shaft Reducer is expected to both increase efficiency and decrease maintenance
costs which will in turn extend the life of the well’s production.  This
was installed subsequent to the period ended September 30, 2009 and we have
already begun to reap benefits from the conversions.
 
 Developments
in Expansion of Wells
 
 We signed
a letter of intent to acquire 100% of the working interest in the Wright Well in
Gonzalez County, Texas from Lucas Energy, Inc., an independent crude oil and gas
company.  The letter of intent has expired, however, as of the date of this
report negotiations are continuing to purchase a 100% interest in the well. No
definitive agreements have been signed to date, but we are continuing to pursue
the proposed transaction.
 
 We signed
a participation agreement with Paragon Petroleum, Inc., an independent crude oil
and gas company, in the Glass 59 #2 well which has been recently completed. The
completion data from Bright & Co., the operator has increased from
anticipated production to initial production levels of 53 bopd of oil and 858
mcf of gas.
 
 Results
of Operations for the Fiscal Years ended December 31, 2009 and December 31,
2008
 
 Revenues.
Our total revenue reported for the fiscal year ended December 31, 2009 was
$35,885, an increase from $-for the fiscal year ended December 31, 2008.
  16
  Lease Operating
Expenses.Our revenues are offset by our lease operating expenses
related to our wells.  The lease operating expenses for the fiscal year
ended December 31, 2009 were $8,068. There were no comparable expenses in the
fiscal year ended December 31, 2008.
 
 Depletion and
Impairment.Depletion expense for the fiscal year ended
December 31, 2009 was $3,508 and we recorded $647,305 impairment expense in the
fiscal year ended December 31, 2009.  There were no comparable
expenses in the fiscal year ended December 31, 2008.
 
 Operating
Expenses.Operating expense for the fiscal year ended December
31, 2009 was $847,434 compared to $37,097 for the fiscal year ended December 31,
2008.  The increase is the result of the merger of the Company with
Plantation Exploration, Inc. which closed in April, 2009.  The
increase in operating expense includes the recognition of stock compensation
expense, certain non-cash expenses relating to the recognition of stock options
and relating to stock issued for services during the fiscal year ended December
31, 2009.
 
 Other Income
(Expenses). We recorded interest expenses of $47,296 for the fiscal year
ended December 31, 2009, compared with $2,652 interest income for the fiscal
year ended December 31, 2008. The increase in interest expense is associated
with a loans entered into during fiscal 2009.
 
 Net Income
(Loss). We reported a net loss of $1,517,726 or $0.04 per share for the
fiscal year ended December 31, 2009 compared with a net loss of $39,749 or $0.00
per share for the fiscal year ended December 31, 2008.
 
 Liquidity
and Capital Resources
 
 As of
December 31, 2009, we had total current assets of $62,717. Our total current
liabilities as of December 31, 2009 were $1,010,587.  Thus, we had a
working capital deficit of $947,870 as of December 31, 2009.
 
 Operating
activities used $42,695 in cash for the fiscal year ended December 31, 2009. Our
net loss of $1,517,726 was the primary component of our negative operating cash
flow, offset by depletion, amortization and depreciation expense, amortization
of stock options, impairment of oil and gas properties and stock compensation.
We had no investing activities during the fiscal year ended December 31, 2009.
Cash flows provided by financing activities during the fiscal year ended
December 31, 2009 was $302,500 consisting of proceeds from notes payable and
other borrowings offset by certain note payments.
 
 Based
upon our current financial condition, we do not have sufficient cash to operate
our business at the current level for the next twelve months. We have negative
working capital and rely on investments and loans to fund our
operations.  We intend to fund operations through increased sales and
debt and/or equity financing arrangements, which may be insufficient to fund
expenditures or other cash requirements. We plan to seek additional financing in
a private equity offering to secure funding for operations. There can be no
assurance that we will be successful in raising additional funding. If we are
not able to secure additional funding, the implementation of our business plan
will be impaired. There can be no assurance that such additional financing will
be available to us on acceptable terms or at all.
 
 Going
Concern
 
 Our
financial statements are prepared using generally accepted accounting principles
applicable to a going concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.  As of
December 31, 2009, we have generated losses from operations, have an accumulated
deficit of $1,581,992 and a working capital deficiency of $947,870. These
factors raise substantial doubt regarding our ability to continue as a going
concern.
 In order
to continue as a going concern and achieve a profitable level of operations, we
will need, among other things, additional capital resources and to develop a
consistent source of revenues.  Our continuation as a going concern is
dependent upon the continued financial support from our shareholders, the
ability to raise equity or debt financing, and the attainment of profitable
operations from our planned business.
 
 The
accompanying financial statements do not include any adjustments that might be
necessary if we are unable to continue as a going concern.
  17
  Off
Balance Sheet Arrangements
 
 As of
December 31, 2009, there were no off balance sheet arrangements.
 
 Item
7A.   Quantitative and Qualitative Disclosures About Market
Risk
 
 A smaller
reporting company is not required to provide the information required by this
Item.
 
 Item
8.   Financial Statements and Supplementary Data
 
 See the
financial statements annexed to this annual report.
 
 Item
9.   Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
 
 On August
3, 2009, Board of Directors of the Company dismissed Moore & Associates
Chartered, its independent registered public account firm. On the same date,
August 3, 2009, the accounting firm of Seale and Beers, CPAs was engaged as the
Company's new independent registered public account firm.  The Company’s
Board of Directors and the Audit Committee approved of the dismissal of Moore
& Associates Chartered and the engagement of Seale and Beers, CPAs as its
independent auditor. None of the reports of Moore & Associates Chartered on
the Company's financial statements for either of the past two years or
subsequent interim period contained an adverse opinion or disclaimer of opinion,
or was qualified or modified as to uncertainty, audit scope or accounting
principles, except that the Company’s audited financial statements contained in
its Form 10-K for the fiscal year ended December 31, 2008 a going concern
qualification in the Company's audited financial statements.
 
 On August
3, 2009 the Company engaged Seale and Beers, however, on September 10, 2009, the
Board of Directors of the Company dismissed Seale and Beers, CPAs and on the
same date, the accounting firm of GBH CPAs, PC was engaged as the Company’s new
independent registered public accounting firm. The Board of Directors of the
Company approved of the dismissal of Seale and Beers, CPAs and the engagement of
GBH CPAs, PC as its independent auditor.
 
 On August
27, 2009, the PCAOB revoked the registration of our prior auditor, Moore &
Associates Chartered, because of violations of PCAOB rules and auditing
standards in auditing financial statements, PCAOB rules and quality controls
standards and Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder, and noncooperation with a Board investigation.  The
Company was notified by the SEC that a due to the revocation, a re-audit of the
Company’s financial statements for the year ended December 31, 2008 would be
required.  For this purpose, GBH CPAs, PC has conducted a re-audit of the
Company’s financial statements for the year ended December 31, 2008, for the
period from Inception (June 25, 2007) through December 31, 2007 and for the
period from Inception (June 25, 2007) through December 31, 2008 and has
conducted an examination of such financial statements which has resulted in the
restatement thereof incorporated in this report.  In addition to the
Company’s financial statements for the year ended December 31, 2009 and for the
period from Inception (June 25, 2007) through December 31, 2009 and for the
period from Inception (June 25, 2007) through December 31, 2008, this report
also incorporates the re-audited Company financial statements for the year ended
December 31, 2008, for the period from Inception (June 25, 2007) through
December 31, 2007 and for the period from Inception (June 25, 2007) through
December 31, 2008.
 
 Item
9A(T).  Controls and Procedures
 
 We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of December 31, 2009.  The Company's internal
control over financial reporting is a process and procedures designed under the
supervision of the Company's Principal Executive Officer and Principal Financial
Officer to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of the Company's financial statements for external
purposes in accordance with U.S. generally accepted accounting
principles.
  18
  Based
upon that evaluation, our Chief Executive Officer who is also our Principal
Financial Officer concluded that, as of December 31, 2009, our disclosure
controls and procedures over financing reporting were not effective.  This
conclusion was based on the existence of the material weaknesses in our internal
control over financial reporting previously disclosed and discussed below. There
have been no changes in our internal controls over financial reporting during
the year ended December 31, 2009.  To address the need for more effective
internal controls, management has plans to improve the existing controls and
implement new controls as our financial position and capital availability
improves.  Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
 
 A
material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the company’s annual or interim financial
statements will not be prevented or detected on a timely basis.
 
 We
identified and continue to have the following material weakness in our internal
controls over financial reporting:
 
 There is
a lack of segregation of duties and technical accounting expertise. Our
financial reporting and all accounting functions are performed by an external
consultant with no oversight by a professional with accounting expertise. 
Our management does not possess accounting expertise and hence our controls over
the selection and application of accounting policies in accordance with
generally accepted accounting principles were inadequate and constitute a
material weakness in the design of internal control over financial
reporting.  This weakness is due to the Company’s lack of working capital
to hire additional staff.
  Limitations
on the Effectiveness of Internal Controls
 
 Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level.  Further, the
design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
 
 Management’s
Annual Report on Internal Control over Financing Reporting
 
 This
annual report does not include a report of management's assessment regarding
internal control over financial reporting or an attestation report of the
company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.
 
 Changes
in Internal Control over Financial Reporting
 
 During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.  Management plans to address the material weakness in internal
controls noted above as sufficient resources become available.
 
 Item
9B.   Other Information
 
 None.
  19
  PART III
 
 Item
10.  Directors, Executive Officers and Corporate Governance
 
 The
following information sets forth the names of our current directors and
executive officers, their ages as of December 31, 2009 and their then
positions.
 
 Name
                
                Age
                
                Office(s) HeldArthur
      Bertagnolli
                
                62
                
                President,
      Chief Executive Officer, Chief Financial Officer and
    DirectorWilliam
      F. Howell
                
                78
                
                DirectorRaymond
      F. Crabbe
                
                61
                
                DirectorCharles
      J. Jacobus
                
                62
                
                DirectorDonald
      C. Rusk
                
                82
                
                Director
 
 Set forth
below is a brief description of the background and business experience of our
current executive officers and directors.
 
 Arthur
Bertagnolli has been our President, CEO, CFO and director since 2007. He
oversees all responsibilities in the areas of corporate administration, business
development, and research. Mr. Bertagnolli began performing contract work for
Plantation Exploration in 1988, and became a full-time employee in 1997. He
served as our vice-president from 2000 until 2007, and became our President in
2007. His duties have included oil field management, competitive intelligence,
demographic studies, strategic marketing, contract negotiations, account
acquisition and retention, and advertising and promotion. Mr. Bertagnolli
followed in the footsteps of his late father, who retired from Shell Oil after
33 years of service, by beginning his oil and gas career with Dresser Industries
in 1980. He is a graduate of the University of South Florida with a B.A. in
Management.
 
 William F.
Howell has been a director of the Company since June 2010. Mr. Howell’s
oil and gas experience spans 47 years, both onshore and offshore.  Mr.
Howell has worked as a geologist domestically in Oklahoma, Texas and the Gulf of
Mexico and internationally in Libya.   Mr. Howell received a BS degree
in Geology from the University of Oklahoma in 1954.  His previous
experience includes 13 years (1955 – 1968) as an exploration geologist at
Continental Oil Company followed by 6 years (1968 – 1974) as Gulf Coast
Exploration Manager for Mesa Petroleum.   Mr. Howell originated
prospects and organized a bidding group for participation in the Gulf of Mexico
Shelf Exploration when he founded Paragon Petroleum, Inc. in 1978.  Roberts
Oil and Gas benefited from his services from 1981 to 1988 when he served as an
Exploration Vice President.  Mr. Howell also served on the Board of
Directors of Roberts Oil and Gas, Inc., but no longer holds that position. 
 From 1989 to June 2000, he served as a Senior Exploration Advisor to Hardy
Oil & Gas and participated in the transition of Hardy to the new company,
Mariner Energy, Inc. which is primarily active in the Gulf Coast.  Since
2000, Mr. Howell continues to serve as the President of Paragon Petroleum,
Inc.
 
 Raymond A.
Crabbe has been a director of the Company since June 2010.  Mr.
Crabbe has had a thirty-five year career with extensive knowledge and experience
in oil and gas.  This experience includes pipeline, chemical,
petrochemical, refining and offshore.  Mr. Crabbe has both domestic and
international expertise in oil and gas gathering, pipeline, storage,
transmission and loading facilities.  His domestic experience covers all
fifty of the United States and his international experience includes South
America, Russia, Asia, Middle East, Indonesia, Canada, Africa and the Virgin
Islands.    In the past five years, Mr. Crabbe has been employed
by Chevron (2005 – 2006); STV Inc. in 2007; and Mustang Engineering from 2007 to
present.  Mr. Crabbe received an AS, in Engineering Technology from San
Jacinto College in 1970, a BS in Engineering Technology from the University of
Maryland in 1973, a BS in Construction Management from Almeda University in 2000
and an MBA in Management from Almeda University in 2003.
 
 Charles J.
Jacobus has been a director of the Company since June 2010. Mr. Jacobus
has been an accomplished real estate attorney and publisher since 1973.  He
has a sole practice law office and maintains affiliations with many real estate
associations as they pertain to commercial and residential real estate law in
the State of Texas.  Mr. Jacobus has published numerous books focused on
Georgia, Ohio and Texas Real Estate Law, co-authoring many of them.  Mr.
Jacobus holds a State Bar of Texas license as well as a Texas Real Estate Broker
license.  Mr. Jacobus received a Bachelor of Science from the University of
Houston, Doctor of Jurisprudence from the University of
Houston.
  20
  Donald C.
Rusk has been a director of the Company since October 2009.  Since
1991, he has been an independent consultant with respect to exploration projects
in Algeria, Ecuador, Egypt, France, Hungary, Jordan, Liberia, Libya, Malta,
Madagascar, Mozambique, Morocco, Sierra Leone, Syria, Tunisia and other
countries for twenty U.S. and non-U.S. major and independent oil
companies.  He is a graduate of the University of Colorado with a B.A. in
Geology.
 
 Family
Relationships
 
 There are
no family relationships between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive
officers.
  Involvement
in Certain Legal Proceedings
 
 To the
best of our knowledge, during the past five years, none of the following
occurred with respect to a present or former director, executive officer, or
employee: (1) any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (2) any conviction in a
criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); (3) being subject to any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his or her involvement in any type of business,
securities or banking activities; and (4) being found by a court of competent
jurisdiction (in a civil action), the SEC or the Commodities Futures Trading
Commission to have violated a federal or state securities or commodities law,
and the judgment has not been reversed, suspended or vacated.
 
 Audit
Committee
 
 Our
company currently does not have nominating, compensation or audit committees or
committees performing similar functions nor does our company have a written
nominating, compensation or audit committee charter. There has been no need to
delegate functions to these committees due to the fact that our operations are
at a very early stage to justify the effort and expense of creating and
maintaining these committees.
 
 Code
of Ethics
 
 As of
December 31, 2009, we have not adopted a Code of Ethics for Financial
Executives, which include our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing
similar functions, as required by sections 406 and 407 of the Sarbanes-Oxley Act
of 2002. We anticipate that we will adopt a code of ethics during
2010.
 
 Item
11.  Executive Compensation
 
 Summary
Compensation Table
 
 The table
below summarizes all compensation awarded to, earned by, or paid to both to our
officers and to our directors for all services rendered in all capacities to us
for our fiscal years ended December 31, 2009 and 2008.
  21
  SUMMARY
      COMPENSATION TABLE
 Name
                                            and
                                            principal
                                            position
                                          
                                          Year
                                          
                                          Salary($)
                                          
                                          
                                          Bonus
                                            ($)
                                          
                                          
                                          Stock
                                            Awards
                                            ($)
                                          
                                          
                                          Option
                                            Awards
                                            ($)
                                          
                                          
                                          Non-Equity
                                            Incentive
      Plan
                                            Compensation
                                            ($)
                                          
                                          
                                          Nonqualified
                                            Deferred
                                            Compensation
                                            Earnings
      ($)
                                          
                                          
                                          All
      Other
                                            Compensation
                                            ($)
                                          
                                          
                                          Total
                                            ($)Arthur
      Kaplan,
                                          
                                          2009
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0Former
      President, Treasurer and Director
                                          
                                          2008
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0Arthur
      Bertagnolli,
                                          
                                          2009
                                          
                                          
                                          56,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          70,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          454,639
                                          
                                          
                                          
                                          580,639President,
      CEO, CFO, Director
                                          
                                          2008
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0William
      F Howell,
                                          
                                          2009
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          15,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          15,000Director
                                          
                                          2008
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0Raymond
      F. Crabbe,
                                          
                                          2009
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          15,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          15,000Director
                                          
                                          2008
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0Charles
      J. Jacobus,
                                          
                                          2009
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          15,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          15,000Director
                                          
                                          2008
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0Donald
      C. Rusk,
                                          
                                          2009
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0Director
                                          
                                          2008
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
                                          
                                          
                                          
                                          0
 
 Narrative
Disclosure to the Summary Compensation Table
 
 Although
we do not currently compensate our officers, we reserve the right to provide
compensation at some time in the future.  Our decision to compensate
officers depends on the availability of our cash resources with respect to the
need for cash to further our business purposes.
 
 Outstanding
Equity Awards at Fiscal Year-End
 
 The table
below summarizes all unexercised options, stock that has not vested, and equity
incentive plan awards for each named executive officer and director as of
December 31, 2009.
 
 Stock
Option Grants
 
 We have
not granted any stock options to the executive officers or directors since our
inception.
  22
 
 Compensation
of Directors
 
 The table
below summarizes all compensation of our directors as of December 31,
2009.
 
 OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END
 OPTION
      AWARDS
                                    
                                    
                                    STOCK
      AWARDSName
                                    
                                    Number
      of
                                      Securities
                                      Underlying
                                      Unexercised
                                      Options
                                      (#)
                                      Exercisable
                                    
                                    
                                    Number
      of
                                      Securities
                                      Underlying
                                      Unexercised
                                      Options
                                      (#)
                                      Unexercisable
                                    
                                    
                                    Equity
                                      Incentive
                                      Plan
                                      Awards:
                                      Number
      of
                                      Securities
                                      Underlying
                                      Unexercised
                                      Unearned
                                      Options
                                      (#)
                                    
                                    
                                    Option
                                      Exercise
                                      Price
                                      ($)
                                    
                                    
                                    Option
                                      Expiration
                                      Date
                                    
                                    
                                    Number
                                      Of
      Shares
                                      or
      Units
                                      of
      Stock That Have
                                      Not
      Vested
                                      (#)
                                    
                                    
                                    Market
                                      Value
                                      Of
      Shares
                                      Or
      Units
                                      Of
      Stock
                                      That
      Have
                                      Not
      Vested
                                      ($)
                                    
                                    
                                    Equity
                                      Incentive
                                      Plan
                                      Awards:
                                      Number
                                      Of
      Unearned
                                      Shares,
                                      Units
      or
                                      Other
                                      Rights
                                      That
      Have
                                      Not
                                      Vested
                                      (#)
                                    
                                    
                                    Equity
                                      Incentive
                                      Plan
                                      Awards:
                                      Market
      or
                                      Payout
                                      Value
      of
                                      Unearned
                                      Shares,
                                      Units
      or
                                      Other
                                      Rights
                                      That
                                      Have
      Not
                                      Vested
                                      (#)Arthur
      Kaplan, Former President, Treasurer and Director
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Arthur
      Bertagnolli,
                                      President,
      CEO, CFO, Director
                                    
                                    
                                    -
                                    
                                    
                                    
                                    6,000,000
                                    
                                    
                                    
                                    -
                                    
                                    
                                    $
                                    1.00
                                    
                                    
                                    4/1/2014
                                    
                                    
                                    
                                    6,000,000
                                    
                                    
                                    $
                                    180,000
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -William
      F Howell, Director
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Raymond
      F. Crabbe, Director
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Charles
      J. Jacobus, Director
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Donald
      C. Rusk, Director
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
 
 Name
                  
                  Fees
                    Earnedor
                    Paid in
                    Cash
                    ($)
                  
                  
                  Stock
                    Awards
                    ($)
                  
                  
                  Option
                    Awards
                    ($)
                  
                  
                  Non-Equity
                    Incentive
                    Plan
                    Compensation
                    ($)
                  
                  
                  Non-Qualified
                    Deferred
                    Compensation
                    Earnings
                    ($)
                  
                  
                  All
                    Other
                    Compensation
                    ($)
                  
                  
                  Total
                    ($)Arthur
      Kaplan
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Arthur
      Bertagnolli
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -William
      F. Howell
                  
                  
                  -
                  
                  
                  
                  15,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  15,000Raymond
      F. Crabbe
                  
                  
                  -
                  
                  
                  
                  15,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  15,000Charles
      J. Jacobus
                  
                  
                  -
                  
                  
                  
                  15,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  15,000Donald
      C. Rusk
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
  23
  Narrative
Disclosure to the Director Compensation Table
 
 We do not
pay any cash compensation to our directors at this time. However, we reserve the
right to compensate our directors in the future with cash, stock, options, or
some combination of the above.
 
 Stock
Option Plans
 
 We did
not have a stock option plan in place as of December 31, 2009.
 
 Item
12.  Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
 
 The
following table sets forth certain information known to us with respect to the
beneficial ownership of our Common Stock as of December 31, 2009, by (1) all
persons who are beneficial owners of 5% or more of our voting securities, (2)
each director, (3) each executive officer, and (4) all directors and executive
officers as a group. The information regarding beneficial ownership of our
common stock has been presented in accordance with the rules of the Securities
and Exchange Commission. Under these rules, a person may be deemed to
beneficially own any shares of capital stock as to which such person, directly
or indirectly, has or shares voting power or investment power, and to
beneficially own any shares of our capital stock as to which such person has the
right to acquire voting or investment power within 60 days through the exercise
of any stock option or other right. The percentage of beneficial ownership as to
any person as of a particular date is calculated by dividing (a) (i) the number
of shares beneficially owned by such person plus (ii) the number of shares as to
which such person has the right to acquire voting or investment power within 60
days by (b) the total number of shares outstanding as of such date, plus any
shares that such person has the right to acquire from us within 60 days.
Including those shares in the tables does not, however, constitute an admission
that the named stockholder is a direct or indirect beneficial owner of those
shares. Unless otherwise indicated, each person or entity named in the table has
sole voting power and investment power (or shares that power with that person’s
spouse) with respect to all shares of capital stock listed as owned by that
person or entity.
  Except as
otherwise indicated, all Shares are owned directly and the percentage shown is
based on 31,296,000 Shares of Common Stock issued and outstanding as of December
31, 2009. Addresses for all of the individuals listed in the table below are c/o
Savoy Energy Corporation, 11200 Westheimer, Suite 900, Houston, TX 
77042.
 
 Name and Address of Beneficial Owners of Common
                        Stock
                      
                      Title of Class
                      
                      Amount and Nature
                        ofBeneficial
                        Ownership
                      
                      
                      % of
                        Common
                        StockArthur
      Bertagnolli
                      
                      Common
      Stock
                      
                      
                      8,400,000
                      
                      
                      
                      26.84
                      %William
      F. Howell
                      
                      Common
      Stock
                      
                      
                      100,000
                      
                      
                      
                      *Raymond
      F. Crabbe
                      
                      Common
      Stock
                      
                      
                      100,000
                      
                      
                      
                      *Charles
      J. Jacobus
                      
                      Common
      Stock
                      
                      
                      100,000
                      
                      
                      
                      *Donald
      C. Rusk
                      
                      Common
      Stock
                      
                      
                      —
                      
                      
                      
                      —DIRECTORS
      AND OFFICERS – TOTAL
                      
                      Common
      Stock
                      
                      
                      8,800,000
                      
                      
                      
                      28.12
                      %*
      Less than 1%5%
      SHAREHOLDERSNONE
 
 Item
13.   Certain Relationships and Related Transactions, and Director
Independence
 
 Except as
provided below, none of our directors or executive officers, nor any proposed
nominee for election as a director, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate
family (including spouse, parents, children, siblings, and in-laws) of any of
the foregoing persons has any material interest, direct or indirect, in any
transaction over the last two years or in any presently proposed transaction
which, in either case, has or will materially affect us.
  24
  As of the
date of this annual report, our common stock is traded on the OTC Bulletin Board
(the “Bulletin Board”).  The Bulletin Board does not impose on us standards
relating to director independence or the makeup of committees with independent
directors, or provide definitions of independence.
 
 Item
14.   Principal Accounting Fees and Services
 
 Below is
the table of Audit Fees (amounts in US$) billed by our auditor in connection
with the audit of the Company’s annual financial statements for the years
ended:
 
 Financial Statements
                        for the Year Ended
                        December 31
                      
                      Audit Services
                      
                      
                      Audit Related Fees
                      
                      
                      Tax Fees
                      
                      
                      Other Fees2009
                      
                      $
                      32,000
                      
                      
                      $
                      0
                      
                      
                      $
                      0
                      
                      
                      $
                      02008
                      
                      $
                      3,000
                      
                      
                      $
                      0
                      
                      
                      $
                      0
                      
                      
                      $
                      0
 
 PART IV
 
 Item
15.   Exhibits, Financial Statements Schedules
 
 Index to
Financial Statements Required by Article 8 of Regulation S-X:
 
 Audited
      Financial Statements:F-1
                                Report
      of Independent Registered Public Accounting
    FirmF-2
                                Balance
      Sheets as of December 31, 2009 and
  2008;F-3
                                Statements
      of Operations forthe
      years ended December 31, 2008 and December 31, 2009, and the period from
      inception to December 31, 2009;F-4
                                Statement
      of Stockholders’Equity
      (Deficit) for the period from inception to December 31,
      2009;F-5
                                Statements
      of Cash Flows for the years ended
      December 31, 2009 and December 31, 2008, and the period from inception to
      December 31, 2009;F-6
                                Notes
      to Financial
Statements
  Exhibit
                        Number
                      
                      Description31.1
                      
                      Certification
      of Chief Executive Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a),
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200231.2
                      
                      Certification
      of Chief Financial Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Actof
      200232.1
                      
                      Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002
  SIGNATURES
 
 In
accordance with Section 13 or 15(d) of the Exchange Act, the Company caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 Savoy Energy
Corporation
 
 By:
                    /s/ Arthur BertagnolliArthur
      BertagnolliPresident,
      Secretary, Treasurer, CEO, CFO and DirectorApril
      16, 2010
  25
  In
accordance with Section 13 or 15(d) of the Exchange Act, this report has been
signed below by the following persons on behalf of the Company and in the
capacities and on the dates indicated:
 
 By:
                    /s/ Arthur BertagnolliArthur
      BertagnolliPresident,
      Secretary, Treasurer, CEO, CFO and DirectorApril
      16, 2010
  By:
                  /s/ William F. HowellWilliam
      F. HowellDirectorApril
      16, 2010
 
 By:
                  /s/ Raymond F. CrabbeRaymond
      F. CrabbeDirectorApril
      16, 2010
 
 By:
                  /s/ Charles J. JacobusCharles
      J. JacobusDirectorApril
      16, 2010
 
 By:
                  /s/ Donald C. RuskDonald
      C. RuskDirectorApril
      16, 2010
  26




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Stockholders and Board of Directors
 Savoy
Energy Corporation
 (FKA
Arthur Kaplan Cosmetics, Inc.)
 Houston,
Texas
 
 We have
audited the accompanying consolidated balance sheets of Savoy Energy Corporation
(fka Arthur Kaplan Cosmetics, Inc.)  and its subsidiaries (the
“Company”) as of December 31, 2009 and 2008, and the related consolidated
statements of operations, stockholders’ equity (deficit) and cash flows for 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 our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits 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 audits 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 opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements.  An audit also includes 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 our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of the Company as
of December 31, 2009 and 2008, 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.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note2
to the financial statements, the Company has a working capital deficit, has
generated limited revenues and has an accumulated deficit, which raises
substantial doubt about their ability to continue as a going
concern.  Management’s plans concerning these matters are also
described in Note 2.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 /s/
GBH CPAs, PC
 
 GBH CPAs,
PC
 www.gbhcpas.com
 Houston,
Texas
 April 16,
2010
 
 F-1
 
 SAVOY
ENERGY CORPORATION
 (FKA
ARTHUR KAPLAN COSMETICS, INC.)
 Consolidated
Balance Sheets
 
  ASSETSDecember
      31,
                2009
              
              
              December
      31,
                2008CURRENT
      ASSETSCash
              
              $
              60,345
              
              
              $
              540Accounts
      receivable
              
              
              2,372
              
              
              
              -Total
      Current Asset
              
              
              62,717
              
              
              
              540OIL
      AND GAS PROPERTIES, FULL COST METHODProperties
      subject to amortization
              
              
              761,987
              
              
              
              -Accumulated
      depletion, depreciation, amortization, and impairment
              
              
              (650,813
              )
              
              
              -Oil
      and Gas Properties, Net
              
              
              111,174
              
              
              
              -TOTAL
      ASSETS
              
              $
              173,891
              
              
              $
              540LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
              
              $
              354,088
              
              
              $
              25,062Advances
      from related parties
              
              
              151,003
              
              
              
              29,500Accrued
      interest payable
              
              
              57,996
              
              
              
              3,694Notes
      payable
              
              
              447,500
              
              
              
              -Total
      Current Liabilities
              
              
              1,010,587
              
              
              
              58,256LONG-TERM
      LIABILITIESAsset
      retirement obligations
              
              
              9,683
              
              
              
              -TOTAL
      LIABILITIES
              
              
              1,020,270
              
              
              
              58,256STOCKHOLDERS' DEFICITCommon
      stock, 100,000,000 shares authorized at par value of $0.001,
      31,296,000 and 60,400,000 shares issued and outstanding,
      respectively
              
              
              31,296
              
              
              
              60,400Additional
      paid-in capital
              
              
              704,317
              
              
              
              (53,850
              )Accumulated
      deficit
              
              
              (1,581,992
              )
              
              
              (64,266
              )Total
      Stockholders' Deficit
              
              
              (846,379
              )
              
              
              (57,716
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              173,891
              
              
              $
              540
  The
accompanying notes are an integral part of these consolidated financial
statements.
  F-2
 SAVOY
ENERGY CORPORATION
 (FKA
ARTHUR KAPLAN COSMETICS, INC.)
 Consolidated
Statements of Operations
  For
      the Year
                
                
                For
      the YearEnded
                
                
                EndedDecember
      31,
                
                
                December
      31,2009
                
                
                2008REVENUESOil and gas
      revenues
                
                $
                35,885
                
                
                $
                -Total
      Revenues
                
                
                35,885
                
                
                
                -COSTS
      AND EXPENSESLease operating
      expenses
                
                
                8,068
                
                
                
                -General
      and administrative expenses
                
                
                847,434
                
                
                
                37,097Depletion,
      depreciation, amortization andimpairment
      expense
                
                
                650,813
                
                
                
                -Total
      Costs and Expenses
                
                
                (1,506,315
                )
                
                
                (37,097
                )LOSS
      FROM OPERATIONS
                
                
                (1,470,430
                )
                
                
                (37,097
                )OTHER
      EXPENSESInterest
      expense
                
                
                (47,296
                )
                
                
                (2,652
                )LOSS
      BEFORE INCOME TAXES
                
                
                (1,517,726
                )
                
                
                (39,749
                )PROVISION
      FOR INCOME TAXES
                
                
                -
                
                
                
                -NET
      LOSS
                
                $
                (1,517,726
                )
                
                $
                (39,749
                )BASIC
      AND DILUTED - INCOME(LOSS)
      PER SHARE
                
                $
                (0.04
                )
                
                $
                (0.00
                )WEIGHTED
      AVERAGE NUMBER OFSHARES
      OUTSTANDING
                
                
                36,849,468
                
                
                
                60,400,000
  The
accompanying notes are an integral part of these consolidated financial
statements.
  F-3
  SAVOY
ENERGY CORPORATION
 (FKA
ARTHUR KAPLAN COSMETICS, INC.)
 Consolidated
Statements of Stockholders' Equity (Deficit)
 For the
Years Ended December 31, 2009 and 2008
  Common
      Stock
                
                
                Additional
                  Paid-in
                
                
                AccumulatedShares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                TotalBalance,
      December 31, 2007
                
                
                60,400,000
                
                
                $
                60,400
                
                
                $
                (54,780
                )
                
                $
                (24,517
                )
                
                $
                (18,897
                )Services
      paid for by shareholder
                
                
                -
                
                
                
                -
                
                
                
                930
                
                
                
                -
                
                
                
                930Net
      loss for the year ended December 31, 2008
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (39,749
                )
                
                
                (39,749
                )Balance,
      December 31, 2008
                
                
                60,400,000
                
                
                $
                60,400
                
                
                $
                (53,850
                )
                
                $
                (64,266
                )
                
                $
                (57,716
                )Cancellation
      of shares
                
                
                (40,400,000
                )
                
                
                (40,400
                )
                
                
                40,400
                
                
                
                -
                
                
                
                -Acquisition
      of Plantation Exploration, Inc.
                
                
                8,000,000
                
                
                
                8,000
                
                
                
                114,132
                
                
                
                -
                
                
                
                121,632Shares
      issued for oil and gas properties
                
                
                500,000
                
                
                
                500
                
                
                
                44,500
                
                
                
                -
                
                
                
                45.000Shares
      issued for services
                
                
                2,796,000
                
                
                
                2,796
                
                
                
                458,454
                
                
                
                -
                
                
                
                461,750Amortization
      of options
                
                
                -
                
                
                
                -
                
                
                
                100,681
                
                
                
                -
                
                
                
                100,681Net
      loss for the year ended December 31, 2009
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,517,726
                )
                
                
                (1,517,726
                )Balance,
      December 31, 2009
                
                
                31,296,000
                
                
                $
                31,296
                
                
                $
                704,317
                
                
                $
                (1,581,992
                )
                
                $
                (846,379
                )
  The
accompanying notes are an integral part of these consolidated financial
statements.
  F-4
 SAVOY
ENERGY CORPORATION
 (FKA
ARTHUR KAPLAN COSMETICS, INC.)
 Consolidated
Statements of Cash Flows
  For
      the Year Ended
                December 31,
      2009
              
              
              For
      the Year Ended
                December 31,
      2008OPERATING
      ACTIVITIESNet
      loss
              
              $
              (1,517,726
              )
              
              $
              (39,749
              )Adjustments
      to reconcile net loss to net cash used by operating
      activities:Donated
      capital
              
              
              -
              
              
              
              930Depletion,
      depreciation, amortization and impairment
              
              
              650,813
              
              
              
              -Accretion
      of asset retirement obligations
              
              
              387
              
              
              
              -Stock
      compensation
              
              
              562,431
              
              
              
              -Accounts
      receivable
              
              
              3,776
              
              
              
              -Prepaid
      expenses
              
              
              -
              
              
              
              5,000Accounts
      payable and accrued expenses
              
              
              257,624
              
              
              
              27,714Net
      Cash Used in Operating Activities
              
              
              (42,695
              )
              
              
              (6,105
              )INVESTING
      ACTIVITIES
              
              
              -
              
              
              
              -FINANCING
      ACTIVITIESProceeds
      from advances from related parties
              
              
              
              
              
              
              4,500Payments
      on notes payable
              
              
              (10,000
              )
              
              
              -Proceeds
      from notes payable
              
              
              112,500
              
              
              
              -Net
      Cash Provided by Financing Activities
              
              
              102,500
              
              
              
              4,500NET
      INCREASE (DECREASE) IN CASH
              
              
              59,805
              
              
              
              (1,605
              )CASH
      AT BEGINNING OF YEAR
              
              
              540
              
              
              
              2,145CASH
      AT END OF YEAR
              
              $
              60,345
              
              
              $
              540SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATIONCASH
      PAID FOR:Interest
              
              $
              -
              
              
              $
              -Income
      Taxes
              
              $
              -
              
              
              $
              -NON
      CASH INVESTING AND FINANCING ACTIVITIES:Acquisition
      of Plantation Exploration, Inc.
              
              $
              121,632
              
              
              $
              -Common
      stock issued for accounts payable
              
              $
              33,194
              
              
              $
              -Cancellation
      of common stock
              
              $
              40,400
              
              
              $
              -Oil
      and gas properties conveyed in exchange for debt
              
              $
              100,000
              
              
              $
              -Common
      stock issued for oil and gas properties
              
              $
              45,000
              
              
              $
              -
  The
accompanying notes are an integral part of these consolidated financial
statements.
 
 F-5
 SAVOY ENERGY
CORPORATION
 (FKA
ARTHUR KAPLAN COSMETICS, INC.)
 Notes to
Consolidated Financial Statements
 December
31, 2009
 
 NOTE
1 - FINANCIAL STATEMENTS AND BASIS OF PRESENTATION
 
 Savoy
Energy Corporation (the “Company”) was incorporated as “Arthur Kaplan Cosmetics,
Inc.” on June 25, 2007, in the State of Nevada. Our principal offices are
located at 11200 Westheimer, Suite 900, Houston, TX 77042 and our telephone
number is (713) 243-8788.
 
 On March
31, 2009, we entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Plantation Exploration, Inc., a privately held Texas
corporation (“Plantation Exploration”), and Plantation Exploration Acquisition,
Inc. (“Acquisition Sub”), our newly formed wholly-owned Nevada subsidiary. In
connection with the closing of this merger transaction, Acquisition Sub merged
with and into Plantation Exploration (the “Merger”) on April 2, 2009, with
the filing of articles of merger with the Texas Secretary of
State.  As a result of the Merger, Plantation Acquisition no longer
exists and Plantation Exploration became our wholly-owned
subsidiary.
 
 Subsequently,
on April 3, 2009, we merged with another wholly-owned subsidiary of our company,
known as Savoy Energy Corporation in a short-form merger transaction under
Nevada law and, in connection with this short form merger, changed our name to
Savoy Energy Corporation.
 
 Effective
June 2, 2009, the Company’s board of directors approved a forward split of the
Company’s common stock on the basis of four shares for each share issued and
outstanding (4:1 split). The total number of authorized shares has not been
changed. The Company’s financial statements reflect the stock split on a
retro-active basis.
 
 Certain
amounts in prior periods have been reclassified to conform to current period
presentation
 
 NOTE
2 - GOING CONCERN
 
 Our
financial statements are prepared using generally accepted accounting principles
applicable to a going concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. As of the date of
this report, the Company has a working capital
deficit, hasgeneratedlimitedrevenues and has an
accumulated deficit. These factors raise substantial doubt regarding our
ability to continue as a going concern.
 
 In order
to continue as a going concern and achieve a profitable level of operations, the
Company will need, among other things, additional capital resources and to
develop a consistent source of revenues. The continuation of the Company as a
going concern is dependent upon the continued financial support from its
shareholders, the ability to raise equity or debt financing, and the attainment
of profitable operations from the Company's planned business.
 
 The
accompanying financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern
 
 NOTE
3 - SIGNIFICANT ACCOUNTING POLICIES
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
 
 F-6
 The
Company’s consolidated financial statements are based on a number of significant
estimates, including oil and gas reserve quantities which are the basis for the
calculation of depreciation, depletion and impairment of oil and gas properties,
and timing and costs associated with its retirement obligations.
 
 Cash and
Cash Equivalents
 
 The
Company considers all highly liquid instruments purchased with a maturity of
three months or less to be cash equivalents to the extent the funds are not
being held for investment purposes.
 
 Oil and
gas properties
 
 The
Company follows the full cost method of accounting for its oil and natural gas
properties, whereby all costs incurred in connection with the acquisition,
exploration for and development of petroleum and natural gas reserves are
capitalized. Such costs include lease acquisition, geological and geophysical
activities, rentals on non-producing leases, drilling, completing and equipping
of oil and gas wells and administrative costs directly attributable to those
activities and asset retirement costs. Disposition of oil and gas properties are
accounted for as a reduction of capitalized costs, with no gain or loss
recognized unless such adjustment would significantly alter the relationship
between capital costs and proved reserves of oil and gas, in which case the gain
or loss is recognized to income.
 
 Depletion
and depreciation of proved oil and gas properties is calculated on the
units-of-production method based upon estimates of proved reserves. Such
calculations include the estimated future costs to developed proved reserves.
Oil and gas reserves are converted to a common unit of measure based on the
energy content of 6,000 cubic feet of gas to one barrel of oil. Costs of
undeveloped properties are not included in the costs subject to depletion. These
costs are assessed periodically for impairment.
 
 The fair
value of an asset retirement obligation is recognized in the period in which it
is incurred if a reasonable estimate of fair value can be made. The present
value of the estimated asset retirement costs is capitalized as part of the
carrying amount of the long-lived asset. For The Company, asset retirement
obligations (“ARO”) relate to the plugging and abandonment of drilled oil and
gas properties. The amounts recognized are based upon numerous estimates
including future retirement costs; future recoverable reserve quantities and
reserve lives; and the credit-adjusted risk-free interest rate.
 
 Ceiling
test
 
 In
applying the full cost method, The Company performs an impairment test (ceiling
test) at each reporting date, whereby the carrying value of property and
equipment is compared to the value of its proved reserves discounted at a
10-percent interest rate of future net revenues, based on current economic and
operating conditions, plus the cost of properties not being amortized, plus the
lower of cost or fair market value of unproved properties included in costs
being amortized, less the income tax effects related to book and tax basis
differences of the properties.
 
 Oil and
gas properties, not subject to amortization.
 
 The
amortization of the oil and gas properties not classified as proved begins when
the oil and gas properties become proved, or their values become impaired. The
Company assesses the realizability of its properties not characterized as proved
on at least an annual basis or when there is or has been an indication that an
impairment in value may have occurred. The impairment of properties not
classified as proved is assessed based on management’s intention with regard to
future exploration and development of individually significant properties, and
the Company’s ability to secure capital funding to finance such exploration and
development. If the result of an assessment indicates that a property is
impaired, the amount of the impairment is added to the capitalized costs in its
full cost pool and they are amortized over production from proved
reserves
 
 F-7
 As of
December 31, 2009, the carrying value of all oil and gas properties were subject
to amortization. The Company has no carrying value for properties not subject to
amortization.
 
 Revenue
and cost recognition
 
 The
Company uses the sales method of accounting for natural gas and oil revenues.
Under this method, revenues are recognized based on the actual volumes of gas
and oil sold to purchasers. The volume sold may differ from the volumes to which
the Company is entitled based on our interest in the properties. Costs
associated with production are expensed in the period incurred. Revenues
from the sale of oil and natural gas are recognized when the product is
delivered at a fixed or determinable price, title has transferred, and
collectability is reasonably assured and evidenced by a contract.  The
Company follows the “sales method” of accounting for oil and natural gas
revenue, so it recognizes revenue on all natural gas or crude oil sold to
purchasers, regardless of whether the sales are proportionate to its ownership
in the property.  A receivable or liability is recognized only to the
extent that the Company has an imbalance on a specific property greater than its
share of the expected remaining proved reserves.  For oil sales, this
occurs when the customer's truck takes delivery of oil from the operators’
storage tanks.
 
 Stock-Based
Compensation
 
 Stock-based
compensation expense includes the estimated fair value of equity awards vested
during the reporting period. The expense for equity awards vested during the
reporting period is determined based upon the grant date fair value of the award
and is recognized as expense over the applicable vesting period of the stock
award using the straight-line method.
 
 Recent
Accounting Pronouncements
 
 In May
2009, the FASB issued ASC 855-10 entitled “Subsequent Events”. Companies are now
required to disclose the date through which subsequent events have been
evaluated by management. Public entities (as defined) must conduct the
evaluation as of the date the financial statements are issued, and provide
disclosure that such date was used for this evaluation. ASC 855-10 provides that
financial statements are considered “issued” when they are widely distributed
for general use and reliance in a form and format that complies with GAAP. ASC
855-10 is effective for interim and annual periods ending after June 15, 2009
and must be applied prospectively. The adoption of ASC 855-10 during the the
year ended December 31, 2009 did not have a significant effect on the Company’s
financial statements. In connection with preparing the accompanying financial
statements as of December 31, 2009, management evaluated subsequent events
through the date that such financial statements were issued (filed with the
SEC).
 
 In June
2009, the FASB issued ASC 105-10, The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles. ASC 105-10
establishes the Codification as the sole source of authoritative accounting
principles recognized by the FASB to be applied by all nongovernmental entities
in the preparation of financial statements in conformity with GAAP. ASC 105-10
was prospectively effective for financial statements issued for fiscal years
ending on or after September 15, 2009 and interim periods within those fiscal
years. The adoption of ASC 105-10 did not impact the Company’s results of
operations or financial condition. The Codification did not change GAAP,
however, it did change the way GAAP is organized and presented. As a result,
these changes impact how companies reference GAAP in their financial statements
and in their significant accounting policies. The Company implemented the
Codification in this Report by providing references to the Codification topics
alongside references to the corresponding standards.
 
 In
January 2010, the FASB issued ASU No. 2010-03, “Extractive activities — Oil and
Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures”. The main
provisions of ASU No. 2010-03 are the following: (1) expanding the definition of
oil- and gas- producing activities to include the extraction of saleable
hydrocarbons, in solid, liquid, or gaseous state, from oil sands, shale,
coalbeds, or other nonrenewable resources that are intended to be upgraded into
synthetic oil or gas, and activities undertaken with a view to such extraction;
(2) entities should use first-day-of-the-month price during the 12-month period
(the 12-months average price) in calculating proved oil and gas reserves and
estimating related standardized measure of discounted net cash flows; (3)
requiring entities to disclose separately information about reserves quantities
and financial statement amounts for geographic areas that represent 15 percent
or more of proved reserves; (4) separate disclosure for consolidated entities
and equity method investments. ASU No. 2010-03 is effective for annual reporting
periods ending on or after December 31, 2009. The Company adopted ASU No.
2010-03 for the 2009 annual financial statements. This adoption did not have a
material impact on the Company’s reported reserves evaluation, results of
operations, financial position or cash flows.
 
 F-8
 With the
exception of the pronouncements noted above, no other accounting standards or
interpretations issued or recently adopted are expected to have a material
impact on the Company’s financial position, operations or cash
flows.
 
 NOTE
4 – BUSINESS COMBINATION
 
 On March
31, 2009, the Company entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Plantation Exploration, Inc., a privately held Texas
corporation (“Plantation Exploration”), and Plantation Exploration Acquisition,
Inc. (“Acquisition Sub”), the Company’s newly formed wholly-owned Nevada
subsidiary. In connection with the closing of this merger transaction,
Acquisition Sub merged with and into Plantation Exploration (the “Merger”) on
April 2, 2009, with the filing of articles of merger with the Texas secretary of
state. As a result of the Merger, Plantation Acquisition no longer exists and
Plantation Exploration became the Company’s wholly-owned
subsidiary.
 
 The
preliminary purchase price of Plantation Exploration was approximately $160,000,
consisting of the Company’s common stock valued at approximately $160,000. The
value of the 2,000,000 shares of the Company’s common stock issued was
determined using acquisition-date fair value of $0.08 per share on April 2,
2009.
  The
following table summarizes the estimated fair values of the assets acquired and
liabilities assumed at the date of acquisition. The purchase price allocation
herein is based on management’s preliminary assessment of the fair value of both
the assets acquired and liabilities assumed. The Company is in the process of
reviewing the preliminary valuation of certain acquired  assets and
liabilities; thus, the allocation of the purchase price is subject to
refinement.
 
 Current
      assets
              
              $
              6,000Property,
      plant, and equipment
              
              
              862,000Other
      noncurrent assets
              
              
              -Identifiable
      intangible assets
              
              
              -Goodwill
              
              
              -Total
      assets acquired
              
              
              868,000Current
      liabilities
              
              
              708,000Other
      noncurrent liabilities
              
              
              -Long-term
      debt
              
              
              -Total
      liabilities assumed
              
              
              708,000Net
      assets acquired
              
              $
              160,000
  There was
no acquired identifiable intangible assets, customer relationships, developed
technology or  trade names. The excess of the fair value of the
consideration paid by the Company over the fair value of the net assets of
Plantation Exploration was assigned to its oil and gas properties (property,
plant and equipment in the table above).
  F-9
 The
following (unaudited) pro forma consolidated results of operations have been
prepared as if the acquisition of Plantation Exploration, LLC had occurred as of
the first day of the years ended December 31, 2009 and 2008:
  2009
              
              
              2008Total
      revenues
              
              $
              48,000
              
              
              $
              173,000Net
      loss
              
              
              (1,800,000
              )
              
              
              (860,000
              )Net
      loss per share—Basic
              
              
              (0.05
              )
              
              
              (0.01
              )Net
      loss per share—Diluted
              
              
              (0.05
              )
              
              
              (0.01
              )
 
 The pro
forma information is presented for informational purposes only and is not
necessarily indicative of the results of operations that actually would have
been achieved had the acquisition been consummated as of that time, nor is it
intended to be a projection of future results.
 
 In
addition, pursuant to the terms and conditions of the Merger
Agreement:
 
 ·
              The
      sole shareholder of all of the capital stock of Plantation Exploration’s
      issued and outstanding immediately prior to the closing of the Merger
      exchanged his shares into 2,000,000 pre-split (8,000,000 post-split)
      shares of the Company’s common stock. As a result, the sole shareholder of
      Plantation Exploration received 2,000,000 pre-split (8,000,000 post
      -split) newly issued shares of the Company’s common
  stock.
 
 ·
              Our
      board of directors was reconstituted to consist of Arthur Bertagnolli who,
      prior to the Merger, was the sole director of Plantation Exploration. In
      connection with such, we entered into an employment agreement (“Employment
      Agreement”) with Mr. Bertagnolli to serve as CEO and director of our
      company. The terms of the Employment Agreement are set forth
      below.
 
 ·
              Immediately
      following the closing of the Merger, in a separate transaction, the
      Company’s former Chief Executive Officer and sole director, Mr. Arthur
      Kaplan, agreed to purchase the Company’s former cosmetics business in
      exchange for the cancellation and return of all of his common stock into
      treasury and the forgiveness of debts owed to him. Specifically, in the
      stock purchase agreement, Mr. Kaplan retired 10,100,000 pre-split
      (40,400,000 post split) shares of the Company’s common stock and forgave
      the Company $33,194 in related party payables in exchange for our prior
      business of developing, manufacturing, and selling organic personal care
      products specifically for men and any assets that relate to that business.
      Subsequent to this transaction, there were 7,000,000 pre-split (28,000,000
      post-split) shares of the Company’s common stock issued and
      outstanding.
 
 Employment
Agreement
 
 Pursuant
to the terms and conditions of the Employment Agreement:
 
 Mr.
Bertagnolli will serve as President, CEO, Chairman and sole director of the
Company and Plantation Exploration. The Company agreed to compensate Mr.
Bertagnolli $14,000 per month for the first 12 months and $20,000 per month for
the second 12 month period. As of December 31, 2009 we have accrued $84,000 as
payable to Mr. Bertagnolli for his salary. Subsequent to September 30, 2009, we
issued 400,000 post-split shares of common stock to Mr. Bertagnolli as payment
for $70,000 of his salary payable.
 
 F-10
 The
Company agreed to issue Mr. Bertagnolli options to purchase 1,000,000 pre-split
shares (4,000,000 post-split) of our common stock at an exercise price of $1.00
per share that will vest in 2 years from the date of the agreement. The fair
value of the options is $242,426 which was valued using the Black-Scholes
pricing model at the date of grant. Variables used in the Black-Scholes pricing
model include (1) discount rate of 1.35%, (2) expected term of 5 years, (3)
expected volatility of 142% and (4) zero expected dividends.
 
 The
Company further agreed to issue Mr. Bertagnolli options to purchase up to 5% of
our outstanding common stock at an exercise price of $1.00 per share that will
vest in 2 years from the date of the agreement. The Company and Mr. Bertagnolli
have since agreed that the number of options issuable under the agreement was to
be 4,000,000 shares of our common stock under the same terms. The fair value of
the options is $181,820 which was valued using the Black-Scholes pricing model
at the date of grant. Variables used in the Black-Scholes pricing model include
(1) discount rate of 1.35%, (2) expected term of 5 years, (3) expected
volatility of 142% and (4) zero expected dividends.
 
 Under the
Employment Agreement, the Company is obligated to pay Mr. Bertagnolli a cash
bonus of 5% of the net proceeds of any sale of the Company to any larger oil and
gas company, with an additional 5% if Mr. Bertagnolli secures the
purchaser.
 
 NOTE
5 – ASSET RETIREMENT OBLIGATIONS
 
 In
accordance with ASC 410, “Accounting for Asset Retirement Obligations” ECCE
records the fair value of a liability for asset retirement obligations (“ARO”)
in the period in which it is incurred and a corresponding increase in the
carrying amount of the related long-lived asset. The present value of the
estimated asset retirement cost is capitalized as part of the carrying amount of
the long-lived asset and is depreciated over the useful life of the asset. ECCE
accrues an abandonment liability associated with its oil and gas wells when
those assets are placed in service. The ARO is recorded at its estimated fair
value and accretion is recognized over time as the discounted liability is
accreted to its expected settlement value. Fair value is determined by using the
expected future cash outflows discounted at ECCE's credit-adjusted risk-free
interest rate. No market risk premium has been included in ECCE's calculation of
the ARO balance.
 
 The
following is a description of the changes to the Company's asset retirement
obligations for the years ended December 31,
 
 2009
              
              
              2008Asset
      retirement obligations at beginning of year
              
              $
              -
              
              
              $
              -Acquisition
      of properties
              
              
              9,296
              
              
              
              -Change
      in estimate
              
              
              -
              
              
              
              -Accretion
      expense
              
              
              387
              
              
              
              -Asset
      retirement obligations at end of year
              
              $
              9,683
              
              
              $
              -
 
 NOTE
6 – NOTES PAYABLE
  On
September 24, 2008 Plantation Exploration, Inc. entered into a financing
agreement with Oil Investment Leases, Inc. (OIL) for cash advances totaling
$290,000. On January 27, 2009 and May 4, 2009, the Company amended the September
24, 2008 agreement with OIL for advance cash payments under the demand loan and
to assign the debt from Plantation Exploration to Savoy. The amended agreements
provided for total borrowings of $335,000 and $360,000,respectively, due on
demand. During the year ended December 31, 2009, the Company borrowed an
additional $40,000 from OIL. As of December 31, 2009, the Company had received
$360,000 from OIL. The interest is payable in-kind at 5,000 (20,000 post-split)
shares of common stock of the Company for each month the debt remains unpaid.
Both the January 27, 2009 and May 4, 2009 agreements require the Company to
issue 5,000 (20,000 post-split) shares of common stock to OIL as financing
fees.
 F-11
 On
December 10, 2009, the Company settled outstanding debts to Lucas Energy, Inc.
in the amount of $100,000.  In exchange for the settlement and release
of the debt, the Company agreed to exchange a 16% working interest in the
Rozella Kifer No.1, Louis Zavadil No.1 and Ali-O Unit No.1 wells.
 
 On
December 17, 2009, the Company borrowed $37,500 from a non-related third party
bearing interest at 6% per annum. The loan is unsecured and the principal and
accrued and unpaid interest is payable at maturity on June 30, 2010. The Company
is using the proceeds for working capital. The outstanding  balance of
$37,500 has been classified as current debt at December 31, 2009.
 
 On
December 29, 2009, the Company borrowed $50,000 from a two non-related third
parties bearing interest at 5% per annum. The loans are unsecured and the
principal and accrued and unpaid interest is payable at maturity on June 30,
2010. The Company is using the proceeds for working capital. The
outstanding  aggregate balance of $50,000 has been classified as
current debt at December 31, 2009.
 
 NOTE
7 – STOCK OPTIONS AND WARRANTS
 
 The
Company agreed to issue Mr. Bertagnolli options to purchase 1,000,000 pre-split
shares (4,000,000 post-split) of our common stock at an exercise price of $1.00
per share that will vest in 2 years from the date of the agreement. The fair
value of the options is $242,426 which was valued using the Black-Scholes
pricing model at the date of grant. Variables used in the Black-Scholes pricing
model include (1) discount rate of 1.35%, (2) expected term of 5 years, (3)
expected volatility of 142% and (4) zero expected dividends.
 
 The
Company further agreed to issue Mr. Bertagnolli options to purchase up to 5% of
our outstanding common stock at an exercise price of $1.00 per share that will
vest in 2 years from the date of the agreement. The Company and Mr. Bertagnolli
have since agreed that the number of options issuable under the agreement was to
be 4,000,000 shares of our common stock under the same terms. The fair value of
the options is $181,820 which was valued using the Black-Scholes pricing model
at the date of grant. Variables used in the Black-Scholes pricing model include
(1) discount rate of 1.35%, (2) expected term of 5 years, (3) expected
volatility of 142% and (4) zero expected dividends.
 
 A summary
of stock option activity is as follows:
 
 Number
      of Shares
              
              
              Weighted
      Average
                Exercise
      PriceOutstanding
      at 12/31/08
              
              
              -
              
              
              $
              -Granted
              
              
              8,000,000
              
              
              
              1.00Exercised
              
              
              -
              
              
              
              -Cancelled/Expired
              
              
              -
              
              
              
              -Outstanding
      at 12/31/09
              
              
              8,000,000
              
              
              $
              1.00
 
 Options
outstanding and their relative exercise price at December 31, 2009 are as
follows:
 
 Exercise
      Price
              
              
              Number
      of shares
              
              Remaining
      life
              
              Aggregate
      Intrinsic Value (In-the-money) Options1.00
              
              
              
              8,000,000
              
              4.25
      years
              
              $
              -8,000,000
              
              
              
              $
              -
 
 F-12
 NOTE
–8 RELATED PARTY TRANSACTIONS
 
 During
2008, the former officer and director paid $4,500 of expenses on behalf of the
Company. The advances were unsecured, non interest bearing, and had no specific
terms for repayment. The amount was forgiven as part of the business combination
(see Note 4). As of December 31, 2009 and 2008, $0 and $33,194, respectively has
been included in related party payables in the financial
statements.
 
 During
2008, a shareholder of the company paid for $930 of the Company’s legal
expenses. The $930 has been recognized as legal expenses and additional paid in
capital in the financial statements as of and for the year ended December 31,
2008.
 
 As of
December 31, 2009, a shareholder had advanced the Company $151,003 for operating
costs. The advances are repayable on demand.
 
 NOTE
9 – COMMITMENTS, CONTINGENCIES AND LITIGATION
 
 The
Company’s Employment Agreement with Arthur Bertagnolli provides for certain
compensation and benefits based on Company output over and above base
compensation based on the Company’s achievement of specified
milestones.  As of this date, none of those milestones have been
achieved.  Under certain circumstances, Mr. Bertagnolli is also
entitled to an additional payment upon sale of the Company to a larger
company.
 
 Panos
Industries, LLC v. Savoy Energy Corporation, et. al., District Court, Clark
County, Nevada Case # A-10-612340-C.
 
 On March
19, 2010, this action was filed in the above-entitled Court seeking damages “...in
excess of $50,000” based upon monies which the Plaintiff claims were advanced by
Plaintiff on behalf of the Company.  This action is in its very early
stages and as of this date the Company has not been served with the Summons and
Complaint and has therefore not filed any Answer to the Complaint. While the
outcome of this matter cannot be predicted, the Company specifically denies that
it is indebted to Plaintiff and believes that any claims purportedly asserted in
the lawsuit are without merit.  The Company further believes that it
has meritorious claims against Plaintiff which arose in connection with the
merger of the Company’s predecessor (Arthur Kaplan Cosmetics, Inc.) with
Plantation Exploration, Inc. and in connection with the aftermath of the
merger.  The Company intends to vigorously defend any claims asserted
by the Plaintiff and to aggressively prosecute its claims against the
Plaintiff.  Even if the Company is ultimately successful in defending
this action, it will incur legal fees and other expenses in connection with such
defense, the amount of which cannot be predicted at this time.  Such
expenses could have a material impact on the Company’s future operating results
and have an adverse impact on the Company’s funds available for its
operations.
 
 NOTE
10 – EARNINGS PER SHARE
 
 Basic
Loss per Common Share
 
 Basic
loss per share is calculated by dividing the Company’s net loss applicable to
common shareholders by the weighted average number of common shares during the
period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number
of shares outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted for any
potentially dilutive debt or equity. In periods where losses are reported, the
weighted-average number of common shares outstanding excludes common stock
equivalents, if any, because their inclusion would be
anti-dilutive.
  F-13
 For
      the Year Ended
                December
      31, 2009
              
              
              For
      the Year Ended
                December
      31, 2008ss
      (numerator)
              
              $
              (1,517,726
              )
              
              $
              (39,749
              )Shares
      (denominator)
              
              
              36,849,468
              
              
              
              60,400,000Per
      share amount
              
              $
              (0.04
              )
              
              $
              (0.00
              )
 
 NOTE
11 - INCOME TAXES
 
 The
Company provides for income taxes under Statement ASC 740 Accounting for
Income Taxes. ASC 740  requires the use of an asset and liability
approach in accounting for income taxes. Deferred tax assets and liabilities are
recorded based on the differences between the financial statement and tax bases
of assets and liabilities and the tax rates in effect when these differences are
expected to reverse. The Company’s predecessor operated as entity exempt from
Federal and State income taxes.
 
 ASC 740
requires the reduction of deferred tax assets by a valuation allowance if, based
on the weight of available evidence, it is more likely than not that some or all
of the deferred tax assets will not be realized.
 
 The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate of 39% to the net loss before
provision for income taxes for the following reasons:
  For
      the Year Ended
                December
      31, 2008
              
              
              For
      the Year Ended
                December
      31, 2008Income
      tax expense at statutory rate
              
              $
              (597,763
              )
              
              $
              (15,502
              )Change
      in Valuation allowance
              
              
              597,763
              
              
              
              15,502Income
      tax expense per books
              
              $
              -
              
              
              $
              -
 
 Net
deferred tax assets consist of the following components as of:
 
 December
      31,
                2008
              
              
              December
      31,
                2008NOL
      carryover
              
              $
              622,829
              
              
              $
              25,063Valuation
      allowance
              
              
              (622,826
              )
              
              
              (25,063
              )Net
      deferred tax asset
              
              $
              -
              
              
              $
              -
 
 F-14
 Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carryforwards of $64,266 for federal income tax reporting purposes are
subject to annual limitations. When a change in ownership occurs, net operating
loss carry forwards may be limited as to use in future years.
 
 NOTE 12 -COMMON STOCK
 
 On April
2, 2009, in accordance with the Merger Agreement dated March 31, 2009, our
Acquisition Sub merged with and into Plantation Exploration, and the sole
stockholder of Plantation Exploration (Arthur Bertagnolli) received 2,000,000
shares of our common stock (8,000,000 post split).  In
conjunction with te closing of the Merger on April 4, 2009, in connection with
the sale of the Company’s previous business, Arthur Kaplan
cancelled 40,400,000 shares Company stock owned by him.
 
 On May
29, 2008, the Company’s common stock was forward split on a 10 shares for 1
share basis. Effective June 2, 2009, our board of directors approved a forward
split of the Company’s common stock on the basis of four shares for each share
issued and outstanding.  The total number of authorized shares was not
changed. The accompanying financial statements reflect the forward stock splits
on a retroactive basis. The par value of the Company’s common stock remained at
$0.001 per share resulting in negative additional paid-in-capital to account for
certain shares issued at less than par value after adjusting for the
split.
 
 On June
4, 2009, the Company issued 996,000 shares of its common stock for consulting
services to a non-related third party valued at approximately $189,000. The
$189,000 fair value of the 300,000 shares was based on the Company’s stock price
on the date of grant and was expensed at the grant date as there was no
requisite service period.
 
 On
October 7, 2009 the Board of Directors granted 400,000 shares of common stock as
payment to Art Bertagnolli for accrued salary valued at approximately $60,000.
The $60,000 fair value of the 400,000 shares was based on the Company’s stock
price on the date of grant and was expensed over the requisite service period
from April 2009 through December 2009.
 
 On
October 7, 2009, the Board of Directors granted 300,000 shares of common stock
to directors of the Company for director fees valued at approximately
$45,000.  The $45,000 fair value of the 300,000 shares was based on
the Company’s stock price on the date of grant and was expensed over the
requisite service period from July 2009 through December 2009.
 
 On
October 7, 2009 the Board of Directors granted 100,000 shares of common stock to
a consultant for services valued at approximately $15,000.  The
$15,000 fair value of the 100,000 shares was based on the Company’s stock price
on the date of grant and was expensed at the grant date as there was no
requisite service period.
 
 On
November 18, 2009, the Board of Directors granted 1,000,000 shares of common
stock for consulting fees to a non-related third party.  The $110,000
fair value of the 1,000,000 shares was based on the Company’s stock price on the
date of grant and was expensed at the grant date as there was no requisite
service period.
 
 On
December 18, 2009, the Company issued 500,000 shares to The RLB 2006 Irrevocable
Trust in exchange for an interest in a well. .  The $45,000 fair value
of the 500,000 shares was based on the Company’s stock price on the date of
grant and was included in the capitalized costs of its oil and gas properties at
the grant date.
 
 NOTE  13- SUPPLEMENTAL OIL
AND GAS INFORMATION-(Unaudited)
 
 Proved
oil and gas reserve quantities are based on estimates prepared externally by an
independent engineer in accordance with guidelines established by the Securities
Exchange Commission (SEC).
 
 F-15
 There are
numerous uncertainties inherent in estimating quantities of proved reserves and
projecting future rates of production. The following reserve data related to the
properties represents estimates only and should not be construed as being exact.
The reliability of these estimates at any point in time depends on both the
quality and quantity of the technical and economic data, the performance of the
reservoirs, as well as extensive engineering judgment. Consequently, reserve
estimates are subject to revision as additional data becomes available during
the producing life of a reservoir. The evolution of technology may also result
in the application of improved recovery techniques, such as supplemental or
enhanced recovery projects, which have the potential to increase reserves beyond
those currently envisioned.
 
 Estimates
of proved reserves are derived from quantities of crude oil and natural gas that
geological and engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs under existing operating and
economic conditions and rely upon a production plan and strategy.
 
 Modernization
of Oil and Natural Gas Reporting Requirements
  Effective
for fiscal years ending on or after December 31, 2009, the Securities and
Exchange Commission (“SEC”) approved revisions designed to modernize reserve
reporting requirements for oil and natural gas companies.  In
addition, effective for the same period, the Financial Accounting Standards
Board issued Accounting Standards Codification Update 2010-03, “Extractive Activities – Oil and Gas
(Topic 932) – Oil and Gas Reserve Estimation and Disclosures,” to provide
consistency with the new SEC rules.  The Company adopted the new
requirements effective December 31, 2009.
 
 Representative NYMEX prices:(1)Natural
      gas (MMBtu)
              
              $
              -Oil
      (Bbl)
              
              $
              61.19
  (1) This
measure is not intended to represent the market value of estimated
reserves.
 
 Reserve
engineering is inherently a subjective process of estimating underground
accumulations of oil, natural gas and NGL that cannot be measured
exactly.  The accuracy of any reserve estimate is a function of the
quality of available data and engineering and geological interpretation and
judgment.  Accordingly, reserve estimates may vary from the quantities
of oil, natural gas and NGL that are ultimately recovered.  Future
prices received for production may vary, perhaps significantly, from the prices
assumed for the purposes of estimating the standardized measure of discounted
future net cash flows.  The standardized measure of discounted future
net cash flows should not be construed as the market value of the reserves at
the dates shown.  The 10% discount factor required to be used under
the provisions of applicable accounting standards may not be the most
appropriate discount factor based on interest rates in effect from time to time
and risks associated with the Company or the oil and natural gas
industry.  The standardized measure of discounted future net cash
flows is materially affected by assumptions about the timing of future
production, which may prove to be inaccurate.
 
 In
accordance with SEC regulations, reserves were estimated using the average price
during the 12-month period, determined as an unweighted average of the
first-day-of-the-month price for each month, unless prices are defined by
contractual arrangements, excluding escalations based upon future
conditions.
 
 Gas
              
              
              Oil(MMcf)
              
              
              (MBbls)Total
      Proved Reserves:Balance,
      December 31, 2008
              
              
              -
              
              
              
              -Acquisitions
              
              
              -
              
              
              
              6,275Extensions,
      discoveries and improved recovery
              
              
              -
              
              
              
              -Production
              
              
              -
              
              
              
              294Sale
      of minerals in place
              
              
              -
              
              
              
              -Revisions
      of previous estimates
              
              
              -
              
              
              
              -Balance,
      December 31, 2009
              
              
              -
              
              
              
              5,981Proved
      developed as of December 31, 2009
              
              
              -
              
              
              
              5,981Proved
      developed as of December 31, 2008
              
              
              -
              
              
              
              -
 
 F-16
 Capitalized
Costs of Oil and Gas Producing Activities
 
 The
following table sets forth the aggregate amounts of capitalized costs relating
to the Company’s oil and gas producing activities and the related accumulated
depletion as of December 31, 2009:
  2009
              
              
              2008Proved
      properties
              
              
              761,987
              
              
              
              -Unproved
      leasehold
              
              
              -
              
              
              
              -Less
      accumulated depletion
              
              
              (650,813
              )
              
              
              -Net
      capitalized costs
              
              $
              111,174
              
              
              $
              -
 
 Costs
Incurred in Oil and Gas Producing Activities
 
 The
following table reflects the costs incurred in oil and gas property acquisition,
exploration and development activities during the years ended December 31, 2009
and 2008:
 
 2009
              
              
              2008Acquisition
      costs
              
              $
              861,987
              
              
              $
              -Development
      costs
              
              
              -
              
              
              
              -Total
      Costs Incurred
              
              $
              862,936
              
              
              $
              -
 
 The
following disclosures concerning the standardized measure of future cash flows
from proved oil and gas reserves are presented in accordance with FAS 69. As
prescribed by FAS 69, the amounts shown are based on prices and costs at the end
of each period and a 10 percent annual discount factor.
 
 Future
cash flows are computed by applying fiscal year-end prices of natural gas and
oil to year-end quantities of proved natural gas and oil reserves. Future
operating expenses and development costs are computed primarily by the Company’s
petroleum engineer by estimating the expenditures to be incurred in developing
and producing the Company’s proved natural gas and oil reserves at the end of
the year, based on year end costs and assuming continuation of existing economic
conditions. Future income taxes are based on currently enacted statutory
rates.
 
 The
standardized measure of discounted future net cash flows is not intended to
represent the replacement costs or fair value of the Company’s natural gas and
oil properties. An estimate of fair value would take into account, among other
things, anticipated future changes in prices and costs, and a discount factor
more representative of the time value of money and the risks inherent in reserve
estimates of natural gas and oil producing operation.
 
 Reserve
estimates were prepared by both external and internal sources.
 
 Standardized
Measure of Discounted Future Net Cash Flow
  2009
              
              
              2008Future
      cash inflows
              
              $
              325,785
              
              
              $
              -Future
      costs-Operating
              
              
              (81,447
              )
              
              
              -Development
      and abandonment
              
              
              -
              
              
              
              -Future
      net cash flows before income taxes
              
              
              244,338
              
              
              
              -Future
      income taxes
              
              
              (85,518
              )
              
              
              -Future
      net cash flows before income taxes
              
              
              158,820
              
              
              
              -Discount
      at 10% annual rate
              
              
              (47,646
              )
              
              
              -Standardized
      measure of discounted future net cash flows
              
              $
              111,174
              
              
              
              -
 
 F-17
 The
following reconciles the change in the standardized measure of discounted net
cash flow for the year ended December 31, 2009 and 2008
  2009
              
              
              2008Beginning
      of  year
              
              $
              -
              
              
              $
              -Acquisition
      of oil and gas properties
              
              
              861,987
              
              
              
              -Extensions,
      discoveries and improved recovery
              
              
              -
              
              
              
              -Revision
      of quantity estimates
              
              
              -
              
              
              
              -Sales
      of minerals in place
              
              
              -
              
              
              
              -Net
      change in prices and production costs
              
              
              -
              
              
              
              -Accretion
      of discount
              
              
              -
              
              
              
              -Sales,
      net of production costs
              
              
              (26,778
              )
              
              
              -Change
      in future development costs
              
              
              -
              
              
              
              -Net
      change in income taxes
              
              
              (724,035
              )
              
              
              -End
      of year
              
              $
              111,174
              
              
              $
              -
 
 NOTE
14– SUBSEQUENT EVENTS
  On January 26, 2010, the
Company issued 1,000,000 shares to Excelsus Capital Partners, LLC for services
rendered.
 
 On
February 1, 2010, the Company issued 800,000 shares to Rio Sterling Holdings,
LLC for repayment of the Company’s note payable with a face amount of
$12,500.00.
 
 On
February 1, 2010, the Company issued 800,000 shares to Barclay Lyons, LLC for
repayment of the Company’s note payable with a face amount of
$12,500.00.
 
 On
February 1, 2010, the Company issued 1,250,000 shares to Tombstone Capital, LLC
for repayment of the Company’s note payable with a face amount of
$12,500.00
 
 On March
4, 2010, the Company issued 10,000,000 shares to Arthur Bertagnolli in exchange
for services rendered.
 
 On March
4, 2010, the Company issued 2,000,000 shares to Excelsus Capital Partners, LLC
for services rendered.
 
 On March
4, 2010, the Company issued 3,000,000 shares to Excelsus Consulting, LLC for
services rendered.
 
 On March
4, 2010, the Company issued 500,000 shares to Robert L. B. Diener, LLC for
services rendered.
 
 On March
18, 2010, the Company issued 1,500,000 shares to Rio Sterling Holdings, LLC for
repayment of the Company’s note payable with a face amount of
$10,000.00.
 
 On March
18, 2010, the Company issued 1,500,000 shares to Barclay Lyons, LLC for
repayment for Company’s note payable with a face amount of
$10,000.00.
 
 On March
31, 2010, the Company secured a 2.75% working and revenue interest in the Glass
59 #2 well in Sterling County, Texas that is operated by Bright &
Company.
  F-18