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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED March 31, 2010
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 BAYOU CITY EXPLORATION, INC.
  NEVADA
    
    61-1306702(State or Other Jurisdiction of
    
    (IRS Employer Identification No.)Incorporation of Organization)
 
 
 þ o
 o o
 Rule 12b-2
 Large accelerated filer: o
    
    Accelerated filer: o
    
    Non-accelerated filer: o
    
    Smaller reporting company: þ
 o þ
 
 Title or Class
    
    
    Share Outstanding on April 30, 2010Common Stock, $0.005 par value
    
    
    26,653,633Preferred Stock, $0.001 par value
    
    
    0
 o þ




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##### 



PART I
FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS (UNAUDITED)FINANCIAL STATEMENTS OF REGISTRANTBALANCE SHEETS AS OF MARCH 31, 2010 (UNAUDITED) AND DECEMBER 31, 2009
    
    
    3STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2010
AND 2009 (UNAUDITED)
    
    
    4STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31,
2010 AND 2009 (UNAUDITED)
    
    
    5NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
    
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF OPERATIONS
    
    
    6ITEM 3. CONTROLS AND PROCEDURES
    
    
    8PART II OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    9ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    
    9ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    9ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    9ITEM 5. OTHER INFORMATION
    
    
    9ITEM 6. EXHIBITS
    
    
    9EX-31.1EX-31.2EX-32.1EX-32.2
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March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)ASSETSCURRENT ASSETS:Cash
    
    $
    636,662
    
    
    $
    51,704Accounts receivable:Trade and other (net of allowance for doubtful accounts  $37,468 as of
March 31, 2010 and December 31, 2009)
    
    
    46,305
    
    
    
    165,946TOTAL CURRENT ASSETS
    
    
    682,967
    
    
    
    217,650OIL & GAS PROPERTIES
    
    
    384,375
    
    
    
    308,967TOTAL ASSETS
    
    $
    1,067,342
    
    
    $
    526,617LIABILITIES & STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable and accrued liabilities
    
    $
    110,526
    
    
    $
    133,071Accounts payable  related party
    
    
    84,906
    
    
    
    134,906Notes payable  related parties
    
    
    100,000
    
    
    
    475,000TOTAL CURRENT LIABILITIES
    
    
    295,432
    
    
    
    742,977TOTAL LIABILITIES
    
    
    295,432
    
    
    
    742,977STOCKHOLDERS EQUITY (DEFICIT)Preferred stock, $0.001 par value; 5,000,000 shares
authorized; 0 shares issued and outstanding as of
March 31, 2009 and December 31, 2008
    
    
    
    
    
    
    Common stock, $0.005 par value; 150,000,000 shares
authorized; 26,653,633 shares issued and
outstanding at March 31, 2010 and
December 31, 2009
    
    
    133,268
    
    
    
    133,268Additional paid in capital
    
    
    13,363,430
    
    
    
    13,363,430Accumulated (deficit)
    
    
    (12,724,788
    )
    
    
    (13,713,058
    )TOTAL STOCKHOLDERS EQUITY (DEFICIT)
    
    
    771,910
    
    
    
    (216,360
    )TOTAL LIABILITIES & SHAREHOLDERS EQUITY (DEFICIT)
    
    $
    1,067,342
    
    
    $
    526,617
 
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Three Months EndedMarch 31,2010
    
    
    2009OPERATING REVENUES:Oil and gas sales
    
    $
    87,413
    
    
    $
    283,025TOTAL OPERATING REVENUES
    
    
    87,413
    
    
    
    283,025OPERATING COSTS AND EXPENSES:Lease operating expenses and production taxes
    
    
    10,896
    
    
    
    24,329Depreciation, depletion and amortization
    
    
    6,580
    
    
    
    1,458General and administrative costs
    
    
    84,410
    
    
    
    52,603TOTAL OPERATING COSTS
    
    
    101,886
    
    
    
    78,390OPERATING INCOME (LOSS)
    
    
    (14,473
    )
    
    
    204,635OTHER INCOME (EXPENSE):Interest expense
    
    
    (3,551
    )
    
    
    (10,093
    )Gain on sale of assets
    
    
    1,000,000
    
    
    
    Forgiveness of debt
    
    
    
    
    
    
    165,541Other income
    
    
    6,294
    
    
    
    NET INCOME BEFORE INCOME TAX
    
    
    988,270
    
    
    
    360,083Income Tax Provision
    
    
    
    
    
    
    NET INCOME
    
    $
    988,270
    
    
    $
    360,083NET INCOME PER COMMON SHARE
    
    $
    0.04
    
    
    $
    0.01Weighted Average Common Shares Outstanding 
Basic and Diluted
    
    
    26,653,633
    
    
    
    26,653,633
 
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THREE MONTHS ENDEDMarch 31,2010
    
    
    2009CASH FLOW FROM OPERATING ACTIVITIES:Net Income
    
    $
    988,270
    
    
    $
    360,083Adjustments to reconcile net income to net cash flows
used in operating activities:Depreciation, depletion, and amortization
    
    
    6,580
    
    
    
    1,458Gain on sale of oil & gas property
    
    
    (1,000,000
    )
    
    
    Forgiveness of debt
    
    
    
    
    
    
    (165,541
    )Change in operating assets and liabilities:Accounts Receivable
    
    
    119,641
    
    
    
    60,674Accounts payable  related party
    
    
    (50,000
    )
    
    
    (57,454
    )Accounts payable and accrued liabilities
    
    
    (22,545
    )
    
    
    (79,959
    )NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    41,946
    
    
    
    119,261CASH FLOW FROM INVESTING ACTIVITIES:Purchase of oil and gas properties
    
    
    (81,988
    )
    
    
    Proceeds from sale of oil and gas property
    
    
    1,000,000NET CASH PROVIDED BY INVESTING ACTIVITIES
    
    
    918,012
    
    
    
    CASH FLOWS FROM FINANCING ACTIVITIES:Payments on line of credit
    
    
    (375,000
    )
    
    
    (108,488
    )NET CASH (USED IN) FINANCING ACTIVITIES
    
    
    (375,000
    )
    
    
    (108,488
    )NET INCREASE IN CASH
    
    
    584,958
    
    
    
    10,773CASH AT BEGINNING OF PERIOD
    
    
    51,704
    
    
    
    18,042CASH AT END OF PERIOD
    
    $
    636,662
    
    
    $
    28,815
 
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BAYOU CITY EXPLORATION, INC.
 
 NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
 1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 INTERIM REPORTING
   2. SALE OF PROPERTY:
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF OPERATIONS
 GENERAL OPERATIONS
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DESCRIPTION OF PROPERTIES
  Key Developed Properties :
 Bridges #1
 Rooke #1
 Chapman No. 75-1
 Garcitas #1:
 Rooke B-1
 Rooke #2
 Key Undeveloped Properties :
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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
  OPERATING REVENUES
  DIRECT OPERATING COSTS
  EXPLORATION COSTS
  OTHER OPERATING EXPENSES
  INCOME TAX PROVISION
  CAPITAL RESOURCES AND FINANCIAL CONDITION
   
 ITEM 3. CONTROLS AND PROCEDURES
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PART II
OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
     
 SIGNATURES
  BAYOU CITY EXPLORATION, INC.Date: May 10, 2010
    By:
    
    /s/ Robert D. BurrRobert D. BurrChief Executive Officer and PresidentBAYOU CITY EXPLORATION, INC.Date: May 10, 2010
    By:
    
    /s/ Stephen C. LarkinStephen C. LarkinChief Financial Officer  9