----

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| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d   ) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

| Nevada                                                         |   | 86-0884116                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other Jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| 201 St. Charles Ave., Suite 2558New Orleans, LA 70170 |
|-------------------------------------------------------|
| (Address of principal executive offices)              |

| (504) 599-5684                                             |
|------------------------------------------------------------|
| (Registrant’s telephone number, including area code) |

| Large accelerated filer | o                                               | Accelerated filer         | o      |
|-------------------------|-------------------------------------------------|---------------------------|--------|
| Non-accelerated filer   | o (do not check if a smaller reporting company) | Smaller reporting company | þ |

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| PART I – FINANCIAL INFORMATION |                                                                                        |   |   |
|--------------------------------------|---------------------------------------------------------------------------------------------|--------|--------|
|                                 |                                                                                        |   |   |   |
| Item 1 –                       | Financial Statements                                                                        |   |   | 3 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 2 -                             | Management’s Discussion And Analysis Of Financial Condition And Results Of Operations |   |   | 24 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 3 -                             | Quantitive And Qualitative Disclosures About Market Risk                                    |   |   | 25 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 4 –                       | Controls and Procedures                                                                |   |   | 26 |   |
|                                 |                                                                                        |   |   |   |   |
| PART II – OTHER INFORMATION    |                                                                                        |   |   |   |
|                                 |                                                                                        |   |   |   |   |
| Item 1 –                       | Legal Proceedings                                                                           |   |   | 27 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 1A –                      | Risk Factors                                                                           |   |   | 27 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 2 -                             | Unregistered Sales of Equity Securities                                                     |   |   | 27 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 3 –                       | Defaults Upon Senior Securities                                                             |   |   | 27 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 4 -                             | Submission of Matters to a Vote of Security Holders                                         |   |   | 28 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 5 –                       | Other Information                                                                           |   |   | 28 |   |
|                                 |                                                                                        |   |   |   |   |
| Item 6 –                       | Exhibits                                                                                    |   |   | 28 |   |
|                                 |                                                                                        |   |   |   |   |
| SIGNATURES                           |                                                                                        |   | 29     |   |

----

|                                                                                                                                                                   |   | June 30, 2011 (Unaudited) |      |   | December 31, 2010 (Audited) |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-----------|--------|-----------------------------|--------|
|                                                                                                                                                                   |   |                      |      |   |                        |   |
| ASSETS                                                                                                                                                                 |   |                      |      |   |                        |   |
|                                                                                                                                                                   |   |                      |      |   |                        |   |
| Cash and equivalents                                                                                                                                                   |   | $                         | 46,531    |   |                        | $      | 148 |   |
| Accounts receivable                                                                                                                                                    |   |                      | 113,740   |   |                        |   | - |   |
| Total current assets                                                                                                                                                   |   |                      | 160,271   |   |                        |   | 148 |   |
|                                                                                                                                                                   |   |                      |      |   |                        |   |   |   |
| Oil and gas properties (successful efforts)                                                                                                                            |   |                      |      |   |                        |   |   |   |
| Proved producing, net                                                                                                                                                  |   |                      | 1,259,052 |   |                        |   | - |   |
| Unproved                                                                                                                                                               |   |                      | 432,196   |   |                        |   | 252,424 |   |
|                                                                                                                                                                   |   |                      |      |   |                        |   |   |   |
| Property, plant and equipment, net                                                                                                                                     |   |                      | 622,284   |   |                        |   | 1,759 |   |
| Prepaid expenses and other                                                                                                                                             |   |                      | 65,000    |   |                        |   | - |   |
| TOTAL ASSETS                                                                                                                                                           |   | $                         | 2,538,803 |   |                        | $      | 254,331 |   |
|                                                                                                                                                                   |   |                      |      |   |                        |   |   |   |
| LIABILITIES                                                                                                                                                            |   |                      |      |   |                        |   |   |   |
|                                                                                                                                                                   |   |                      |      |   |                        |   |   |   |
| Accounts payable and accrued liabilities                                                                                                                               |   | $                         | 386,570   |   |                        | $      | 152.851 |   |
| Accrued salaries                                                                                                                                                       |   |                      | 6,300     |   |                        |   | 316,924 |   |
| Asset retirement obligation                                                                                                                                            |   |                      | 36,258    |   |                        |   | - |   |
| Notes and accrued interest to related parties                                                                                                                          |   |                      | -         |   |                        |   | 481,646 |   |
| Notes and accrued interest payable                                                                                                                                     |   |                      | 1,513,888 |   |                        |   | 534,278 |   |
| Total current liabilities                                                                                                                                              |   |                      | 1,943,016 |   |                        |   | 1,485,699 |   |
|                                                                                                                                                                   |   |                      |      |   |                        |   |   |   |
| TOTAL LIABILITIES                                                                                                                                                      |   | $                         | 1,943,016 |   |                        | $      | 1,485,699 |   |
|                                                                                                                                                                   |   |                      |      |   |                        |   |   |   |
| Commitments and contingencies                                                                                                                                          |   |                      |      |   |                        |   |   |   |
| Convertible Redeemable Class A Preferred Stock (12,000 and 0 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively. $5 redemption value ) |   |                      | 60,000    |   |                        |   | - |   |

----

|                                                                                                                                                                                             |   | June 30, 2011 (Unaudited) |       |   | December 31, 2010 (Audited) |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|--------|-----------------------------|--------|
|                                                                                                                                                                                             |   |                      |       |   |                        |   |
| STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                   |   |                      |       |   |                        |   |
|                                                                                                                                                                                             |   |                      |       |   |                        |   |
| Preferred stock - par value $0.001, 50 million shares authorized, none issued or outstanding at June 30, 2011                                                                                    |   |                      | -          |   |                        |   |   |
| Common stock – par value $0.001, 750 million shares authorized,  706,405,868 and 496,605,424 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively. |   |                      | 706,406    |   |                        |   | 496,605 |   |
| Additional paid in capital                                                                                                                                                                       |   |                      | 5,937,144  |   |                        |   | 527,483 |   |
| Common stock payable                                                                                                                                                                             |   |                      | 545,250    |   |                        |   | 204,000 |   |
| Accumulated loss - pre exploration stage                                                                                                                                                         |   |                      | (644,829   | )      |                        |   | (644,829 | ) |
| Accumulated loss - exploration stage                                                                                                                                                             |   |                      | (6,008,184 | )      |                        |   | (1,814,627 | ) |
|                                                                                                                                                                                             |   |                      |       |   |                        |   |   |   |
| Total stockholders' equity (deficit)                                                                                                                                                             |   |                      | 535,787    |   |                        |   | (1,231,368 | ) |
|                                                                                                                                                                                             |   |                      |       |   |                        |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                             |   | $                         | 2,538,803  |   |                        | $      | 254,331 |   |

----

|                                           |   | Six Months Ended June 30, |       |   | Three Months Ended June 30, |   |
|------------------------------------------------|--------|---------------------------|------------|--------|-----------------------------|--------|
|                                           |   | 2011 (Unaudited)          |       |   | 2010 (Unaudited)            |   |   | 2011 (Unaudited) |   |   | 2010 (Unaudited) |   |
|                                           |   |                      |       |   |                        |   |   |   |   |   |   |   |
| REVENUES                                       |   |                      |       |   |                        |   |   |   |   |   |   |   |
| Oil and gas revenues                           |   | $                         | 69,530     |   |                        | $      | - |   |   | $ | 69,530 |   |   | $ | - |   |
| Drilling revenues                              |   |                      | 41,505     |   |                        |   | - |   |   |   | 41,505 |   |   |   | - |   |
| Total revenues                                 |   |                      | 111,035    |   |                        |   | - |   |   |   | 111,035 |   |   |   | - |   |
|                                           |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                       |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|  Royalties                                |   |                      | 15,668     |   |                        |   | - |   |   |   | 15,668 |   |   |   | - |   |
|  Lease operating expenses                 |   |                      | 221,711    |   |                        |   | 12,225 |   |   |   | 114,996 |   |   |   | 12,225 |   |
|  Direct drilling costs                    |   |                      | 7,987      |   |                        |   | - |   |   |   | 7,987 |   |   |   | - |   |
|  Production taxes                         |   |                      | 3,205      |   |                        |   | - |   |   |   | 3,205 |   |   |   | - |   |
|  General and administrative               |   |                      | 2,835,615  |   |                        |   | 231,276 |   |   |   | 2,693,067 |   |   |   | 99,687 |   |
|  Depreciation, depletion and amortization |   |                      | 22,201     |   |                        |   | - |   |   |   | 19,855 |   |   |   | - |   |
|  Accretion of asset retirement obligation |   |                      | 710        |   |                        |   | - |   |   |   | 710 |   |   |   | - |   |
|  Interest expense                         |   |                      | 126,793    |   |                        |   | 6,413 |   |   |   | 115,390 |   |   |   | 3,290 |   |
|  Total expenses                           |   |                      | 3,233,890  |   |                        |   | 249,914 |   |   |   | 2,970,878 |   |   |   | 115,202 |   |
|                                           |   |                      |       |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|  Operating income / (loss)                |   |                      | (3,122,855 | )      |                        |   | (249,914 | ) |   |   | (2,859,843 | ) |   |   | (115,202 | ) |

----

|                                                                 |   | Six Months Ended June 30, |        |   | Three Months Ended June 30, |   |
|----------------------------------------------------------------------|--------|---------------------------|-------------|--------|-----------------------------|--------|
|                                                                 |   | 2011 (Unaudited)          |        |   | 2010 (Unaudited)            |   |   | 2011 (Unaudited) |   |   | 2010 (Unaudited) |   |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |
| OTHER INCOME AND EXPENSE ITEMS                                       |   |                      |        |   |                        |   |   |   |   |   |   |   |
|  Gains / (losses) on dispositions of properties                 |   |                      | -           |   |                        |   | 47,223 |   |   |   | - |   |   |   | - |   |
|  Gains / (losses) on retirement of debt                         |   |                      | (1,070,702  | )      |                        |   | - |   |   |   | (1,087,989 | ) |   |   | - |   |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|  NET LOSS                                                       |   | $                         | (4,193,557  | )      |                        | $      | (202,691 | ) |   | $ | (3,947,832 | ) |   | $ | (115,202 | ) |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|  Net loss per common shares - basic and diluted                 |   | $                         | (0.01       | )      |                        | $      | - |   |   | $ | (0.01 | ) |   | $ | - |   |
|  Weighted average common shares outstanding - basic and diluted |   |                      | 579,158,527 |   |                        |   | 496,605,424 |   |   |   | 643,027,415 |   |   |   | 496,605,424 |   |

----

|                                                                                        |   | Six Months Ended June 30, |       |
|---------------------------------------------------------------------------------------------|--------|---------------------------|------------|
|                                                                                        |   | 2011                      |       |   | 2010 |   |
|                                                                                        |   |                      |       |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                        |   |                      |       |   |   |   |
| Net loss                                                                                    |   | $                         | (4,193,557 | ) |   | $ | (202,691 | ) |
|                                                                                        |   |                      |       |   |   |   |   |   |
| Adjustments to reconcile net loss to net cash provided by / (used in) operating activities: |   |                      |       |   |   |   |   |   |
| Depreciation, depletion and amortization                                                    |   |                      | 22,201     |   |   |   | - |   |
| Gain on sales of oil and gas interests                                                      |   |                      | -          |   |   |   | (47,223 | ) |
| (Gain)/loss on retirement of debt                                                           |   |                      | 1,070,702  |   |   |   | - |   |
| Shares owed for payment of interest on notes payable                                        |   |                      | 39,000     |   |   |   | - |   |
| Amortization of discount on notes payable                                                   |   |                      | 43,972     |   |   |   | - |   |
| Accretion of asset retirement obligation                                                    |   |                      | 710        |   |   |   | - |   |
| Stock based compensation (shares issued and owed)                                           |   |                      | 2,093,743  |   |   |   | 36,828 |   |
| Interest imputed on related-party notes                                                     |   |                      | 9,564      |   |   |   | 3,906 |   |
|                                                                                        |   |                      |       |   |   |   |   |   |
| Changes in operating assets and liabilities:                                                |   |                      |       |   |   |   |   |   |
| Accounts receivable                                                                         |   |                      | (113,740   | ) |   |   | - |   |
| Accounts payable and accrued liabilities                                                    |   |                      | 293,101    |   |   |   | 9,204 |   |
| Officer and director liabilities                                                            |   |                      | 30,000     |   |   |   | 117,739 |   |
| Interest payable                                                                            |   |                      | (1,863     | ) |   |   | 2,507 |   |
| Prepaid expenses                                                                            |   |                      | (65,000    | ) |   |   | - |   |
| Net cash provided by / (used in) operating activities                                       |   |                      | (771,167   | ) |   |   | (79,730 | ) |

----

|                                                  |   | Six Months Ended June 30, |      |
|-------------------------------------------------------|--------|---------------------------|-----------|
|                                                  |   | 2011                      |      |   | 2010 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                  |   |                      |      |   |   |   |
| Acquisitions of oil and gas properties                |   |                      | (65,000   | ) |   |   | (115,975 | ) |
| Development of oil and gas properties                 |   |                      | -         |   |   |   | (19,787 | ) |
| Purchases of fixed assets                             |   |                      | (239,885  | ) |   |   | - |   |
| Proceeds from sales of oil and gas properties         |   |                      | -         |   |   |   | 35,000 |   |
| Net cash provided by / (used in) investing activities |   |                      | (304,885  | ) |   |   | (100,762 | ) |
|                                                  |   |                      |      |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                  |   |                      |      |   |   |   |   |   |
| Expenses paid by related parties-cash                 |   |                      | -         |   |   |   | 1,155 |   |
| Advances from related parties, net                    |   |                      | 769,685   |   |   |   | 116,556 |   |
| Proceeds from notes payable                           |   |                      | 340,500   |   |   |   | 75,000 |   |
| Principal payments on notes payable                   |   |                      | (205,500  | ) |   |   | - |   |
| Common stock issued for cash                          |   |                      | 197,750   |   |   |   | - |   |
| Common stock payable for cash                         |   |                      | 20,000    |   |   |   | - |   |
|                                                  |   |                      |      |   |   |   |   |   |
| Net cash provided by / (used in) financing activities |   |                      | 1,122,435 |   |   |   | 192,711 |   |

----

|                                                                                  |   | Six Months Ended June 30, |      |
|---------------------------------------------------------------------------------------|--------|---------------------------|-----------|
|                                                                                  |   | 2011                      |      |   | 2010 |   |
| Net increase / (decrease) in cash and cash equivalents                                |   |                      | 46,383    |   |   |   | 12,219 |   |
| Cash and cash equivalents, beginning of period                                        |   |                      | 148       |   |   |   | - |   |
| Cash and cash equivalents, end of period                                              |   | $                         | 46,531    |   |   | $ | 12,219 |   |
|                                                                                  |   |                      |      |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION                                                    |   |                      |      |   |   |   |   |   |
| Cash paid for interest                                                                |   | $                         | 6,000     |   |   | $ | - |   |
| Cash paid for income taxes                                                            |   |                      | -         |   |   |   | - |   |
| Shares issued for retirement of debt                                                  |   |                      | 1,737,566 |   |   |   | - |   |
| Preferred and common shares issued to acquire oil and gas properties and fixed assets |   |                      | 445,100   |   |   |   | - |   |
| Acquisition of oil and gas properties with debt                                       |   |                      | 1,296,017 |   |   |   | 19,500 |   |
| Preferred shares converted to common shares                                           |   |                      | 120,000   |   |   |   |   |   |
| Shares owed for conversion of notes payable                                           |   |                      | 390,000   |   |   |   |   |   |
| Assumption of asset retirement obligation with acquisition of oil and gas properties  |   |                      | 35,548    |   |   |   |   |   |
| Shares issued to relieve stock payable                                                |   |                      | 204,000   |   |   |   |   |   |
| Shares issued to shareholder to reimburse issuances on behalf of the company          |   |                      | 26,809    |   |   |   |   |   |

----

----

----

----

----

| Initial cash paid                                     |   |   | 50,000  |   |
|-------------------------------------------------------|--------|--------|---------|--------|
| Note payable in 12 installments                       |   |   | 300,000 |   |
| 6 million shares of common stock                      |   |   | 83,400  |   |
| 36,000 shares of Class A Convertible Preferred shares |   |   | 180,000 |   |
| Total value of consideration paid                     |   | $      | 613,400 |   |

| Purchase price allocated to:   |   |   |    |
|--------------------------------|--------|--------|---------|
| Tangible well equipment        |   |   | 191,775 |   |
| Intangible lease costs         |   |   | 421,625 |   |
| Total purchase price allocated |   | $      | 613,400 |   |

----

| Purchase price allocated to:   |   |   |    |
|--------------------------------|--------|--------|---------|
| Tangible well equipment        |   |   | 29,800  |   |
| Intangible lease costs         |   |   | 140,200 |   |
| Total purchase price allocated |   | $      | 170,000 |   |

|                        |   | 06/30/11 |      |   | 12/31/10 |   |
|-----------------------------|--------|----------|-----------|--------|----------|--------|
| Proved developed producing: |   |     |      |   |     |   |
| Texas                       |   | $        | 1,260,823 |   |     | $      | - |   |
| Less: accumulated depletion |   |     | (1,771    | )      |     |   | - |   |
| Total                       |   |     | 1,259,052 |   |     |   | - |   |
|                        |   |     |      |   |     |   |   |   |
| Unproved:                   |   |     |      |   |     |   |   |   |
| Belize                      |   |     | 202,950   |   |     |   | 202,950 |   |
| Texas                       |   |     | 179,772   |   |     |   | - |   |
| Tennessee                   |   |     | 49,474    |   |     |   | 49,474 |   |
| Total                       |   | $        | 432,196   |   |     | $      | 252,424 |   |

|                                                |   | 06/30/11 |    |   | 12/31/10 |   |
|-----------------------------------------------------|--------|----------|---------|--------|----------|--------|
|                                                |   |     |    |   |     |   |
|  Drilling rigs and related equipment           |   | $        | 516,112 |   |     | $      | 759 |   |
|  Office equipment                              |   |     | 3,359   |   |     |   | - |   |
|  Furniture and fixtures                        |   |     | 1,000   |   |     |   | 1,000 |   |
|  Aircraft                                      |   |     | 72,250  |   |     |   | - |   |
|  Vehicles                                      |   |     | 25,520  |   |     |   | - |   |
|  Equipment                                     |   |     | 24,598  |   |     |   | - |   |
|  Total property, plant and equipment - at cost |   |     | 642,839 |   |     |   | 1,759 |   |
|  Less: accumulated depreciation                |   |     | (20,555 | )      |     |   | - |   |
|  Net property, plant and equipment - other     |   | $        | 622,284 |   |     | $      | 1,759 |   |

----

----

----

----

| ●   | On February 14, 2011, we issued 10,296,609 shares for cash and received $60,750. |
|---------------------|----------------------------------------------------------------------------------|

| ●   | On March 1, 2011, we issued 1 million shares to a consultant.  We valued the shares at the closing price on the date of grant and recorded a charge to general and administrative expense of $8,200. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on March 1, 2011, we issued 2,250,000 shares to our previous operator in Tennessee to settle contractual amounts owed by us to him.  We valued the shares at the closing price on the grant date and reduced his liability from $20,000 to $1,550. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On March 3, 2011, we issued 23,500,000 shares to our seismic consultant in Belize, Patrick Wayne Maloy.  15 million of these shares were for services rendered in 2010.  We reduced our stock payable to the consultant from $204,000 to zero.  8.5 million of these shares were in payment of an aircraft for use on our Belize project.  These shares were valued at the closing price on the date of grant and we recorded our cost basis in the aircraft at $72,250. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on March 3, 2011, we issued 13,597,874 shares to a consultant for work performed during 2009 and 2010.  We valued the shares at the closing price on the grant date, reduced the liability from $94,345 to $23,500 and recorded a loss on retirement of debt in the amount of $69,737. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On March 16, 2011, we issued 4 million shares to a previous director and recorded.  We valued the shares at the closing price on the grant date and charged general and administrative expenses with $34,000. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On March 29, 2010, we issued 14 million shares to our previous CEO and Chairman, Randall Newton, for work performed during 2009 and 2010, and repayment of cash contributions made by him.  We valued the shares at the closing price on the grant date, reduced our liability to him from $269,024 to zero, and recorded a gain on retirement of debt of $87,024. This party was not considered to be related to the Company based on his resignation being during 2009 and he not holding a material share interest. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On March 31, 2011, we issued 7,900,000 shares to our current CEO and Chairman, Andrew Reid in payment for services.  We valued the shares at the closing price on the grant date, and reduced our liability to him from $109,000 to $6,300. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On April 6, 2011 we issued 1.5 million shares to a consultant for commissions on our Belize acquisition, valuing them at the closing price on the grant date and charging lease operating expense with $22,200. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On April 8, 2011, we issued 6 million shares to the seller of one of our Texas acquisitions (see Note 5).  We valued the shares at the closing price on the grant date and included the value of $83,400 the stock in our carrying value of the Texas leases. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On May 10, 2011, we issued 3.2 million shares for conversion of tranches 1 and 2 associated with our Texas leases (see Note 5).  We retired $120,000 mezzanine liability included in Commitments and Contingencies.  The conversion was according to the terms of the agreement.  Therefore, no gain or loss was recognized. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On April 27, 2011, we issued 5,675,989 shares to an affiliate for services.  We valued the shares at the closing price on the grant date and charged general and administrative expenses with $306,503. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ●   | On May 12, 2011, we issued 1 million shares to our President and Chief Operating Officer as a signing bonus.  We valued the shares on the grant date and charged general and administrative expense with $40,000. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On June 22, 2011 we issued 2,333,333 shares to acquire certain equipment.  We valued the shares at the closing price on the date of grant, or $91,000, and recorded the equipment as an asset equal to the cash price of $77,000.   The difference of $14,000 is included in general and administrative expenses. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on June 22, 2011 we issued 7,050,000 shares to various consultants for services.  We valued the shares at the closing price on the grant date and charged general and administrative expense with $255,340. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On June 22, 2011, we issued 2,367,886 to certain creditors of a company controlled by our Chairman and Chief Executive Officer, Andrew Reid.  We valued the shares at the closing price on the grant date, crediting equity with $95,483, reducing our liability to the affiliate company by $67,083 and recording a loss on extinguishment of debt in the amount of $28,400. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on June 22, 2011 we issued 11 million shares to the same company controlled by our Chairman and Chief Executive Officer, Andrew Reid in conversion of the outstanding balance of $664,190.  We valued the shares at the closing price on the grant date, crediting equity with $418,000, reducing our liability by $664,190 with an offsetting gain on extinguishment of debt.  Because the gain here and loss above were from a related party, we included the net gain in Additional Paid in Capital rather than recognizing a gain. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on June 22, 2011, we issued 2.5 million shares to two creditors who loaned us money to acquire the leases in Tennessee to convert their debt balances to equity.  We valued the shares at the closing price on the grant date, crediting equity with $97,500, reducing our liability by $55,000 with an offsetting loss on extinguishment of debt of $42,500. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on June 30, 2011, we issued 8.25 million shares to convert certain notes payable for debts we owed in connection with our Tennessee and Belize acquisitions.  We valued the shares at the closing price on the grant date, crediting equity with $330,000, reducing interest and principal due to these creditors by $125,761 with an offsetting loss on extinguishment of debt of $204,239. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on June 22, 2011, we issued 450,000 shares in connection with our acquisition of certain heavy equipment.  We valued the shares at the closing price on the date of grant, or $18,450, and recorded the equipment as an asset equal to the cash price of $18,000.   The difference of $450 is included in Asset Impairments. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on June 22, 2011, we issued 5,670,000 shares to several accredited investors for $137,000 in cash. |
|---------------------|---------------------------------------------------------------------------------------------------------|

| ●   | Also on June 22, 2011, we issued an affiliate 77,258,753 shares as reimbursement for personal shares the affiliate used in various deals in Belize, Tennessee, Louisiana and Texas.  We valued the shares at the closing price on the grant date and credited Additional Paid in Capital with $3,285,170, charging Additional Paid in Capital with $483,577, liabilities with $119,500, loss on conversion of debt of $980,000 and operating expense with $1,702,093. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On May 20, 2011 the Company entered into a note agreement for $100,000 that required payment of 1,000,000 shares as an inducement to the lender. Due to the short term nature of the note the full value of the shares of $39,000 was expensed and recorded to stock payable with the agreement. These shares remained unissued as of June 30, 2011, and are recorded within stock payable as of June 30, 2011. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On May 20, 2011, the Company agreed to issue 1,500,000 shares for $20,000 of cash proceeds received. These shares remained unissued as of June 30, 2011, and are recorded within stock payable as of June 30, 2011. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ●   | On June 25, 2011, the Company agreed to issue 2,750,000 shares to convert related party liabilities owed of $105,000. The value of the shares owed was equal to $110,000 which is recorded within stock payable. The difference between the share value and the value of the liabilities relieved was recorded as a loss for $5,000 due to these parties being employed by the company and the excess being considered as additional compensation to the recipients. The value of the shares owed remained in stock payable as of June 30, 2011. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On June 28,2011, the Company agreed to issue 8,919,173 shares to convert the acquisition liability owed to C&C Petroleum of $285,000. The value of the shares owed was equal to $356,250 which is recorded within stock payable. The difference between the share value and the value of the liabilities relieved was recorded as a loss for $71,250. The value of the shares owed remained in stock payable as of June 30, 2011. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                             |   | 06/30/11 |    |   | 12/31/11 |   |
|------------------------------------------------------------------|--------|----------|---------|--------|----------|--------|
| Trade accounts payable                                           |   | $        | 172,522 |   |     | $      | 152,851 |   |
| Royalties payable                                                |   |     | 15,668  |   |     |   | - |   |
| Liabilities associated with our reverse merger in December, 2008 |   |     | 200,380 |   |     |   | - |   |
| Total                                                            |   | $        | 386,570 |   |     | $      | 152,851 |   |

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|                                                       |   | 06/30/11 |   |   | 12/31/10 |   |
|------------------------------------------------------------|--------|----------|--------|--------|----------|--------|
| Obligations acquired upon purchase of producing properties |   | $        | 35,548 |   |     | $      | - |   |
| Accretion to balance sheet date                            |   |     | 710    |   |     |   | - |   |
| Asset retirement obligation at balance sheet date          |   | $        | 36,258 |   |     | $      | - |   |

| ●   | Oil and gas production and |
|---------------------|----------------------------|

| ●   | Drilling |
|---------------------|----------|

|                                      |   | Six Months Ended June 30, 2011 |     |
|-------------------------------------------|--------|--------------------------------|----------|
|                                      |   | Oil and Gas Production         |     |   | Drilling |   |   | Total |   |
|                                      |   |                           |     |   |   |   |   |   |   |
| Net revenues                              |   | $                              | 69,530   |   |   | $ | 41,505 |   |   | $ | 111,035 |   |
| Direct costs                              |   |                           | 483,852  |   |   |   | 29,774 |   |   |   | 513,626 |   |
| Loss before interest and taxes            |   |                           | (414,322 | ) |   |   | 11,731 |   |   |   | (402,591 | ) |
|                                      |   |                           |     |   |   |   |   |   |   |   |   |   |
| Corporate items not allocated to segments |   |                           |     |   |   |   |   |   |   |   | 3,670,105 |   |
| Interest expense                          |   |                           |     |   |   |   |   |   |   |   | 120,861 |   |
| Net loss before income tax effect         |   |                           |     |   |   |   |   |   |   | $ | (4,193,557 | ) |

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|                                      |   | Three Months Ended June 30, 2011 |     |
|-------------------------------------------|--------|----------------------------------|----------|
|                                      |   | Oil and Gas Production           |     |   | Drilling |   |   | Total |   |
|                                      |   |                             |     |   |   |   |   |   |   |
| Net revenues                              |   | $                                | 69,530   |   |   | $ | 41,505 |   |   | $ | 111,035 |   |
| Direct costs                              |   |                             | 387,028  |   |   |   | 29,774 |   |   |   | 416,802 |   |
| Loss before interest and taxes            |   |                             | (317,498 | ) |   |   | 11,731 |   |   |   | (305,767 | ) |
|                                      |   |                             |     |   |   |   |   |   |   |   |   |   |
| Corporate items not allocated to segments |   |                             |     |   |   |   |   |   |   |   | 3,532,607 |   |
| Interest expense                          |   |                             |     |   |   |   |   |   |   |   | 109,458 |   |
| Net loss before income tax effect         |   |                             |     |   |   |   |   |   |   | $ | (3,947,832 | ) |

| ●   | We paid $24,427 in cash to a major shareholder in repayment of cash contributions previously made. |
|---------------------|----------------------------------------------------------------------------------------------------|

| ●   | We accrued $90,000 in compensation costs to our Chairman and CEO and paid him 9.4 million shares, reducing the balance owed to Mr. Reid to $6,300 from $169,000. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | We issued 14 million shares to our previous CEO and Chairman, Randall Newton, for work performed during 2009 and 2010, and repayment of cash contributions made by him.  We valued the shares at the closing price on the grant date, reduced our liability to him from $269,024 to zero, and recorded a gain on retirement of debt of $87,024. This party was not considered to be related to the Company at the time of the conversion based on his resignation being during 2009 and he not holding a material share interest. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | We borrowed $1,746,411 from an entity owned by our Chairman and CEO, Andrew Reid, and repaid $227,081 in cash.  Additionally, we issued the affiliate entity, or creditors of the affiliate entity, shares which we recorded as a reduction of our liability to the affiliate.  The aggregate amount of shares issued for this purpose was 11 million which reduced the liability by $664,190.  At June 30, 2011, nothing was owed to or from this entity. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | During the three months ended June 30, 2011, the balance of a note issued in December, 2010 for the purchase of an aircraft used in our Belize operation was paid by an entity controlled by our Chief Executive Officer and Board Chairman, Andrew Reid. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

----

|   | As of December 31, 2010, we did not maintain effective controls over the control environment.  Specifically we have not developed and effectively communicated to our employees its accounting policies and procedures.  This has resulted in inconsistent practices.  Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-B.  Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute e a material weakness. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | As of December 31, 2010, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements.   Accordingly, management has determined that this control deficiency constitutes a material weakness. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Exhibit No. |   | Description of Exhibit                                                                                                                                                                           |
|-------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1         |   | Articles of Incorporation, as filed August 1, 1997 (included as Exhibit 3.1 to the Form 10-SB12G filed November 10, 1999, and incorporated herein by reference).                                 |
| 3.2         |   | Bylaws (included as Exhibit 3.2 to the Form 10-SB12G filed November 10, 1999, and incorporated herein by reference).                                                                             |
| 3.3         |   | Articles of Amendment to the Articles of Incorporation, as filed August 23, 1997 (included as Exhibit 3.3 to the Form 10-SB12G filed November 10, 1999, and incorporated herein by reference).   |
| 3.4         |   | Articles of Amendment to the Articles of Incorporation, as filed November 20, 1998 (included as Exhibit 3.4 to the Form 10-SB12G filed November 10, 1999, and incorporated herein by reference). |
| 3.5         |   | Articles of Amendment to the Articles of Incorporation, as filed May 16, 2003 (included as Exhibit 3.5 to the Form 10-SB12G filed November 10, 1999, and incorporated herein by reference).      |
| 4.1         |   | 2003 Stock Benefit Plan, dated July, 1, 2003 (included as Exhibit 4.1 to the Form S-8 filed July 23, 2003, and incorporated herein by  reference).                                     |
| 4.2         |   | Form of Class A Warrant (included as Exhibit 4 to the Form 8-K filed March 15, 2005, and incorporated herein by reference).                                                                      |
| 4.3         |   | Form of Class B Warrant (included as Exhibit 4 to the Form 8-K filed March 15, 2005, and incorporated herein by reference).                                                                      |
| 4.4         |   | Form of Class C Warrant (included as Exhibit 4 to the Form 8-K filed March 15, 2005, and incorporated herein by reference).                                                                      |
| 4.5         |   | Subscription Agreement between the Company and various subscribers  (included as Exhibit 10.1 to the Form SB-2/A filed September 14, 2005, and incorporated herein by reference).      |
| 4.6         |   | Subscription Agreement between the Company and various subscribers (included as Exhibit 4 to the Form 8-K filed March 15, 2005, and incorporated herein by reference).                           |
| 14.1        |   | Corporate Code of Ethics (included as Exhibit 14 to From 10-KSB filed March 16, 2004, and incorporated herein by reference).                                                                     |
| 2.1         |   | Subsidiaries of the registrant (filed herewith).                                                                                                                                                 |
| 31.1        |   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).                                                                             |
| 32.1        |   | Certification of Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                               |

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|                  | Treaty Energy Corporation |                                  |
|-----------------------|---------------------------|---------------------------------------|
|                  |                      |                                  |   |
| Date: August 25, 2011 |  By:                 | /s/ Andrew V. Reid                    |   |
|                  |                      | Andrew V. ReidChief Executive Officer |   |