SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





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





FOR THE
QUARTERLY PERIOD ENDED JUNE 30,
2010





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





FOR THE
TRANSITION PERIOD FROM ___________ TO _____________.




Commission
file number: 000-28015




TREATY ENERGY
      CORPORATION(Exact name of
      registrant as specified in its charter)




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





440
      Louisiana, Suite 1400
              Houston,
      Texas 77002(Address
      of principal executive offices)





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





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes þNo o





Indicate
by check mark whether the registrant is a large 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 o
            Accelerated
      filer oNon-accelerated
      filer   o    (do
      not check if a smaller reporting company)
            Smaller
      reporting companyþ





Indicate
by check mark whether the registrant is a shell company (as defined in rule
12b-2 of the Exchange Act). Yes oNo þ





The
number of shares of the registrant’s common stock outstanding as of August 15,
2010, was 496,605,424.












TREATY
ENERGY CORPORATION
 FORM
10-Q
 
 INDEX
 
 PART
      I  FINANCIAL INFORMATIONItem 1  Financial Statements
                1Item 2 - Managements Discussion And Analysis Of Financial Condition And
      Results Of Operations
                13Item 3 - Quantitive And Qualitative Disclosures About Market
      Risk
                15Item 4  Controls and Procedures
                15PART
      II  OTHER INFORMATIONItem 1  Legal Proceedings
                16Item 1A  Risk Factors
                16Item 2 - Unregistered Sales of Equity Securities
                16Item 3  Defaults Upon Senior Securities
                17Item 4 - Submission of Matters to a Vote of Security
    Holders
                17Item 5  Other Information
                17Item 6  Exhibits
                17SIGNATURES
                18
 
   PART
I – FINANCIAL INFORMATION
   ITEM
1 – FINANCIAL STATEMENTS
  TREATY ENERGY
CORPORATION
 (An
Exploration Stage Company)
 BALANCE
SHEETS
  June
      30, 2010 (Unaudited)
              
              
              Dec
      31, 2009
                (Audited)ASSETSCash
      and equivalents
              
              $
              12,219
              
              
              $
              -Other
      receivables
              
              
              85,000
              
              
              
              -Total
      current assets
              
              
              97,219
              
              
              
              -Oil
      and gas properties (successful efforts method)
              
              
              137,485
              
              
              
              -Less:
      accumulated amortization
              
              
              -
              
              
              
              -Net
      oil and gas properties
              
              
              137,485
              
              
              
              -Prepaid
      expenses and other
              
              
              6,678
              
              
              
              6,678TOTAL
      ASSETS
              
              $
              241,382
              
              
              $
              6,678LIABILITIESAccounts
      payable and accrued liabilities
              
              $
              369,224
              
              
              $
              360,020Notes
      and accrued interest to related parties
              
              
              370,387
              
              
              
              201,641Notes
      and accrued interest payable
              
              
              380,057
              
              
              
              162,501Total
      current liabilities
              
              
              1,119,668
              
              
              
              724,162TOTAL
      LIABILITIES
              
              
              1,119,668
              
              
              
              724,162STOCKHOLDERS'
      DEFICITPreferred
      Stock, par value $0.001, 50 million shares authorized, none issued and
      outstanding at June 30, 2010 or December 31, 2009
              
              
              -
              
              
              
              -Common
      stock – par value $0.001, 500 million shares
      authorized.  496,605,424 shares issued and outstanding at June
      30, 2010 and December 31, 2009.
              
              
              496,605
              
              
              
              496,605Additional
      paid in capital
              
              
              517,577
              
              
              
              475,688Accumulated
      loss - pre exploration stage
              
              
              (644,829
              )
              
              
              (644,829
              )Accumulated
      loss – exploration stage
              
              
              (1,247,639
              )
              
              
              (1,044,948
              )Total
      stockholders' deficit
              
              
              (878,286
              )
              
              
              (717,484
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              241,382
              
              
              $
              6,678
 
 The
accompanying notes are an integral part of these financial
statements.
  1
  TREATY
ENERGY CORPORATION
 (An
Exploration Stage Company)
 STATEMENTS
OF OPERATIONS
 
 Six
      months ended June 30,
              
              
              Three
      months ended June 30,2010
                (Unaudited)
              
              
              2009
                (Unaudited)
              
              
              2010
                (Unaudited)
              
              
              2009
                (Unaudited)
              
              
              From
      Re Entry to the Exploration Stage (7/1/09) to 06/30/10REVENUESSales
      of oil
              
              $
              -
              
              
              $
              7,406
              
              
              $
              -
              
              
              $
              1,739
              
              
              $
              -Total
      revenues
              
              
              -
              
              
              
              7,406
              
              
              
              -
              
              
              
              1,739
              
              
              
              -EXPENSESLease
      operating expenses
              
              
              12,225
              
              
              
              27,813
              
              
              
              12,225
              
              
              
              15,982
              
              
              
              27,408Transportation
      costs
              
              
              -
              
              
              
              809
              
              
              
              -
              
              
              
              294
              
              
              
              (354
              )Production
      taxes
              
              
              -
              
              
              
              366
              
              
              
              -
              
              
              
              352
              
              
              
              (352
              )Impairment
      of oil and gas properties
              
              
              -
              
              
              
              
              
              
              
              -
              
              
              
              -
              
              
              
              411,412General
      and administrative
              
              
              231,276
              
              
              
              109,058
              
              
              
              99,687
              
              
              
              39,219
              
              
              
              843,779Depreciation,
      depletion and amortization
              
              
              -
              
              
              
              1,520
              
              
              
              -
              
              
              
              321
              
              
              
              -Accretion
      of asset retirement obligation
              
              
              -
              
              
              
              898
              
              
              
              -
              
              
              
              449
              
              
              
              -Interest
      expense
              
              
              6,413
              
              
              
              17,201
              
              
              
              3,290
              
              
              
              10,820
              
              
              
              12,969Total
      expenses
              
              
              249,914
              
              
              
              157,665
              
              
              
              115,202
              
              
              
              67,437
              
              
              
              1,294,862Operating
      income / (loss)
              
              
              (249,914
              )
              
              
              (150,259
              )
              
              
              (115,202
              )
              
              
              (65,698
              )
              
              
              (1,294,862
              )OTHER
      INCOME AND EXPENSE ITEMSGains
      / (losses) on dispositions of properties
              
              
              47,223
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              47,223NET
      LOSS
              
              $
              (202,691
              )
              
              $
              (150,259
              )
              
              $
              (115,202
              )
              
              $
              (65,698
              )
              
              $
              (1,247,639
              )Net
      loss per common shares - basic and diluted
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Weighted
      average common shares outstanding - basic and diluted
              
              
              496,605,424
              
              
              
              460,092,407
              
              
              
              496,605,424
              
              
              
              460,110,701
 
  
 The
accompanying notes are an integral part of these financial
statements.
  2
  
 TREATY
ENERGY CORPORATION
 (An
Exploration Stage Company)
 STATEMENT
OF SHAREHOLDERS’ DEFICIT
 
 
 Common
      Stock
              
              
              Additional
              
              
              Pre-Exploration
              
              
              ExplorationShares
              
              
              Amount
              
              
              Paid
      In Capital
              
              
              Stage
      Losses
              
              
              Stage
      Losses
              
              
              TotalBalances,
      December 31, 2008
              
              
              460,061,553
              
              
              $
              460,062
              
              
              $
              (629,320
              )
              
              $
              -
              
              
              $
              (487,587
              )
              
              $
              (656,845
              )Cashless
      exercise of options
              
              
              49,148
              
              
              
              49
              
              
              
              (49
              )
              
              
              
              
              
              
              
              
              
              
              -Cash
      provided by a related party
              
              
              
              
              
              
              
              
              
              
              104,000
              
              
              
              
              
              
              
              
              
              
              
              104,000Expenses
      paid on behalf of the Company by a related party:Paid
      in cash
              
              
              
              
              
              
              
              
              
              
              61,822
              
              
              
              
              
              
              
              
              
              
              
              61,822Paid
      in stock
              
              
              
              
              
              
              
              
              
              
              162,695
              
              
              
              
              
              
              
              
              
              
              
              162,695Interest
      imputed on notes payable
              
              
              
              
              
              
              
              
              
              
              10,090
              
              
              
              
              
              
              
              
              
              
              
              10,090Acquisitions
      of oil and gas properties
              
              
              7,000,000
              
              
              
              7,000
              
              
              
              168,000
              
              
              
              
              
              
              
              
              
              
              
              175,000Stock
      for services
              
              
              4,000,000
              
              
              
              4,000
              
              
              
              48,400
              
              
              
              
              
              
              
              
              
              
              
              52,400Sale
      of stock for cash
              
              
              3,000,000
              
              
              
              3,000
              
              
              
              36,000
              
              
              
              
              
              
              
              
              
              
              
              39,000Officer
      and director compensation
              
              
              7,886,776
              
              
              
              7,886
              
              
              
              316,831
              
              
              
              
              
              
              
              
              
              
              
              324,717Retirement
      of debt
              
              
              14,607,947
              
              
              
              14,608
              
              
              
              197,219
              
              
              
              
              
              
              
              
              
              
              
              211,827Net
      loss, year ended 12/31/09
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (644,829
              )
              
              
              (557,361
              )
              
              
              (1,202,190
              )-Balances,
      December 31, 2009
              
              
              496,605,424
              
              
              $
              496,605
              
              
              $
              475,688
              
              
              $
              (644,829
              )
              
              $
              (1,044,948
              )
              
              $
              (717,484
              )Expenses
      paid by a related party
              
              
              
              
              
              
              
              
              
              
              1,155
              
              
              
              
              
              
              
              
              
              
              
              1,155Interest
      imputed on notes payable
              
              
              
              
              
              
              
              
              
              
              3,906
              
              
              
              
              
              
              
              
              
              
              
              3,906Stock
      based compensation
              
              
              
              
              
              
              
              
              
              
              36,828
              
              
              
              
              
              
              
              
              
              
              
              36,828Net
      loss, six months ended 06/30/10
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (202,691
              )
              
              
              (202,691
              )Balances,
      June 30, 2010 (unaudited)
              
              
              496,605,424
              
              
              $
              496,605
              
              
              $
              517,577
              
              
              $
              (644,829
              )
              
              $
              (1,247,639
              )
              
              $
              (878,286
              )
 
  The
accompanying notes are an integral part of these financial
statements.
 
  3
  TREATY
ENERGY CORPORATION
 (An
Exploration Stage Company)
 STATEMENTS
OF CASH FLOWS
 (Unaudited)
 
 Six
      Months Ended June 30,
              
              
              From Re Entry to
      the2010
                (Unaudited)
              
              
              2009
                (Unaudited)
              
              
              Exploration
      Stage
                (7/1/09)
      to 6/30/10CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
              
              $
              (202,691
              )
              
              $
              (150,259
              )
              
              $
              (1,247,639
              )Adjustments
      to reconcile net loss to net cash provided by / (used in) operating
      activitiesDepreciation,
      depletion and amortization
              
              
              -
              
              
              
              1,520
              
              
              
              -Gain
      on sales of oil and gas interests
              
              
              (47,223
              )
              
              
              -
              
              
              
              (47,223
              )Impairment
      of oil and gas assets
              
              
              -
              
              
              
              -
              
              
              
              411,412Amortization
      of discount on related-party note
              
              
              -
              
              
              
              7,266
              
              
              
              -Accretion
      of asset retirement obligation
              
              
              -
              
              
              
              898
              
              
              
              -Stock
      based compensation
              
              
              36,828
              
              
              
              -
              
              
              
              413,945Interest
      imputed on related-party notes
              
              
              3,906
              
              
              
              6,184
              
              
              
              7,812Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              -
              
              
              
              223
              
              
              
              -Accounts
      payable and accrued liabilities
              
              
              9,204
              
              
              
              (37,805
              )
              
              
              28,892Officer
      and director liabilities
              
              
              117,739
              
              
              
              -
              
              
              
              288,131Interest
      payable
              
              
              2,507
              
              
              
              2,233
              
              
              
              4,847Prepaid
      expenses
              
              
              -
              
              
              
              -
              
              
              
              (6,678
              )Net
      cash provided by / (used in) operating activities
              
              
              (79,730
              )
              
              
              (169,740
              )
              
              
              (146,501
              )CASH
      FLOWS FROM INVESTING ACTIVITIESAcquisitions
      of oil and gas properties
              
              
              (115,975
              )
              
              
              -
              
              
              
              (115,975
              )Development
      of oil and gas properties
              
              
              (19,787
              )
              
              
              -
              
              
              
              (19,787
              )Proceeds
      from sales of oil and gas interests
              
              
              35,000
              
              
              
              -
              
              
              
              35,000Net
      cash provided by / (used in) investing activities
              
              
              (100,762
              )
              
              
              -
              
              
              
              (100,762
              )
  4
  TREATY
ENERGY CORPORATION
 (An
Exploration Stage Company)
 STATEMENTS
OF CASH FLOWS
 (Unaudited)
 (Continued)
 
 Six
      Months Ended June 30,
              
              
              From Re Entry to the2010
                (Unaudited)
              
              
              2009
                (Unaudited)
              
              
              Development
      Stage (7/1/09) to 6/30/10CASH
      FLOWS FROM FINANCING ACTIVITIESExpenses
      paid by related parties-cash
              
              
              1,155
              
              
              
              83,547
              
              
              
              3,430Expenses
      paid by related parties-stock
              
              
              -
              
              
              
              -
              
              
              
              -Borrowings
      from related parties
              
              
              158,556
              
              
              
              -
              
              
              
              167,256Proceeds
      from notes payable
              
              
              75,000
              
              
              
              -
              
              
              
              75,000Principal
      payments on related-party notes payable
              
              
              (42,000
              )
              
              
              (1,982
              )
              
              
              (42,000
              )Common
      stock issued for cash
              
              
              -
              
              
              
              -
              
              
              
              39,000Cash
      contributed by related parties
              
              
              -
              
              
              
              90,000
              
              
              
              14,000Net
      cash provided by / (used in) financing activities
              
              
              192,711
              
              
              
              171,565
              
              
              
              256,686Net
      increase / (decrease) in cash and cash equivalents
              
              
              12,219
              
              
              
              1,825
              
              
              
              9,423Cash
      and cash equivalents, beginning of period
              
              
              -
              
              
              
              971
              
              
              
              2,796Cash
      and cash equivalents, end of period
              
              $
              12,219
              
              
              $
              2,796
              
              
              $
              12,219SUPPLEMENTAL
      CASH FLOW INFORMATIONCash
      paid for interest
              
              
              -
              
              
              
              1,472
              
              
              
              -Cash
      paid for income taxes
              
              
              -
              
              
              
              -
              
              
              
              -Stock
      issued for retirement of debt
              
              
              -
              
              
              
              -
              
              
              
              211,827Acquisitions
      of oil and gas properties:-with
      stock
              
              
              -
              
              
              
              -
              
              
              
              175,000-with
      related-party debt
              
              
              19,500
              
              
              
              -
              
              
              
              19,500
 
  The
accompanying notes are an integral part of these financial
statements.
  5
  TREATY
ENERGY CORPORATION
 NOTES
TO UNAUDITED FINANCIAL STATEMENTS
  NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
  Information
Regarding Forward-Looking Statements
 This
report contains forward-looking statements that involve risks and uncertainties.
We generally use words such as "believe," "may," "could," "will," "intend,"
"expect," "anticipate," "plan," and similar expressions to identify
forward-looking statements. You should not place undue reliance on these
forward-looking statements. Our actual results could differ materially from
those anticipated in the forward-looking statements for many reasons, including
the risks described below and elsewhere in this report. Although we believe the
expectations reflected in the forward-looking statements are reasonable, they
relate only to events as of the date on which the statements are made, and our
future results, levels of activity, performance or achievements may not meet
these expectations. We do not intend to update any of the forward-looking
statements after the date of this document to conform these statements to actual
results or to changes in our expectations, except as required by
law.
  History
 Treaty
Energy Corporation, (“Treaty”, “the Company”, “we”, or “us”) was incorporated in
the State of Nevada in August, 1997.  In December, 2008, we merged
with Treaty Petroleum, Inc., a Texas Corporation under a transaction commonly
referred to as a reverse merger.
 
 We are a
crude oil and natural gas producing company currently seeking to acquire
producing oil and gas properties which have current production and development
opportunities.
 
 As is
more thoroughly discussed in Note 4 to our annual report filed on Form 10-K as
of December 31, 2009, during July, 2009, we lost our leases in Crockett County,
Texas.  Since those leases constituted the only oil and gas assets the
Company had at the time, management has deemed the Company subsequent to that
point an “Exploration Stage Company”.
 
 Also
discussed in Note 5 to this Form 10-Q is our acquisition activity during the
three months ended June 30, 2010.  We acquired a 100 percent working
interest in several leases in Tennessee, then subsequently sold various working
interests to raise the capital to re-open the wells.  We also entered
into a 50/50 Joint Venture with Princess Petroleum Limited, a company organized
under the laws of Belize, to develop approximately 200,000 on-shore acres and
1.8 million offshore acres.
  NOTE
2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
  Condensed
Financial Statements
 In the
opinion of management, the accompanying financial statements includes all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations, and cash flows for
the period ending June 30, 2010.  Preparing financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue, and expenses.  Interim
results are not necessarily indicative of results for a full
year.  The information included in this Form 10-Q should be read in
conjunction with information included in our audited financial statements for
the period ended December 31, 2009, as reported in Form 10-K filed with the SEC
on May 6, 2010.
 
 Management
further acknowledges that it is solely responsible for adopting sound accounting
practices, establishing and maintaining a system of internal accounting control
and preventing and detecting fraud.  The Company's system of internal
accounting control is designed to assure, among other items, that 1) recorded
transactions are valid; 2) valid transactions are recorded; and 3) transactions
are recorded in the proper period in a timely manner to produce financial
statements which present fairly the financial condition, results of operations
and cash flows of the Company for the respective periods being
presented.
   6
  Use
of Estimates
 The
preparation of consolidated financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Significant estimates underlying these consolidated financial statements include
the estimated quantities of proved oil reserves used to compute depletion of oil
and natural gas properties and the estimated fair value of asset retirement
obligations.
 
 All of
the Company’s accounting policies are not included in this Form
10-Q.  A more comprehensive set of accounting policies adopted by the
Company are included on our Form 10-K as of December 31, 2009 and are herein
incorporated by reference.
  Fair
Value Measurement
 The
Company has adopted guidance contained in Codification Topic No. 820 which
defines fair value, establishes a framework for measuring fair value and expands
disclosure of fair value measurements. Topic 820 applies under other accounting
pronouncements that require or permit fair value measurements and accordingly,
does not require any new fair value measurements. Topic 820 is effective for
financial statements issued for fiscal years beginning after November 15, 2007.
The Company believes that the adoption of Topic 820 will not have a material
effect on its statements of operations and financial condition.  Topic
820 requires disclosure of assets and liabilities measured at fair value within
a three-tiered hierarchy.
 
 The
following table shows the Company’s fair value instruments, measured on a
recurring basis:
 
 Level
              
              AmountLevel
      1:
              
              $
              -Level
      2: Notes payable and accrued interest to related parties and third
      parties
              
              
              370,387Level
      3: Notes payable, long term and short term, net of
discount
              
              
              380,057Totals
              
              $
              750,444
  Revenue
Recognition
 Oil
revenue is recognized when persuasive evidence of an arrangement exists, our oil
is delivered, the fee is fixed and determinate and collectibility is reasonably
assured.
  Stock-Based
Compensation
 In
December of 2004, the Financial Accounting Standards Board issued guidance now
codified as Topic 718 (“Topic 18”) which applies to transactions in which an
entity exchanges its equity instruments for goods or services and also applies
to liabilities an entity may incur for goods or services that are based on the
fair value of those equity instruments. For any unvested portion of previously
issued and outstanding awards, compensation expense is required to be recorded
based on the previously disclosed Topic 18 methodology and
amounts.  Prior periods presented are not required to be restated. The
Company adopted Topic 18 at its inception and applied the standard using the
modified prospective method.
 
 Oil and
Gas Properties
 
 We use
the successful efforts method for crude oil and natural gas exploration and
production activities. All costs for development wells, related plant and
equipment, proved mineral interests in crude oil and natural gas properties, and
related asset retirement obligation (ARO) assets are capitalized. Costs of
exploratory wells are capitalized pending determination of whether the wells
found proved reserves. Costs of wells that are assigned proved reserves remain
capitalized. Costs also are capitalized for exploratory wells that have found
crude oil and natural gas reserves even if the reserves cannot be classified as
proved when the drilling is completed, provided the exploratory well has found a
sufficient quantity of reserves to justify its completion as a producing well
and the company is making sufficient progress assessing the reserves and the
economic and operating viability of the project. All other exploratory wells and
costs are expensed.
   7
 
 Long-lived
assets to be held and used, including proved crude oil and natural gas
properties, are assessed for possible impairment by comparing their carrying
values with their associated undiscounted future net before-tax cash flows.
Events that can trigger assessments for possible impairments include write-downs
of proved reserves based on field performance, significant decreases in the
market value of an asset, significant change in the extent or manner of use of
or a physical change in an asset, and a more-likely-than-not expectation that a
long-lived asset or asset group will be sold or otherwise disposed of
significantly sooner than the end of its previously estimated useful life.
Impaired assets are written down to their estimated fair values, generally their
discounted future net before-tax cash flows. For proved crude oil and natural
gas properties in the United States, the company generally performs the
impairment review on an individual field basis. Outside the United States,
reviews are performed on a country, concession, development area or field basis,
as appropriate.
 
 Long-lived
assets that are held for sale are evaluated for possible impairment by comparing
the carrying value of the asset with its fair value less the cost to sell. If
the net book value exceeds the fair value less cost to sell, the asset is
considered impaired and adjusted to the lower value.
 
 As
required under ASC 410, Asset
Retirement and Environmental Obligations, the fair value of a liability
for an asset retirement obligation (“ARO”) is recorded as an asset and a
liability when there is a legal obligation associated with the retirement of a
long-lived asset and the amount can be reasonably estimated.  As of
June 30, 2010, we have recorded no asset retirement obligations as we are still
determining whether our efforts to re-open our recently-acquired shut-in wells
in Tennessee will be successful and therefore we do not know if the liability is
long-term (which would be the case if the wells are successful) or short-term
(which would be the case if they are not).  Once we have re-opened the
wells and determined that their production is of commercial quantities, we will
record the obligation as an increase in our carrying value of our oil and gas
properties and an increase in our asset retirement obligation.
 
 Depreciation
and depletion of all capitalized costs of proved crude oil and natural gas
producing properties, except mineral interests, are expensed using the
unit-of-production method generally by individual field, as the proved developed
reserves are produced. Depletion expenses for capitalized costs of proved
mineral interests are recognized using the unit-of-production method by
individual field as the related proved reserves are produced. Periodic valuation
provisions for impairment of capitalized costs of unproved mineral interests are
expensed.  As of June 30, 2010, we have not recorded any depreciation
and depletion of our acquired oil and gas properties as we have no production
from those properties.  When production begins and we determine that
the amount of production will be economical to produce, we will begin to record
depreciation and depletion.
 
 Gains and
losses from dispositions of oil and gas properties is calculated by subtracting
the pro-rata carrying value of the working interest in the property from the
proceeds of the sale.
 
 NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
  In May
2008, the FASB issued a new accounting standard relating to the hierarchy of
Generally Accepted Accounting Principles. This standard identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles
(“GAAP”) in the United States (the GAAP hierarchy). This standard becomes
effective 60 days following the SEC’s approval of the Public Company Accounting
Oversight Board (“PCAOB”) amendment to AU Section 411, “The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles” and is not
expected to have a significant impact on our consolidated financial
statements.
   8
 
 The
Company has adopted a new accounting standard issued by the FASB related to
fixed assets and impairments of fixed assets (“Topic
360”).   This topic requires us to review for impairment
long-lived assets, such as property, plant, equipment, and acquired intangible
assets subject to amortization, whenever events or changes in circumstances
indicate that the carrying amount of an asset or group of assets may not be
recoverable. We assess recoverability of assets to be held and used by comparing
their carrying amount to the expected future undiscounted net cash flows they
are expected to generate. If an asset or group of assets is considered to be
impaired, the impairment to be recognized is measured as the amount by which the
carrying amount of the asset or group of assets exceeds fair
value.  We report long-lived assets meeting the criteria to be
considered as held-for-sale at the lower of their carrying amount or fair value
less anticipated disposal costs.
 
 In May
2009, the FASB issued a new accounting standard relating to subsequent events
(“Topic 855”).  This pronouncement establishes standards for
accounting for and disclosing subsequent events (events which occur after the
balance sheet date but before financial statements are issued or are available
to be issued). Topic 855 requires an entity to disclose the date subsequent
events were evaluated and whether that evaluation took place on the date
financial statements were issued or were available to be issued. It is effective
for interim and annual periods ending after June 15, 2009.  The
Company has adopted this standard in the current report on Form
10-Q.
 
 In
general, the amount of an Asset Retirement Obligation (“ARO”) and the costs
capitalized will be equal to the estimated future cost to satisfy the
abandonment obligation using current prices that are escalated by an assumed
inflation factor up to the estimated settlement date which is then discounted
back to the date that the abandonment obligation was incurred using an assumed
cost of funds for the Company. After recording these amounts, the ARO is
accreted to its future estimated value using the same assumed cost of funds and
the liability is increased each period as the retirement obligation
approaches.
  NOTE
4 – GOING CONCERN
  The
accompanying financial statements have been prepared assuming that Treaty will
continue as a going concern. As shown in these financial statements, we have had
continuing negative cash flows from operations and working capital
deficits.  Although we have acquired several leases in Tennessee which
we are working to bring on line, as of June 30, 2010, we have had no production
from them except that which resulted from the initial
testing.   These conditions raise substantial doubt as to our
ability to continue as a going concern. The financial statements do not include
any adjustments that might be necessary if we are unable to continue as a going
concern.  Management intends to finance these deficits by making
additional shareholder notes and seeking additional outside financing through
either debt or sales of its common stock.
  NOTE
5 – OIL PRODUCING PROPERTIES
  The
history of our producing properties is found in Note 4 of our report on Form
10-K as of December 31, 2009, filed on April 15, 2010.
  Acquisitions
During the Three Months Ended June 30, 2010.
  Pickett County,
Tennessee
 On April
13, 2010, we acquired 100% undivided working interest (82.5% royalty interest)
in eight leases in Pickett County, Tennessee in exchange for 1.5 million shares
which were contributed by a major shareholder.  These leases
are:  Herbert Groce #1, 77 acres;  Herbert Groce #2, 80
acres; Leeta West, 20 acres; Joseph Schwallie, 47 acres; Byron Hill, 18.5 acres,
Robin Moody, 18.5 acres, Terry Williams, 18.5 acres and Kimberly Hicks, 18.5
acres.
 
 We valued
the 1.5 million shares at the closing price on April 13, 2010 and valued the
Tennessee properties at $19,500, or $0.013 per share.  We then divided
the purchase price, plus commissions and other costs, equally among the three
properties expected to be developed during 2010, and arrived at a cost basis of
$10,158 per well.  Finally, we recorded a liability to the major
shareholder in the amount of $19,500, the value of the shares given in exchange
for the leases.
  9
 
 On June
11, 2010, we entered into an agreement to sell 35% of our working interest in
the Joseph Schwallie #1 well to an investor for $20,000 cash.
 
 Also on
June 11, 2010, we entered into an agreement to sell another 20% of the Joseph
Schwallie #1 well for $55,000 in cash.  Under the terms of this
agreement, we are obligated to increase the distributions of cash flows to this
investor from 20% to 34% until such time as the investor has received $55,000,
after which the distribution obligation will revert to the 20% working
interest.  This $55,000 was received in July, 2010.  As of
June 30, 2010, we held the amount due from the seller in Other
Receivables.
 
 As a
result of the two above sales, we recorded a reduction in our historical cost
basis of the Joseph Schwallie well from $10,158 to $4,571, recorded a liability
in the amount of $55,000 and a gain on the two sales in the amount of
$14,413.
 
 On May
27, 2010, we entered into an agreement to sell 50% of our working interest in
the Robin Moody #1 well for $20,000 in cash.   Under the terms of
this agreement, we are obligated to increase the distributions of cash flows to
this investor from 50% to 56% until such time as the investor has received
$20,000, after which the distribution obligation will revert to the 50% working
interest.
 
 On June
11, 2010, we sold a 20% interest in the Robin Moody lease for $55,000 in
cash.  Under the terms of this agreement, we are obligated to increase
the distributions of cash flows to this investor from 20% to 29% until such time
as the investor has received $55,000, after which the distribution obligation
will revert to the 20% working interest.
 
 As a
result of the two above sales of our interests in the Robin Moody well #1, we
recorded a reduction in our historical cost basis of the Robin Moody lease from
$10,158 to $3,047, recorded liabilities in the amount of $75,000 and a loss on
the two sales in the amount of $7,111.
 
 On June
18, 2010, we entered into an agreement to sell 50% of our working interest in
the Herbert Groce #1 well for $45,000 in cash.   At June 30,
2010, $15,000 had been received.  The remainder was received in July,
2010.  We recorded the sale by reducing the carrying value of our
interest in the Herbert Groce #1 well by an amount equal to the pro-rata portion
of our historical cost in the property, and recorded a gain of
$39,921.
 
 The
$85,000 in Other Receivables arising from the $55,000 on the sale of the 20%
interest in the Joseph Schwallie #1 well and the $20,000 arising from the sale
of the 50% interest in the Herbert Groce #1 well was collected in July,
2010.
  Belize Concession and Joint
Venture with Princess Petroleum Ltd.
 On April
20, 2010, we entered into a 50/50 Joint Venture agreement with Princess
Petroleum Limited, a company organized under the laws of Belize to explore for
oil and gas on approximately 2 million acres in Belize.  The country
of Belize is located in Central America, in the south of the Yucatan Island to
the southeast of Mexico. It is surrounded by Mexico in the north, by Guatemala
in the west and south and by the Caribbean Sea in the east. Its old name was
British Honduras.
 
 A major
shareholder of the Company paid $100,000 cash as required under the
agreement.  We have recorded our basis in the $100,000 property and
the corresponding debt to our shareholder.
  
 10
  NOTE
6 – NOTES PAYABLE
  At June
30, 2010, we have the following liabilities to related and unrelated
parties:
  Notes
      and Interest PayableNotes
      and interest payable to previous officers and directors
              
              
              164,841Liability
      relating to Crockett County leases
              
              
              85,049Notes
      and interest payable related to our Tennessee acquisition
              
              
              130,167Total
      notes and interest payable
              
              $
              380,057Notes
      and Interest Payable to Related PartiesAdvances
      from an affiliate
              
              
              127,655Accrued
      compensation to officers and directors
              
              
              242,732Total
      related party notes and interest payable
              
              $
              370,387
  Notes and Interest Payable
to Previous Officers and Directors
 These
liabilities arose principally between January, 2007 and December, 2008 as cash
contributions and accrued compensation to officers and directors of Treaty
Petroleum, Inc. with whom Treaty Energy Corporation merged in December of
2008.  Some additional compensation was accrued during 2009 until the
Crockett County, Texas leases were lost.
 
 On
January 29, 2010, a lawsuit was filed in the 22nd Judicial District Court,
Parish of St. Tammany, Louisiana naming Treaty Energy Corporation, among others,
as a defendant.  The liabilities here form a portion of the basis of
this lawsuit.  We continue to accrue interest on these amounts until
the court system has determined what liability, if any, Treaty Energy
Corporation may have to the previous officers and directors.
 
 Liability
relating to the Crockett County Leases
 Upon
assuming the rights to receive production revenues assigned to Treaty Energy
Corporation from Treaty Petroleum, Inc., we agreed to service the note payable
to the assignee of the working interest (Treaty Petroleum, Inc.) so long as the
Company held the lease.
 
 As is
discussed more thoroughly in Note 4 to our annual report on Form 10-K as of
December 31, 2009, we lost the Crockett County, Texas leases due to our failure
to hold the leases by production.  At the point the leases were lost,
we had net note balance owed of $85,049.  Although the Company has not
issued a promissory note in this amount, we continue to carry this liability
until we collect evidence that the original note made by Treaty Petroleum, Inc.
has been retired.
 
 Advances
from an Affiliate
 This
liability relates to amounts contributed by shareholders to pay certain Company
expenses and to acquire assets in Belize.  The shareholder expects to
be reimbursed in cash or stock.
 
 Accrued
Compensation to officers and directors
 This
liability arises from our contract with Randall Newton, our former Chairman and
CEO pursuant to his employment agreement with the Company, and with Newton
Collaboration, LLC, which provides accounting and corporate governance services
to us.
 
 Also
included in this category is $25,000 accrued to our current CEO, Andrew
Reid.
  
 11
 
 NOTE
7 – SHAREHOLDERS’ EQUITY
  We are
authorized to issue 500 million shares of our common stock.  At
December 31, 2009, we had 496,605,424 shares issued and
outstanding.  During the six months ended June 30, 2010, we issued no
additional shares nor made any changes in our common stock.
 
 Authorization
of Preferred Stock
 On
February 16, 2010, we applied to and were granted a Certificate of Amendment to
our Articles of Incorporation as follows:
 
 The
authorized capital stock of the Corporation shall include 50,000,000 shares of
Class A Convertible Preferred Stock,  par value $0.001 per share,
whose terms and conditions may be expressly determined by resolution of the
Corporation’s Board of Directors.  These shares of preferred stock may
be issuable in various series and may or may not be convertible to common stock,
in accordance with the terms of the specific issued series.  The Board
of Directors shall have the authority to fix by resolution all other
rights.
  Shareholder Contribution of
Capital
 During
the six months ended June 30, 2010, an affiliate paid company expenses of $1,155
which was recorded as Additional Paid-In Capital.
  Imputed
Interest
 Pursuant
to our notes payable to our former corporate secretary and the former operator
of the Crockett County leases, the aggregate principal amount of which is
$156,545, and which forms a portion of the lawsuit discussed in Note 5 to our
annual report filed on Form 10-K as of December 31, 2009, we accrue simple
interest at 3% per year.  This resulted in an interest charge
collectively of $2,340 for six months ended June 30, 2010.
 
 Management
believes that the stated interest on these notes is not equivalent to the
Company’s realistic cost of capital.  We therefore imputed an
additional 5% interest and charged interest expense with an additional $3,906
for the six months ended June 30, 2010.
  Stock
–Based Compensation
 During
2009, the Company awarded certain officers and directors shares which were to be
earned ratably over their respective contracts.  During the six months
ended June 30, 2010, $36,828 of this amount was earned and accrued to
compensation expense and included in General and Administrative
Expenses.  The unearned portion of these amounts at June 30, 2010 is
$6,000 and will be earned in future periods.
  NOTE
8 – RELATED PARTY TRANSACTIONS
  On July
1, 2009, we entered into a contract with Newton Collaboration, LLC, to provide
accounting, corporate governance and statutory filing services to the
Company.  During the six months ended June 30, 2010, we accrued
$30,000 of costs relating to that contract.  As of June 30, 2010, we
have not made a payment to Newton Collaboration, LLC for any accounting
services.  Newton Collaboration, LLC is owned by our director, Randall
Newton.
 
 Additionally,
Mr. Newton is owed $126,955 in unpaid services pursuant to our consulting
agreement with him as of June 30, 2010.
 
 Mr.
Newton made short-term loans to the Company in the amount of $14,569 which are
unpaid as of June 30, 2010.
  NOTE
9 – SUBSEQUENT EVENTS
  In July,
2010, we sold a 5% interest in our investment in the Joint Venture with Princess
Petroleum Limited (2.5% of the total partnership interest) to an investor for
$250,000 in cash.
 
 We have
evaluated subsequent events through the date of issuance of the financial
statements.
  
 12
 ITEM
2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  You
should read the following discussion in conjunction with management’s discussion
and analysis contained in our 2009 Annual Report on Form 10-K, as well as the
financial statements and notes hereto included in this quarterly report on Form
10-Q. The following discussion contains forward-looking statements that involve
risks, uncertainties, and assumptions, such as statements of our plans,
objectives, expectations, and intentions. Our actual results may differ
materially from those discussed in these forward-looking statements because of
the risks and uncertainties inherent in future events.
  Results
of Operations
  Six Months Ended June 30,
2010, compared with Six Months Ended June 30, 2009
 We had no
revenues for the six months ended June 30, 2010 compared with $7,406 for the
same period in 2009.  This is a result of the loss of the Crockett
County, Texas leases which were failing toward the end of the second quarter
2009.
  Transportation
expense and production taxes are zero for the six months ended June 30, 2010,
compared to $1,175 for the same period in 2009.  This is due to the
fact that we have not yet produced any salable oil from our Tennessee properties
as of the end of June, 2010, but we had small production from the Crockett
County leases during the same period in 2009.
 
 Our lease
operating expenses for the six months ended June 30, 2010 of $12,225 include the
costs of working over the Robin Moody #1 well.  The $27,813 expense
for the same period in 2009 included costs of operating the Crockett County
leases.
 
 General
and administrative expenses have increased dramatically.  They
increased from $109,058 for the six months ended June 30, 2009 to $231,276, a
112% increase over the same period in 2009.  Most of this increase is
a result of hiring Mr. Newton as our Board Chairman and Chief Executive Officer,
from the hiring of a consultant, and from costs associated with statutory
compliance and reporting.
 
 Our
depreciation, depletion and amortization expenses for the six months ended June
30, 2010 were zero as compared to $1,520 for the same period in 2009 since the
costs related to the Crockett County, Texas leases have been lost and therefore,
no costs are recorded to depreciate.  Moreover, since there is not yet
production from the Tennessee leases, we have not recorded any amortization of
our investment in oil and gas properties.
 
 Interest
expense is significantly lower for the six months ended June 30, 2010 than the
same period in 2009 - $6,413 versus $17,201, respectively.  This is
principally due to the suspension of the amortization of discount related to our
note payable in connection with the Crockett County, Texas
leases.  This debt is the subject of two lawsuits filed in Shelby
County, Texas on which the Company was not named as a defendant (see Note
6).
  Three Months Ended June 30,
2010, compared with Three Months Ended June 30, 2009
 We had no
revenues for the three months ended June 30, 2010 compared with $1,739 for the
same period in 2009.  We had not fully completed any of the Tennessee
wells as of June 30, 2010 whereas we had a small amount of production from the
Crockett County leases during the period in 2009.
  Transportation
expense and production taxes we zero for the three months ended June 30, 2010,
compared to $646 for the same period in 2009.  Again, in 2009, we had
a small amount of production from Crockett County, but no production as of the
end of June, 2010.
 
 Our lease
operating expenses for the three months ended June 30, 2010 of $12,225 include
the costs of working over the Robin Moody #1 well where is the lease operating
expenses for the same period in 2009 consisted of operating the Crockett County
leases.
 
 General
and administrative expenses have increased dramatically.  They
increased from $39,219 for the three months ended June 30, 2009 to $99,687, a
154% increase over the same period in 2009.  Most of this increase is
a result of hiring Mr. Newton as our Board Chairman and Chief Executive Officer,
from the hiring of a consultant, and from costs associated with statutory
compliance and reporting.
   13
 Our
depreciation, depletion and amortization expenses for the three months ended
June 30, 2010 were zero as compared to $321 for the same period in 2009 due to
the differences in production in Tennessee and Crockett County, Texas leases
explained above.
 
 Interest
expense is lower for the six months ended June 30, 2010 than the same period in
2009 - $3,290 versus $10,820, respectively.  This is principally due
to the suspension of the amortization of discount related to our note payable in
connection with the Crockett County, Texas leases.  This debt is the
subject of two lawsuits filed in Shelby County, Texas on which the Company was
not named as a defendant (see Note 6).
  Liquidity
and Capital Resources
 Our
financial statements have been prepared on a going concern basis that
contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business.
 
 Currently,
we are not able to maintain our existing operations through the existing cash
balances and internally generated cash flows from sales of oil production.
Additionally, we have lost the only oil and gas lease providing the Company cash
flows from operations and have only recently acquired new properties to replace
them.  It is not certain that the properties in Tennessee will produce
cash flows to cover some or all of our operating costs.  Moreover, we
have determined that our existing capital structure is not adequate to fund our
planned growth.
 
 We intend
to finance our drilling, work over and acquisition program by bank debt, by
joint venturing with other strategic partners, and by internally generated cash
flows. There can be no assurance that we will be successful in procuring
the financing or partnerering we are seeking.  Future cash flows are
subject to a number of variables, including the level of production, natural gas
prices and successful drilling efforts. There can be no assurance that
operations and other capital resources will provide cash in sufficient amounts
to maintain planned or future levels of capital expenditures.
  Plan
of Operation
 Over the
next twelve months we intend to develop the following initiatives:
  Revenue
Generation
  Kansas - We expect that the
Kansas oil and gas leases, if acquired and financing is obtained, will initially
produce between 135 and 150 barrels per day which will immediately add positive
cash flows from operations to our negative cash flows currently existing due to
our corporate costs.  We expect that our aggressive drilling program
will provide additional cash flows in the future.
 
 There is
no guarantee that we can raise the funds to accomplish our production goals or
consummate our intended acquisitions, or that the expenditures on our existing
leases will produce the increases in production we anticipate.
 
 Tennessee – Subsequent to June
30, 2010, we completed the Robin Moody well #1 and should be producing and
selling oil in the third quarter of 2010.  Initial indications appear
that this well will produce from 10 to 20 barrels per day.  In
addition, we are in the process of completing the Herbert Groce #1 well and the
Joseph Schwallie #1.  We expect to have similar, if not greater
success with the second two re-completions.
 
 Belize - We intend to finance
the drilling of one to three wells by selling additional interests in our Joint
Venture with Princess Petroleum Limited.
  
 14
 Drilling and Work-Over
Programs
  Kansas - We have identified
approximately 600 locations in eastern Kansas on the oil and gas leases that we
have under contract.  If we close the acquisition and obtain the bank
financing, we will plan on drilling approximately 400 of these wells in five
years.
 
 Several
existing leases can be enhanced through water-flooding which will increase
pressure and incremental production from existing wells.
 
 We
currently do not have adequate cash to undertake these plans.  Unless
we close our acquisition in Kansas and obtain the required bank financing, we
will be unable to execute them.
  Financing
 We hope
to finance our work over, drilling and acquisition programs by a combination of
bank financing, owner financing and cash flows from operations.
 
 There is
no guarantee that we can raise the required capital to make
acquisitions,  drill new wells, or repair equipment on any acquired
properties, or that undertaking such repairs, acquisitions and drilling program
will make us profitable or self-sustaining.
  ITEM
3 - QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  A smaller
reporting company is not required to provide the information required by this
item.
  ITEM
4 – CONTROLS AND PROCEDURES
  Evaluation
of Disclosure Controls and Procedures
 We
carried out an evaluation, under the supervision and with the participation of
our management, including our principal executive officer, of the effectiveness
of our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)). Based upon that evaluation, our Chief Executive
Officer and principal financial officer concluded that, as of the end of the
period covered in this report, our disclosure controls and procedures were not
effective to ensure that information required to be disclosed in reports filed
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the required time periods and is accumulated and communicated to
our management, including our principal executive officer, as appropriate to
allow timely decisions regarding required disclosure.
 
 Our
management, including our principal executive officer, does not expect that our
disclosure controls and procedures or our internal controls will prevent all
error or fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met. 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. Due to 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, have been detected. To
address the material weaknesses, we performed additional analysis and other
post-closing procedures in an effort to ensure our consolidated financial
statements included in this annual report have been prepared in accordance with
generally accepted accounting principles. Accordingly, management believes that
the financial statements included in this report fairly present in all material
respects our financial condition, results of operations and cash flows for the
periods presented.
  Change
In Internal Control Over Financial Reporting
 There
were no changes in our internal control over financial reporting that occurred
during the six months ended June 30, 2010 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
  
 15
 
 PART
II – OTHER INFORMATION
   ITEM
1 – LEGAL PROCEEDINGS
  On
January 29, 2010, a lawsuit (Highground et al. versus Ronald L.
Blackburn et al.)was filed in the 22nd Judicial District Court, Parish of
St. Tammany, Louisiana naming Treaty Energy Corporation, among others, as a
defendant.
 
 The
lawsuit alleges certain wrongdoings by the defendants (other than Treaty) which
have no bearing on our operations since inception.  The lawsuit also
alleges certain monies owed to some of the plaintiffs by the
Company.
 
 On March
11, 2010, we filed a Notice of Removal of the state action to the United States
District Court, Eastern District of Louisiana, based upon the diversity of all
the parties.  The Complainants may challenge the removal, but as of
the date of this report have not responded.
 
 On April
11, 2010, the defendants filed a countersuit against the plaintiffs seeking
damages against Highground, et al based on misrepresentation of the Crockett
County, Texas leases.
 
 We may be
involved from time to time in ordinary litigation, negotiation and settlement
matters that will not have a material effect on our operations or finances. We
are not aware of any pending or threatened litigation against us or our officers
and directors in their capacity as such that could have a material impact on our
operations or finances, except as disclosed in this report.
  ITEM
1A – RISK FACTORS
  Our
business has many risks. Factors that could materially adversely affect our
business, financial condition, operating results or liquidity and the trading
price of our common stock are described under “Risk Factors in Item 1A of our
Annual Report on Form 10-K for the year ended December 31, 2009, filed April 15,
2010.
 
 This
information should be considered carefully, together with other information in
this report and other reports and materials we file with the Securities and
Exchange Commission.
  ITEM
2 - UNREGISTERED SALES OF EQUITY SECURITIES
  We issued
no common shares during the six months ended June 30, 2010
  
 16
  Options and
Warrants
  During
the six months ended June 30, 2010, no options or warrants have been granted,
expired or exercised.
 
 Our
options and warrants outstanding at June 30, 2010 are as follows:
 
 Expiry
      Date
              
              Average
      Strike Price
              
              
              No.
      of Options
                or
      Warrants06/22/12
              
              
              0.08
              
              
              
              124,49206/22/13
              
              
              0.08
              
              
              
              138,43506/22/14
              
              
              0.08
              
              
              
              124,49206/22/15
              
              
              0.08
              
              
              
              2,300,000Total
              
              
              
              
              
              
              2,687,419
  ITEM
3 – DEFAULTS UPON SENIOR SECURITIES
  None.
  ITEM
4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  None.
  ITEM
5 – OTHER INFORMATION
  None.
  ITEM
6 – EXHIBITS
  Exhibit
      No.
              
              Description
      of Exhibit3.1
              
              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.
  
 17
 
 SIGNATURES
  In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
 
 Date:
      August 16, 2010
              Treaty
      Energy CorporationBy:/s/ Andrew V.
      ReidAndrew
      V. Reid
                Chief
      Executive Officer
 
 18