----

----

| 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 | Smaller reporting company |  þ |
| (do not check if a smaller reporting company) |    |                      |         |

----

----

----

| PART I – FINANCIAL INFORMATION    |                                                                                                    | 3      |   |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------|--------|--------|
|                                    |                                                                                                    |   |   |   |   |
|  Item 1 –                    | Financial Statements                                                                          |   |   | 3 |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 2 –                          | Management’s Discussion And Analysis Of Financial Condition And Results Of Operations   |   |   | 22 |   |
|                                    |                                                                                                    |   |   |   |   |
|  Item 3 –                    | Quantitive And Qualitative Disclosures About Market Risk                                      |   |   | 24 |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 4 –                          | Controls and Procedures                                                                       |   |   | 24 |   |
|                                    |                                                                                                    |   |   |   |   |
| PART II – OTHER INFORMATION  |                                                                                                    |   | 26     |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 1 –                | Legal Proceedings                                                                             |   |   | 26 |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 1A –               | Risk Factors                                                                                  |   |   | 26 |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 2 –                          | Unregistered Sales of Equity Securities                                                       |   |   | 26  |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 3 –                | Defaults Upon Senior Securities                                                               |   |   | 26 |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 4 –                          | Submission of Matters to a Vote of Security Holders                                           |   |   | 27 |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 5 –                          | Other Information                                                                             |   |   | 27 |   |
|                                    |                                                                                                    |   |   |   |   |
| Item 6 –                          | Exhibits                                                                                      |   |   | 27 |   |
|                                    |                                                                                                    |   |   |   |   |
| SIGNATURES                         |                                                                                                    |   | 28     |   |

----

|                                                       |   | September 30, 2012 |      |   | December 31, 2011 |   |
|------------------------------------------------------------|--------|--------------------|-----------|--------|-------------------|--------|
|                                                       |   |  (Unaudited)  |      |   |              |   |
| ASSETS                                                     |   |               |      |   |              |   |
|                                                       |   |               |      |   |              |   |
| Cash and cash equivalents                                  |   | $                  | 14,780    |   |              | $      | 14,716 |   |
| Accounts & other receivables                           |   |               | 31,644    |   |              |   | 23,438 |   |
| Total current assets                                       |   |               | 46,424    |   |              |   | 38,154 |   |
|                                                       |   |               |      |   |              |   |   |   |
| Oil and gas properties (successful efforts)                |   |               |      |   |              |   |   |   |
| Proved producing                                           |   |               | 1,912,795 |   |              |   | 105,494 |   |
| Unproved                                                   |   |               | 48,075    |   |              |   | 48,075 |   |
| Oilfield support equipment                                 |   |               | 907,343   |   |              |   | 1,141,701 |   |
| Less: accumulated depreciation, depletion and amortization |   |               | (206,741  | )      |              |   | (125,439 | ) |
| Net oil and gas properties and support equipment           |   |               | 2,661,472 |   |              |   | 1,169,831 |   |
|                                                       |   |               |      |   |              |   |   |   |
| Property, plant and equipment, net                         |   |               | 911,621   |   |              |   | 494,473 |   |
| Prepaid expenses and other assets                          |   |               | 205,363   |   |              |   | 65,363 |   |
| Carved out interest, net                                   |   |               | 73,313    |   |              |   | 76,005 |   |
| TOTAL ASSETS                                               |   | $                  | 3,898,193 |   |              | $      | 1,843,826 |   |
|                                                       |   |               |      |   |              |   |   |   |
| LIABILITIES                                                |   |               |      |   |              |   |   |   |
|                                                       |   |               |      |   |              |   |   |   |
| Accounts payable and accrued liabilities                   |   | $                  | 668,586   |   |              | $      | 717,612 |   |
| Notes and accrued interest payable                         |   |               | 1,493,475 |   |              |   | 829,095 |   |
| Related party payable                                      |   |               | 49,321    |   |              |   | - |   |
| Purchase Option Liabilities                                |   |               | 25,000    |   |              |   | 25,000 |   |
| Total current liabilities                                  |   |               | 2,236,382 |   |              |   | 1,571,707 |   |
|                                                       |   |               |      |   |              |   |   |   |
| Deferred Revenue                                           |   |               | 509,772   |   |              |   | 545,507 |   |
| Asset retirement obligation                                |   |               | 223,964   |   |              |   | 130,397 |   |
| TOTAL LIABILITIES                                          |   | $                  | 2,970,118 |   |              | $      | 2,247,611 |   |

----

|                                                                                                                                                                                                                                                                                            |   | September 30, 2012 |        |   | December 31, 2011 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                            |   |  (Unaudited)  |        |   |              |   |
| Convertible Redeemable Class A Preferred Stock (0 and 12,000 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively, $5 redemption value)                                                                                                                      |   |               | -           |   |              |   | 60,000 |   |
|                                                                                                                                                                                                                                                                                            |   |               |        |   |              |   |   |   |
| STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                                                                                                                  |   |               |        |   |              |   |   |   |
|                                                                                                                                                                                                                                                                                            |   |               |        |   |              |   |   |   |
| Preferred stock - par value $0.001, 50 million shares authorized, none issued or outstanding at September 30, 2012 and December 31, 2011                                                                                                                                                        |   |               | -           |   |              |   | - |   |
| Common stock – par value $0.001, 950 million shares authorized,  893,153,954 and 746,449,069 shares issued  at September 30, 2012 and December 31, 2011, and 893,153,954 and 737,449,069 shares outstanding at September 30, 2012 and December 31, 2011, respectively |   |               | 893,153     |   |              |   | 746,449 |   |
|                                                                                                                                                                                                                                                                                            |   |               |        |   |              |   |   |   |
| Treasury Stock                                                                                                                                                                                                                                                                                  |   |               | -           |   |              |   | (355,500 | ) |
| Additional paid in capital                                                                                                                                                                                                                                                                      |   |               | 15,997,466  |   |              |   | 8,730,631 |   |
| Common stock payable                                                                                                                                                                                                                                                                            |   |               | 1,721,743   |   |              |   | 85,875 |   |
| Accumulated loss - pre-exploration stage                                                                                                                                                                                                                                                        |   |               | (644,829    | )      |              |   | (644,829 | ) |
| Accumulated loss - exploration stage                                                                                                                                                                                                                                                            |   |               | (16,793,051 | )      |              |   | (8,963,829 | ) |
| Accumulated other comprehensive income                                                                                                                                                                                                                                                          |   |               | 6,976       |   |              |   | 390 |   |
|                                                                                                                                                                                                                                                                                            |   |               |        |   |              |   |   |   |
| Total stockholders' equity (deficit) attibutable to Treaty Energy                                                                                                                                                                                                                               |   |               | 1,181,458   |   |              |   | (400,813 | ) |
|                                                                                                                                                                                                                                                                                            |   |               |        |   |              |   |   |   |
| Non-Controlling Interest                                                                                                                                                                                                                                                                        |   |               | (253,383    | )      |              |   | (62,972 | ) |
|    Total Stockholder's equity (deficit)                                                                                                                                                                                                                                          |   |               | 928,075     |   |              |   | (463,785 | ) |
|                                                                                                                                                                                                                                                                                            |   |               |        |   |              |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                                                                                            |   | $                  | 3,898,193   |   |              | $      | 1,843,826 |   |

----

|                                            |   | Nine Months Ended September 30, |       |   | Three Months Ended September 30, |   |
|-------------------------------------------------|--------|---------------------------------|------------|--------|----------------------------------|--------|
|                                            |   | 2012                            |       |   | 2011                             |   |   | 2012 |   |   | 2011 |   |
|                                            |   |  (Unaudited)               |       |   |  (Unaudited)                |   |   |  (Unaudited) |   |   |  (Unaudited) |   |
| REVENUES                                        |   |                            |       |   |                             |   |   |   |   |   |   |   |
| Oil and gas revenues                            |   | $                               | 145,770    |   |                             | $      | 102,555 |   |   | $ | 75,667 |   |   | $ | 48,693 |   |
| Total revenues                                  |   |                            | 145,770    |   |                             |   | 102,555 |   |   |   | 75,667 |   |   |   | 48,693 |   |
|                                            |   |                            |       |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                        |   |                            |       |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| Lease operating expenses                        |   |                            | 260,473    |   |                             |   | 372,351 |   |   |   | 101,594 |   |   |   | 150,893 |   |
| Direct drilling costs                           |   |                            | 419,198    |   |                             |   | 25,634 |   |   |   | 208,721 |   |   |   | 17,394 |   |
| Land lease costs                                |   |                            | 20,000     |   |                             |   | - |   |   |   | - |   |   |   | - |   |
| Production taxes                                |   |                            | 3,740      |   |                             |   | 7,231 |   |   |   | - |   |   |   | 4,026 |   |
| General and  administrative           |   |                            | 5,885,492  |   |                             |   | 3,656,897 |   |   |   | 4,680,631 |   |   |   | 862,787 |   |
| Depreciation, depletion and amortization        |   |                            | 287,048    |   |                             |   | 53,817 |   |   |   | 133,732 |   |   |   | 31,616 |   |
| Accretion of asset retirement obligation        |   |                            | 18,339     |   |                             |   | 1,574 |   |   |   | 6,102 |   |   |   | 864 |   |
| Interest expense                                |   |                            | 136,384    |   |                             |   | 139,845 |   |   |   | 41,507 |   |   |   | 13,052 |   |
| Total expenses                                  |   |                            | 7,030,674  |   |                             |   | 4,257,349 |   |   |   | 5,172,287 |   |   |   | 1,080,632 |   |
|                                            |   |                            |       |   |                             |   |   |   |   |   |   |   |   |   |   |   |
|  Operating Loss                            |   |                            | (6,884,904 | )      |                             |   | (4,154,794 | ) |   |   | (5,096,620 | ) |   |   | (1,031,939 | ) |
|                                            |   |                            |       |   |                             |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME AND EXPENSE ITEMS                  |   |                            |       |   |                             |   |   |   |   |   |   |   |   |
| Gain (Loss) on retirement of debt               |   |                            | (862,212   | )      |                             |   | (1,250,464 | ) |   |   | (860,835 | ) |   |   | (179,762 | ) |
| Gain (loss) on disposition of royalty interests |   |                            | -          |   |                             |   | 790,776 |   |   |   | - |   |   |   | 790,776 |   |
| Gain (Loss) on sale of assets                   |   |                            | (272,517   | )      |                             |   | - |   |   |   | (265,163 | ) |   |   | - |   |
|   NET LOSS                                 |   |                            | (8,019,633 | )      |                             |   | (4,614,482 | ) |   |   | (6,222,618 | ) |   |   | (420,925 | ) |

----

| Less: Loss attributable to Non-Controlling Interests           |   |   | 190,411     |   |   |   | -           |   |   |   | 101,781     |   |   |   | -           |   |
|----------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|
| Net loss attributable to Treaty Energy Corporation             |   | $      | (7,829,222  | )      |   | $      | (4,614,482  | )      |   | $      | (6,120,837  | )      |   | $      | (420,925    | )      |
| Foreign Currency Translation Gain/(Loss)                       |   |   | 6,587       |   |   |   | -           |   |   |   | 2,947       |   |   |   | -           |   |
| Comprehensive Loss attributable to Treaty                      |   |   | (7,822,635  | )      |   |   | (4,614,482  | )      |   |   | (6,117,890  | )      |   |   | (420,925    | )      |
| Add: loss attributable to Non-Controlling Interests            |   |   | (190,411    | )      |   |   | -           |   |   |   | (101,781    | )      |   |   | -           |   |
| Total Comprehensive Loss                                       |   | $      | (8,013,046  | )      |   |   | (4,614,482  | )      |   |   | (6,219,671  | )      |   |   | (420,925    | )      |
|                                                           |   |   |        |   |   |   |        |   |   |   |        |   |   |   |        |   |
| Net loss per common shares - basic and diluted                 |   | $      | (0.01       | )      |   | $      | (0.01       | )      |   | $      | (0.01       | )      |   | $      | (0.00       | )      |
| Weighted average common shares outstanding - basic and diluted |   |   | 764,129,590 |   |   |   | 628,317,210 |   |   |   | 814,027,452 |   |   |   | 725,031,575 |   |

----

|                                 |                                                                                           |   | Nine Months Ended September 30, |       |
|--------------------------------------|------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                 |                                                                                           |   | 2012                            |       |   | 2011 |   |
|                                 |                                                                                           |   | (Unaudited)                     |       |   | (Unaudited) |   |
| CASH FLOWS FROM OPERATING ACTIVITIES |                                                                                           |   |                            |       |   |   |
|                                 | Net loss                                                                                       |   | $                               | (8,019,633 | ) |   | $ | (4,614,482 | ) |
|                                 | Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: |   |                            |       |   |   |   |   |   |
|                                 | Depreciation, depletion and amortization                                                       |   |                            | 287,048    |   |   |   | 53,817 |   |
|                                 | Loss on sales of assets                                                                        |   |                            | 272,517    |   |   |   | - |   |
|                                 | (Gain) loss on retirement of debt                                                              |   |                            | 862,212    |   |   |   | 1,250,464 |   |
|                                 | ORRI issued with note as inducement, expensed due to short term note                           |   |                            | -          |   |   |   | 25,900 |   |
|                                 | Gain on sale of ORRI                                                                           |   |                            | -          |   |   |   | (790,776 | ) |
|                                 | Amortization of discount on notes payable                                                      |   |                            | 9,633      |   |   |   | 45,076 |   |
|                                 | Accretion of asset retirement obligation                                                       |   |                            | 18,339     |   |   |   | 1,574 |   |
|                                 | Stock based compensation (shares issued and owed)                                              |   |                            | 4,217,770  |   |   |   | 2,736,711 |   |
|                                 | Interest imputed on related-party notes                                                        |   |                            | 27,712     |   |   |   | 11,517 |   |
|                                 | Amortization of deferred revenue                                                               |   |                            | (35,735    | ) |   |   | - |   |
|                                 | Changes in operating assets and liabilities:                                                   |   |                            |       |   |   |   |   |   |
|                                 |    Accounts receivable                                                          |   |                            | (8,206     | ) |   |   | (114,171 | ) |
|                                 |    Accounts payable & accrued expenses                                      |   |                            | 89,144     |   |   |   | (67,851 | ) |
|                                 |    Prepaid expenses & other assets                                          |   |                            | -          |   |   |   | (65,363 | ) |
|                                 | Net cash provided by / (used in) operating activities                                          |   |                            | (2,279,199 | ) |   |   | (1,527,584 | ) |
|                                 |                                                                                           |   |                            |       |   |   |   |   |   |
|                                 |                                                                                           |   |                            |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES |                                                                                           |   |                            |       |   |   |   |   |
|                                 | Acquisitions of oil and gas properties & lease equipment                                   |   |                            | (516,793   | ) |   |   | (478,088 | ) |
|                                 | Proceeds from sale of ORRI                                                                     |   |                            | -          |   |   |   | 515,000 |   |
|                                 | Purchases of fixed assets                                                                      |   |                            | (498,197   | ) |   |   | - |   |
|                                 | Proceeds from sales of oil and gas interests                                                   |   |                            | 60,000     |   |   |   | - |   |
|                                 | Net cash provided by / (used in) investing activities                                          |   |                            | (954,990   | ) |   |   | 36,912 |   |

----

|                                                                                  |   | Nine Months Ended September 30, |      |
|---------------------------------------------------------------------------------------|--------|---------------------------------|-----------|
|                                                                                  |   | 2012                            |      |   | 2011 |   |
|                                                                                  |   | (Unaudited)                     |      |   | (Unaudited) |   |
|                                                                                  |   |                            |      |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                  |   |                            |      |   |   |   |
| Advances from related parties, net                                                    |   |                            | 1,833,625 |   |   |   | 1,011,362 |   |
| Proceeds from notes payable                                                           |   |                            | 908,000   |   |   |   | 353,000 |   |
| Principal payments on notes payable                                                   |   |                            | (506,469  | ) |   |   | (466,062 | ) |
| Bank overdraft                                                                        |   |                            | (1,982    | ) |   |   | 2,205 |   |
| Common stock issued for cash                                                          |   |                            | 531,750   |   |   |   | 373,750 |   |
| Proceeds from sale of Treasury Stock                                                  |   |                            | -         |   |   |   | 225,000 |   |
| Common stock payable for cash                                                         |   |                            | 462,743   |   |   |   | - |   |
| Net cash provided by / (used in) financing activities                                 |   |                            | 3,227,667 |   |   |   | 1,499,255 |   |
|                                                                                  |   |                            |      |   |   |   |   |   |
| Net increase / (decrease) in cash and cash equivalents                                |   |                            | (6,522    | ) |   |   | 8,583 |   |
| Foreign Currency translation gain/loss                                                |   |                            | 6,586     |   |   |   | - |   |
| Cash and cash equivalents, beginning of period                                        |   |                            | 14,716    |   |   |   | 148 |   |
| Cash and cash equivalents, end of period                                              |   | $                               | 14,780    |   |   | $ | 8,731 |   |
|                                                                                  |   |                            |      |   |   |   |   |   |
|                                                                                  |   |                            |      |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION                                                    |   |                            |      |   |   |   |   |   |
| Purchase of treasury stock for increase  in related party expense           |   | $                               | -         |   |   | $ | 790,000 |   |
| Cost of treasury shares in excess of cash received for resale                         |   |                            | -         |   |   |   | 214,500 |   |
| Shares issued for retirement of debt                                                  |   |                            | 1,042,801 |   |   |   | 2,153,014 |   |
| ORRI issued to relieve debt                                                           |   |                            | -         |   |   |   | 176,351 |   |
| Preferred and common shares issued to acquire oil and gas properties and fixed assets |   |                            | 1,228,414 |   |   |   | 265,100 |   |
| Acquisition of oil & gas properties with debt                                     |   |                            | 328,012   |   |   |   | 1,296,017 |   |
| Preferred shares converted to common shares                                           |   |                            | 60,000    |   |   |   | 120,000 |   |
| Note relieved in exchange for transfer of assets                                      |   |                            | -         |   |   |   | 69,011 |   |
| Assumption of asset retirement obligation with acquisition of oil and gas properties  |   |                            | 76,707    |   |   |   | 35,548 |   |
| Shares issued to relieve stock payable                                                |   |                            | -         |   |   |   | 204,000 |   |
| Shares issued to shareholder to reimburse issuances on behalf of the company          |   |                            | -         |   |   |   | 26,809 |   |
| Shares issued by related party on behalf of company for potential acquisition         |   |                            | 140,000   |   |   |   | - |   |

----

| Related party debt donated to Additional Paid in Capital   |   |   | 971,504 |   |   |   | 397,671 |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|
| Asset retirement obligation assumed with acquisition       |   |   | 95,578  |   |   |   | -       |   |
| Debt discount due to sale of ORRI attached to note payable |   |   | 137,620 |   |   |   | -       |   |

----

----

----

----

|                           |   | 09/30/12 |      |   | 12/31/11 |   |
|--------------------------------|--------|----------|-----------|--------|----------|--------|
| Oilfield Support Equipment     |   | $        | 907,343   |   |     | $      | 1,141,701 |   |
| Less: accumulated depreciation |   |     | (143,007  | )      |     |   | (107,353 | ) |
| Total                          |   |     | 764,336   |   |     |   | 1,034,348 |   |
| Proved developed producing:    |   |     |      |   |     |   |   |   |
| Texas                          |   | $        | 1,912,795 |   |     | $      | 105,494 |   |
| Less: accumulated depletion    |   |     | (63,734   | )      |     |   | (18,086 | ) |
| Total                          |   |     | 1,849,061 |   |     |   | 87,408 |   |
|                           |   |     |      |   |     |   |   |   |
| Unproved:                      |   |     |      |   |     |   |   |   |
| Belize                         |   |     | 48,075    |   |     |   | 48,075 |   |
| Total                          |   | $        | 48,075    |   |     | $      | 48,075 |   |

----

|                                                |   | 09/30/12 |      |   | 12/31/11 |   |
|-----------------------------------------------------|--------|----------|-----------|--------|----------|--------|
|                                                |   |     |      |   |     |   |
|  Drilling rigs and related equipment           |   | $        | 839,696   |   |     | $      | 467,656 |   |
|  Office equipment                              |   |     | 5,165     |   |     |   | 3,958 |   |
|  Furniture and fixtures                        |   |     | 1,049     |   |     |   | 1,000 |   |
|  Vehicles                                      |   |     | 200,435   |   |     |   | 42,520 |   |
|  Equipment                                     |   |     | 25,043    |   |     |   | 32,474 |   |
|  Total property, plant and equipment - at cost |   |     | 1,071,388 |   |     |   | 547,608 |   |
|  Less: accumulated depreciation                |   |     | (159,767  | )      |     |   | (53,135 | ) |
|  Net property, plant and equipment - other     |   | $        | 911,621   |   |     | $      | 494,473 |   |

----

----

| ●   | On June 7, 2012, the Company issued 177,143 shares of common stock to a related party, to relieve $5,000 of debt.  The fair value of the shares was $6,377 resulting in a loss of $1,377. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 3, 2012, the Company issued 15,872,936 shares of common stock valued at $427,500 for cash payments from unrelated investors. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on August 3, 2012, the Company issued 4,592,986 shares of common stock valued at $234,242, to a related party controlled by our Chairman, Andrew Reid, to relieve debt to that company, resulting in a loss of $107,967. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on August 3, 2012, the Company issued 1,000,000 shares of common stock valued at $43,000, for services rendered to the Company by consultants. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on August 3, 2012, the Company issued 557,143 shares of common stock valued at $28,414 for the purchase of equipment. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------|

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| ●   | Also on August 3, 2012, the Company issued 1,962,490 shares of common stock valued at $100,084, to pay an outstanding balance to one of our legal consultants. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 8, 2012, the Company issued 22,185,893 shares of common stock valued at $1,082,672 to a principal in a related company controlled by our Chairman and Chief Executive Officer, Andrew Reid as recognition for his efforts in providing shares for fund raising on behalf of  the Company and for unpaid and unreimbursed fees and expenses. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 9, 2012, the Company issued 7,616,533 shares of common stock valued at 373,210 to our Chairman and Chief Executive Officer, Andrew Reid as recognition for his efforts in providing shares for fund raising on behalf of  the Company and for unpaid and unreimbursed fees and expenses. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 20, 2012, the Company issued 3,943,750 shares of common stock valued at $104,250 for cash payments from unrelated investors. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Also on August 20, 2012, the Company issued 28,506,812 shares of common stock valued at $1,331,268, to a related party controlled by our Chairman, Andrew Reid, to relieve debt to that company, resulting in a loss of $752,868. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   |  Also on August 20, 2012, the Company issued 8,347,188 shares of common stock valued at $389,814, for services rendered to the Company by consultants. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 27, 2012, the Company issued 7,500,000 shares of common stock valued at $345,000, to the Company’s new Chief Financial Officer, George Warren, in recognition of his efforts in raising capital for the company. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 29, 2012, the Company issued 18,662,011 shares of common stock valued at $839,791, to consultants and others who had provided services to the company. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On September 5, 2012, the Company issued 600,000 shares of common stock, valued at $60,000 for the conversion of preferred stock.  The conversion was consistent with the original issuance agreement, therefore no gain or loss was recognized. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On September 6, 2012, the Company issued 20,180,000 shares of common stock valued at $864,200, to consultants and others who had provided services to the company. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On September 17, 2012, the Company issued 5,000,000 shares of common stock valued at $180,000, to consultants and others who had provided services to the company. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | 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 September 30, 2012, and are recorded within stock payable as of September 30, 2012. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | 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 September 30, 2012, and are recorded within stock payable as of September 30, 2012. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On July 1, 2011 we contracted with a broker to purchase and sell shares of our common stock. As of September 30, 2012, $26,875 had been received for 1,343,750 shares subscribed to but not yet issued by the Company.  The agreement has now been abandoned and the stock payable was terminated with a related party agreeing to pay the $26,875 back to the broker. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On June 8, 2012, an unrelated investor advanced the Company  $26,250 for 1,500,000 common shares to be issued.  These shares were issued with the August 3, 2012, issuance of shares described above. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | During the three months ended September 30, 2012, the Company received $462,743 from various unrelated investors for which stock had not been issued as of this report date. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 15, 2012, the Company purchased three leases from 3K Oil Trust.  Under the terms of that agreement, the Company is to issue 30,000,000 shares of common stock.  These shares were issued on October 9, 2012, subsequent to the report date.  The value of the shares is reflected in the Stock Payable at  $1,200,000. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                             |   | 09/30/12 |    |   | 12/31/11 |   |
|------------------------------------------------------------------|--------|----------|---------|--------|----------|--------|
|                                                             |   |     |    |   |     |   |   |   |
| Trade accounts payable                                           |   | $        | 361,957 |   |     | $      | 425,903 |   |
| Accrued expenses – related party                           |   |     | -       |   |     |   |   |   |
| Accrued expenses                                                 |   |     | 54,849  |   |     |   |   |   |
| Royalties payable                                                |   |     | 18,302  |   |     |   |   |   |
| Liabilities associated with our reverse merger in December, 2008 |   |     | 200,380 |   |     |   | 200,380  |   |
| Bank overdraft                                                   |   |     | -       |   |     |   | 1,982 |   |
| All-Secure payable                                               |   |     | 33,098  |   |     |   | 89,347 |   |
| Total                                                            |   | $        | 668,586 |   |     | $      | 717,612 |   |

|                                              |   | 09/30/12 |         |   | 12/31/11 |   |
|---------------------------------------------------|--------|----------|--------------|--------|----------|--------|
| Beginning Balance                                 |   | $        | 130,397      |   |     | $      | 128,367 |   |
| Increase due to purchased leases                  |   |     | 95,578  |   |     |   | -0- |   |
| Decrease due to property disposed of              |   |     | (20,350      | )      |     |   | -0- |   |
| Accretion to balance sheet date                   |   |     | 18,339       |   |     |   | 2,030 |   |
| Asset retirement obligation at balance sheet date |   | $        | 223,964      |   |     | $      | 130,397 |   |

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| ●   | We accrued $90,000 and $270,000 of compensation costs for the three and nine months ended September 30, 2012 to our Chairman and CEO and two other related consultants.  During the three months ended March 31, 2012, $90,000 was forgiven by these parties and relieved to Additional Paid in Capital.   During the three months ended September 30, 2012, stock was issued to each of the parties to pay all of the unpaid accrued payments, as well as, prepaying fees of $90,000 through December 31, 2012. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | September 30, 2012, we borrowed a net amount of $1,819,625 for the nine months ended September 30, 2012, from an entity owned by our Chairman and CEO, Andrew Reid.  During the nine months ended September 30, 2012, $881,504 was forgiven by this party and relieved to Additional Paid in Capital.  During the three months ended September 30, 2012, the Company issued shares to the principals of the related party, reducing the liability by $709,675.  Amounts owed as of September 30, 2012 and December 31, 2011 were $49,321 and $0, respectively. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | An entity owned by our Chairman and CEO, Andrew Reid, paid 4,000,000 shares they held in our common stock to an acquisition target as a deposit for a potential acquisition. The shares were valued on the date they were issued at $140,000 and recorded as an addition to other assets and additional paid in capital as the entity contributed the shares and is not seeking repayment. The acquisition had not closed as of September 30, 2012 and relates to a Belize target with undrilled and unproved oil and gas leases. If the acquisition is closed the Company will be obligated to pay $4,500 monthly for 3 years. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | The entity owned by our Chairman and CEO, Andrew Reid, reacquired stock they had sold back to the Company during 2011.  The Company reacquired the 9,000,000 shares previously held by the Company as treasury stock in lieu of relief of debt of $333,125 and assumption of a stock payable owed valued at $26,875. The fair value of the shares issued was equal to $360,000 as of the date of grant. As a result of this transaction, treasury stock was credited for $355,500 (cost basis of treasury shares issued), additional paid in capital was credited for $4,500 (to value shares at fair market value), related party debt was debited for $333,125, and stock payable was debited for $26,875. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 8, 2012, the Company issued 22,185,893 shares of common stock to a principal in a related company controlled by our Chairman and Chief Executive Officer, Andrew Reid as recognition for his efforts in providing shares for fund raising on behalf of  the Company and for unpaid and unreimbursed fees and expenses. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 9, 2012, the Company issued 7,616,533 shares of common stock to our Chairman and Chief Executive Officer, Andrew Reid as recognition for his efforts in providing shares for fund raising on behalf of  the Company and for unpaid and unreimbursed fees and expenses. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On August 24, 2012, the Company received a cash payment of $14,000 for the purchase of Company shares of common stock.  Prior to September 30, 2012, our Chairman, Andrew Reid, issued shares to the investor from his personal holdings.  The Company has included the $14,000 in the Related Party payable at September 30, 2012. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ●   | Paid an additional $40,000 on our promissory note on the promissory note from Wiljam. |
|---------------------|---------------------------------------------------------------------------------------|

| ●   | Paid an additional $13,000 on our payable to All Secure Holdings. |
|---------------------|-------------------------------------------------------------------|

| ●   | Have set aside $342,000 in escrow against the legal judgment pending with former officers. The balance expected to be paid is already fully accrued at September 30, 2012. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Have issued 30,000,000 shares of common stock to conclude our obligations from the purchase of  the 3K Oil Trust. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ●   | Have issued 13,880,142 shares of common stock for services rendered by consultants. |
|---------------------|-------------------------------------------------------------------------------------|

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| 1.   | As of December 31, 2011, 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, 2011, 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: November 19, 2012 | By:                       | /s/ Andrew V. Reid                    |   |
|                    |                      | Andrew V. ReidChief Executive Officer |   |

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