----

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

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

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

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

----

----

----

| PART I – FINANCIAL INFORMATION |                                                                                        |   | 3      |   |
|--------------------------------------|---------------------------------------------------------------------------------------------|--------|--------|--------|
|                                 |                                                                                        |   |   |   |   |
| Item 1 –                       | Financial Statements                                                                        |   |   | 3      |   |
|                                 |                                                                                        |   |   |   |   |
| Item 2 –                       | Management’s Discussion And Analysis Of Financial Condition And Results Of Operations |   |   | 19     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 3 –                       | Quantitive And Qualitative Disclosures About Market Risk                                    |   |   | 20     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 4 –                       | Controls and Procedures                                                                     |   |   | 21     |   |
|                                 |                                                                                        |   |   |   |   |
| PART II – OTHER INFORMATION    |                                                                                        |   | 22     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 1 –                       | Legal Proceedings                                                                           |   |   | 22     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 1A –                      | Risk Factors                                                                                |   |   | 22     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 2 –                       | Unregistered Sales of Equity Securities                                                     |   |   | 22     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 3 –                       | Defaults Upon Senior Securities                                                             |   |   | 23     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 4 –                       | Submission of Matters to a Vote of Security Holders                                         |   |   | 23     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 5 –                       | Other Information                                                                           |   |   | 23     |   |
|                                 |                                                                                        |   |   |   |   |
| Item 6 –                       | Exhibits                                                                                    |   |   | 23     |   |
|                                 |                                                                                        |   |   |   |   |
| SIGNATURES                           |                                                                                        |   | 24     |   |

----

|                                                       |   | June 30, 2012 (Unaudited) |      |   | December 31,2011 |   |
|------------------------------------------------------------|--------|---------------------------|-----------|--------|------------------|--------|
|                                                       |   |                      |      |   |             |   |
| ASSETS                                                     |   |                      |      |   |             |   |
|                                                       |   |                      |      |   |             |   |
| Cash and equivalents                                       |   | $                         | 22,889    |   |             | $      | 14,716 |   |
| Accounts & other receivables                           |   |                      | 11,285    |   |             |   | 23,438 |   |
| Total current assets                                       |   |                      | 34,174    |   |             |   | 38,154 |   |
|                                                       |   |                      |      |   |             |   |   |   |
| Oil and gas properties (successful efforts)                |   |                      |      |   |             |   |   |   |
| Proved producing, net                                      |   |                      | 105,494   |   |             |   | 105,494 |   |
| Unproved                                                   |   |                      | 48,075    |   |             |   | 48,075 |   |
| Oilfield support equipment                                 |   |                      | 1,141,701 |   |             |   | 1,141,701 |   |
| Less: accumulated depreciation, depletion and amortization |   |                      | (211,702  | )      |             |   | (125,439 | ) |
| Net oil and gas properties and support equipment           |   |                      | 1,083,568 |   |             |   | 1,169,831 |   |
|                                                       |   |                      |      |   |             |   |   |   |
| Property, plant and equipment, net                         |   |                      | 786,609   |   |             |   | 494,473 |   |
| Prepaid expenses and other assets                          |   |                      | 205,363   |   |             |   | 65,363 |   |
| Carved out interest, net                                   |   |                      | 73,808    |   |             |   | 76,005 |   |
| TOTAL ASSETS                                               |   | $                         | 2,183,522 |   |             | $      | 1,843,826 |   |
|                                                       |   |                      |      |   |             |   |   |   |
| LIABILITIES                                                |   |                      |      |   |             |   |   |   |
|                                                       |   |                      |      |   |             |   |   |   |
| Accounts payable and accrued liabilities                   |   | $                         | 670,032   |   |             | $      | 717,612 |   |
| Notes and accrued interest payable                         |   |                      | 732,798   |   |             |   | 829,095 |   |
| Related party payable                                      |   |                      | 866,421   |   |             |   | - |   |
| Cash Call Liability                                        |   |                      | 74,200    |   |             |   | - |   |
| Purchase Option Liabilities                                |   |                      | 25,000    |   |             |   | 25,000 |   |
| Total current liabilities                                  |   |                      | 2,368,451 |   |             |   | 1,571,707 |   |
|                                                       |   |                      |      |   |             |   |   |   |
| Deferred Revenue                                           |   |                      | 514,702   |   |             |   | 545,507 |   |
| Asset retirement obligation                                |   |                      | 142,634   |   |             |   | 130,397 |   |
| TOTAL LIABILITIES                                          |   | $                         | 3,025,787 |   |             | $      | 2,247,611 |   |

----

|                                                                                                                                                                                                                                                                                  |   | June 30, 2012 (Unaudited) |        |   | December 31,2011 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-------------|--------|------------------|--------|
| Convertible Redeemable Class A Preferred Stock (12,000 and 0 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively, $5 redemption value )                                                                                                           |   |                      | 60,000      |   |             |   | 60,000 |   |
|                                                                                                                                                                                                                                                                                  |   |                      |        |   |             |   |   |   |
| STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                                                                                                        |   |                      |        |   |             |   |   |   |
|                                                                                                                                                                                                                                                                                  |   |                      |        |   |             |   |   |   |
| Preferred stock - par value $0.001, 50 million shares authorized, none issued or outstanding at September 30, 2011 and December 31, 2010                                                                                                                                              |   |                      | -           |   |             |   |   |   |
| Common stock – par value $0.001, 950 million shares authorized,  746,626,212 and 746,449,069 shares issued  at June 30, 2012 and December 31, 2011, and 746,626,212 and 737,449,069 shares outstanding at June 30, 2012 and December 31, 2011, respectively |   |                      | 746,626     |   |             |   | 746,449 |   |
|                                                                                                                                                                                                                                                                                  |   |                      |        |   |             |   |   |   |
| Treasury Stock                                                                                                                                                                                                                                                                        |   |                      | -           |   |             |   | (355,500 | ) |
| Additional paid in capital                                                                                                                                                                                                                                                            |   |                      | 9,730,474   |   |             |   | 8,730,631 |   |
| Common stock payable                                                                                                                                                                                                                                                                  |   |                      | 85,250      |   |             |   | 85,875 |   |
| Accumulated loss - pre-exploration stage                                                                                                                                                                                                                                              |   |                      | (644,829    | )      |             |   | (644,829 | ) |
| Accumulated loss - exploration stage                                                                                                                                                                                                                                                  |   |                      | (10,672,214 | )      |             |   | (8,963,829 | ) |
| Accumulated other comprehensive income                                                                                                                                                                                                                                                |   |                      | 4,030       |   |             |   | 390 |   |
|                                                                                                                                                                                                                                                                                  |   |                      |        |   |             |   |   |   |
| Total stockholders' equity (deficit) attributable to Treaty                                                                                                                                                                                                                           |   |                      | (750,663    | )      |             |   | (400,813 | ) |
| Non-Controlling Interest                                                                                                                                                                                                                                                              |   |                      | (151,602    | )      |             |   | (62,972 | ) |
|    Total Stockholder's equity (deficit)                                                                                                                                                                                                                                |   |                      | (902,265    | )      |             |   | (463,785 | ) |
|                                                                                                                                                                                                                                                                                  |   |                      |        |   |             |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                                                                                  |   | $                         | 2,183,522   |   |             | $      | 1,843,826 |   |

----

|                                                                 |   | Six Months Ended June 30, |        |   | Three Months Ended June 30, |   |
|----------------------------------------------------------------------|--------|---------------------------|-------------|--------|-----------------------------|--------|
|                                                                 |   | 2012 (Unaudited)          |        |   | 2011 (Unaudited)            |   |   | 2012 (Unaudited) |   |   | 2011 (Unaudited) |   |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |
| REVENUES                                                             |   |                      |        |   |                        |   |   |   |   |   |   |   |
| Oil and gas revenues                                                 |   | $                         | 70,103      |   |                        | $      | 69,530 |   |   | $ | 13,087 |   |   | $ | 69,530 |   |
| Total revenues                                                       |   |                      | 70,103      |   |                        |   | 69,530 |   |   |   | 13,087 |   |   |   | 69,530 |   |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                                             |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Lease operating expenses                                             |   |                      | 158,879     |   |                        |   | 237,379 |   |   |   | 81,388 |   |   |   | 130,664 |   |
| Direct drilling costs                                                |   |                      | 210,477     |   |                        |   | 7,987 |   |   |   | 136,805 |   |   |   | 7,987 |   |
| Land lease costs                                                     |   |                      | 20,000      |   |                        |   | - |   |   |   | - |   |   |   | - |   |
| Production taxes                                                     |   |                      | 3,740       |   |                        |   | 3,205 |   |   |   | - |   |   |   | 3,205 |   |
| General and  administrative                                |   |                      | 1,204,861   |   |                        |   | 2,794,110 |   |   |   | 653,045 |   |   |   | 2,651,562 |   |
| Depreciation, depletion and amortization                             |   |                      | 153,316     |   |                        |   | 22,201 |   |   |   | 75,050 |   |   |   | 19,855 |   |
| Accretion of asset retirement obligation                             |   |                      | 12,237      |   |                        |   | 710 |   |   |   | 11,061 |   |   |   | 710 |   |
| Interest expense                                                     |   |                      | 94,877      |   |                        |   | 126,793 |   |   |   | 51,687 |   |   |   | 115,390 |   |
|  Total expenses                                                 |   |                      | 1,858,387   |   |                        |   | 3,192,385 |   |   |   | 1,009,036 |   |   |   | 2,929,373 |   |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|  Operating Loss                                                 |   |                      | (1,788,284  | )      |                        |   | (3,122,855 | ) |   |   | (995,949 | ) |   |   | (2,859,843 | ) |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME AND EXPENSE ITEMS                                       |   |                      |        |   |                        |   |   |   |   |   |   |   |   |
| Gain (Loss) on retirement of debt                                    |   |                      | (1,377      | )      |                        |   | (1,070,702 | ) |   |   | (1,377 | ) |   |   | (1,087,989 | ) |
| Gain (Loss) on sale of assets                                        |   |                      | (7,354      | )      |                        |   | - |   |   |   | - |   |   |   | - |   |
|  NET LOSS                                                       |   |                      | (1,797,015  | )      |                        |   | (4,193,557 | ) |   |   | (997,326 | ) |   |   | (3,947,832 | ) |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Less: loss attributable to Non-Controlling Interests                 |   |                      | 88,630      |   |                        |   | - |   |   |   | 58,243 |   |   |   | - |   |
| Net loss attributable to Treaty Energy Corporation                   |   | $                         | (1,708,385  | )      |                        | $      | (4,193,557 | ) |   | $ | (939,083 | ) |   | $ | (3,947,832 | ) |
| Foreign Currency Translation Gain / (Loss)                           |   |                      | 3,640       |   |                        |   | - |   |   |   | 3,640 |   |   |   | - |   |
| Comprehensive loss attributable to Treaty                            |   |                      | (1,704,745  | )      |                        |   | (4,193,557 | ) |   |   | (935,443 | ) |   |   | (3,947,832 | ) |
| Add: loss attributable to Non-Controlling Interests                  |   |                      | (88,630     | )      |                        |   | - |   |   |   | (58,243 | ) |   |   | - |   |
| Total Comprehensive Loss                                             |   |                      | (1,793,375  | )      |                        |   | (4,193,557 | ) |   |   | (993,686 | ) |   |   | (3,947,832 | ) |
|                                                                 |   |                      |        |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|  Net loss per common shares - basic and diluted                 |   | $                         | (0.00       | )      |                        | $      | (0.01 | ) |   | $ | (0.00 | ) |   | $ | (0.01 | ) |
|  Weighted average common shares outstanding - basic and diluted |   |                      | 738,906,494 |   |                        |   | 579,158,527 |   |   |   | 740,363,920 |   |   |   | 643,027,415 |   |

----

|                                                          |   | Six Months Ended June 30, |       |
|---------------------------------------------------------------|--------|---------------------------|------------|
|                                                          |   | 2012                      |       |   | 2011 |   |
|                                                          |   | (Unaudited)               |       |   | (Unaudited) |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                          |   |                      |       |   |   |   |
| Net loss                                                      |   | $                         | (1,797,015 | ) |   | $ | (4,193,557 | ) |
| Adjustments to reconcile net loss to net cash                 |   |                      |       |   |   |   |   |   |
|    provided by/(used in) operating activities: |   |                      |       |   |   |   |   |   |
| Depreciation, depletion and amortization                      |   |                      | 153,316    |   |   |   | 22,201 |   |
| Loss on sales of assets                                       |   |                      | 7,354      |   |   |   | - |   |
| (Gain) loss on retirement of debt                             |   |                      | 1,377      |   |   |   | 1,070,702 |   |
| Shares owed for payment of interest on notes payable          |   |                      | -          |   |   |   | 39,000 |   |
| Amortization of discount on notes payable                     |   |                      | 3,983      |   |   |   | 43,972 |   |
| Accretion of asset retirement obligation                      |   |                      | 12,237     |   |   |   | 710 |   |
| Stock based compensation (shares issued and owed)             |   |                      | -          |   |   |   | 2,093,743 |   |
| Interest imputed on related-party notes                       |   |                      | 17,638     |   |   |   | 9,564 |   |
| Amortization of deferred revenue                              |   |                      | (30,805    | ) |   |   | - |   |
|                                                          |   |                      |       |   |   |   |   |   |
| Changes in operating assets and liabilities:                  |   |                      |       |   |   |   |   |   |
| Accounts receivable                                           |   |                      | 12,153     |   |   |   | (113,740 | ) |
|                                                          |   |                      |       |   |   |   |   |   |
| Accounts payable & accrued expenses                       |   |                      | 181,152    |   |   |   | 291,238 |   |
| Director & officer liabilities                            |   |                      | -          |   |   |   | 30,000 |   |
| Prepaid expenses & other assets                           |   |                      | -          |   |   |   | (65,000 | ) |
| Cash Call Liability                                           |   |                      | 74,200     |   |   |   | - |   |
| Net cash provided by / (used in) operating activities         |   |                      | (1,364,410 | ) |   |   | (771,167 | ) |
|                                                          |   |                      |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                          |   |                      |       |   |   |   |   |   |
| Acquisitions of oil and gas properties & fixed assets     |   |                      | -          |   |   |   | (65,000 | ) |
| Deposit on equipment lease purchase                           |   |                      | (28,000    | ) |   |   | - |   |
| Purchases of fixed assets                                     |   |                      | (336,296   | ) |   |   | (239,885 | ) |
| Proceeds from sales of oil and gas interests                  |   |                      | -          |   |   |   | - |   |
| Net cash provided by / (used in) investing activities         |   |                      | (364,296   | ) |   |   | (304,885 | ) |

----

|                                                                                  |   | Six Months Ended June 30, |      |
|---------------------------------------------------------------------------------------|--------|---------------------------|-----------|
|                                                                                  |   | 2012                      |      |   | 2011 |   |
|                                                                                  |   | (Unaudited)               |      |   | (Unaudited) |   |
|                                                                                  |   |                      |      |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                  |   |                      |      |   |   |   |
| Advances from related parties, net                                                    |   |                      | 1,854,051 |   |   |   | 769,685 |   |
| Proceeds from notes payable                                                           |   |                      | 150,000   |   |   |   | 340,500 |   |
| Principal payments on notes payable                                                   |   |                      | (295,080  | ) |   |   | (205,500 | ) |
| Bank overdraft                                                                        |   |                      | (1,982    | ) |   |   | - |   |
| Common stock issued for cash                                                          |   |                      | -         |   |   |   | 197,750 |   |
| Common stock payable for cash                                                         |   |                      | 26,250    |   |   |   | 20,000 |   |
| Net cash provided by / (used in) financing activities                                 |   |                      | 1,733,239 |   |   |   | 1,122,435 |   |
|                                                                                  |   |                      |      |   |   |   |   |   |
| Net increase / (decrease) in cash and cash equivalents                                |   |                      | 4,533     |   |   |   | 46,383 |   |
| Foreign Currency translation gain/loss                                                |   |                      | 3,640     |   |   |   | - |   |
| Cash and cash equivalents, beginning of period                                        |   |                      | 14,716    |   |   |   | 148 |   |
| Cash and cash equivalents, end of period                                              |   | $                         | 22,889    |   |   | $ | 46,531 |   |
|                                                                                  |   |                      |      |   |   |   |   |   |
|                                                                                  |   |                      |      |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION                                                    |   |                      |      |   |   |   |   |   |
| Cash paid for interest                                                                |   | $                         | 26,723    |   |   | $ | 6,000 |   |
| Shares issued for retirement of debt                                                  |   |                      | 5,000     |   |   |   | 1,737,566 |   |
| Preferred and common shares issued to acquire oil and gas properties and fixed assets |   |                      | -         |   |   |   | 445,100 |   |
| Acquisition of oil & gas properties with debt                                     |   |                      | -         |   |   |   | 1,296,017 |   |
| Preferred shares converted to common shares                                           |   |                      | -         |   |   |   | 120,000 |   |
| Shares owed for conversion of notes payable                                           |   |                      | -         |   |   |   | 390,000 |   |
| Assumption of asset retirement obligation with acquisition of oil and gas properties  |   |                      | -         |   |   |   | 35,548 |   |
| Shares issued to relieve stock payable                                                |   |                      | -         |   |   |   | 204,000 |   |
| Shares issued to shareholder to reimburse issuances on behalf of the company          |   |                      | -         |   |   |   | 26,809 |   |
|                                                                                  |   |                      |      |   |   |   |   |   |
| 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   |   |   |   | - |   |
| Treasury shares issued for debt relief                                                |   |                      | 360,000   |   |   |   | - |   |

----

----

----

----

|                           |   | 06/30/12 |      |   | 12/31/11 |   |
|--------------------------------|--------|----------|-----------|--------|----------|--------|
| Oilfield Support Equipment     |   | $        | 1,141,701 |   |     | $      | 1,141,701 |   |
| Less: accumulated depreciation |   |     | (188,680  | )      |     |   | (107,353 | ) |
| Total                          |   |     | 953,021   |   |     |   | 1,034,348 |   |
|                           |   |     |      |   |     |   |   |   |
| Proved developed producing:    |   |     |      |   |     |   |   |   |
|                           |   |     |      |   |     |   |   |   |
| Texas                          |   | $        | 105,494   |   |     | $      | 105,494 |   |
| Less: accumulated depletion    |   |     | (23,022   | )      |     |   | (18,086 | ) |
| Total                          |   |     | 82,472    |   |     |   | 87,408 |   |
|                           |   |     |      |   |     |   |   |   |
| Unproved:                      |   |     |      |   |     |   |   |   |
| Belize                         |   |     | 48,075    |   |     |   | 48,075 |   |
| Total                          |   | $        | 48,075    |   |     | $      | 48,075 |   |

----

|                                          |   | 06/30/12 |     |   | 12/31/11 |   |
|-----------------------------------------------|--------|----------|----------|--------|----------|--------|
|                                          |   |     |     |   |     |   |
| Drilling rigs and related equipment           |   | $        | 750,245  |   |     | $      | 467,656 |   |
| Office equipment                              |   |     | 5,165    |   |     |   | 3,958 |   |
| Furniture and fixtures                        |   |     | 1,000    |   |     |   | 1,000 |   |
| Vehicles                                      |   |     | 123,020  |   |     |   | 42,520 |   |
| Equipment                                     |   |     | 24,598   |   |     |   | 32,474 |   |
| Total property, plant and equipment - at cost |   |     | 904,028  |   |     |   | 547,608 |   |
| Less: accumulated depreciation                |   |     | (117,419 | )      |     |   | (53,135 | ) |
| Net property, plant and equipment - other     |   | $        | 786,609  |   |     | $      | 494,473 |   |

----

----

| ●   | On June 7, 2012, the Company issued 177,143 shares to an investor and unrelated party. |
|---------------------|----------------------------------------------------------------------------------------|

| ●   | On May 20, 2011 the Company entered into a note agreement for $100,000 that required payment of 1,000,000 shares as an inducement to the lender. Due to the short term nature of the note the full value of the shares of $39,000 was expensed and recorded to stock payable with the agreement. These shares remained unissued as of June 30, 2012, and are recorded within stock payable as of June 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 June 30, 2012, and are recorded within stock payable as of June 30, 2012. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On July 1, 2011 we contracted with a broker to purchase and sell shares of our common stock. As of June 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. |
|---------------------|---------------------------------------------------------------------------------------------------------------|

----

----

|                                                             |   | 06/30/12 |    |   | 12/31/11 |   |
|------------------------------------------------------------------|--------|----------|---------|--------|----------|--------|
| Trade accounts payable                                           |   | $        | 310,525 |   |     | $      | 425,903 |   |
| Accrued expenses – related party                           |   |     | 90,000  |   |     |   |   |   |
| Accrued expenses                                                 |   |     | 109,279 |   |     |   |   |   |
| Liabilities associated with our reverse merger in December, 2008 |   |     | 200,380 |   |     |   | 200,380 |   |
| Bank overdraft                                                   |   |     | -       |   |     |   | 1,982 |   |
| All-Secure payable                                               |   |     | 51,848  |   |     |   | 89,347 |   |
| Total                                                            |   | $        | 762,032 |   |     | $      | 717,612 |   |

|                                              |   | 06/30/12 |    |   | 12/31/11 |   |
|---------------------------------------------------|--------|----------|---------|--------|----------|--------|
| Beginning Balance                                 |   | $        | 130,397 |   |     | $      | 128,367 |   |
| Accretion to balance sheet date                   |   |     | 12,237  |   |     |   | 2,030 |   |
| Asset retirement obligation at balance sheet date |   | $        | 142,634 |   |     | $      | 130,397 |   |

----

| ●   | We accrued $90,000 and $180,000 of compensation costs for the three and six months ended June 30, 2012 to our Chairman and CEO and two other related consultants.  During the six months ended June 30, 2012, $90,000 was forgiven by these parties and relieved to Additional Paid in Capital. Amounts owed as of June 30, 2012 and December 31, 2011 were $90,000 and $0, respectively. |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | We borrowed a net amount of $1,854,051 for the six months ended June 30, 2012, from an entity owned by our Chairman and CEO, Andrew Reid.  During the six months ended June 30, 2012 $881,504 was forgiven by this party and relieved to Additional Paid in Capital. Amounts owed as of June 30, 2012 and December 31, 2011 were $774,421 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 June 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. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ●   | Paid an additional $10,000 on our promissory note on the promissory note from Wm. Hackmeyer |
|---------------------|---------------------------------------------------------------------------------------------|

| ●   | Have set aside $60,000 in escrow against the legal judgment pending with former officers. The balance expected to be paid is already fully accrued at June 30, 2012. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Assumed the purchase of a lease acquisition made by the entity partially owned by our Chairman and CEO.  Under this agreement the Company will add 3 leases for $1,200,000 in cash and $6,000,000 in stock.  The Company has paid $34,770 towards the cash liability and points on the sale. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | On July 31, 2012, the Company authorized the issuance of 24,115,950 shares of stock of which 1,000,000 shares was issued for consulting expenses, and the balance for  the retirement of amounts owed to a related party. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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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: August 14, 2012 | By:                       | /s/ Andrew V. Reid      |   |
|                  |                      | Andrew V. Reid          |   |
|                  |                      | Chief Executive Officer |   |

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