----

| NEVADA                                                        |   | 98-0687026                          |
|---------------------------------------------------------------|--------|-------------------------------------|
| (State or other jurisdiction ofincorporation or organization) |   | (I.R.S. EmployerIdentification No.) |
|   | Large accelerated filer | ☐ | Accelerated filer         | ☐ |
|--------|-------------------------|---------|---------------------------|---------|
|   | Non-accelerated filer   | ☐ | Smaller reporting company | ☒ |

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Table of Contents

|                                 | Page                                                                                                          |
|--------------------------------------|---------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                                          |
| Part I – FINANCIAL INFORMATION | 3                                                                                                             |
|                                 |                                                                                                          |
| Item 1.                              | Financial Statements                                                                                          | 3 |
|                                 |                                                                                                          |   |
|                                 | Consolidated Balance Sheets as of April 30, 2016 (unaudited) and October 31, 2015                        | 3 |
|                                 |                                                                                                          |   |
|                                 | Consolidated Statements of Operations for the three months ended April 30, 2016 and 2015 (unaudited)          | 4 |
|                                 |                                                                                                          |   |
|                                 | Consolidated Statements of Operations for the six months ended April 30, 2016 and 2015 (unaudited)            | 5 |
|                                 |                                                                                                          |   |
|                                 | Consolidated Statements of Cash Flows for the six months ended April 30, 2016 and 2015  (unaudited) | 6 |
|                                 |                                                                                                          |   |
|                                 | Notes to Consolidated Financial Statements (unaudited)                                                        | 7 - 17 |
|                                 |                                                                                                          |   |
| Item 2.                              | Management's Discussion and Analysis of Financial Condition and Results of Operations                         | 18 |
|                                 |                                                                                                          |   |
| Item 3.                              | Quantitative and Qualitative Disclosures About Market Risk                                                    | 24 |
|                                 |                                                                                                          |   |
| Item 4.                              | Controls and Procedures                                                                                       | 24 |
|                                 |                                                                                                          |   |
| Part II – OTHER INFORMATION    | 25                                                                                                            |
|                                 |                                                                                                          |   |
| Item 1.                              | Legal Proceedings                                                                                             | 25 |
|                                 |                                                                                                          |   |
| Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds                                                   | 25 |
|                                 |                                                                                                          |   |
| Item 6.                              | Exhibits                                                                                                      | 26 |
|                                 |                                                                                                          |   |
| SIGNATURES                           | 27                                                                                                            |

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|                                                                                   |   | April 30,   |       |   | October 31, |   |
|----------------------------------------------------------------------------------------|--------|-------------|------------|--------|-------------|--------|
|                                                                                   |   | 2016        |       |   | 2015        |   |
|                                                                                   |   | (unaudited) |       |   |        |   |
|                                                                                   |   |        |       |   |        |   |
| ASSETS                                                                                 |   |        |       |   |        |   |
| CURRENT ASSETS                                                                         |   |        |       |   |        |   |
| Cash                                                                                   |   | $           | 523,240    |   |        | $      | 21,706 |   |
| Accounts receivable, trade                                                             |   |        | 2,527,068  |   |        |   | 67,189 |   |
| Accounts receivable, other                                                             |   |        | -          |   |        |   | 313,989 |   |
| Accrued revenue                                                                        |   |        | 373,042    |   |        |   |   |   |
| Total current assets                                                                   |   |        | 3,423,350  |   |        |   | 402,884 |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| LONG-LIVED ASSETS                                                                      |   |        |       |   |        |   |   |   |
| Property and Equipment, net of accumulated depreciation and                            |   |        |       |   |        |   |   |   |
| amortization of $833,829 and $322,281                                                  |   |        | 9,691,889  |   |        |   | 1,846,111 |   |
| Bonds and deposits                                                                     |   |        | 167,867    |   |        |   | 167,867 |   |
| Land and other equipment                                                               |   |        | 194,540    |   |        |   | - |   |
| Oil and gas properties - proved developed (successful efforts method)                  |   |        |       |   |        |   |   |   |
| net of accumulated depletion and impairment of $2,676,671 and $2,623,339               |   |        | 1,229,544  |   |        |   | 1,282,876 |   |
| Oil and gas properties - proved undeveloped (successful efforts method)                |   |        | 1,241,724  |   |        |   | 1,241,724 |   |
| Oil and gas properties - unproved (successful efforts method)                          |   |        | 2,932,730  |   |        |   | 2,932,730 |   |
| Goodwill                                                                               |   |        | 3,984,695  |   |        |   | - |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| Total assets                                                                           |   | $           | 22,866,339 |   |        | $      | 7,874,192 |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                   |   |        |       |   |        |   |   |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| CURRENT LIABILITIES                                                                    |   |        |       |   |        |   |   |   |
| Accounts payable                                                                       |   | $           | 1,061,710  |   |        | $      | 387,027 |   |
| Accounts payable, related party                                                        |   |        | 148,736    |   |        |   | 147,736 |   |
| Current portion of notes payable                                                       |   |        | 1,095,471  |   |        |   | 319,632 |   |
| Note payable – related party                                                     |   |        | 107,070    |   |        |   | 107,070 |   |
| Accrued interest, related party                                                        |   |        | 19,184     |   |        |   | 15,287 |   |
| Current portion of capital lease obligation                                            |   |        | 89,004     |   |        |   | - |   |
| Estimated income tax liability                                                         |   |        | 741,329    |   |        |   | - |   |
| Line of credit                                                                         |   |        | 308,023    |   |        |   | - |   |
| Accrued expenses                                                                       |   |        | 439,548    |   |        |   | 405,669 |   |
| Total current liabilities                                                              |   |        | 4,010,075  |   |        |   | 1,382,421 |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| LONG TERM LIABILITIES                                                                  |   |        |       |   |        |   |   |   |
| Long term debt, notes payable                                                          |   |        | 7,196,836  |   |        |   | 3,498,108 |   |
| Accrued liability                                                                      |   |        | 750,000    |   |        |   |   |   |
| Capital lease obligation                                                               |   |        | 179,670    |   |        |   | - |   |
| Asset retirement obligation                                                            |   |        | 338,573    |   |        |   | 321,101 |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| COMMITMENTS AND CONTINGENT LIABILITIES                                                 |   |        |       |   |        |   |   |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| STOCKHOLDERS' EQUITY                                                                   |   |        |       |   |        |   |   |   |
| Preferred stock, $0.001 par value  50,000,000 shares authorized:             |   |        | -          |   |        |   | 301 |   |
| 301,000 shares issued and outstanding in 2015                                          |   |        |       |   |        |   |   |   |
| Common stock, $0.001 par value, 450,000,000 shares authorized,                         |   |        |       |   |        |   |   |   |
| 44,883,462 and 23,215,926 shares issued and outstanding in 2016 and 2015, respectively |   |        | 44,884     |   |        |   | 23,216 |   |
| Additional paid in capital                                                             |   |        | 20,137,747 |   |        |   | 9,741,759 |   |
| Accumulated deficit                                                                    |   |        | (9,791,446 | )      |        |   | (7,092,714 | ) |
| Total stockholders' equity                                                             |   |        | 10,391,185 |   |        |   | 2,672,562 |   |
|                                                                                   |   |        |       |   |        |   |   |   |
| Total liabilities and stockholders' equity                                             |   | $           | 22,866,339 |   |        | $      | 7,874,192 |   |

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| Diversified Resources, Inc.            |   |
|----------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS  |   |
| (Unaudited)                            |   |
|                                   |   |
|                                   |   | Three Months Ended |   |
|                                   |   | April 30, |   |   | April 30, |   |
|                                   |   | 2016 |   |   | 2015 |   |
|                                   |   |   |   |   |   |   |
| Operating revenues                     |   |   |   |   |   |   |
| Oil and gas sales                      |   | $ | 81,498 |   |   | $ | 117,539 |   |
| Oilfield and construction services     |   |   | 3,771,190 |   |   |   | - |   |
| Revenue - other                        |   |   | 59,700 |   |   |   | - |   |
| Total operating revenue                |   |   | 3,912,388 |   |   |   | 117,539 |   |
|                                   |   |   |   |   |   |   |   |   |
| Cost of services                       |   |   |   |   |   |   |   |   |
| Subcontractor expenses                 |   |   | 811,365 |   |   |   | - |   |
| Field payroll                          |   |   | 1,894,998 |   |   |   | - |   |
| Fuel expenses                          |   |   | 207,466 |   |   |   | - |   |
| Equipment rental                       |   |   | 119,026 |   |   |   | - |   |
| Material                               |   |   | 249,040 |   |   |   | - |   |
| Total cost of services                 |   |   | 3,281,895 |   |   |   | - |   |
|                                   |   |   |   |   |   |   |   |   |
| Gross margin                           |   |   | 630,493 |   |   |   | 117,539 |   |
|                                   |   |   |   |   |   |   |   |   |
| Operating expenses                     |   |   |   |   |   |   |   |   |
| Exploration costs, including dry holes |   |   | - |   |   |   | 16,513 |   |
| Lease operating expenses               |   |   | 144,839 |   |   |   | 159,011 |   |
| General and administrative             |   |   | 1,008,224 |   |   |   | 390,338 |   |
| Legal expense                          |   |   | 750,000 |   |   |   | - |   |
| Insurance expense                      |   |   | 339,134 |   |   |   | 7,670 |   |
| Depreciation expense                   |   |   | 510,346 |   |   |   | 41,768 |   |
| Depletion expense                      |   |   | 22,711 |   |   |   | 23,101 |   |
| Production tax and royalty expense     |   |   | 13,324 |   |   |   | 34,906 |   |
| Accretion expense                      |   |   | 8,736 |   |   |   | 8,254 |   |
| Total operating expenses               |   |   | 2,797,314 |   |   |   | 681,561 |   |
|                                   |   |   |   |   |   |   |   |   |
| (Loss) from operations                 |   |   | (2,166,821 | ) |   |   | (564,022 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Other income (expense)                 |   |   |   |   |   |   |   |   |
| Interest expense                       |   |   | (45,081 | ) |   |   | (30,352 | ) |
| Other income (expense), net            |   |   | (45,081 | ) |   |   | (30,352 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Net (loss)                             |   | $ | (2,211,902 | ) |   | $ | (594,374 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Net (loss) per common share            |   |   |   |   |   |   |   |   |
| Basic and diluted                      |   | $ | (0.06 | ) |   | $ | (0.03 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding    |   |   |   |   |   |   |   |   |
| Basic and diluted                      |   |   | 39,733,808 |   |   |   | 23,074,252 |   |

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| Diversified Resources, Inc.            |   |
|----------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS  |   |
| (Unaudited)                            |   |
|                                   |   |
|                                   |   | Six Months Ended |   |
|                                   |   | April 30, |   |   | April 30, |   |
|                                   |   | 2016 |   |   | 2015 |   |
|                                   |   |   |   |   |   |   |
| Operating revenues                     |   |   |   |   |   |   |
| Oil and gas sales                      |   | $ | 116,046 |   |   | $ | 357,813 |   |
| Oilfield and construction services     |   |   | 3,771,190 |   |   |   | - |   |
| Revenue - other                        |   |   | 59,700 |   |   |   | - |   |
| Total operating revenue                |   |   | 3,946,936 |   |   |   | 357,813 |   |
|                                   |   |   |   |   |   |   |   |   |
| Cost of services                       |   |   |   |   |   |   |   |   |
| Subcontractor expenses                 |   |   | 811,365 |   |   |   | - |   |
| Field payroll                          |   |   | 1,894,998 |   |   |   | - |   |
| Fuel expenses                          |   |   | 207,466 |   |   |   | - |   |
| Equipment rental                       |   |   | 119,026 |   |   |   | - |   |
| Material                               |   |   | 249,040 |   |   |   | - |   |
| Total cost of services                 |   |   | 3,281,895 |   |   |   | - |   |
|                                   |   |   |   |   |   |   |   |   |
| Gross margin                           |   |   | 665,041 |   |   |   | 357,813 |   |
|                                   |   |   |   |   |   |   |   |   |
| Operating expenses                     |   |   |   |   |   |   |   |   |
| Exploration costs, including dry holes |   |   | - |   |   |   | 16,513 |   |
| Lease operating expenses               |   |   | 226,527 |   |   |   | 330,800 |   |
| General and administrative             |   |   | 1,285,285 |   |   |   | 925,922 |   |
| Legal expense                          |   |   | 750,000 |   |   |   | - |   |
| Insurance expense                      |   |   | 339,134 |   |   |   | 23,747 |   |
| Depreciation expense                   |   |   | 584,848 |   |   |   | 83,536 |   |
| Depletion expense                      |   |   | 30,489 |   |   |   | 61,126 |   |
| Production tax and royalty expense     |   |   | 21,566 |   |   |   | 144,924 |   |
| Accretion expense                      |   |   | 22,060 |   |   |   | 14,962 |   |
| Total operating expenses               |   |   | 3,259,909 |   |   |   | 1,601,530 |   |
|                                   |   |   |   |   |   |   |   |   |
| (Loss) from operations                 |   |   | (2,594,868 | ) |   |   | (1,243,717 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Other income (expense)                 |   |   |   |   |   |   |   |   |
| Interest expense                       |   |   | (103,864 | ) |   |   | (39,237 | ) |
| Other income (expense), net            |   |   | (103,864 | ) |   |   | (39,237 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Net (loss)                             |   | $ | (2,698,732 | ) |   | $ | (1,282,954 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Net (loss) per common share            |   |   |   |   |   |   |   |   |
| Basic and diluted                      |   | $ | (0.08 | ) |   | $ | (0.06 | ) |
|                                   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding    |   |   |   |   |   |   |   |   |
| Basic and diluted                      |   |   | 32,707,725 |   |   |   | 21,563,319 |   |

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| Diversified Resources, Inc.                         |   |
|-----------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     |   |
| (Unaudited)                                         |   |
|                                                |   |   |   |   |   |   |
|                                                |   | Six Months Ended |   |
|                                                |   | April 30, |   |   | April 30, |   |
|                                                |   | 2016 |   |   | 2015 |   |
|                                                |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:               |   |   |   |   |   |   |
| Net cash provided by (used in) operating activities |   | $ | 563,287 |   |   | $ | (1,208,912 | ) |
|                                                |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:               |   |   |   |   |   |   |   |   |
| Cash paid for purchase of property and equipment    |   |   | (121,753 | ) |   |   | - |   |
|                                                |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:               |   |   |   |   |   |   |   |   |
| Proceeds from sale of common stock                  |   |   | 60,000 |   |   |   | 663,720 |   |
| Proceeds from notes payable                         |   |   | - |   |   |   | 600,000 |   |
| Payment on notes payable                            |   |   | - |   |   |   | (54,214 | ) |
| Net cash provided by financing activities           |   |   | 60,000 |   |   |   | 1,209,506 |   |
|                                                |   |   |   |   |   |   |   |   |
| INCREASE IN CASH                                    |   |   | 501,534 |   |   |   | 594 |   |
|                                                |   |   |   |   |   |   |   |   |
| BEGINNING BALANCE                                   |   |   | 21,706 |   |   |   | 209,054 |   |
|                                                |   |   |   |   |   |   |   |   |
| ENDING BALANCE                                      |   | $ | 523,240 |   |   | $ | 209,648 |   |
|                                                |   |   |   |   |   |   |   |   |
| Cash paid for income taxes                          |   | $ |   |   |   | $ | - |   |
| Cash paid for interest                              |   | $ | 103,864 |   |   | $ | 20,251 |   |
|                                                |   |   |   |   |   |   |   |   |
| Non cash investing and financing activities:        |   |   |   |   |   |   |   |   |
| Acquisition of Diversified Energy Services, Inc.:   |   |   |   |   |   |   |   |   |
| Common stock issued                                 |   | $ | 10,016,355 |   |   | $ | - |   |
| Notes payable issued                                |   | $ | 2,000,000 |   |   | $ | - |   |

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*Depreciation, depletion and amortization*

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|                                                  |   | 2016   |    |   | 2015   |   |
|-------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Asset retirement obligation as of beginning of period |   | $      | 321,101 |   |   | $      | 290,312 |   |
| Liabilities added                                     |   |   | -       |   |   |   | - |   |
| Liabilities settled                                   |   |   | -       |   |   |   | - |   |
| Revision of estimated obligation                      |   |   | -       |   |   |   | - |   |
| Accretion expense on discounted obligation            |   |   | 17,572  |   |   |   | 30,789 |   |
|                                                  |   |   |    |   |   |   |   |   |
| Asset retirement obligation as of end of period       |   | $      | 338,673 |   |   | $      | 321,101 |   |
| Heavy Equipment       | 3-15 years |
|-----------------------|------------|
| Furniture and fixture | 3-5 years  |
| Vehicles              | 3-7 years  |

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| Selected Financial Data;                            |   | Three months ended |      |
|-----------------------------------------------------|--------|--------------------|-----------|
|                                           |   | April 30, 2016     |      |
|                                                |   |               |      |
| Sales                                               |   |               |      |
| Oil and Gas                                         |   | $                  | 81,498    |   |
| Oilfield Services                                   |   |               | 3,830,890 |   |
| Total Sales                                         |   | $                  | 3,912,388 |   |
|                                                |   |               |      |   |
| Segment income (loss) and reconciliation before tax |   |               |      |   |
| Oil and Gas                                         |   | $                  | (119,726  | ) |
| Oilfield Services                                   |   |               | (288,871  | ) |
| Total segment income (loss)                         |   | $                  | (408,597  | ) |

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| Reconciling items          |   |   |       |   |
|----------------------------|--------|--------|------------|--------|
| General and administrative |   | $      | 1,008,224  |   |
| Legal expense              |   |   | 750,000    |   |
| Interest                   |   |   | 45,081     |   |
| Net loss                   |   | $      | (2,211,902 | )      |
|                       |   |   |       |   |
| Total assets               |   |   |       |   |
| Oil and Gas                |   | $      | 7,147,507  |   |
| Oilfield Services          |   |   | 15,718,832 |   |
|                  |   | $      | 22,866,339 |   |
|                                           |   | April 30,2016 |       |   | October 31,2015 |   |
|------------------------------------------------|--------|---------------|------------|--------|-----------------|--------|
|                                           |   |          |       |   |            |   |   |   |
| Heavy equipment                                |   | $             | 7,555,053  |   |            | $      | - |   |
| Pickup trucks                                  |   |          | 782,483    |   |            |   | - |   |
| Property and equipment                         |   |          | 2,188,182  |   |            |   | 2,168,392 |   |
|                                           |   |          | 10,525,718 |   |            |   | 2,168,392 |   |
|                                           |   |          |       |   |            |   |   |   |
| Less accumulated depreciation and amortization |   |          | (833,829   | )      |            |   | (322,281 | ) |
| Property and equipment, net                    |   | $             | 9,691,889  |   |            | $      | 1,846,111 |   |
|   | ● | any overriding royalties or other burden on production in excess of the 80% net revenue interest;                                                   |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | production, severance and similar taxes assessed by any taxing authority based on volume or value of the production;                                |
|   | ● | direct costs incurred in producing oil or natural gas, or the operation of the wells excluding administrative, supervisory or other indirect costs; |
|   | ● | costs reasonably incurred to process the production for market;                                                                                     |
|   | ● | costs reasonably incurred in transportation, delivery, storage or marketing the production.                                                         |

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|                                     |   | April 30,2016 |      |   | October 31,2015 |   |
|------------------------------------------|--------|---------------|-----------|--------|-----------------|--------|
|                                     |   |          |      |   |            |   |
| Convertible promissory note              |   | $             | 248,895   |   |            | $      | 248,895 |   |
| BIYA note                                |   |          | 1,860,000 |   |            |   | 1,860,000 |   |
| BIYA settlement                          |   |          | 489,154   |   |            |   | 489,154 |   |
| Convertible promissory notes             |   |          | 1,250,000 |   |            |   | 1,250,000 |   |
| Discount on convertible promissory notes |   |          | (90,000   | )      |            |   | (126,000 | ) |
| DESI note                                |   |          | 2,000,000 |   |            |   | - |   |
| Installment loan                         |   |          | 2,534,258 |   |            |   | 95,691 |   |
|                                     |   |          | 8,292,307 |   |            |   | 3,817,740 |   |
| Current portion                          |   |          | 1,095,471 |   |            |   | 319,632 |   |
|                                     |   | $             | 7,196,836 |   |            | $      | 3,498,108 |   |
|                          |   | April 30 |    |
|-------------------------------|--------|----------|---------|
|                          |   | 2016     |    |
|                          |   |     |    |   |
| Heavy equipment               |   | $        | 478,637 |   |
| Less accumulated depreciation |   |     | 125,180 |   |
| Net                           |   | $        | 353,457 |   |
| April 30,                                         |   |   |    |
|---------------------------------------------------|--------|--------|---------|
| 2016                                              |   | $      | 89,004  |   |
| 2017                                              |   |   | 84,226  |   |
| 2018                                              |   |   | 82,980  |   |
| 2019                                              |   |   | 19,705  |   |
| Total                                             |   |   | 275,915 |   |
| Less interest                                     |   |   | 7,241   |   |
| Present value of minimum lease payments           |   |   | 268,674 |   |
| Less current portion of capital lease obligations |   |   | 89,004  |   |
|                                              |   |   |    |   |
| Capital lease obligations, net of current portion |   | $      | 179,670 |   |

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|  | 1. | Bernal had an ownership interest in Ultra Energy Solutions and Vinco Logistics, two of the three entities that combined to form Diversified Energy Services. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | Bernal never consented to the transfer of his interest in Ultra Energy Solutions and Vinco Logistics to Diversified Energy Services. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | Diversified Energy Services has possession of equipment owned by the Plaintiffs and has ignored Plaintiffs demand to return the equipment to the Plaintiffs. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Current assets, including cash and cash equivalents of $503,389 |   | $      | 3,906,845  |   |
|-----------------------------------------------------------------|--------|--------|------------|--------|
| Property, plant and equipment                                   |   |   | 8,270,765  |   |
| Bonds and other assets                                          |   |   | 16,000     |   |
|                                                            |   |   |       |   |
| Total assets acquired                                           |   |   | 12,193,610 |   |
| Current liabilities                                             |   |   | (1,487,535 | )      |
| Long-term liabilities                                           |   |   | (2,674,414 | )      |
|                                                            |   |   |       |   |
| Net assets acquired                                             |   |   | 8,031,661  |   |
| Goodwill                                                        |   |   | 3,984,695  |   |
| Net consideration                                               |   | $      | 12,016,356 |   |

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|   | ● | leases covering 4,600 gross (4,600 net) acres,                                                                   |
|--------|---------|------------------------------------------------------------------------------------------------------------------|
|   | ● | four wells which produce natural gas and naturals gas liquids;                                                   |
|   | ● | a refrigeration/compression plant which separates natural gas liquids from gas produced from the four wells; and |
|   | ● | one injection well;                                                                                              |
|   | ● | leases covering 1,400 gross (1,400 net) acres,        |
|--------|---------|-------------------------------------------------------|
|   | ● | three shut-in wells which need to be recompleted; and |
|   | ● | three producing oil and gas wells.                    |

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|  | ● | 48 producing oil and gas wells, all of which we operate, |
|--|---------|----------------------------------------------------------|

|  | ● | leases covering approximately 10,000 gross and net acres, and |
|--|---------|---------------------------------------------------------------|

|  | ● | miscellaneous equipment. |
|--|---------|--------------------------|

|  | ● | rework 50 producing and shut-in wells at a total cost of approximately $400,000 |
|--|---------|---------------------------------------------------------------------------------|

|  | ● | drill 1 new well at a cost of approximately $150,000 per well |
|--|---------|---------------------------------------------------------------|

|        | Three Months Ended April 30, |   |
|-------------|------------------------------|--------|
|        | 2016                         |   | 2015 |   |
| Production: |                         |   |   |   |
| Oil (Bbls)  |                         |   | 2,264 |   |   |   | 7,989 |   |
| Gas (Mcf)   |                         |   | - |   |   |   | 1,135 |   |

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|     |   | Productive Wells |   | Developed Acreage |       | Undeveloped Acreage(1) |      |
|--------------------|--------|------------------|--------|-------------------|------------|------------------------|-----------|
| Location           |   | Gross            |   |              | Net        |                   | Gross     |   |   | Net |   | Gross |   |   | Net |   |
|               |   |             |   |              |       |                   |      |   |   |   |   |   |   |   |   |   |
| New Mexico:        |   |             |   |              |       |                   |      |   |   |   |   |   |   |   |   |   |
| Horseshoe          |   |             |   |              |       |                   |      |   |   |   |   |   |   |   |   |   |
| Gallup Field       |   | 48               |   |              | 48         |                   | 4,440     |   |   | 3,560 |   | 5,672 |   |   | 3,403 |   |
| Colorado:          |   |             |   |              |       |                   |      |   |   |   |   |   |   |   |   |   |
| Garcia Field       |   | 5                |   |              | 5          |                   | 200       |   |   |  200 |   |  4,400 |   |   |  4,400 |   |
| D-J Basin          |   |  4          |   |              |  3.75 |                   |  160 |   |   |  128 |   |  760 |   |   |  608 |   |

| (1) | Undeveloped acreage includes leasehold interests on which wells have not been drilled or completed to the point that would permit the production of commercial quantities of natural gas and oil regardless of whether the leasehold interest is classified as containing proved undeveloped reserves. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                |   | Three months ended |       |
|-----------------------------------------------------|--------|--------------------|------------|
|                                                |   | April 30, 2016     |       |
|                                                |   |               |       |
| Net loss                                            |   | $                  | (2,211,902 | ) |
| Add (Less):                                         |   |               |       |   |
| Depreciation, depletion, amortization and accretion |   |               | 541,793    |   |
| Share-based compensation                            |   |               | 365,130    |   |
| Accrued potential liability for lawsuit             |   |               | 750,000    |   |
| Adjusted EBITDA                                     |   | $                  | (554,979   | ) |
| Adjusted EBITDA per common share                    |   |               |       |   |
|    Basic and diluted                 |   | $                  | (0.01      | ) |
|                                                |   |               |       |   |
| Weighted average shares outstanding                 |   |               |       |   |
|    Basic and diluted                 |   |               | 39,733,808 |   |

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|                                           |   | 2016   |     |   | 2015   |   |
|------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                           |   |   |     |   |   |   |
| Cash provided by (used in)  operations    |   | $      | 563,287  |   |   | $      | (1,208,912 | ) |
| Payments on purchase of property and equipment |   |   | (121,753 | )      |   |   | - |   |
| Sale of common stock                           |   |   | 60,000   |   |   |   | 663,720 |   |
| Proceeds from notes payable                    |   |   | -        |   |   |   | 600,000 |   |
| Payment on notes payable                       |   |   | -        |   |   |   | (54,214 | ) |
| 2016  |   | $      | 1,220,595 |   |
|-------|--------|--------|-----------|--------|
| 2017  |   |   | 4,533,195 |   |
| 2018  |   |   | 2,936,914 |   |
| 2019  |   |   | 285,372   |   |
| Total |   | $      | 8,976,076 |   |
|   | ● | the sale prices of crude oil and gas;                                         |
|--------|---------|-------------------------------------------------------------------------------|
|   | ● | the amount of production from oil and gas wells in which we have an interest; |
|   | ● | the construction and related activities;                                      |

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|   | ● | insurance and field payroll cost;                                                                                        |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|
|   | ● | lease operating expenses;                                                                                                |
|   | ● | the availability of drilling rigs, drill pipe and other supplies and equipment required to drill and complete wells; and |
|   | ● | corporate overhead costs.                                                                                                |
|   | ● | trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, any material increase or decrease in liquidity; or |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | significant changes in expected sources and uses of cash.                                                                                                                 |

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|  | 1. | We do not have an audit committee; |
|--|----|------------------------------------|

|  | 2. | We did not have the proper segregation of duties with respect to our finance and accounting functions due to limited personnel. During the three months ended April 30, 2016 we had a CFO/CAO that performed nearly all aspects of our financial reporting process, including but not limited to, preparation of underlying account records and systems,  posting and recording journal entries and the preparation of our financial statements.  Accordingly, this created certain incompatible duties and a lack of review over the  financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations or assumptions used to compile the financial statements and related disclosures as filed with the SEC.  These control deficiencies could result in a material misstatement of our interim or annual financial statements that would not be prevented or detected; and |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3.   | Our corporate governance activities and processes are not always formally documented. |
|--|----------------|---------------------------------------------------------------------------------------|

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|  | 1. | Bernal had an ownership interest in Ultra Energy Solutions and Vinco Logistics, two of the three entities that combined to form Diversified Energy Services. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | Bernal never consented to the transfer of his interest in Ultra Energy Solutions and Vinco Logistics to Diversified Energy Services. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | Diversified Energy Services has possession of equipment owned by the Plaintiffs and has ignored Plaintiffs demand to return the equipment to the Plaintiffs. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 31.1   | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Paul Laird.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 31.2   | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Abdul Khan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 32.1   | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Paul Laird.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 32.2   | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Abdul Khan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 101    | The following materials are filed herewith: (i) XBRL Instance, (ii) XBRL Taxonomy Extension Schema, (iii) XBRL Taxonomy Extension Calculation, (iv) XBRL Taxonomy Extension Labels, (v) XBRL Taxonomy Extension Presentation, and (vi) XBRL Taxonomy Extension Definition. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by the specific reference in such filing. |

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|               | DIVERSIFIED RESOURCES, INC. |                                    |
|--------------------|-----------------------------|-----------------------------------------|
|               |                        |                                    |   |
| Date: July 6, 2016 | By:                         | /s/ Paul Laird                     |   |
|               |                        | Paul Laird, Principal Executive Officer |   |
| Date: July 6, 2016 | By:    | /s/ Abdul Khan                                    |   |
|--------------------|--------|--------------------------------------------------------|--------|
|               |   | Abdul Khan, Principal Financial and Accounting Officer |   |