**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-Q/A**


(Amendment
      No. 1)





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





For
      the
      quarterly period ended June 30, 2008





or





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





For
      the
      transition period from ___________ to __________





Commission
      file number: **000-51553**





**PLATINUM
      ENERGY RESOURCES, INC.**





(Exact
      name of registrant as specified in its charter)





**Delaware**
            
            **14-1928384**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)**11490
                Westheimer Road, Suite 1000**
              **Houston,
                Texas**
              (Address
                of principal executive offices)
            
            **77077**
              (Zip
                Code)




**(281)
      649-4500**


(Registrant's
      telephone number, including area code)





Indicate
      by check mark whether the Registrant: (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the Registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes x No o




Indicate
      by check mark whether the Registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (check
      one).


Large
      Accelerated Filer o Accelerated
      Filer x Non-Accelerated
      Filer o





Indicated
      by check mark whether the Registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x





As
      of
      June 30, 2008, 24,068,675 shares of the registrant’s common stock, par value
      $0.0001 per share, were outstanding.





**EXPLANATORY
        NOTE**
 
 Platinum
        Energy Resources, Inc. (the “Company” or “Platinum”) is filing this Amendment
        No. 1 (“Amendment”) to our Quarterly Report on Form 10-Q for the three and
        six months ended June 30, 2008 filed with the Securities and Exchange
        Commission (“SEC”) on August 15, 2008 (“the Original Report”) to restate
        our unaudited condensed consolidated financial statements for the periods
        then
        ended under Item 1 and to amend Items 2 and 4 of Part I of the
        Original Report. This Amendment does not affect any other items or sections
        in
        the Original Filing, and no attempt has been made in this Form 10-Q/A to
        update
        other disclosures presented in the Original Filing, except as required to
        reflect the effects of the restatement. In addition, Exhibits 31 and 32.1
        of the Original Filing have been re-filed to contain currently dated
        certifications from our Chief Executive Officer and Principal Financial Officer.
        We are republishing the entire Original Filing, as amended by this Amendment,
        so
        that all of our information regarding the quarter ended June 30, 2008 is in
        one report.
 
 Management
        determined certain commodity hedges that were entered into in April 2008
        were
        inadvertently omitted from the reported second quarter 2008 financial results
        and the schedule of contracts at June 30, 2008. The accounting error resulted
        in
        an understatement of net loss by $5.8 million. In addition the tax provision
        was
        restated to reflect the tax impact of the hedging loss and to adjust the
        purchase accounting for the Tandem acquisition. The purchase price and deferred
        tax liability were modified for the deferred tax effect caused by timing
        differences in the tax basis and financial basis of oil and gas properties
        and
        recognition of the tax benefit of net operating losses. The latter determination
        was made upon filing of the consolidated tax return. There was no
        impact on cash flows from operating activities. The tables below present
        the
        effect of the financial statement adjustments related to the restatement
        of our
        previously reported financial statements for the three and six months ended
        June
        30, 2008:
 
 Three
                  Months Ended June 30, 2008
              
              As
                  Reported
              
              Adjustments
              
              As
                  RestatedChange
                  in fair value of commodity derivatives
              
              $
              (9,756,171
              )
              $
              (13,337,159
              )
              $
              (23,093,330
              )Income
                  (loss) before income taxes
              
              
              (7,312,207
              )
              
              (13,337,159
              )
              
              (20,649,366
              )Provision
                  (benefit) for income taxes
              
              
              -
              
              
              (7,577,740
              )
              
              (7,577,740
              )Net
                  income (loss)
              
              
              (7,312,207
              )
              
              (5,759,419
              )
              
              (13,071,626
              )Net
                  income (loss) per common share:Basic
              
              
              (0.33
              )
              
              (0.26
              )
              
              (0.59
              )Diluted
              
              
              (0.33
              )
              
              (0.26
              )
              
              (0.59
              )
 
 
 Six
                  Months Ended June 30, 2008
              
              As
                  Reported
              
              Adjustments
              
              As
                  RestatedChange
                  in fair value of commodity derivatives
              
              $
              (11,792,094
              )
              $
              (13,337,159
              )
              $
              (25,129,253
              )Income
                  (loss) before income taxes
              
              
              (8,366,724
              )
              
              (13,337,159
              )
              
              (21,703,883
              )Provision
                  (benefit) for income taxes
              
              
              (54,000
              )
              
              (7,577,740
              )
              
              (7,631,740
              )Net
                  income (loss)
              
              
              (8,312,724
              )
              
              (5,759,419
              )
              
              (14,072,143
              )Net
                  income (loss) per common share:Basic
              
              
              (0.38
              )
              
              (0.26
              )
              
              (0.63
              )Diluted
              
              
              (0.38
              )
              
              (0.26
              )
              
              (0.63
              )
 
 As
                  of June 30, 2008
              
              As
                  Reported
              
              Adjustments
              
              As
                  RestatedOil
                  and gas properties, full cost method
              
              $
              188,943,166
              
              $
              4,640,000
              
              $
              193,583,166Income
                  taxes payable
              
              
              101,960
              
              
              (19,468
              )
              
              82,474Fair
                  value of commodity derivatives
              
              
              2,478,871
              
              
              13,337,159
              
              
              15,816,030Deferred
                  income taxes
              
              
              48,085,215
              
              
              (2,918,254
              )
              
              45,166,961Retained
                  earnings (accumulated deficit)
              
              
              (6,750,349
              )
              
              (5,759,419
              )
              
              (12,509,768
              )
 
 As
        previously disclosed in our Current Report on Form 8-K filed October 31,
        2008, after discussions between management and the
        Company’s independent registered public accounting firm, the
        Company concluded that the previously issued unaudited condensed consolidated
        financial statements included in the Original Filing should no longer be
        relied
        upon because of an error in reporting commodity hedges that were entered
        into in
        April 2008 but inadvertently omitted from the reported second quarter 2008
        financial results in the Original Filing. The effects of the restatement
        on the
        Company’s unaudited condensed consolidated financial statements as of and for
        the period presented herein are described in Note 12 to the unaudited condensed
        consolidated financial statements included in this Form 10-Q/A and are also
        reflected in Items 2 and 4 of Part I of this Form 10-Q/A.
 
 As
        a
        result of the restatement of the unaudited condensed consolidated financial
        statements, our management, including the principal executive and financial
        officer, have re-evaluated our disclosure controls and procedures as of
        June 30, 2008, and have found our disclosure controls and procedures to have
        been ineffective. Management has initiated corrective measures that will
        continue through 2008. See Item 4 of Part I of this Form 10-Q/A for a
        further discussion.





**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARY**


**Table
      of Contents**





PagePART
                I- FINANCIAL INFORMATIONItem
                1.
            Financial
                Statements
            3Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            30Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            40Item
                4.
            Controls
                and Procedures
            41PART
                II- OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            42Item
                1A.
            Risk
                Factors
            42Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            43Item
                3.
            Defaults
                Upon Senior Securities
            43Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            43Item
                5.
            Other
                Information
            43Item
                6.
            Exhibits
            43Signatures
            44




2


**FINANCIAL
      INFORMATION**





**Item
      1.**  **Financial
      Statements.**





PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED BALANCE SHEETS








June
                30,
            
            December
                31,2008
            
            2007(Unaudited)
            
            *ASSETS
            
            (As
                Restated)CURRENT
                ASSETSCash
                and cash equivalents
            
            $
            7,014,718
            
            $
            16,429,619Accounts
                receivable, netOil
                and gas sales
            
            
            4,870,304
            
            
            2,619,363Service
            
            
            4,743,507
            
            
            —Affililiates
                and other
            
            
            991,494
            
            
            668,216Inventory
            
            
            542,035
            
            
            88,556Prepaid
                expenses and other current assets
            
            
            584,082
            
            
            299,445Total
                Current Assets
            
            
            18,746,140
            
            
            20,105,199Property
                and equipment, at costOil
                and gas properties, full cost method
            
            
            193,583,166
            
            
            170,571,663Other
            
            
            5,243,876
            
            
            3,293,108Less
                accumulated depreciation, depletion and amortization
            
            
            (5,605,817
            )
            
            (1,253,026
            )Property
                and equipment, net
            
            
            193,221,225
            
            
            172,611,745Other
                assetsIntangible
                assets, net
            
            
            5,718,963
            
            
            376,164Goodwill
            
            
            5,912,611
            
            
            —Fair
                value of commodity derivatives
            
            
            —
            
            
            73,446Advance
                payment and costs, acquisition transactions
            
            
            —
            
            
            2,522,639Real
                estate held for development
            
            
            2,700,000
            
            
            2,700,000Total
                Assets
            
            $
            226,298,939
            
            $
            198,389,193LIABILITIES
                AND STOCKHOLDERS' EQUITYCURRENT
                LIABILITIESAccounts
                payableTrade
            
            $
            3,175,560
            
            $
            1,132,725Oil
                and gas sales
            
            
            2,687,580
            
            
            1,074,222Fair
                value of commodity derivatives
            
            
            8,098,471
            
            
            3,116,542Asset
                retirement obligation - current
            
            
            —
            
            
            186,545Accrued
                liabilities and other
            
            
            2,318,979
            
            
            181,430Income
                taxes payable
            
            
            82,474
            
            
            254,960Current
                maturities of long-term debt and capital lease obligations
            
            
            876,961
            
            
            —Total
                Current Liabilities
            
            
            17,240,025
            
            
            5,946,424Revolving
                lines of credit
            
            
            10,757,922
            
            
            —Long-term
                debt and capital lease obligations, net of current portion
            
            
            2,360,709
            
            
            —Notes
                payable - Maverick acquisition
            
            
            3,070,772
            
            
            —Other
                accrued liabilities
            
            
            996,673
            
            
            —Fair
                value of commodity derivatives
            
            
            15,816,030
            
            
            —Asset
                retirement obligation
            
            
            3,994,530
            
            
            3,390,094Deferred
                income taxes
            
            
            45,166,961
            
            
            48,085,21582,163,597
            
            
            51,475,309COMMITMENTS
                AND CONTINGENCIESSTOCKHOLDERS'EQUITYPreferred
                stock, $.0001 par value, 1,000,000 authorized, 0 issued
            
            
            —
            
            
            —Common
                stock, $.0001 par value; 75,000,000 shares authorized; 24,068,675
                issued
                and outstanding in each period, respectively
            
            
            2,407
            
            
            2,407Additional
                paid-in capital
            
            
            155,064,142
            
            
            155,064,142Retained
                earnings (accumulated deficit)
            
            
            (12,509,768
            )
            
            1,562,375Treasury
                stock - 1,997,913 shares
            
            
            (15,661,464
            )
            
            (15,661,464
            )Total
                Stockholders' Equity
            
            
            126,895,317
            
            
            140,967,460Total
                Liabilities and Stockholders' Equity
            
            $
            226,298,939
            
            $
            198,389,193




*
      Condensed from audited consolidated financial statements


*See
        notes to condensed consolidated financial statements*


3





PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)








Three Months Ended June 30,
            
            Six Months Ended June 30,2008
            
            2007
            
            2008
            
            2007(As
                Restated)
            
            
            
            (As
                Restated)RevenuesOil
                and gas Sales
            
            $
            10,694,071
            
            $
            —
            
            $
            17,828,875
            
            $
            —Service
                revenues
            
            
            5,056,682
            
            
            —
            
            
            5,056,682
            
            
            —15,750,753
            
            
            —
            
            
            22,885,557Costs
                and expensesLease
                and other operating expense
            
            
            2,864,605
            
            
            —
            
            
            5,320,911
            
            
            —Cost
                of sevice revenues
            
            
            3,959,110
            
            
            
            
            
            3,959,110
            
            
            —Marketing,
                general and administrative expense
            
            
            3,768,613
            
            
            144,214
            
            
            5,500,440
            
            
            299,205Depreciation,
                depletion and amortization expense
            
            
            2,577,874
            
            
            —
            
            
            4,641,163
            
            
            —Accretion
                of abandonment obligations
            
            
            49,319
            
            
            —
            
            
            110,988
            
            
            —Total
                costs and expenses
            
            
            13,219,521
            
            
            144,214
            
            
            19,532,612
            
            
            299,205Operating
                income (loss)
            
            
            2,531,232
            
            
            (144,214
            )
            
            3,352,945
            
            
            (299,205
            )OTHER
                INCOME (EXPENSES)Interest
                income, net of interest allocated to common stock subject to possibleredemption
                of $0, $188,991, $0 and $366,111, respectively
            
            
            35,796
            
            
            756,437
            
            
            140,183
            
            
            1,465,362Interest
                expense
            
            
            (230,880
            )
            
            (5,380
            )
            
            (244,685
            )
            
            (23,449
            )Change
                in fair value of commodity derivatives
            
            
            (23,093,171
            )
            
            —
            
            
            (25,129,253
            )
            
            —Other
            
            
            107,816
            
            
            —
            
            
            176,927
            
            
            —Total
                other income (expense)
            
            
            (23,180,598
            )
            
            751,057
            
            
            (25,056,828
            )
            
            1,441,913Income
                (Loss) Before Income Taxes
            
            
            (20,649,366
            )
            
            606,843
            
            
            (21,703,883
            )
            
            1,142,708Provision
                (Benefit) For Income Taxes
            
            
            (7,577,740
            )
            
            28,000
            
            
            (7,631,740
            )
            
            66,000Net
                Income (Loss)
            
            $
            (13,071,626
            )
            $
            578,843
            
            $
            (14,072,143
            )
            $
            1,076,708WEIGHTED
                AVERAGE NUMBER OF COMMON SHARES:Basic
            
            
            22,070,762
            
            
            15,121,440
            
            
            22,070,762
            
            
            15,121,440Diluted
            
            
            22,070,762
            
            
            18,220,150
            
            
            22,070,762
            
            
            17,882,548NET
                INCOME (LOSS) PER COMMON SHARE:Basic
            
            $
            (0.59
            )
            $
            0.04
            
            $
            (0.63
            )
            $
            0.07Diluted
            
            $
            (0.59
            )
            $
            0.03
            
            $
            (0.63
            )
            $
            0.06


*See
        notes to condensed consolidated financial statements*


4





PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY


(Unaudited)





Common stock
                
                Additional paid-
                
                Retained
                  earnings
                
                Treasury Stock
                
                Total
                  stockholders'Shares
                
                Amount
                
                in capital
                
                (deficit)
                
                Shares
                
                Amount
                
                equity(As
                      Restated)Balance
                    at January 1, 2008
                
                
                24,068,675
                
                $
                2,407
                
                $
                155,064,142
                
                $
                1,562,375
                
                
                (1,997,913
                )
                $
                (15,661,464
                )
                $
                140,967,460Net
                    loss for the six months ended June 30, 2008
                
                
                —
                
                
                —
                
                
                —
                
                
                (14,072,143
                )
                
                —
                
                
                —
                
                
                (14,072,143
                )Balance
                    at June 30, 2008
                
                
                24,068,675
                
                $
                2,407
                
                $
                155,064,142
                
                $
                (12,509,768
                )
                
                (1,997,913
                )
                $
                (15,661,464
                )
                $
                126,895,317




*See
        notes to condensed consolidated financial statements*




5




PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)








Six Months
              Ended June 30,
              2008
            
            Six Months
              Ended June 30,
              2007(As
                Restated)Cash
                Flows From Operating ActivitiesNet
                income (loss)
            
            $
            (14,072,143
            )
            $
            1,076,708Adjustments
                to reconcile net income (loss) to net cash provided by operating
                activities:Depreciation,
                depletion and amortization
            
            
            4,603,546
            
            
            —Accretion
                of asset retirement obligation and debt discount
            
            
            147,760
            
            
            —Deferred
                income taxes
            
            
            (7,558,254
            )
            
            —Amortization/write-off
                of bank loan fees
            
            
            37,617
            
            
            —Stock
                based compensation
            
            
            848,215
            
            
            —Unrealized
                change in fair value of derivatives
            
            
            21,879,970
            
            
            —Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (3,021,693
            )
            
            —Inventory
            
            
            (453,479
            )
            
            —Prepaid
                expenses and other current assets
            
            
            (127,334
            )
            
            48,634Accounts
                payable
            
            
            3,021,210
            
            
            (88,188
            )Accrued
                liabilities and other
            
            
            (77,956
            )
            
            —Due
                to related party
            
            
            —
            
            
            45,000Income
                taxes payable - State
            
            
            (172,486
            )
            
            66,000Commodity
                derivatives
            
            
            (1,008,566
            )
            
            —Net
                cash provided by operating activities
            
            
            4,046,407
            
            
            1,148,154Cash
                Flows From Investing ActivitiesAdditions
                to property and equipment
            
            
            (10,325,098
            )
            
            —Acquisition
                of other businesses - oil and gas properties
            
            
            (7,739,139
            )
            
            —Acquisition
                of Maverick, net of cash of $ 621,518
            
            
            (5,640,601
            )
            
            —Advance
                payment and costs, Pleasanton transaction
            
            
            2,522,639
            
            
            —Deposits
                to cash and cash equivalents held in trust fund
            
            
            —
            
            
            (1,831,474
            )Payment
                of deferred acquisition costs
            
            
            —
            
            
            (22,791
            )Net
                cash used in investing activities
            
            
            (21,182,199
            )
            
            (1,854,265
            )Cash
                Flows From Financing ActivitiesProceeds
                of revolving credit facility
            
            
            7,797,767
            
            
            —Accretion
                of discount on cash flow notes - Maverick acquisition
            
            
            (42,454
            )
            
            —Payments,
                long-term debt and capital leases
            
            
            (34,422
            )
            
            —Interest
                on cash held in trust allocated to common stock subject to possible
                redemption
            
            
            —
            
            
            366,111Proceeds
                from notes payable-stockholder
            
            
            —
            
            
            340,000Net
                cash provided by financing activities
            
            
            7,720,891
            
            
            706,111Net
                Increase (Decrease)in Cash
            
            
            (9,414,901
            )
            
            —Cash
                - Beginning of the Period
            
            
            16,429,619
            
            
            —Cash
                - End of Period
            
            $
            7,014,718
            
            $
            -SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATIONCash
                paid during the period for:Interest
            
            $
            194,108
            
            $
            16,639Income
                taxes - State
            
            $
            99,000
            
            $
            -Non-Cash
                Investing and Financing Activities:Issuance
                of notes payable - Pleasanton acquisition
            
            $
            550,000
            
            $
            -Acquisition
                of oil and gas property - Pleasanton
            
            $
            550,000
            
            $
            -Issuance
                of Cash Flow Notes, net- Maverick transaction
            
            $
            3,034,000
            
            $
            -Acquisition
                of Maverick
            
            $
            3,034,000
            
            $
            -Adjustment
                of purchase price of oil and gas properties
            
            $
            4,640,000
            
            $
            —Deferred
                acquisition costs accrued and deferred
            
            $
            -
            
            $
            252,852Acquisition
                of Maverick:Cash
            
            $
            621,518Accounts
                receivable
            
            
            4,296,033Other
                current assets
            
            
            157,303Property
                and equipment
            
            
            1,510,052Goodwill
            
            
            5,912,611Intangible
                assets
            
            
            5,522,250Accounts
                payable
            
            
            (634,984
            )Accrued
                expenses
            
            
            (1,765,404
            )Accrued
                payroll
            
            
            (576,165
            )Term
                notes and revolving line of credit
            
            
            (5,223,086
            )Capitalized
                lease obligations
            
            
            (524,010
            )Total
                purchase price
            
            
            9,296,118Less:
                cash consideration paid to sellers
            
            
            (6,000,000
            )Less:
                transaction costs
            
            
            (262,118
            )Non-cash
                consideration issued to sellers - Cash Flow Notes, net
            
            $
            3,034,000




*See
        notes to condensed consolidated financial statements*


6





**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      1 — Organization, Business and Operations and Basis of
      Presentation**




Platinum
      Energy Resources, Inc. and subsidiaries (the “Company” or “Platinum”) was
      incorporated in Delaware on April 25, 2005 as a blank check company for the
      purpose of effecting a business combination with an unidentified operating
      business in the global oil and natural gas industry. In October 2007, the
      Company acquired substantially all of the assets and assumed all of the
      liabilities of Tandem Energy Corporation described in Note 4 below. Prior
      to the Tandem transactions, the Company had no operations other than conducting
      an initial public offering and seeking a business combination.Effective on April 29, 2008, the Company acquired Maverick Engineering, Inc.
      (“Maverick”), an engineering services enterprise which was incorporated in
      December 1993 in the State of Texas, described in Note 4.





Subsequent
      to the Maverick acquisition, the Company considers itself to be in two lines
      of
      business as follows:





(i)
      The
      oil and gas division operations have approximately 37,000 acres under lease
      in
      relatively long-lived fields with well-established production histories, 21,000
      of which were acquired as part of the Tandem acquisition. The Company’s
      properties are concentrated primarily in the Gulf Coast region in Texas, the
      Permian Basin in Texas and New Mexico and the Fort Worth Basin in Texas; and





(ii)
      Maverick provides engineering and construction services primarily for three
      types of clients: (1) upstream oil and gas, domestic oil and gas producers
      and
      pipeline companies; (2) industrial, petrochemical and refining plants; and
      (3)
      infrastructure, private and public sectors, including state municipalities,
      cities, and port authorities. Maverick operates out of facilities headquartered
      in Victoria, Texas and operates primarily in Texas.





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America (“GAAP”) for interim financial statements and the
      instructions to Form 10-Q. Accordingly, the financial statements do not include
      all of the information and footnotes required by GAAP for complete financial
      statements. In the opinion of management, all adjustments considered necessary
      for a fair presentation have been included and such adjustments are of a normal
      recurring nature. These condensed consolidated financial statements should
      be
      read in conjunction with the consolidated financial statements for the year
      ended December 31, 2007 and notes thereto of Platinum Energy Resources, Inc
      (the “Company” or “Platinum”) included in the Annual Report on Form 10-K/A for
      the fiscal year ended December 31, 2007 filed with the Securities and
      Exchange Commission on April 15, 2008. The results of operations for the three
      and six month periods ended June 30, 2008 are not necessarily indicative of
      the
      results for the full fiscal year ending December 31, 2008.




**Note
      2 — Summary of Significant Accounting Policies**




*Principles
      of Consolidation*




The
      consolidated financial statements include the accounts of the Company and its
      wholly owned subsidiaries. All material intercompany balances and transactions
      have been eliminated.




*Estimates
      and Assumptions*




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and the disclosure of contingent assets and liabilities as of the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from those
      estimates. The accounting policy most affected by management’s estimates and
      assumptions is the reliance on




7


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      2 — Summary of Significant Accounting Policies**  **-
      continued**





*Estimates
      and Assumptions, continued*





estimates
      of proved reserves to compute the provision for depreciation, depletion and
      amortization (“DD&A”), and the determination of any impairment of long-lived
      assets.




*Oil
      and Gas Properties*




The
      Company uses the full cost method of accounting for exploration and development
      activities as defined by the Securities and Exchange Commission (“SEC”). Under
      this method of accounting, the costs of unsuccessful, as well as successful,
      exploration and development activities are capitalized as properties and
      equipment. This includes any internal costs that are directly related to
      exploration and development activities but does not include any costs related
      to
      production, general corporate overhead or similar activities. Gain or loss
      on
      the sale or other disposition of oil and gas properties is not recognized,
      unless the gain or loss would significantly alter the relationship between
      capitalized costs and proved reserves of oil and natural gas attributable to
      a
      country. The Company has defined a cost center by country. Currently, all of
      the
      Company’s oil and gas properties are located within the continental United
      States.




Properties
      and equipment may include costs that are excluded from costs being depreciated
      or amortized. Oil and gas costs excluded represent investments in unproved
      properties and major development projects in which the Company owns a direct
      interest. These unproved property costs include nonproducing leasehold,
      geological and geophysical costs associated with leasehold or drilling interests
      and exploration drilling costs. All costs excluded are reviewed at least
      quarterly to determine if impairment has occurred. The amount of any impairment
      is transferred to the capitalized costs being amortized in the DD&A
      pool.




*Depreciation,
      Depletion and Amortization*




The
      depreciable base for oil and gas properties includes the sum of capitalized
      costs net of accumulated DD&A, estimated future development costs and asset
      retirement costs not accrued in oil and gas properties, less costs excluded
      from
      amortization and salvage. The depreciable base of oil and gas properties and
      mineral investments are amortized using the unit-of-production method based
      on
      total proved oil and gas reserves. Properties and equipment carrying values
      do
      not purport to represent replacement or market values.




*Proved
      Oil and Gas Reserves*




In
      accordance with Rule 4-10(a) of SEC Regulation S-X, proved oil and gas reserves
      are the estimated quantities of crude oil, natural gas, and natural gas liquids
      which geological and engineering data demonstrate with reasonable certainty
      to
      be recoverable in future years from known reservoirs under existing economic
      and
      operating


8


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      2 — Summary of Significant Accounting Policies –
continued**





*Proved
      Oil and Gas Reserves, continued*





conditions,
      i.e., prices and costs as of the date the estimate is made. Prices include
      consideration of changes in existing prices provided only by contractual
      arrangements, but not on escalation based upon future conditions.




(i)
            Reservoirs
                are considered proved if economic producibility is supported by either
                actual production or conclusive formation tests. The area of a reservoir
                considered proved includes (A) that portion delineated by drilling
                and
                defined by gas-oil and/or oil-water contacts, if any; and (B) the
                immediately adjoining portions not yet drilled, but which can be
                reasonably judged as economically productive on the basis of available
                geological and engineering data. In the absence of information on
                fluid
                contacts, the lowest known structural occurrence of hydrocarbons
                controls
                the lower proved limit of the
                reservoir.




(ii)
            Reserves
                which can be produced economically through application of improved
                recovery techniques (such as fluid injection) are included in the
“proved”
                classification when successful testing by a pilot project, or the
                operation of an installed program in the reservoir, provides support
                for
                the engineering analysis on which the project or program was
                based.




(iii)
            Estimates
                of proved reserves do not include the
                following:




(A)
            oil
                that may become available from known reservoirs but is classified
                separately as “indicated additional reserves”;(B)
            crude
                oil, natural gas, and natural gas liquids, the recovery of which
                is
                subject to reasonable doubt because of uncertainty as to geology,
                reservoir characteristics, or economic
                factors;




(C)
            crude
                oil, natural gas, and natural gas liquids, that may occur in undrilled
                prospects; and




(D)
            crude
                oil, natural gas, and natural gas liquids that may be recovered from
                oil
                shales, coal, gilsonite and other such
                sources.





*Ceiling
      Test*




Under
      the
      full cost method of accounting, a ceiling test is performed each quarter. The
      full cost ceiling test is an impairment test prescribed by SEC Regulation S-X
      Rule 4-10. The ceiling test determines a limit, on a country-by-country basis,
      on the book value of oil and gas properties. Currently, all of the Company’s
      operations are located in the United States. The capitalized costs of proved
      oil
      and gas properties, net of accumulated DD&A and the related deferred income
      taxes, may not exceed the estimated future net cash flows from proved oil and
      gas reserves, excluding future cash outflows associated with settling asset
      retirement obligations that have been accrued on the balance sheet, generally
      using prices in effect at the end of the period held flat for the life of
      production and including the effect of derivative instruments that qualify
      as
      cash flow hedges, discounted at 10%, net of related tax effects, plus the cost
      of unevaluated properties and major development projects excluded from the
      costs
      being amortized. If capitalized costs exceed this limit, the excess is charged
      to expense and reflected as additional accumulated DD&A.




*Asset
      Retirement Obligation*




The
      Company follows the provisions of Statement of Financial Accounting Standards
      (“SFAS”) No. 143, *Accounting
      for Asset Retirement Obligations.* SFAS
      No. 143 requires the Company to recognize a liability for the present
      value of all legal obligations associated with the retirement of tangible,
      long-lived assets and capitalize an equal
      amount as a cost of the asset. The cost of the abandonment obligations, less
      estimated salvage values, is included in the computation of depreciation,
      depletion and amortization.


9


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      2 — Summary of Significant Accounting Policies –
continued**




*Income
      Taxes*




The
      Company follows the asset and liability method prescribed by SFAS No. 109, *Accounting
      for Income Taxes (“SFAS 109”).* Under
      this method of accounting for income taxes, deferred tax assets and liabilities
      are recognized for the future tax consequences attributable to differences
      between the financial statement carrying amounts of existing assets and
      liabilities and their respective tax bases. Deferred tax assets and liabilities
      are measured using enacted tax rates expected to apply to taxable income in
      the
      years in which those temporary differences are expected to be recovered or
      settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities
      of a change in enacted tax rates is recognized in income in the period that
      includes the enactment date.





Effective
      January 1, 2007, the Company adopted the provisions of Financial Accounting
      Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income
      Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies
      the accounting for uncertainty in income taxes recognized in the Company’s
      financial statements in accordance with SFAS 109, and prescribes a recognition
      threshold and measurement process for financial statement recognition and
      measurement of a tax position taken or expected to be taken in a tax return.
      FIN
      48 also provides guidance on derecognition, classification, interest and
      penalties, accounting in interim periods, disclosure and
      transition.





Management
      has evaluated and concluded that there are no significant uncertain tax
      positions requiring recognition in the Company’s financial statements as of
      January 1, 2008. The evaluation was performed for the tax period April 25
      (inception) to December 31, 2005 and for the years ended December 31, 2006
      and
      2007, the tax years which remain subject to examination for federal and New
      Jersey State purposes as of June 30, 2008.





The
      Company’s policy is to classify assessments, if any, for tax related interest as
      interest expenses and penalties as marketing, general and administrative
      expenses.




*Property*





Property
      is recorded at cost. Improvements or betterments of a permanent nature are
      capitalized. Expenditures for maintenance and repairs are charged to expense
      as
      incurred. The cost of assets retired or otherwise disposed of and the related
      accumulated depreciation are eliminated from the accounts in the year of
      disposal. Gains or losses resulting from property disposals are credited or
      charged to operations currently.





Depreciation
      is computed using the straight-line method over the estimated useful lives
      as
      follows:





Office
                equipment and furniture
            
            
            3 -
                15 yearsVehicles
            
            
            5 yearsDrilling
                Rigs
            
            
            10 yearsLeasehold
                improvements
            
            
            5
                yearsMachinery
                and equipment
            
            
            5
                - 7 years





*Goodwill*





Goodwill
      represents the excess of cost over fair value of net assets acquired through
      acquisitions. The Company follows the provisions of Statement of Financial
      Accounting Standards (“SFAS”) No. 142, *Goodwill
      and Other Intangible Assets.* Goodwill
      recorded by the Company has not been amortized and will be evaluated on an
      annual basis, or sooner if deemed necessary, in connection with other long-lived
      assets, for potential impairment. Management performed an impairment assessment
      on goodwill as of June 30, 2008, which resulted in no impairment of goodwill.
      An
      annual assessment of goodwill will be assessed in the fourth quarter of each
      year.




10


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      2 — Summary of Significant Accounting Policies - continued**





*Non-Employee
      Stock Based Compensation*  **




The
      Company accounts for equity instruments issued to non-employees in accordance
      with the provisions of SFAS No. 123(R) and Emerging Issues Task Force
      (“EITF”) Issue No. 96-18, “Accounting for Equity Instruments That are
      Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
      Goods or Services,” (“EITF 96-18”) which requires that such equity instruments
      be recorded at their fair value on the measurement date. The measurement of
      stock-based compensation is subject to periodic adjustment as the underlying
      equity instrument vests. No such instruments were issued in 2007 and 2008.
      In
      October 2007, the Company issued 178,572 shares of its common stock in
      connection with a consulting agreement as described in Note 5(d).





*Income
      (Loss) Per Share*




The
      Company follows the provisions of SFAS No. 128, “Earnings Per Share” (“SFAS No.
      128”). In accordance with SFAS No. 128, earnings (loss) per common share amounts
      (“basic EPS”) were computed by dividing earnings (loss) by the weighted
      average number of common shares outstanding for the period. Earnings per common
      share amounts, assuming dilution (“diluted EPS”), were computed by reflecting
      the potential dilution from the exercise of dilutive common stock purchase
      warrants. SFAS No. 128 requires the presentation of both basic EPS and diluted
      EPS on the face of the consolidated statements of operations.





Reconciliations
      between the numerators and denominators of the basic and diluted EPS
      computations for each period where there was a dilutive effect are as
      follows :




Three Months Ended June 30, 2007Net Income
              (Numerator)
            
            Shares
              (Denominator)
            
            Per Share
              Amounts**Basic
                EPS**Net
                Income
            
            $
            578,843
            
            
            15,121,440
            
            $
            0.04**Effect
                of Dilutive Securities**Warrants
            
            $
            —
            
            
            3,098,710
            
            $
            (0.01
            )Net
                income attributable to common stock and assumed exercise of
                warrants
            
            $
            578,843
            
            
            18,220,150
            
            $
            0.03




Six Months Ended June 30, 2007Net Income
              (Numerator)
            
            Shares
              (Denominator)
            
            Per Share
              Amounts**Basic
                EPS**Net
                Income
            
            $
            1,076,708
            
            
            15,121,440
            
            $
            0.07**Effect
                of Dilutive Securities**Warrants
            
            $
            —
            
            
            2,761,108
            
            $
            (0.01
            )Net
                income attributable to common stock and assumed exercise of
                warrants
            
            $
            1,076,708
            
            
            17,882,548
            
            $
            0.06




11


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      2 — Summary of Significant Accounting Policies - continued**





*Income
      (Loss) Per Share, continued*





In
      2007,
      for the periods prior to the October 26, 2007 Tandem acquisition, common shares
      subject to possible conversion of 2,878,560 were excluded from the calculation
      of basic EPS since such shares if redeemed, would only participate in their
      pro-rata share of the trust asset earnings. In this acquisition, 1,802,205
      shares were actually converted and redeemed. Subsequent to the date of the
      Tandem acquisition, the remainder of 1,076,355 common shares subject to
      conversion but which were not redeemed, were included in the determination
      of
      weighted average number of common shares outstanding for the three months and
      six months ended June 30, 2008. The Company has determined that the warrants
      contained in the units sold in its initial public offering are dilutive for
      the
      2007 periods, and accordingly included the effects of these warrants in diluted
      EPS using the treasury stock method in these periods. The Company has determined
      that their inclusion in 2008 would be antidilutive and thus excluded the effects
      of the warrants in these periods. An option to purchase 720,000 units was
      excluded in the computation of diluted EPS because the option exercise
      price exceeded the average market price for the units in all
      periods.





*Environmental
      Expenditures*




The
      Company is subject to extensive federal, state and local environmental laws
      and
      regulations. These laws regulate the discharge of materials into the environment
      and may require the Company to remove or mitigate the environmental effects
      of
      the disposal or release of petroleum or chemical substances at various sites.
      Environmental expenditures are expensed or capitalized depending on their future
      economic benefit. Expenditures that relate to an existing condition caused
      by
      past operations and that have no future economic benefits are
      expensed.





Liabilities
      for expenditures of a non-capital nature are recorded when environmental
      assessment and/or remediation is probable, and the costs can be reasonably
      estimated. Such liabilities are generally undiscounted unless the timing of
      cash
      payments for the liability or component is fixed or reliably
      determinable.




*Hedging
      Activities*




From
      time
      to time, the Company may utilize derivative instruments, consisting of swaps,
      floors and collars, to attempt to reduce its exposure to changes in commodity
      prices and interest rates. The Company accounts for its derivatives in
      accordance with SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities,* as
      amended. SFAS No. 133 requires that all derivative instruments be
      recognized as assets or liabilities in the balance sheet, measured at fair
      value. The accounting for changes in the fair value of a derivative depends
      on
      both the intended purpose and the formal designation of the derivative.
      Designation is established at the inception of a derivative, but subsequent
      changes to the designation are permitted. The Company has elected not to
      designate any of its derivative financial contracts as accounting hedges and,
      accordingly, has accounted for these derivative financial contracts using
      mark-to-market accounting. Changes in fair value of derivative instruments
      which
      are not designated as cash flow hedges are recorded in other income (expense)
      as
      changes in fair value of derivatives.




*Real
      Estate Held for Development*




The
      Company’s real estate held for development was recorded at fair market value
      when the Company completed its purchase of the assets of Tandem Energy
      Corporation on October 26, 2007 and relates to approximately 41 acres of
      undeveloped land located near Tomball, Texas.





*Revenue
      Recognition and Gas Balancing*




The
      Company utilizes the sales method of accounting for oil, natural gas and natural
      gas liquids revenues whereby revenues, net of royalties, are recognized as
      the
      production is sold to purchasers. The amount of gas sold


12


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      2 — Summary of Significant Accounting Policies - continued**





*Revenue
      Recognition and Gas Balancing, continued*





may
      differ from the amount to which the Company is entitled based on its revenue
      interests in the properties. The Company did not have any significant gas
      imbalance positions at June 30, 2008 and December 31, 2007.




*Comprehensive
      Income*




SFAS
      No.
      130, *Reporting
      Comprehensive Income,* established standards for reporting and displaying comprehensive income and
      its
      components (revenue, expenses, gains and losses) in a full set of
      general-purpose financial statements. There were no differences between net
      income and comprehensive income.




*Accounts
      Receivable and Allowance for Doubtful Accounts*




*Oil
      and gas operations*





The
      Company’s trade receivables consist primarily of receivables from non-operators
      who own an interest in properties which the Company operates, and trade
      receivables associated with the operations of the Company’s wholly owned
      subsidiary, Red Iron Tool, Inc. Insofar as the receivables relate to oil and
      gas
      trade receivables, the Company has the ability and the right to withhold oil
      and
      gas revenues from any owner who is delinquent in their payments.





*Services*





Revenues
      are billed and accounts receivable recorded as services are performed. Most
      services revenues are derived from time and material projects. Management
      periodically reviews all accounts receivable to determine if any are considered
      delinquent based upon the age of the receivable and the credit worthiness of
      the
      parties involved. An allowance for doubtful accounts is recorded for the amount
      management estimates as uncollectible. An allowance of $63,182 was considered
      necessary by management at June 30, 2008 with respect to services accounts
      receivable. Unbilled receivables represent costs and estimated fees on work
      for
      which billings have not been presented to customers.
      When billed, these amounts are included in accounts receivable - trade. Unbilled
      accounts receivable include management’s best estimates of the amounts expected
      to be realized on the work that has been performed to date.




*Recent
      Accounting Pronouncements*




In
      September 2006, the Financial Accounting Standards Board (FASB) issued SFAS
      No. 157, “Fair Value Measurements.” SFAS No. 157 establishes a single
      definition of fair value and a framework for measuring fair value, sets out
      a
      fair value hierarchy to be used to classify the source of information used
      in
      fair value measurements, and requires new disclosures of assets and liabilities
      measured at fair value based on their level in the hierarchy. This statement
      applies under other accounting pronouncements that require or permit fair value
      measurements. In February 2008, the FASB issued Staff Positions (FSPs)
      No. 157-1 and No. 157-2, which, respectively, remove leasing
      transactions from the scope of SFAS No. 157 and defer its effective date
      for one year relative to certain nonfinancial assets and liabilities. As a
      result, the application of the definition of fair value and related disclosures
      of SFAS No. 157 (as impacted by these two FSPs) was effective for the
      Company beginning January 1, 2008 on a prospective basis with respect to
      fair value measurements of (a) nonfinancial assets and liabilities that are
      recognized or disclosed at fair value in the Company’s financial statements on a
      recurring basis (at least annually) and (b) all financial assets and
      liabilities. This adoption did not have a material impact on the Company’s
      consolidated results of operations or financial condition. The remaining aspects
      of SFAS No. 157 for which the effective date was deferred under FSP
      No. 157-2 are currently being evaluated by the Company. Areas


13


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      2 — Summary of Significant Accounting Policies - continued**





*Recent
      Accounting Pronouncements, continued*





impacted
      by the deferral relate to nonfinancial assets and liabilities that are measured
      at fair value, but are recognized or disclosed at fair value on a nonrecurring
      basis. This deferral applies to such items as nonfinancial assets and
      liabilities initially measured at fair value in a business combination (but
      not
      measured at fair value in subsequent periods) or nonfinancial long-lived asset
      groups measured at fair value for an impairment assessment. The effects of
      these
      remaining aspects of SFAS No. 157 are to be applied to fair value
      measurements prospectively beginning January 1, 2009.





In
      February 2007, the FASB issued SFAS 159, *The
      Fair Value Option for Financial Assets and Financial Liabilities, Including
      an
      Amendment of FASB Statement No. 115,* which
      will become effective on January 1, 2008. FAS 159 permits entities to
      measure eligible financial assets, financial liabilities and firm commitments
      at
      fair value. on an instrument-by-instrument basis, that are otherwise not
      permitted to be accounted for at fair value under other generally accepted
      accounting principles. The fair value measurement election is irrevocable and
      subsequent changes in fair value must be recorded in earnings.





In
      April 2007, the FASB issued FASB Staff Position FIN 39-1, *Amendment
      of FASB Interpretation No. 39* .
      FSP FIN
      39-1 clarifies that a reporting entity that is party to a master netting
      arrangement can offset fair value amounts recognized for the right to reclaim
      cash collateral (a receivable) or the obligation to return cash collateral
      (a
      payable) against fair value amounts recognized for derivative instruments that
      have been offset under the same master netting arrangement. FSP FIN 39-1 is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007.





In
      December 2007, the FASB issued SFAS No. 141 (revised 2007), *Business
      Combinations* (“SFAS
      141(R)”), which replaces FASB Statement No. 141. SFAS 141(R) establishes
      principles and requirements for how an acquirer recognizes and measures in
      its
      financial statements the identifiable assets acquired, the liabilities assumed,
      any non- controlling interest in the acquiree and the goodwill acquired. The
      Statement also establishes disclosure requirements
      that will enable users to evaluate the nature and financial effects of the
      business combination. SFAS 141(R) is effective for acquisitions that occur
      in an
      entity’s fiscal year that begins after December 15, 2008.





In
      December 2007, the FASB issued SFAS No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements—an amendment of ARB
      No. 51.* SFAS 160
      requires that accounting and reporting for minority interests will be
      recharacterized as noncontrolling interests and classified as a component of
      equity. SFAS 160 also establishes reporting requirements that provide sufficient
      disclosures that clearly identify and distinguish between the interests of
      the
      parent and the interests of the noncontrolling owners. SFAS 160 applies to
      all
      entities that prepare consolidated financial statements, except not-for-profit
      organizations, but will affect only those entities that have an outstanding
      noncontrolling interest in one or more subsidiaries or that deconsolidate a
      subsidiary. This statement is effective as of the beginning of an entity’s first
      fiscal year beginning after December 15, 2008.





In
      March
      2008, the FASB issued Statement of Financial Accounting Standards No. 161,
      “Disclosures about Derivative Instruments and Hedging Activities—an amendment of
      FASB Statement No. 133” (“SFAS 161”). SFAS 161 changes the disclosure
      requirements for derivative instruments and hedging activities. Entities are
      required to provide enhanced disclosures about (a) how and why an entity uses
      derivative instruments, (b) how derivative instruments and related hedged items
      are accounted for under SFAS No. 133 and its related interpretations, and (c)
      how derivative instruments and related hedged items affect an entity’s financial
      position, financial performance and cash flows. The guidance in SFAS 161 is
      effective for financial statements issued for fiscal years and interim periods
      beginning after November 15, 2008, with early application encouraged. This
      Statement encourages, but does not require, comparative disclosures for earlier
      periods at initial adoption. At this time, management is evaluating the
      implications of SFAS 161 and its impact on the financial statements has not
      yet
      been determined.





In
      April
      2008, the FASB issued FSP No. 142-3, “Determination of the Useful Life of
      Intangible Assets”. FSP No. 142-3 amends the factors that should be considered
      in developing renewal or extension assumptions used to


14





**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      2 — Summary of Significant Accounting Policies - continued**





*Recent
      Accounting Pronouncements - continued*





determine
      the useful life of a recognized intangible asset under FASB Statement No. 142,
      Goodwill and Other Intangible Assets. FSP No. 142-3 is effective for financial
      statements issued for fiscal years beginning after December 15, 2008. Early
      adoption is prohibited. The Company is currently evaluating the impact of the
      pending adoption of FSP No. 142-3 on its consolidated financial statements.





In
      June
      2008, the FASB ratified the consensus reached on EITF Issue No. 07-05,
“Determining Whether an Instrument (or Embedded Feature) Is Indexed to an
      Entity’s Own Stock”. EITF Issue No. 07-05 clarifies the determination of whether
      an instrument (or an embedded feature) is indexed to an entity’s own stock,
      which would qualify as a scope exception under SFAS No. 133, Accounting for
      Derivative Instruments and Hedging Activities. EITF Issue No. 07-05 is effective
      for financial statement issued for fiscal years beginning after December 15,
      2008. Early adoption for an existing instrument is not permitted. The Company
      is
      currently evaluating the impact of the pending adoption of EITF Issue No. 07-05
      on its consolidated financial statements.




**Note
      3 — Initial Public Offering**





On
      October 28, 2005, the Company sold to the public 14,400,000 units at an offering
      price of $8.00 per unit. Each unit consists of one share of the Company’s common
      stock, $0.0001 par value, and one redeemable common stock purchase warrant.
      Each
      warrant entitles the holder to purchase from the Company one share of common
      stock at an exercise price of $6.00 commencing on the later of the completion
      of
      a business combination with a target business or one year from the effective
      date of the offering and expiring four years from the effective date of the
      offering. The warrants will be redeemable, in whole or in part, upon written
      consent of the representative of the underwriters, at a price of $0.01 per
      warrant upon thirty days notice after the warrants become exercisable, only
      in
      the event that the last sale price of the common stock is at least $11.50 per
      share for any twenty trading days within a thirty trading day period ending
      on
      the third day prior to the date on which notice of redemption is given. Separate
      trading of the common stock and warrants comprising the units commenced on
      or
      about December 9, 2005.




In
      connection with the offering, the Company issued an option (the “Units Purchase
      Option” or “UPO”), for $100.00, to the representative of the underwriters to
      purchase up to 720,000 units at an exercise price of $10.00 per unit. The units
      issuable upon exercise of this option are identical to those described in the
      preceding paragraph, except that the warrants underlying the units will be
      exercisable at $7.50 per share. This option is exercisable at $10.00 per unit
      commencing on the later of the consummation of a business combination or one
      year from the date of the prospectus relating to the offering (October 24,
      2005)
      and expiring five years from such date. The option may be exercised for cash
      or
      on a “cashless” basis, at the holder’s option, such that the holder may use the
      appreciated value of the option (the difference between the exercise prices
      of
      the option and the underlying warrants and the market price of the units and
      underlying securities) to exercise the option without the payment of any cash.
      The option and the 720,000 units, the 720,000 shares of common stock and the
      720,000 warrants included in such units, and the 720,000 shares of common stock
      underlying such warrants, were deemed compensation by the National Association
      of Securities Dealers (“NASD”). The option grants to holders demand and
“piggy back” rights for periods of five and seven years, respectively, from the
      date of the offering with respect to the registration under the Securities
      Act
      of the securities directly and indirectly issuable upon exercise of the option.
      The Company would be obligated to bear all fees and expenses attendant to
      registering the securities.





The
      exercise price and number of units issuable upon exercise of the option may
      be
      adjusted in certain circumstances including in the event of a stock dividend,
      or
      a recapitalization, reorganization, merger or consolidation. However, the option
      will not be adjusted for issuances of common stock at a price below its exercise
      price.




15


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      3 — Initial Public Offering - continued**





Should
      the Company be unable to deliver shares of its common stock underlying the
      exercise of the warrants included in the units and shares of its common stock
      underlying the exercise of the underwriters’ unit purchase option
      as
      a result of the absence of an effective registration statement with respect
      to
      these securities, then these warrants and the UPO would not be exercisable
      and
      the Company will have no obligation to pay holders of the warrants and UPO
      any
      cash or otherwise “net cash settle” these warrants or the UPO. In this event,
      the warrants and UPO may expire worthless.





**Note
      4 — Business Combinations**


****


On
      October 26, 2007, Platinum consummated the Tandem acquisition pursuant to the
      related acquisition agreement. Among other terms and conditions, the Company
      filed a registration statement with the Securities and Exchange Commission
      with
      respect to the approximately 7.7 million Platinum common shares issued in
      connection with the acquisition. This registration statement became effective
      on
      August 7, 2008. In connection with the asset acquisition agreement, the Company
      entered into a finder’s agreement and a consulting agreement with Mr. Lance
      Duncan, an individual with prior affiliations with Tandem, who had been given
      limited authority by Tandem management to act on its behalf.





In
      December 2007, Platinum, through a wholly owned subsidiary acquired a 50%
      working interest in the La Rosa field for approximately $5.3 million. Although
      the La Rosa field is a producing field of approximately 3,800 acres in Refugio
      County, Texas, actual production was minimal. The primary focus of the
      acquisition is related to its recompletion and re-entry potential. The entire
      purchase price was allocated to oil and gas properties. In March 2008 an
      additional related working interest was acquired for $461,500.





In
      January 2008, the Company acquired a 70% working interest in the Pleasanton
      field for approximately $6.1 million. $2.5 million of the purchase price was
      paid in December 2007 and recorded as a deposit on the Decembe r 31,
      2007
      balance sheet. The remainder of the purchase price was paid in January 2008,
      including direct transaction costs. See Note 6 for a further description of
      consideration paid. The Pleasanton Field is a non-producing field of
      approximately 4,200 acres in Atascosa County, Texas. The field contains
      previously drilled and abandoned wells. The entire purchase price was allocated
      to the fair value of oil and gas properties.





In
      April,
      2008 the Company purchased a 100% working interest in producing leases (Quantum
      prospect) in Atascosa County, Texas for $750,000. The leases consist of 12
      producing wells, 2 shut in wells, 2 injection wells and 1 salt water disposal
      well. The Company will operate this lease.





In
      May,
      2008 the Company purchased a 70% working interest in an acreage position (Lieke
      prospect) in Atascosa County, Texas for $600,000, with the initial goal of
      re-entering an abandoned well bore and attempting a completion in the Edwards
      formation. The Company will operate this lease.





In
      June,
      2008 the Company purchased a 25% non-operated working interest in an acreage
      position (Lacy prospect) in Nueces County, Texas for $400,000. The agreement
      contains a requirement for the drilling of the initial test well to a depth
      of
      9,500 feet.





On
      April
      29, 2008, the Company completed the acquisition of Maverick pursuant to an
      agreement and plan of merger entered into on March 18, 2008 among the Company,
      a
      wholly-owned subsidiary, Maverick, and Robert L. Kovar Services, LLC, as the
      stockholder representative. The aggregate consideration paid in the merger
      was
      $6 million in cash and $5 million to be paid over the next 6 years pursuant
      to
      non-interest bearing cash flow notes, subject to certain escrows, holdbacks
      and
      post-closing adjustments. The cash flow notes are payable quarterly at the
      rate
      of 50% of pre-tax net income, as it is defined in the merger agreement,
      generated by the Maverick business on a stand-alone basis in the preceding
      quarter. Payment can be accelerated by certain events, including change in
      control of the Company. The purchase price was subject to adjustment for any
      change in working capital as defined in the agreement,
      between October 31, 2007 and the closing date, as well as other adjustments
      associated with changes in indebtedness. The balance of the cash flow notes
      remaining unpaid upon maturity, if any, will be converted into a 12 month
      self-amortizing note bearing interest at the annual rate of 2% over the bank's
      prime rate at the time. The cash flow notes were reduced by the amount of the
      working capital post closing adjustment which was determined by the Company
      to
      be $645,596. This amount may be subject to modification as may be agreed between
      the parties. In addition, a discount to present value in the amount of
      $1,320,404 has been recorded in the accompanying financial statements and
      deducted from the cash flow notes as these notes are non-interest bearing for
      the initial 5 years of their term. As a result, the net book value of the notes
      on April 29, 2008 was $3,034,000.


16


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      4 — Business Combinations - continued**





In
      addition, the sellers agreed to satisfy and assume Maverick's bank indebtedness
      in the aggregate amount of $4,889,538 consisting of a $2,960,155 revolving
      line
      of credit maturing April 2008, a $1,584,375 term note due April 2011, and
      $345,008 oil and gas note due May 2009, using a portion of the cash received
      by
      them at closing. Following the closing, the Company was indebted to the sellers
      for these amounts under the identical terms of the bank loan agreements. On
      April 30, 2008, Maverick entered into extension and modification agreements
      with
      the sellers pursuant to which sellers agreed to defer principal payments of
      the
      $1.6 million term loan for six months and extend the maturity date to April
      2013. The sellers also agreed to extend the maturity dates of the revolving
      line
      of credit and oil and gas note to 2010 and 2013, respectively. In addition,
      as
      of June 30, 2008, Maverick was not in compliance with the debt service coverage
      ratio contained in the loan agreements. Subsequent to June 30, 2008, the sellers
      waived the Company's obligation to maintain this ratio through September 30,
      2009.




Maverick
      is a provider of project management, engineering, procurement, and
      construction management services to both the public and private sectors,
      including the oil and gas business in which the Company is engaged. Maverick
      is
      based in south Texas with offices in Corpus Christi, Victoria, Harlingen and
      Houston. It is anticipated


that
      Maverick will provide complimentary services to the Company which would
      otherwise be procured from third parties, as well as strengthen the overall
      management of the Company.





The
      aggregate purchase price for Maverick reflected in the financials, including
      legal and other items, was $9,296,118. The results of operations of Maverick
      are
      included for the period from April 29, 2008 (the date of acquisition) to June
      30, 2008.




The
      following table details the allocation of the purchase price of the Maverick
      acquisition.





**Consideration:**Cash,
                including costs
            
            $
            6,262,118Cash
                Flow Notes – net of discount
            
            
            3,034,000$
            9,296,118**Recognized
                amount of assets acquired and liabilities
                assumed:****Assets
                Acquired:**Cash
            
            $
            621,518Accounts
                receivable
            
            
            4,296,033Other
                current assets
            
            
            157,303Property
                and equipment
            
            
            1,510,052Goodwill
            
            
            5,912,611Intangible
                assets
            
            
            5,522,25018,019,767**Liabilities
                Assumed:**Accounts
                payable
            
            
            (634,984
            )Accrued
                expenses
            
            
            (1,765,404
            )Accrued
                payroll
            
            
            (576,165
            )Term
                notes and revolving line of credit
            
            
            (5,223,086
            )Capitalized
                lease obligations
            
            
            (524,010
            )(8,723,649
            )**Total
                net assets acquired**
            
            $
            9,296,118




17





**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





***Unaudited
      Pro-Forma Financial Information***




The
      following unaudited pro forma consolidated results of operations assume that
      the
      Maverick acquisition was completed as of January 1, 2008 for each of the periods
      shown below:





Pro Forma Consolidated Results of OperationsRevenue
            
            (Loss)
              Before
              Income
              Taxes
            
            Net
                (Loss)
            
            (Loss)
              Per
                ShareSix
                Months Ended June 30,Pro
                forma 2008
            
            $
            33,819,000
            
            $
            (22,366,000
            )
            $
            (14,598,000
            )
            $
            (0.66
            )Three
                Months Ended June 30,Pro
                forma 2008
            
            $
            18,463,000
            
            $
            (20,916,000
            )
            $
            (13,596,000
            )
            $
            (0.62
            )





The
      pro
      forma combined results are not necessarily indicative of the results that
      actually would have occurred if the Maverick acquisition had been completed
      as
      of the beginning of 2008, nor are they necessarily indicative of future
      consolidated results. The impact on pro forma results of other transactions
      entered into by the Company other than Maverick was immaterial.





The
      assets and liabilities related to the foregoing acquisitions were recorded
      in
      the Company’s consolidated balance sheet at their estimated fair values at the
      date of acquisition in accordance with the provisions of SFAS No. 141, “Business
      Combinations” and may be adjusted based upon third party fair value studies
      within one year of the date of acquisition.





**Note
      5 — Commitments**





a.
      The
      Company has engaged Casimir Capital LP (“CCLP”), the representative of the
      underwriters, on a non-exclusive basis, as its agent for the solicitation of
      the
      exercise of the warrants included in the units sold to the public. To the extent
      not inconsistent with the guidelines of the NASD and the rules and regulations
      of the SEC, the Company has agreed to pay CCLP for bona fide services rendered,
      a commission equal to 5% of the exercise price for each warrant exercised more
      than one year after the date of an effective prospectus if the exercise was
      solicited by the underwriters. In addition to soliciting, either orally or
      in
      writing, the exercise of the warrants, the representative’s services may also
      include disseminating information, either orally or in writing, to warrant
      holders about the Company or the market for its securities, and assisting in
      the
      processing of the exercise of the warrants. No compensation will be paid to
      the
      representative upon the exercise of the warrants if:


18


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      5 — Commitments – continued**





·
            the
                market price of the underlying shares of common stock is lower than
                the
                exercise price;





·
            the
                holder of the warrants has not confirmed in writing that the underwriters
                solicited the exercise;





·
            the
                warrants are held in a discretionary
                account;





·
            the
                warrants are exercised in an unsolicited transaction;
                or





·
            the
                arrangement to pay the commission is not disclosed in the prospectus
                provided to warrant holdersat
                the time of exercise.





b.
      On
      March 20, 2006, the Board of Directors of the Company approved its 2006
      Long-Term Incentive Plan. Pursuant to the plan, the Company may grant incentive
      and non-qualified stock options, stock appreciation rights, performance units,
      restricted stock awards and performance bonuses, or collectively, awards, to
      officers and key employees. In addition, the plan authorizes the grant of
      non-qualified stock options and restricted stock awards to directors and to
      any
      independent contractors and consultants. Generally, all classes of employees
      are
      eligible to participate in the plan.




The
      Company has reserved a maximum of 4 million shares of its authorized common
      stock for issuance upon the exercise of awards to be granted pursuant to the
      plan.




Other
      than stock options and restricted stock issued and issuable in connection with
      the Maverick acquisition described in Note 4 and the related employment
      agreement in Note 5e, the employment agreement entered into with the new chief
      financial officer on August 11, 2008 as described in Note 12 and an aggregate
      of
      10,000 options issued to directors on July 16, 2008, no options, restricted
      stock or other awards under the plan have been made or committed to be made
      as
      of the date hereof.




*c.
      Stock Repurchase Program*





In
      November 2006, the Company’s board approved a share repurchase program to
      repurchase shares of Company common stock in open market transactions in an
      amount up to $80 million, following the consummation of a the Tandem
      acquisition. On November 1, 2007, the board of directors instituted the initial
      open market stage of this share repurchase program and established a plan
      in conformity with the provisions of Rule 10b5-1 to purchase up to 2,000,000
      shares of Platinum common stock in open market transactions during the month
      of
      November 2007, subject to the broker, volume, price and timing restrictions
      of
      Rule 10b-18 under the Securities Exchange Act of 1934. Pursuant to the plan,
      in
      November 2007 the Company purchased 1,997,913 of its common shares for an
      aggregate of $15,661,464 under the repurchase program. On
      October 26, 2007, the Company redeemed 1,802,205 shares of its common stock
      for
      a total purchase price of $14,057,199. The initial stage of
      the repurchase plan expired November 30, 2007. The Company may resume
      repurchases in the future, pursuant to the share repurchase program, for
      up to
      the remaining amount of $50.3 million.





*d.*  *Consulting
      Agreement*





Effective
      with the Tandem acquisition on October 26, 2007, the Company entered into a
      consulting agreement with Mr. Lance Duncan, for consulting services, including
      investigation and evaluation of possible future acquisitions for the Company.
      Under the terms of the consulting agreement, the Company valued such services
      at
      $5 million and agreed to issue to Mr. Duncan a total of 714,286 shares (based
      upon a $7 per share valuation at that date) of the Company’s restricted common
      stock as consideration over the period of service. These shares are fixed in
      number (except for stock splits or other recapitalizations). These shares are
      to
      be issued in semi-annual installments over the eighteen month term of the
      agreement beginning with the closing of the Tandem acquisition.


19


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      5 — Commitments - continued**





*d.*  *Consulting
      Agreement* , *continued*





On
      October 26, 2007, the first installment of 178,572 of irrevocable shares was
      issued to Mr. Duncan. The Company was required to issue the second installment
      of 178,572 shares of its common stock on April 26, 2008. The
      Company has not issued these shares due to a dispute between the Company and
      Duncan with respect to other claims that Duncan has raised. In
      a
      letter addressed to the Company dated October 10, 2008, Duncan demanded
      payment of $7.7 million relating to all such claims, including payment in cash
      for shares for which he is not yet entitled at a
      valuation not provided for in the consulting agreement and significantly
      above current market price. The
      Company believes that these claims have no merit and will vigorously defend
      its
      position. Stock
      compensation expense in the amount of $848,215, based upon a closing price
      of
      $4.75 per share of the Company’s common stock on April 26, 2008 as quoted on the
      Electronic Bulletin Board, is included in marketing, general and administrative
      expense for the six months ended June 30, 2008 and in other accrued liabilities
      on the balance sheet as of June 30, 2008.





*e.
      Employment Agreement*





In
      connection with completion by the Company of its acquisition of Maverick on
      April 29, 2008, as discussed in Note 4,  the
      Company entered into an employment agreement with Robert Kovar pursuant to
      which
      Mr. Kovar was appointed as Chief Operating Officer of the Company and President
      of Maverick, a wholly-owned subsidiary. Mr. Kovar was Maverick’s founder and its
      president and chief executive officer prior to the acquisition.




The
      employment agreement provides for an initial term of five years. Pursuant to
      the
      terms of the employment agreement, Mr. Kovar will be paid a $200,000 base annual
      salary and will be eligible for annual performance bonuses in such amount and
      at
      such times as determined by the Board or the compensation committee, in their
      sole discretion. In addition, pursuant to the employment agreement, Mr. Kovar
      was granted 50,000 options to purchase shares of Platinum’s common stock with an
      exercise price of $5.15 per share, the closing price on the date of grant,
      and
      will be granted an additional 50,000 stock options on each of the four
      succeeding anniversaries of the effective date of the employment agreement
      at
      the closing price on each anniversary date. The stock compensation expense
      of
      these options, using the Black-Scholes option pricing model to determine their
      fair market value, was not material for the period from April 29, 2008 to June
      30, 2008. All options will be issued pursuant to the Company’s 2006 Long Term
      Incentive Plan and will be subject to a 5 year vesting schedule, with one-fifth
      of such options vesting on each anniversary of the date of grant, beginning
      April 29, 2009. Upon a change in control of the Company, the employment
      agreement provides that all options granted to Mr. Kovar will immediately vest.





Pursuant
      to the employment agreement, if Mr. Kovar’s employment is terminated by the
      Company without cause or Mr. Kovar terminates his employment for good reason,
      he
      will receive an 18 month severance package and his cash flow note (as defined
      in
      Note 4) will become immediately due and payable. If, however, Mr. Kovar’s
      employment is terminated for cause or Mr. Kovar terminates his employment
      without good reason, he will receive no severance package and his cash flow
      note
      will be cancelled.





Mr.
      Kovar
      has also agreed that during the term of his employment with the Company and
      for
      an 18 month period thereafter, he will not compete with nor solicit employees
      of
      the Company. If Mr. Kovar breaches any of these obligations, he would forfeit
      his right to any severance payments and benefits to which he otherwise would
      be
      entitled.





*f.
      Operating leases*





The
      Company leases its general office space and equipment under non-cancellable
      operating leases that expire through August 2012. The obligations presented
      below include the operating leases associated with the Maverick
      acquisition:


20


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)





**Note
      5 — Commitments - continued**




For
                the Year Ending June 30:2009
            
            $
            1,261,0642010
            
            
            1,276,9942011
            
            
            1,243,0252012
            
            
            884,657$
            4,665,740





Rent
      expense amounted to approximately $221,000 for the period ending June 30,
      2008.





*g.
      Capitalized leases*





Maverick
      leases office equipment and vehicles under capital lease agreements.
      Depreciation expense for capital leases is included with depreciation on
      property.





The
      cost
      and accumulated depreciation of capital leases, included in property and
      equipment at June 30, 2008, is as follows:





For
                the Year Ending June 30, 2008:Office
                equipment and furniture
            
            $
            885,010Vehicles
            
            
            371,5981,256,608Less:
                Accumulated depreciation
            
            
            672,189$
            584,419





The
      following is a schedule of future minimum lease payments under capitalized
      leases together with the present value of the net minimum lease payments at
      June
      30, 2008:





For
                the Year Ending June 30:2009
            
            $
            318,2552010
            
            
            201,7612011
            
            
            130,9452012
            
            
            74,0032013
            
            
            24,859Total
                minimum lease payments
            
            
            749,823Less:
                Amount representing interest
            
            
            197,726Current
                value of minimum lease payments
            
            
            552,097Less:
                Current maturities
            
            
            253,252$
            298,845




The
        effective interest rate on capitalized leases ranges from 5% -
        27%.




21





**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)







**Note
      6 — Long-Term Debt**




On
      March 14, 2008, two operating subsidiaries of the Company entered into a new
      credit facility with a bank, establishing a revolving line of credit with an
      initial borrowing base of $35 million. The revolving line of credit is secured
      by the co-borrowers’ oil and gas properties and will be used to facilitate the
      execution of the two entities’ drilling
      and acquisition programs. The line bears interest at the bank’s base rate or
      LIBOR, plus a margin which varies with the ratio of the co-borrowers’
outstanding borrowings against the defined borrowing base, ranging from 1.5%
      to
      2.25 %. The co-borrowers’ can choose periodically to change the interest rate
      base which applies to outstanding borrowings. Under the terms of revolving
      line
      of credit agreement, the co-borrowers must maintain certain financial ratios,
      must repay any amounts due in excess of the borrowing base, and may not declare
      any dividends or enter into any transactions resulting in a change in control,
      without the bank’s consent. The Company, as
      the
      parent company, is not a co-borrower or guarantor of the line, and transfers
      from the co-borrowers to the parent company are limited to (i) $1 million per
      fiscal year to the parent for management fees, and (ii) the repayment of up
      to
      $2 million per fiscal year in subordinate indebtedness owed to the parent.
      As of
      June 30, 2008 there was approximately $7.5 million outstanding under the
      revolving line of credit, bearing interest at the bank’s base rate, which
      was
      5.00%. The entire $7.5 million outstanding balance is classified as long term
      debt in the accompanying financial statements. The facility expires in March,
      2012. In conjunction with the execution of the new line of credit and as
      required under the terms of the new credit facility, the Company novated its
      existing hedge positions from its existing counterparty over to the bank under
      terms satisfactory to the Company. In connection with establishing the line
      of
      credit, the bank received a commitment fee of $87,500 and a fee of $60,229
      for
      its expenses in connection with the aforementioned novation. In addition, the
      co-borrowers are obligated to the bank for a monthly fee of any unused portion
      of the line of credit at the rate of 0.25% per annum.





In
      conjunction with and simultaneous to the establishment of the new bank credit
      facility, the previously existing $5 million line of credit with another bank
      was terminated. No outstanding borrowings existed at the time of the termination
      of this previous arrangement.





In
      connection with the Pleasanton acquisition as more fully described in Note
      4,
      the Company entered into a settlement agreement for $1,000,000 in order to
      secure clear title to the properties acquired, of which it paid $450,000 cash
      and issued its note for the balance in the amount of $550,000. The Company
      was
      given a credit against the purchase price in the amount of the cash payment
      pursuant to the indemnification provisions of the acquisition agreement. The
      note bears interest at 12% per annum, and is subject to monthly payments
      beginning June 1, 2008 of an amount equal to 1⁄2 of the net proceeds from
      production attributable to the Company’s interest in the purchased leasehold or
      $30,000, whichever is greater, until the note is paid in full. The long term
      portion of the note at June 30, 2008 was $147,546.





The
      following table sets forth the Company’s long-term debt position as of June 30,
      2008:





Oil
                  and gas revolving line of credit
              
              
              
              
              $
              7,508,767Notes
                  payable, Pleasanton agreement
              
              
              
              
              
              507,546Revolving
                  line of credit to former shareholders - Maverick
              
              
              (a)
              
              
              3,249,155Term
                  note to former shareholders - Maverick
              
              
              (b)
              
              
              329,277Second
                  term note to former shareholders - Maverick
              
              
              (c)
              
              
              1,543,750Notes
                  payable to third party – Maverick
              
              
              (d)
              
              
              305,000$
              13,443,595Less:
                  Current maturities
              
              
              
              
              
              623,709Long-term
                  debt
              
              
              
              
              $
              12,819,786




(a)
      $3,250,000 revolving line of credit, payable to the Maverick former shareholders
      in monthly interest payments at prime plus .25%, principal and unpaid interest
      due at maturity in September 2010.


22




**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
        6 — Long-Term Debt, continued**
  (b) Term
        note, payable to the Maverick former shareholders in monthly principal and
        interest payments of $10,280 with interest at prime plus .75%, unpaid principal
        and interest due at maturity in April 2011.





(c)
      Second term note, payable to the Maverick former shareholders in monthly
      interest payments at prime plus .50% beginning in April 2008 and beginning
      in
      October 2008, principal payments of $23,390 plus interest until maturity in
      April 2013.





(d)
      Note
      payable to a third party in monthly installments, with interest paid at 12%,
      principal due at maturity in September 2009, collateralized by the guaranty
      of
      the Maverick former majority stockholder and substantially all assets. These
      notes are collateralized by accounts receivable, a $4,000,000 life insurance
      policy on the former majority stockholder, and general and limited oil and
      gas
      partnership interests owned by the Maverick former majority
      stockholder.





Annual
      maturities of indebtedness included in this Footnote 6 at June 30, 2008 are
      as
      follows:





For
                the Year Ending June 30,2009
            
            $
            623,7092010
            
            
            890,1722011
            
            
            3,648,9672012
            
            
            7,789,4472013
            
            
            491,200$
            13,443,495




**Note
      7 — Marketing Arrangements and Segment Information**




With
      the
      consummation of the Maverick acquisition , in accordance with Statement of
      Financial Accounting Standards No. 131, *Disclosures
      about Segments of an Enterprise and Related Information* ,
      the
      Company considers itself to be in two lines of business - (i) as an independent
      oil and gas exploration and production company and (ii) as an engineering
      services company.




(i)
      The
      Company sells substantially all of its crude oil production under short-term
      contracts based on prices quoted on the New York Mercantile Exchange (“NYMEX”)
      for spot West Texas Intermediate contracts, adjusted by agreed-upon increases
      or
      decreases which vary by grade of crude oil. The majority of the Company’s
      natural gas production is sold under short-term contracts based on pricing
      formulas which are generally market responsive. From time to time, the Company
      may also sell a portion of the gas production under short-term contracts at
      fixed prices. The Company believes that the loss of any of its oil and gas
      purchasers would not have a material adverse effect on its results of operations
      due to the availability of other purchasers.





(ii)
      Maverick provides engineering and construction services primarily for three
      types of clients: (1) upstream oil & gas, domestic oil and gas producers and
      pipeline companies; (2) industrial, petrochemical and refining plants; and
      (3)
      infrastructure, private and public sectors, including state municipalities,
      cities, and port authorities. Maverick operates out of facilities headquartered
      in Victoria, Texas and operates primarily in Texas. The types of services
      provided include project management, engineering, procurement, and construction
      management services to both the public and private sectors, including the oil
      and gas business in which the Company is engaged. Maverick is based in south
      Texas with offices in Corpus Christi, Victoria, Harlingen and Houston.


23




**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      7 — Marketing Arrangements and Segment Information -
      continued**




The
      following table presents selected financial information for the Company’s
      operating segments.


.


**Exploration**
            
            
            
            **Parent**
            
            **Intercompany**
            
            **Consolidated****and Production**
            
            **Engineering**
            
            **and Other**
            
            **Eliminations**
            
            **Total****For
                the Three Months Ended****June
                30, 2008:**Revenues
            
            $
            10,694,071
            
            $
            5,344,546
            
            $
            -
            
            $
            (287,864
            )
            $
            15,750,753Intersegment
                revenues
            
            
            -
            
            
            (287,864
            )
            
            -
            
            
            287,864
            
            
            -Total
                revenues
            
            $
            10,694,071
            
            $
            5,056,682
            
            $
            -
            
            $
            -
            
            $
            15,750,753Income
                (loss) before income taxes
            
            $
            (17,192,607
            )
            $
            (241,500
            )
            $
            (2,966,275
            )
            $
            (248,984
            )
            $
            (20,649,366
            )**For
                the Six Months Ended****June
                30, 2008:**Revenues
            
            $
            17,828,875
            
            $
            5,344,546
            
            $
            -
            
            $
            (287,864
            )
            $
            22,885,557Intersegment
                revenues
            
            
            -
            
            
            (287,864
            )
            
            -
            
            
            287,864
            
            
            -Total
                revenues
            
            $
            17,828,875
            
            $
            5,056,682
            
            $
            -
            
            $
            -
            
            $
            22,885,557Income
                (loss) before income taxes
            
            $
            (17,515,358
            )
            $
            (241,500
            )
            $
            (3,582,421
            )
            $
            (364,604
            )
            $
            (21,703,883
            )**As
                of June 30, 2008:**Total
                assets
            
            $
            202,654,223
            
            $
            18,371,322
            
            $
            144,831,055
            
            $
            (139,557,661
            )
            $
            226,298,939**As
                of December 31, 2007:**Total
                assets
            
            $
            180,686,645
            
            $
            -
            
            $
            144,674,091
            
            $
            (126,971,543
            )
            $
            198,389,193





The
      Company reported no oil and gas or service operations in 2007 interim
      periods.




**Note
      8 — Price, Interest Rate and Credit Risk Management
      Activities**





The
      Company engages in price risk management activities from time to time. These
      activities are intended to manage the Company’s exposure to fluctuations in
      commodity prices for natural gas and crude oil. The Company utilizes derivative
      financial instruments, primarily price collars, puts and calls, as the means
      to
      manage this price risk. In addition to these financial transactions, the Company
      is a party to various physical commodity contracts for the
      sale
      of hydrocarbons that cover varying periods of time and have varying pricing
      provisions. Under SFAS No. 133, *Accounting
      for Derivative Instruments and Hedging Activities,* as
      amended by SFAS Nos. 137, 138, 149 and 157, these various physical commodity
      contracts qualify for the normal purchases and normal sales exception and
      therefore, are not subject to hedge accounting or mark-to-market accounting.
      The
      financial impact of these various physical commodity contracts is included
      in
      revenues at the time of settlement, which in turn affects average realized
      hydrocarbon prices. The Company has elected not to designate any of its
      derivative financial contracts as accounting hedges and, accordingly, has
      accounted for these derivative financial contracts using mark-to-market
      accounting.


24


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      8 — Price, Interest Rate and Credit Risk Management Activities -
      continued**





In
      accordance with SFAS No. 157, the Company has categorized its
      derivative financial instruments, based on the priority of the inputs to the
      valuation technique, into a three-level fair value hierarchy. The fair value
      hierarchy gives the highest priority to quoted prices in active markets for
      identical assets or liabilities (Level 1); the next highest priority inputs
      include quoted prices for similar assets or liabilities in active markets,
      quoted prices for identical or similar assets or liabilities in markets that
      are
      not active, and inputs (other than quoted prices) that are observable for the
      asset or liability, either directly or indirectly (Level 2); and the lowest
      priority to unobservable inputs (Level 3). The Company uses Level 1
      valuation techniques to value its derivatives.





Presented
      below is a summary of the Company’s crude oil and natural gas derivative
      financial contracts at June 30, 2008 and December 31, 2007, with crude oil
      prices expressed in dollars per barrel of crude oil and notional crude oil
      volumes in barrels of crude oil per year; and natural gas prices expressed
      in
      dollars per million British thermal units ($/MMBtu) and notional natural gas
      volumes in million British thermal units per year (MMBtuy). As indicated, The
      Company does not have any financial derivative contracts that extend beyond
      December 2012.




The
      total
      fair value of the crude oil and natural gas financial derivative contracts
      at
      June 30, 2008, was a liability of approximately $23.9 million as follows:


**Period
                  Ended June 30,**
              
              **Instrument
                  Type**
              
              **Total
                  Volumes (MMBTU/BBL)**
              
              **Weighted
                  Average (Floor/Ceiling)**
              
              **Fair
                  Value Asset/ (Liability) (stated in thousands)**2009
              
              
              Gas
                  Collar
              
              
              25,846
              
              
              5.00/11.02
              
              
              (255
              )Gas
                  Call Option Sold
              
              
              25,846
              
              
              9.10
              
              
              (698
              )Gas
                  Call Option Purchased
              
              
              25,846
              
              
              12.00
              
              
              255Gas
                  Put Option Sold
              
              
              25,846
              
              
              5.00
              
              
              0Gas
                  Put Option Purchased
              
              
              25,846
              
              
              6.00
              
              
              0Oil
                  Collar
              
              
              99,000
              
              
              40.00/72.10
              
              
              (3,073
              )Oil
                  Call Option Sold
              
              
              50,000
              
              
              67.00
              
              
              (3,662
              )Oil
                  Call Option Purchased
              
              
              50,000
              
              
              72.10
              
              
              3,414Oil
                  Swaps
              
              
              60,000
              
              
              71.00
              
              
              (4,080
              )2010
              
              
              Oil
                  Swaps
              
              
              60,000
              
              
              71.00
              
              
              (3,915
              )Oil
                  Swaps
              
              
              60,000
              
              
              95.50
              
              
              (2,441
              )Oil
                  Put Option Purchased
              
              
              120,000
              
              
              75.00
              
              
              283Oil
                  Put Option Purchased
              
              
              170,000
              
              
              80.00/85.00
              
              
              6692011
              
              
              Oil
                  Swaps
              
              
              60,000
              
              
              95.50
              
              
              (2,332
              )Oil
                  Swaps
              
              
              60,000
              
              
              95.25
              
              
              (2,244
              )Oil
                  Put Option Purchased
              
              
              120,000
              
              
              80.00
              
              
              4852012
              
              
              Oil
                  Swaps
              
              
              60,000
              
              
              95.25
              
              
              (2,163
              )60,000
              
              
              95.00
              
              
              (2,108
              )Oil
                  Swaps
              
              
              60,000
              
              
              95.00
              
              
              (2,050
              )Total
                  fair value liability
              
              
              
              
              
              
              
              
              (23,915
              )





The
      fair
      value of the Company’s financial derivative contracts at June 30, 2008 are shown
      in the accompanying financial statements as follows (in thousands):





Fair
                value of commodity derivative:Current
                portion
            
            $
            (8,098
            )Long-term
                portion
            
            
            (15,816
            )Total
                fair value liability
            
            $
            (23,915
            )




25


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      8 — Price, Interest Rate and Credit Risk Management Activities -
      continued**





The
      total
      fair value of the crude oil and natural gas financial derivative contracts
      at
      December 31, 2007, was a liability of approximately $3.0 million as
      follows:




**Period**
            
            **Instrument
                Type**
            
            **Total Volumes**
              **(MMBTU/BBL)**
            
            **Weighted**
              **Average**
              **(Floor/Ceiling)**
            
            **Fair Value**
              **Asset/**
              **(Liability)**
              **(stated in**
              **thousands)**2008
            
            Gas
              Collar
            
            
            64,615
            
            
            5.00/11.02
            
            
            (25
            )Gas
              Call Option Sold
            
            
            64,615
            
            
            9.10
            
            
            (128
            )Gas
              Call Option Purchased
            
            
            64,615
            
            
            12.00
            
            
            36Gas
              Put Option Sold
            
            
            64,615
            
            
            5.00
            
            
            (11
            )Gas
              Put Option Purchased
            
            
            64,615
            
            
            6.00
            
            
            46Oil
              Collar
            
            
            113,502
            
            
            40.00/72.10
            
            
            (2,455
            )Oil
              Call Option Sold
            
            
            125,000
            
            
            67.00
            
            
            (3,282
            )Oil
              Call Option Purchased
            
            
            125,000
            
            
            72.10
            
            
            2,7032009
            
            Oil
              Swaps
            
            
            120,000
            
            
            71.00
            
            
            (1,928
            )2010
            
            Oil
              Put Option Purchased
            
            
            120,000
            
            
            75.00
            
            
            1,0152011
            
            Oil
              Put Option Purchased
            
            
            120,000
            
            
            80.00
            
            
            986Total
              fair value liability
            
            
            
            
            
            
            
            $
            (3,043
            )





The
      fair
      value of the Company’s financial derivative contracts at December 31, 2007 are
      shown in the accompanying financial statements as follows (in
      thousands):





Fair
                value of commodity derivative:Current
                portion
            
            $
            (3,116
            )Long-term
                portion
            
            
            73Total
                fair value liability
            
            $
            (3,043
            )





The
      natural gas and crude oil prices shown in the above table are based on the
      corresponding NYMEX index and have been valued using actively quoted prices
      and
      quotes obtained from the counterparties to the derivative agreements. The above
      prices represent a weighted average of several contracts entered into and are
      on
      a per MMBtu
      or
      per barrel basis for gas and oil derivatives, respectively. Total volumes shown
      for the crude oil collar reflect net volumetric positions with a single
      counterparty under which contracts provide for netting of all settlement
      amounts.


26


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      8 — Price, Interest Rate and Credit Risk Management Activities -
      continued**





The
      following table summarizes the estimated fair value of financial instruments
      and
      related transactions at June 30, 2008 and December 31, 2007 (in millions):
      (The
      carrying amount and the fair value (1) are the same for each period
      reported.)




**June
                30,**
              **2008**
            
            **December**
              **31,
                2007**NYMEX-Related
                Commodity DerivativeMarket
                Positions (1)
            
            $
            23.9
            
            $
            3.0




(1)
            Estimated
                fair values have been determined by using available market data and
                valuation methodologies. Judgment is required in interpreting market
                data
                and the use of different market assumptions or estimation methodologies
                may affect the estimated fair value
                amounts.




**Note
      9 — Oil and Gas Properties**


****


The
      following table sets forth the Company’s costs incurred in oil and gas property
      acquisition, exploration and development activities for the period from January
      1, 2008 through June 30, 2008:





Balance
                at January 1, 2008:
            
            $
            170,571,663Purchase
                accounting adjustment
            
            
            4,640,000Acquisition
                of propertiesProved
            
            
            7,289,139Unproved
            
            
            1,000,000Exploration
                Costs
            
            
            986,586Development
                Costs
            
            
            9,095,778Balance
                at June 30, 2008:
            
            $
            193,583,166




The
      following table sets forth the Company’s capitalized costs relating to oil and
      gas producing activities at June 30, 2008:




Proved
                oil and gas properties
            
            $
            192,583,166Unproved
                oil and gas properties
            
            
            1,000,000193,583,166Accumulated
                depletion
            
            
            (5,396,000
            )Net
                capitalized costs  at June 30, 2008
            
            $
            188,187,166




27


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      10 — Litigation**





On January
      16, 2008, Exxon Mobil Corporation filed a petition in the 270 th District
      Court of Harris County, Texas, naming Tandem and a third party, Merenco Realty,
      Inc., demanding environmental remediation of certain properties in Tomball,
      Texas. In 1996, pursuant to an assignment agreement, Exxon Mobil sold certain
      oil and gas leasehold interests and real estate interests in Tomball, Texas
      to
      the Company’s predecessor in interest, Merit Energy Corporation. In 1999, the
      Company assigned its 50% undivided interest in one of the tracts in the acquired
      property to Merenco, an affiliate of the Company, owned 50% by the chairman
      of
      the board of the Company, Tim Culp. In October 2007, the Texas Railroad
      Commission notified Exxon Mobil of an environmental site assessment alleging
      soil and groundwater contamination for a site in the area of Tomball, Texas.
      Exxon Mobil believes that the site is one which was sold to the Company and
      claims that the Company is obligated to remediate the site under the assignment
      agreement. Exxon Mobil has requested that the court declare the defendants
      obligated to restore and remediate the properties and has requested any actual
      damages arising from breach and attorneys’ fees. The Company believes that Exxon
      Mobil’s claim that the Company is responsible for any remediation of such site
      is without merit and the Company intends to vigorously defend itself against
      this claim. However, no assurance can be given that the Company will prevail
      in
      this matter. The Company acquired substantially all the assets and liabilities
      of Tandem in the Tandem acquisition. Merenco was not acquired by the Company
      in
      the Tandem acquisition and the Company’s chairman, Tim Culp, continues to have a
      50% ownership interest in Merenco.





**Note
      11 — Benefit Plan**





Prior
      to
      its acquisition by the Company, Maverick adopted a defined contribution plan
      under Section 401(k) of the Internal Revenue Code for the benefit of all
      employees who have met certain length-of-service requirements. Under this plan,
      Maverick employees may elect to make contributions pursuant to a salary
      reduction agreement. Each year, Maverick may make a matching contribution to
      the
      plan on behalf of the participating employees. Employer contributions to the
      plan are discretionary. For the period from April 29, 2008 to June 30, 2008,
      employer contributions charged to operations totaled approximately
      $113,000.


**Note
        12 — Restatement of Prior Period Financial Statements**
 
 Management
        determined certain commodity hedges that were entered into in April 2008
        were
        inadvertently omitted from the reported second quarter 2008 financial results
        and the schedule of contracts at June 30, 2008. The accounting error resulted
        in
        an understatement of net loss by $5.8 million. In addition the tax provision
        was
        restated to reflect the tax impact of the hedging loss and to adjust the
        purchase accounting for the Tandem Energy Holdings, Inc. acquisition. The
        purchase price and deferred tax liability were modified for the deferred
        tax
        effect caused by timing differences in the tax basis and financial basis
        of oil
        and gas properties and recognition of the tax benefit of net operating losses.
        The latter determination was made upon filing of the consolidated tax
        return. There was no impact on cash flows from operating activities. The
        tables below present the effect of the financial statement adjustments related
        to the restatement of our previously reported financial statements for the
        three
        and six months ended June 30, 2008:
 
 Three
                  Months Ended June 30, 2008
              
              As
                  Reported
              
              Adjustments
              
              As
                  RestatedChange
                  in fair value of commodity derivatives
              
              $
              (9,756,171
              )
              $
              (13,337,159
              )
              $
              (23,093,330
              )Income
                  (loss) before income taxes
              
              
              (7,312,207
              )
              
              (13,337,159
              )
              
              (20,649,366
              )Provision
                  (benefit) for income taxes
              
              
              -
              
              
              (7,577,740
              )
              
              (7,577,740
              )Net
                  income (loss)
              
              
              (7,312,207
              )
              
              (5,759,419
              )
              
              (13,071,626
              )Net
                  income (loss) per common share:Basic
              
              
              (0.33
              )
              
              (0.26
              )
              
              (0.59
              )Diluted
              
              
              (0.33
              )
              
              (0.26
              )
              
              (0.59
              )
 
 
 Six
                  Months Ended June 30, 2008
              
              As
                  Reported
              
              Adjustments
              
              As
                  RestatedChange
                  in fair value of commodity derivatives
              
              $
              (11,792,094
              )
              $
              (13,337,159
              )
              $
              (25,129,253
              )Income
                  (loss) before income taxes
              
              
              (8,366,724
              )
              
              (13,337,159
              )
              
              (21,703,883
              )Provision
                  (benefit) for income taxes
              
              
              (54,000
              )
              
              (7,577,740
              )
              
              (7,631,740
              )Net
                  income (loss)
              
              
              (8,312,724
              )
              
              (5,759,419
              )
              
              (14,072,143
              )Net
                  income (loss) per common share:Basic
              
              
              (0.38
              )
              
              (0.26
              )
              
              (0.63
              )Diluted
              
              
              (0.38
              )
              
              (0.26
              )
              
              (0.63
              )
 
 As
                  of June 30, 2008
              
              As
                  Reported
              
              Adjustments
              
              As
                  RestatedOil
                  and gas properties, full cost method
              
              $
              188,943,166
              
              $
              4,640,000
              
              $
              193,583,166Income
                  taxes payable
              
              
              101,960
              
              
              (19,468
              )
              
              82,474Fair
                  value of commodity derivatives
              
              
              2,478,871
              
              
              13,337,159
              
              
              15,816,030Deferred
                  income taxes
              
              
              48,085,215
              
              
              (2,918,254
              )
              
              45,166,961Retained
                  earnings (accumulated deficit)
              
              
              (6,750,349
              )
              
              (5,759,419
              )
              
              (12,509,768
              )




28


**PLATINUM
      ENERGY RESOURCES, INC. AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** (As
        Restated)




**Note
      13 — Subsequent Events**




*Employment
      Agreement*




On
      August
      11, 2008, the Company entered into an employment agreement with Lisa Meier
      pursuant to which Ms. Meier was appointed as chief financial officer and
      treasurer of the Company. Ms. Meier is a certified public accountant Ms. Meier
      earned a Bachelor of Business Administration (BBA) from the University of Texas
      at Austin and a Master of Professional Accountancy (MPA) from the University
      of
      Texas at Austin in 1996. The employment agreement provides for an initial five
      year term. Pursuant to the terms of the employment agreement, Ms. Meier will
      be
      paid a $250,000 base annual salary, increasing by 5% annually. Ms. Meier will
      be
      eligible for an annual bonus as determined by the Board or a compensation
      committee of the Board which, in the event the Company has positive cash flow,
      will be at least $50,000. In addition, Ms. Meier will be eligible for a
      performance bonus based on certain predetermined budgeted goals. The target
      bonus for this purpose will be 50% of base salary.




In
      addition, pursuant to the employment agreement, Ms. Meier was granted 50,000
      incentive stock options to purchase shares of the Company’s common stock with an
      exercise price equal to the closing price on August 11, 2008, the date of grant,
      and will be granted an additional 50,000 stock options each year thereafter
      during the term of her employment. All options will be issued pursuant to the
      Company’s 2006 Long Term Incentive Plan and will be subject to a four year
      vesting schedule, with one-quarter of such options vesting on each anniversary
      of the date of grant, beginning August 11, 2009. Upon a change in control of
      the
      Company, the employment agreement provides that all options granted to Ms.
      Meier
      will immediately vest.




Pursuant
      to the employment agreement, if Ms. Meier’s employment is terminated by the
      Company without cause or Ms. Meier terminates her employment for good reason,
      she will receive an 18 month severance package. If, however, Ms. Meier’s
      employment is terminated by the Company for cause or Ms. Meier terminates her
      employment without good reason, she will receive no severance package.




Ms.
      Meier
      has also agreed that during the term of her employment with the Company and
      for
      an 18 month period thereafter, she will not compete with the Company nor solicit
      employees of the Company. If Ms. Meier breaches any of these obligations, she
      would forfeit her right to any severance payments and benefits to which she
      otherwise would be entitled.




*Platenergy
      Services and Infrastructure*




Platenergy
      Services and Infrastructure (“PSI”) is a proposed new business that Ms.
      Meier will help develop in the oilfield services industry.  Pursuant to the
      employment agreement, Ms. Meier will also be appointed President of PSI. PSI’s
      business plan is to develop products, services and solutions to optimize
      customer performance in a safe and environmentally sound manner. PSI has entered
      into a restricted stock agreement with Ms Meier pursuant to which Ms. Meier
      will
      be issued 50 restricted shares of PSI’s common stock, representing 5% of
      the outstanding shares of PSI common stock. Under the agreement, the
      shares will be subject to a four year vesting schedule, with one-quarter of
      such shares to be released on each anniversary of the date of
      issue.   All shares will be released from restriction upon a sale
      of the PSI business.




29


**Item
      2.**  **Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.**





This
      Quarterly Report on Form 10-Q includes forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended. We have based these
      forward-looking statements on our current expectations and projections about
      future events. These forward-looking statements are subject to known and unknown
      risks, uncertainties and assumptions about us that may cause our actual results,
      levels of activity, performance or achievements to be materially different
      from
      any future results, levels of activity, performance or achievements expressed
      or
      implied by such forward-looking statements. In some cases, you can identify
      forward-looking statements by terminology such as “may,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or
      the negative of such terms or other similar expressions. Factors that might
      cause or contribute to such a discrepancy include, but are not limited to,
      those
      described in our other Securities and Exchange Commission filings.





On
      October 26, 2007, we acquired substantially all of the assets and assumed
      substantially all of the liabilities of Tandem. Prior to that time, we were
      a
      blank check company with no operations and no net revenues. On April 29, 2008
      we
      acquired the 100% of the stock of Maverick Engineering, Inc. (Maverick), a
      full-service engineering service company.





Set
      forth
      below are:





(A)
        Results of operations for Platinum for the three months and six months
      ended June 30, 2008 as compared to the three months and six months ended June
      30, 2007. Included within the results of operations for the comparative periods
      are the results of operations of the oil and gas properties we purchased, as
      well as the operations of Maverick, from their respective dates of
      acquisition




(B)
      A
      comparison of certain summarized historical information of our oil and gas
      subsidiaries for the quarter ended June 30, 2008 with the quarter ended March
      31, 2008, in order to provide the reader with certain meaningful analytical
      data.





(C)
      A
      discussion of the engineering services company (Maverick) for the period from
      the date of acquisition (April 29, 2008) through June 30, 2008.





The
      following discussion should be read in conjunction with our Condensed
      Consolidated Financial Statements and related Notes thereto included elsewhere
      in this report.




**Overview**





With
      the
      consummation of the Maverick acquisition, we consider ourselves to be in two
      lines of business - (i) as an independent oil and gas exploration and production
      company and (ii) as an engineering services company.





i)
            In
                our oil and gas operations, we conduct oil and natural gas exploration,
                development, acquisition, and production. Our basic business model
                is to
                find and develop oil and gas reserves through development activities,
                and
                sell the production from those reserves at a profit. To be successful,
                we
                must, over time, be able to find oil and gas reserves and then sell
                the
                resulting production at a price that is sufficient to cover our finding
                costs, operating expenses, administrative costs and interest expense,
                plus
                offer an acceptable rate of return on our capital investment. We
                sell
                substantially all of our crude oil production under short-term contracts
                based on prices quoted on the New York Mercantile Exchange (“NYMEX”) for
                spot West Texas Intermediate contracts, less agreed-upon deductions
                which
                vary by grade of crude oil. The majority of our natural gas production
                is
                sold under short-term contracts based on pricing formulas which are
                generally market responsive. From time to time, we may also sell
                a portion
                of the gas production under short-term contracts at fixed prices.


30


(ii)
            Through
                our wholly-owned Maverick operation, we provide engineering and
                construction services primarily for three types of clients: (1) upstream
                oil and gas, domestic oil and gas producers and pipeline companies;
                (2)
                industrial, petrochemical and refining plants; and (3) infrastructure,
                private and public sectors, including state municipalities, cities,
                and
                port authorities. Maverick operates out of facilities headquartered
                in
                Victoria, Texas and operates primarily in Texas. The types of services
                provided include project management, engineering, procurement, and
                construction management services to both the public and private sectors,
                including the oil and gas business in which we are engaged as described
                above. Maverick is based in south Texas with offices in Corpus Christi,
                Victoria, Harlingen and Houston.





From
      time
      to time, we may make strategic acquisitions in our oil and natural gas business
      if we believe the acquired assets offer us the potential for reserve growth
      through additional developmental drilling activities. However, the successful
      acquisition of oil and natural gas properties requires assessment of many
      factors, which are inherently inexact and may be inaccurate, including future
      oil and natural gas prices, the amount of recoverable reserves, future operating
      costs, future development costs, failure of titles to properties, costs and
      timing of plugging and abandoning wells and potential environmental and other
      liabilities.





We
      believe that the economic climate in the domestic oil and gas industry continues
      to be suitable for our business model. Oil prices are currently at or
      near-record levels, and gas prices are well above historic averages. Although
      oil and gas prices are typically volatile and are subject to market
      fluctuations, we believe that supply and demand fundamentals in the energy
      marketplace continue to provide us with the economic incentives necessary for
      us
      to assume the risks we face in our search for oil and gas reserves. While profit
      margins remain currently favorable, we cannot guarantee that rising finding
      costs, production costs, and depletion expense will not affect our future
      success. Specifically, our revenue, cash flow from operations and future growth
      depend substantially on many factors, including those beyond our control, such
      as economic, political and regulatory developments and competition from other
      sources of energy. Because of these factors, we continuously seeks ways to
      reduce exposure to the volatility in oil and natural gas prices. Our strategy
      is
      to hedge a portion of our expected future oil and natural gas production, using
      a mixture of calls, puts, forward contracts and other derivative instruments,
      to
      reduce our exposure to fluctuations in commodity price.





Furthermore,
      like all businesses engaged in the exploration and production of oil and natural
      gas, we face the challenge of natural production declines. As initial reservoir
      pressures are depleted, oil and natural gas production from a given well
      decreases. Thus, an oil and natural gas exploration and production company
      depletes part of its asset base with each unit of oil or natural gas it
      produces. Consequently, key to our success is not only finding reserves through
      developmental drilling and strategic acquisitions, but also by exploiting
      opportunities related to our existing production. For example, we have two
      fields, the Ira Unit located in Scurry County, Texas, and the Ballard Unit
      located in Eddy County, New Mexico which we believe contain substantial
      opportunities to expand and enhance their existing waterflood capabilities.
      These projects will require capital in the form of money and
      expertise.


31


**(A)
      – Results of Operations - Platinum**





*For
      the three and six month periods ended June 30, 2008 as compared to the three
      month and six month periods ended June 30, 2007*





We
      were a
      blank check company for the periods ended in 2007 and consequently had no
      operations and no net operating results. For the three months and six months
      ended June 30, 2008 , our results of operations included those of the oil and
      gas entities acquired on and subsequent to October 26, 2007 for the 2008 periods
      and those of our engineering services business, Maverick, from its date of
      acquisition April 29, 2008 through June 30, 2008. See “Business - Growth
      Strategy” beginning on page 5 and Note 4 to the consolidated financial
      statements beginning on page F1-14 in our Form 10K/A for the year ended December
      31, 2007 filed on April 15, 2008 and Note 4 included elsewhere herein. For
      a
      comparison of results of operations relating to our oil and natural gas assets,
      see “Results of Operations - Oil and Gas” below.





With
      respect to our results of operations excluding our oil and natural gas assets
      and the engineering services business (Maverick), we had no net operating
      revenues during the 2008 or 2007 periods. Our general and administrative
      expenses other than those attributable to our oil and natural gas assets and
      our
      engineering services business for the three and six month periods ended June
      30,
      2008 was $1,543,000 and $2,233,000 (of the $3.8 million and $5.5 million of
      general and administrative expenses included in our condensed consolidated
      results for the corresponding periods) as compared to approximately $144,000
      and
      $299,000 in the three and six month periods ended June 30, 2007. The increase
      of
      $ 1,399,000 and $1,934,000 in such expenses for the three and six months ended
      June 30, 2008, respectively as compared to the three and six months ended June
      30, 2007 is attributable to (i) $848,000 in stock compensation expense incurred
      in the 2008 periods related to a consulting arrangement and an employment
      agreement (See Note 5 to the condensed consolidated financial statements) as
      compared to $0 in the 2007 periods and (ii) to our status as a parent company
      of
      operating businesses in 2008, comprised principally of officer salaries’
($232,000 as compared to $0 for six months ended June 30, 2008 as compared
      to
      2007), legal and accounting relating to normal corporate and regulatory
      compliance matters ($919,000 as compared to $168,000 for six months ended June
      30, 2008 as compared to 2007), investor relations and other administrative
      costs. Results of operations for the three months ended June 30, 2007 included
      interest income of $1,465,000 (substantially all of which was earned on funds
      held trust for the benefit of public shareholders prior to the closing of the
      Tandem acquisition) as compared to interest income earned of $117,000 for six
      months ended June 30, 2008 on substantially lower cash balances.





We
      also
      incurred unrealized losses of $1,573,000 for the six months ended June 30,
      2008
      as compared to $0 in 2007 on the decrease in the value of certain put options
      on
      crude oil we purchased in December 2007 and January 2008 for an aggregate of
      $3,035,000. In the period from June 30, 2008 through August 11, 2008, as a
      result of a decrease in the price of crude oil, these put options experienced
      an
      unrealized increase in value of $1,050,000.





**(B)
      – Results of Operations - Oil and Gas**




The
      following summary of oil and gas revenues and lease and other operating expenses
      for the periods indicated is provided for comparative purposes. These
      comparative results are for the three months ended June 30, 2008 as compared
      to
      the three months ended March 31, 2008. As indicated in the preceding paragraph,
      since our results for the three months ended June 30, 2007 are not in any way
      comparable to the three months ended June 30, 2008, we believe that the
      comparison of our current operating data to the immediately preceding period
      would provide more relevant information to assist in evaluating our
      Company.


32


*Comparison
      of the Three Months Ended June 30, 2008 to the Three Months Ended March 31,
      2008*





Any
      reference in this comparison to the second quarter relates to the three months
      ended June 30, 2008, and any reference to the first quarter relates to the
      three
      months ended March 31, 2008, unless otherwise indicated.





Our
      revenues from oil and natural gas sales for the three months ended June 30,
      2008
      were $10.7 million. Oil and gas sales for the three months ended March 31,
      2008
      were $7.1 million. The 50% increase in oil and gas revenues was due to an
      increase in commodity prices as well as to an increase in production on a Boe
      basis during the second quarter. The average oil price for the second quarter
      was $122.22 compared to $96.83 for the first quarter. The average gas price
      for
      the second quarter was $11.11 per Mcf compared to $8.19 for the first quarter.
      Production on a Boe basis increased 14% from 88,239 Boe’s during the first
      quarter to 100,831 Boe’s during the second quarter.





Oil
      and
      gas production costs in the form of lease operating expense on a Boe basis
      increased 4.2% from $27.53 per Boe during the first quarter to $28.68 per Boe
      during the second quarter. The slight increase was due partially to an increased
      emphasis on environmental clean-up efforts across our oil and gas assets on
      a
      field by field basis. The increase was partially offset by higher production
      due
      to increased drilling and workover activities. Other factors outside management
      control, such as third party service availability and the availability of
      adequate technical and field staff, could have an adverse effect on lease
      operating costs in the future





Depletion
      expense for oil and gas properties increased approximately $250,000, or 14%,
      during the second quarter compared to the first quarter. The increase was
      attributable primarily to property additions during the second quarter and
      a
      significant increase in the future development costs related to our proved
      undeveloped locations.





General
      and administrative costs for the oil and gas entities decreased approximately
      $50,000, or 5%, during the second quarter compared to the first quarter. The
      decrease was related to a general decline in engineering and professional fees
      (excluding fees incurred with our engineering services group).





We
      also
      incurred unrealized losses of approximately $21.5 million for the second quarter
      2008 as compared to approximately a $2.0 million during the first quarter 2008
      on the decrease in the value of certain hedge contracts on crude oil and natural
      gas.




**(C) –
      Results of Operations – Engineering Services (Maverick)**




Revenues
      for the period since the acquisition (April 29, 2008 – June 30, 2008)
      were  $5.1
      million.  Gross
      margin performance for the same period was 21.7%. Performance for the second
      quarter was hampered by an unusual convergence of contemporaneous weakness
      in
      all of our business segments for unrelated reasons. The oil and gas business
      was
      impacted by project deferrals and slowdowns in work from some our traditional
      clients. The industrial division was adversely impacted by capital budget cuts
      in the refining market plus the decision by Valero to seek strategic
      alternatives for its Aruba refinery, with a resulting deferral of some project
      work there. The infrastructure business was adversely impacted by a four-month
      delay in commencement of a major road project, and elimination of all of our
      TxDOT survey business due to state government fiscal concerns. These operations
      reported a pretax loss of $241,500 in the period April 29, 2008 to June 30,
      2008, including amortization expense of $142,000 associated with the intangible
      assets acquired.


33


**Liquidity
      and Capital Resources**





In
      connection with our initial public offering consummated on October 28, 2005,
      we
      sold (i) 14,400,000 units to the public, with each unit consisting of one share
      of our common stock, $0.0001 per share, and one warrant expiring October 28,
      2009 to purchase one share of common stock at an exercise price of $6.00 per
      share and (ii) to the representatives of the underwriters a five year option
      to
      purchase up to a total of 720,000 units in the aggregate at a per unit price
      of
      $10.00. The units issuable upon exercise of this option are identical to those
      offered in the public offering except that the warrants included in the option
      have an exercise price of $7.50. The underwriters’ unit purchase option may be
      exercised for cash or on a “cashless” basis, at the holder’s option, such that
      the holder may use the appreciated value of the option (the difference between
      the exercise prices of the option and the underlying warrants and the market
      price of the units and underlying securities) to exercise the option without
      the
      payment of any cash. If circumstances warrant and in the event that any holders
      of the unit purchase option choose to exercise all or a portion of the unit
      purchase option on a cashless basis, we will receive no cash proceeds but would
      be required to issue additional units. In addition we can give no assurance
      that
      any of the warrants included in the units sold to the public will be exercised
      and result in any proceeds to us.





The
      following additional events occurred or had an impact during the six months
      ended June 30, 2008 or may have an impact on our liquidity in future
      periods:





a.
 
      In November 2006, the Company’s board approved a share repurchase program to
      repurchase shares of Company common stock in an amount up to $80 million
      (including shares that may be redeemed in connection with stockholders
      conversion rights upon consummation of the Tandem acquisition). On October
      26,
      2007, we redeemed 1,802,205 shares of our common stock for a total cash purchase
      price of $14,057,199 pursuant to such conversion rights.





b.
      On
      November 1, 2007, the Company announced the initial stage of the share
      repurchase program and adopted a share repurchase plan for the month of November
      2007. In the period from November 1 through November 30, 2007, we purchased
      1,997,913 shares for an aggregate of $15,661,464. We financed these purchases
      with available cash. The initial share repurchase plan expired November 30,
      2007, but the Company may resume repurchases in the future, pursuant to our
      current share repurchase program, under which approximately $50 million may
      be
      used to acquire additional shares.





c.
      As
      part of our overall business strategy (See Note 4, Business Combinations to
      the
      condensed consolidated financial statements), we continued our program of
      strategic acquisitions and investment opportunities that complement our existing
      business. We made various acquisitions of oil and gas properties and businesses
      in the six month period ended June 30, 2008, summarized as follows:





·
            In
                December 2007, Platinum, through a wholly owned subsidiary acquired
                a 50%
                working interest in the La Rosa field for approximately $5.3 million.
                Although the La Rosa field is a producing field of approximately
                3,800
                acres in Refugio County, Texas, actual production was minimal. The
                primary
                focus of the acquisition is related to its recompletion and re-entry
                potential. The entire purchase price was allocated to oil and gas
                properties. In March 2008 an additional related working interest
                to our
                December 2007 La Rosa field acquisition was acquired for
                $461,500;




·
            In
                January 2008, the Company acquired a 70% working interest in the
                Pleasanton field for approximately $6.1 million. $2.5 million of
                the
                purchase price was paid in December 2007 and recorded as a deposit
                on the
                December31,
                2007 balance sheet. The remainder of the purchase price was paid
                in
                January 2008, including direct transaction costs. See Note 6 for a
                further description of consideration paid. The Pleasanton Field is
                a
                non-producing field of approximately 4,200 acres in Atascosa County,
                Texas. The field contains previously drilled and abandoned wells.
                In
                connection with the Pleasanton acquisition, in April 2008 we entered
                into
                a settlement agreement for $1,000,000 in order to secure clear title
                to
                the properties acquired, of which we paid $450,000 cash and issued
                our
                note for the balance in the amount of $550,000. We received a credit
                against the purchase price in the amount of the cash payment pursuant
                to
                the indemnification provisions of the acquisition agreement. The
                note
                bears interest at 12% per annum, and is subject to monthly payments
                beginning June 1, 2008 of an amount equal to 1⁄2 of the net proceeds from
                production attributable to our interest in the purchased leasehold
                or
                $30,000, whichever is greater, until the note is paid in
                full;


34


·
            In
                April, 2008 we purchased a 100% working interest in producing leases
                (Quantum prospect) in Atascosa County, Texas for $750,000. The leases
                consist of twelve producing wells, two shut in wells, two injection
                wells
                and one salt water disposal well. We will operate this
                lease;




·
            In
                May, 2008 we purchased a 70% working interest in an acreage position
                (Lieke prospect) in Atascosa County, Texas for $600,000, with the
                initial
                goal of re-entering an abandoned well bore and attempting a completion
                in
                the Edwards formation. We will operate this lease;




In
      June,
      2008 the Company purchased a 25% non-operated working interest in an acreage
      position (Lacy prospect) in Nueces County, Texas for $400,000. The agreement
      contains a requirement for the drilling of the initial test well to a depth
      of
      9,500.





d.
 
      On March 14, 2008, two of our oil and natural gas operating subsidiaries, Tandem
      Energy Corporation and PER Gulf Coast, Inc. entered into a new credit facility
      with the Bank of Texas, establishing a revolving line of credit with an initial
      borrowing base of $35 million. The revolving line of credit is secured by the
      oil and gas properties and will be used to facilitate the execution of our
      drilling and acquisition programs. The line bears interest at the bank’s base
      rate or LIBOR, plus a margin which varies with the ratio of the outstanding
      borrowings against the defined borrowing base, ranging from 1.50% to 2.25%.
      These oil and gas subsidiaries can choose periodically to change the interest
      rate base which applies to outstanding borrowings. Under the terms of revolving
      line of credit agreement, they must maintain certain financial ratios, must
      repay any amounts due in excess of the borrowing base, and may not declare
      any
      dividends or enter into any transactions resulting in a change in control,
      without the bank’s consent. As the parent company, we are not a co-borrower or
      guarantor of the line, and transfers from the oil and gas operations to us
      are
      limited to (i) $1 million per fiscal year for management fees, and (ii) the
      repayment of up to $2 million per fiscal year in subordinate indebtedness owed
      to us. As of June 30, 2008, there was approximately $7.5 million
      outstanding under the revolving line of credit. In conjunction with the
      execution of the new line of credit, and as required under the terms of the
      new
      credit facility, we novated our existing hedge positions from our existing
      counterparty over to the Bank of Texas under terms satisfactory to us. In
      addition, there is an obligation to the bank for a monthly fee for any unused
      portion of the line of credit at the rate of 0.25% per annum. The unused portion
      of this revolving line of credit of approximately $27.5 million remains
      available.





e. On April
      29, 2008, we completed the acquisition of Maverick. The aggregate consideration
      paid in the merger was $6 million in cash and $5 million to be paid over the
      next 6 years pursuant to non-interest bearing cash flow notes, subject to
      certain escrows, holdbacks and post-closing adjustments. Provisions of the
      cash
      flow notes require quarterly payments commencing in June 2008 to the noteholders
      pro rata equal to 50% of the pre-tax net income, as defined, generated by the
      Maverick business on a stand alone basis in the prior quarter. Payment of the
      cash flow notes can be accelerated by certain events, including a change in
      control. The balance of the cash flow notes remaining unpaid upon maturity,
      if
      any, will be converted into a 12 month self amortizing note bearing interest
      at
      the annual rate of 2% over the bank’s prime rate. In addition, we will assume
      Maverick’s indebtedness under certain bank and loan arrangements, which
      aggregate balances approximated $4.5 million at January 31, 2008. In addition,
      the sellers agreed to satisfy and assume Maverick's bank indebtedness in the
      aggregate amount of $4.9 million consisting of a $3 million revolving line
      of
      credit maturing April 2008, a $1.6 million term note due April 2011, and $.3
      million oil and gas note due May 2009, using a portion of the cash received
      by
      them at closing. Following the closing, the Company was indebted to the sellers
      for these amounts under the identical terms of the bank loan agreements. On
      April 30, 2008, Maverick entered into extension and modification agreements
      with
      the sellers pursuant to which sellers agreed to defer principal payments of
      the
      $1.6 million term loan for six months and extend the maturity date to April
      2013. The sellers also agreed to extend the maturity dates of the revolving
      line
      of credit and oil and gas note to 2010 and 2013, respectively. In addition,
      as
      of June 30, 2008, Maverick was not in compliance with the debt service coverage
      ratio contained in the loan agreements. Subsequent to June 30, 2008, the sellers
      waived the Company's obligation to maintain this ratio through September 30,
      2009.


35


The
      cash
      flow notes will be payable quarterly at the rate of 50% of pre-tax net income,
      as defined, generated by the Maverick business on a stand-alone basis in the
      preceding quarter. Payment can be accelerated by certain events, including
      change in control of the Company. The purchase price is also subject to
      adjustment for any change in working capital as defined in the agreement,
      between October 31, 2007 and the closing date, as well as other adjustments
      associated with changes in indebtedness. Any adjustment will be treated as
      a
      modification of the amount of the cash flow notes and is to be determined within
      45 days of closing.





In
      connection with the acquisition of Maverick, we entered into an employment
      agreement with Mr. Kovar to serve as chief operating officer of Platinum. The
      employment agreement provides for an initial term of five years. Pursuant to
      the
      terms of the employment agreement, Mr. Kovar will be paid a $200,000 base annual
      salary and will be eligible for annual performance bonuses in such amount and
      at
      such times as determined by the Board or the compensation committee, in their
      sole discretion. In addition, pursuant to the employment agreement, Mr. Kovar
      was granted 50,000 options to purchase shares of the Company’s common stock with
      an exercise price of $5.15 per share, the closing price on the date of grant,
      and will be granted an additional 50,000 stock options on each of the four
      succeeding anniversaries of the effective date of the employment agreement.
      All
      options will be issued pursuant to the Company’s 2006 Long Term Incentive Plan
      and will be subject to a 5 year vesting schedule, with one-fifth of such options
      vesting on each anniversary of the date of grant, beginning April 29, 2009.
      In
      the event of a change in control of the Company, the employment agreement
      provides that all options granted to Mr. Kovar will immediately
      vest.




Pursuant
      to the employment agreement, if Mr. Kovar’s employment is terminated by us
      without cause or Mr. Kovar terminates his employment for good reason, he will
      receive an 18 month severance package and his cash flow note will become
      immediately due and payable. If, however, Mr. Kovar’s employment is terminated
      by us for cause or Mr. Kovar terminates his employment without good reason,
      he
      will receive no severance package and his cash flow note will be
      cancelled.





f.
      On
      August 11, 2008, we entered into an employment agreement with Lisa Meier
      pursuant to which Ms. Meier was appointed as chief financial officer and
      treasurer of the Company. Ms. Meier is a certified public accountant. Ms. Meier
      earned a Bachelor of Business Administration from the University of Texas at
      Austin and a Master of Professional Accountancy from the University of Texas
      at
      Austin in 1996. The employment agreement provides for an initial five year
      term.
      Pursuant to the terms of the employment agreement, Ms. Meier will be paid a
      $250,000 base annual salary, increasing by 5% annually. Ms. Meier will be
      eligible for an annual bonus as determined by the Board or a compensation
      committee of the Board which, in the event the Company has positive cash flow,
      will be at least $50,000. In addition, Ms. Meier will be eligible for a
      performance bonus based on certain predetermined budgeted goals. The target
      bonus for this purpose will be 50% of base salary.





In
      addition, under terms of the employment agreement, Ms. Meier was granted 50,000
      incentive stock options to purchase shares of the Company’s common stock with an
      exercise price equal to the closing price on August 11, 2008, the date of grant,
      and will be granted an additional 50,000 stock options each year thereafter
      during the term of her employment. All options will be issued pursuant to the
      Company’s 2006 Long Term Incentive Plan and will be subject to a four year
      vesting schedule, with one-quarter of such options vesting on each anniversary
      of the date of grant, beginning August 11, 2009. Upon a change in control of
      the
      Company, the employment agreement provides that all options granted to Ms.
      Meier
      will immediately vest.





Pursuant
      to the employment agreement, if Ms. Meier’s employment is terminated by the
      Company without cause or Ms. Meier terminates her employment for good reason,
      she will receive an 18 month severance package. If, however, Ms. Meier’s
      employment is terminated by us for cause or Ms. Meier terminates her employment
      without good reason, she will receive no severance package.


36


Ms.
      Meier
      has also agreed that during the term of her employment with us and for an 18
      month period thereafter, she will not compete with the Company nor solicit
      our
      employees. If Ms. Meier breaches any of these obligations, she would forfeit
      her
      right to any severance payments and benefits to which she otherwise would be
      entitled.




*Platenergy
      Services and Infrastructure*




Platenergy
      Services and Infrastructure (“PSI”) is a proposed new business that Ms.
      Meier will help develop in the oilfield services industry.  Pursuant to the
      employment agreement, Ms. Meier will also be appointed President of PSI. PSI’s
      business plan is to develop products, services and solutions to optimize
      customer performance in a safe and environmentally sound manner. PSI has entered
      into a restricted stock agreement with Ms Meier pursuant to which Ms. Meier
      will
      be issued 50 restricted shares of PSI’s common stock, representing 5% of
      the outstanding shares of PSI common stock. Under the agreement, the
      shares will be subject to a four year vesting schedule, with one-quarter of
      such shares to be released on each anniversary of the date of
      issue.   All shares will be released from restriction upon a sale
      of the PSI business.




**Supplemental
      Oil and Gas Information**





The
      following information is intended to supplement the consolidated financial
      statements included in this report with data that is not readily available
      from
      those statements.





Three Months Ended
            
            Year to DateMarch 31, 2008
            
            June 30, 2008
            
            June 30, 2008ProductionOil
                (Bls)
            
            
            58,707
            
            
            71,508
            
            
            130,215Gas
                (Mcf)
            
            
            177,189
            
            
            175,936
            
            
            353,125Boe
                (Bls)
            
            
            88,239
            
            
            100,831
            
            
            189,070Average
                PricesOil
                ($/Bbl)
            
            $
            96.83
            
            $
            122.22
            
            $
            110.77Gas
                ($/Mcf)
            
            $
            8.19
            
            $
            11.11
            
            $
            9.64Average
                Lifting CostPer
                Boe
            
            $
            27.53
            
            $
            28.68
            
            $
            28.14




**Capital
      Expenditures**–
      Oil and Gas Development





The
      reserve report prepared as of December 31, 2007 assumes that we will expend
      approximately $19.4 million in expenditures in 2008 to drill a number of
      existing proved undeveloped locations, with the intent of converting them into
      proved developed producing locations, thereby generating new cash flows. The
      execution of the drilling program is dependent on rig availability, the
      availability of technical and field staff, and product pricing. Through June
      30,
      2008 we have incurred approximately $10.4 million of these
      expenditures.





**Off-Balance
      Sheet Arrangements**





We
      do not
      have any off-balance sheet arrangements as defined in Item 303(a) (4) (ii)
      of
      Regulation S-K promulgated under the Securities Exchange Act of
      1934.


37


**Contractual
      Obligations**





In
      connection with the October 26, 2007 Tandem acquisition, we entered into an
      agreement with Mr. Lance Duncan, for consulting services, including
      investigation and evaluation of possible future acquisitions. Under the terms
      of
      the consulting agreement, Mr. Duncan’s services were valued at $5 million. We
      agreed to issue to Mr. Duncan a total of 714,286 shares (based upon a $7 per
      share valuation at that date) of our restricted common stock, 25% to be issued
      upon commencement of services and the remainder in semi-annual installments
      of
      25% each over the eighteen month term of the agreement. Each installment will
      be
      paid with 178,572 shares of our common stock, based on payments of $1,250,000
      valued at a fixed price of $7.00 per share.





On
      October 26, 2007, the first installment of 178,572 of irrevocable restricted
      shares was issued to Mr. Duncan. We were required to issue the second
      installment of 178,572 shares of our common stock on April 26, 2008. The
      Company has not issued these shares due to a dispute between the Company and
      Duncan with respect to other claims that Duncan has raised. In
      a
      letter addressed to the Company dated October 10, 2008, Duncan demanded
      payment of $7.7 million relating to all such claims, including payment in cash
      for shares for which he is not yet entitled at a
      valuation not provided for in the consulting agreement and significantly
      above current market price. The
      Company believes that these claims have no merit and will vigorously defend
      its
      position. Stock
      compensation expense in the amount of $848,215, based upon a closing price
      of
      $4.75 per share on April 26, 2008 as quoted on the OTC Bulletin Board, is
      reflected in our financial statements for the three and six month periods ended
      June 30, 2008.




**Critical
      Accounting Policies:**





**Use
      of Estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.




**Full
      Cost and Impairment of Assets**





We
      account for our oil and natural gas exploration and development activities
      using
      the full cost method of accounting. Under this method, all costs incurred in
      the
      acquisition, exploration and development of oil and natural gas properties
      are
      capitalized. Costs of non-producing properties, wells in the process of being
      drilled and significant development projects are excluded from depletion until
      such time as the related project is developed and proved reserves are
      established or impairment is determined. At the end of each quarter, the net
      capitalized costs of our oil and natural gas properties, as adjusted for asset
      retirement obligations, is limited to the lower of unamortized cost or a
      ceiling, based on the present value of estimated future net revenues, net of
      income tax effects, discounted at 10%, plus the lower of cost or fair market
      value of our unproved properties. Revenues are measured at unescalated oil
      and
      natural gas prices at the end of each quarter, with effect given to cash flow
      hedge positions. If the net capitalized costs of oil and natural gas properties
      exceed the ceiling, we are subject to a ceiling test write-down to the extent
      of
      the excess. A ceiling test write-down is a non-cash charge to earnings. It
      reduces earnings and impacts stockholders’ equity in the period of occurrence
      and results in lower DD&A expense in future periods.





There
      is
      a risk that we will be required to write down the carrying value of our oil
      and
      natural gas properties when oil and natural gas prices decline. If commodity
      prices deteriorate, it is possible that we could incur impairment in future
      periods.




**Depletion**





Provision
      for depletion of oil and natural gas properties under the full cost method
      is
      calculated using the unit of production method based upon estimates of proved
      developed oil and natural gas reserves with oil and natural gas production
      being
      converted to a common unit of measure based upon their relative energy content.
      Investments in unproved properties and major development projects are not
      amortized until proved reserves associated with the projects can be determined
      or until impairment occurs. The cost of any impaired property is transferred
      to
      the balance of oil and natural gas properties being depleted.


38


**Significant
      Estimates and Assumptions**





**Oil
      and Gas Reserves**





(1)
      Reserve engineering is a subjective process of estimating underground
      accumulations of oil and gas that cannot be measured in an exact manner. The
      accuracy of a reserve estimate depends on the quality of available geological
      and engineering data, the precision of the interpretation of that data, and
      judgment based on experience and training. We have historically engaged an
      independent petroleum engineering firm to evaluate our oil and gas reserves.
      As
      a part of this process, our internal reservoir engineer and the independent
      engineers exchange information and attempt to reconcile any material differences
      in estimates and assumptions.





(2)
      Reserves which can be produced economically through application of improved
      recovery techniques (such as fluid injection) are included in the proved
      classification when successful testing by a pilot project, or the operation
      of
      an installed program in the reservoir, provides support for the engineering
      analysis on which the project or program was based.





(3)
      Estimates of proved reserves do not include the following: (A) oil that may
      become available from known reservoirs but is classified separately as indicated
      additional reserves; (B) crude oil, natural gas, and natural gas liquids, the
      recovery of which is subject to reasonable doubt because of uncertainty as
      to
      geology, reservoir characteristics, or economic factors; (C) crude oil, natural
      gas, and natural gas liquids, that may occur in undrilled prospects; and (D)
      crude oil, natural gas, and natural gas liquids, that may be recovered from
      oil
      shales, coal, gilsonite and other such sources.




**Valuation
      of proved undeveloped properties**





Placing
      a
      fair market value on proved undeveloped properties, commonly referred to as
      “PUDs” is very subjective since there is no quoted market for them. The
      negotiated price of any PUD between a willing seller and willing buyer depends
      on the specific facts regarding the PUD, including:





·
            the
                location of the PUD in relation to known fields and reservoirs, available
                markets and transportation systems for oil and gas production in
                the
                vicinity, and other critical
                services;




·
            the
                nature and extent of geological and geophysical data on the
                PUD;





·
            the
                terms of the leases holding the acreage in the area, such as ownership
                interests,
                expiration terms, delay rental obligations, depth limitations, drilling
                and marketing restrictions, and similar
                terms;





·
            the
                PUDs risk-adjusted potential for return on investment, giving effect
                to
                suchfactors
                as potential reserves to be discovered, drilling and completion costs,
                prevailing commodity prices, and other economic factors;
                and





·
            the
                results of drilling activity in close proximity to the PUD that could
                either enhance or condemn the prospect’s chances of
                success.




**Provision
      for DD&A**





We
      have
      computed our provision for DD&A on a unit-of-production method. Each
      quarter, we use the following formulas to compute the provision for
      DD&A.


39


·
            DD&A
                Rate = Current period production, divided by beginning proved
                reserves





·
            Provision
                for DD&A = DD&A Rate, times the un-depleted full cost pool of oil
                and gas properties





Reserve
      estimates have a significant impact on the DD&A rate. If reserve estimates
      for our properties are revised downward in future periods, the DD&A rate
      will increase as a result of the revision. Alternatively, if reserve estimates
      are revised upward, the DD&A rate will decrease.




**Hedging
      Activities**





From
      time
      to time, we utilize derivative instruments, consisting of swaps, floors and
      collars, to attempt to reduce our exposure to changes in commodity prices and
      interest rates. We account for our derivatives in accordance with SFAS No.
      133,
      Accounting for Derivative Instruments and Hedging Activities, as amended. SFAS
      No. 133 requires that all derivative instruments be recognized as assets or
      liabilities in the balance sheet, measured at fair value. The accounting for
      changes in the fair value of a derivative depends on both the intended purpose
      and the formal designation of the derivative. Designation is established at
      the
      inception of a derivative, but subsequent changes to the designation are
      permitted. We have elected not to designate any of our derivative financial
      contracts as accounting hedges and, accordingly, account for these derivative
      financial contracts using mark-to-market accounting. Changes in fair value
      of
      derivative instruments which are not designated as cash flow hedges are recorded
      in other income (expense) as changes in fair value of derivatives. Hedging
      is a
      strategy that can help a company to mitigate the volatility of oil and gas
      prices by limiting its losses if oil and gas prices decline; however, this
      strategy may also limit the potential gains that a company could realize if
      oil
      and gas prices increase. Historically, certain “costless collars” executed in
      June 2005 and swaps executed in mid 2006 by our predecessor in interest were
      employed to protect such predecessor and its creditors from exposure to lower
      oil and gas prices. However, as a result of those positions, we have and may
      continue to periodically incur settlement losses associated with the ceiling
      component of such hedges as oil prices have increased during 2007 and in 2008.
      For the three and six months ended June 30, 2008, we reported derivative losses
      of $23.1 and $25.1 million, respectively.





**Asset
      Retirement Obligation**





We
      follow
      the provisions of SFAS No. 143, Accounting for Asset Retirement Obligations.
      SFAS No. 143 requires us to recognize a liability for the present value of
      all
      legal obligations associated with the retirement of tangible, long-lived assets
      and capitalize an equal amount as a cost of the asset. The cost of the
      abandonment obligations, less estimated salvage values, is included in the
      computation of depreciation, depletion and amortization.





**Recent
      Accounting Pronouncements**





See *Recent
      Accounting Pronouncements* in Note
      2 within the financial statements in Item 1 for a description of Recent
      Accounting Pronouncements.




**Item
      3.**  **Quantitative
      and Qualitative Disclosures About Market Risk.**




The
      primary objective of the following information is to provide forward-looking
      quantitative and qualitative information about our potential exposure to market
      risks. Market risk is the sensitivity of income to changes in interest rates,
      foreign exchanges, commodity prices, equity prices, and other market-driven
      rates or prices. The disclosures are not meant to be precise indicators of
      expected future losses, but rather indicators of reasonably possible losses.
      This forward-looking information provides indicators of how we view and manage
      our ongoing market risk exposures.


40


**Interest
      Rate Risk**





At
      June
      30,2008 our oil and gas subsidiaries had approximately $7.5 million in
      outstanding borrowings associated with their credit facility with a major bank
      and our engineering services company had $4.9 million in outstanding borrowings
      under a revolving credit facility and term notes with the selling shareholders
      in the acquisition of that business. To the extent we have debt outstanding,
      we
      will be subject to risk of interest rate changes that would impact our future
      results of operations and cash flows.




**Price
      Risks**





See
      Note
      8 within the financial statements in Item 1 for a description of our price
      risks
      and price risk management activities.




**Item
      4.****Controls
      and Procedures.**


**Evaluation
        of Disclosure Controls and Procedures**
  In
        our
        Quarterly Report on Form 10-Q (“Original Filing”) for the period ended June 30,
        2008, filed on August 15, 2008 management of the Company, including our
        principal executive and financial officer, evaluated the effectiveness of
        our
        disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
        promulgated under the Exchange Act of 1934, as amended (the “Exchange Act”)) as
        of the end of the period covered by the Original Filing. Based on that
        evaluation, management initially concluded that our disclosure controls and
        procedures were effective in reaching a reasonable level of assurance that
        information required to be included in our reports filed or submitted under
        the
        Exchange Act as of such time was recorded, processed, summarized, and reported
        within the time period specified in the U.S. Securities and Exchange
        Commission’s (the “Commission”) rules and forms and such information was
        accumulated and communicated as appropriate to allow timely decisions regarding
        required disclosures.
  In
        connection with the restatement discussed in the Explanatory Note to this
        Form
        10-Q/A and in Note 12 to our consolidated financial statements, management
        of
        the Company, including our principal executive and financial officer,
        reevaluated the effectiveness of our disclosure controls and procedures as
        of
        June 30, 2008 pursuant to SEC Rule 13a-15(b) under the Exchange Act. As a
        result
        of such reevaluation, management has determined that we had a material weakness
        in our system of internal control over financial reporting as of such date.
        This
        weakness related to the monitoring and timely recording of oil and gas
        derivative hedging transactions in our financial statements.
  As
        a
        result of the material weakness in our internal control over financial reporting
        described above, management, including our principal executive and financial
        officer, has revised its earlier assessment and has now concluded that our
        disclosure controls and procedures were not effective as of June 30,
        2008.
  Disclosure
        controls and procedures include controls and procedures designed to ensure
        that
        information required to be disclosed in our reports filed or submitted under
        the
        Exchange Act are properly recorded, processed, summarized and reported within
        the time periods required by the Commission’s rules and forms. Management
        necessarily applied its judgment in assessing the costs and benefits of such
        controls and procedures that, by their nature, can provide only reasonable
        assurance regarding management’s control objectives. Management does not expect
        that its disclosure controls and procedures will prevent all errors and fraud.
        A
        control system, irrespective of how well it is designed and operated, can
        only
        provide reasonable assurance, and cannot guarantee that it will succeed in
        its
        stated objectives.
  **Changes
        in Internal Control Over Financial Reporting**
  There
        were no changes in internal control over financial reporting that occurred
        during the second quarter of 2008 that have materially affected, or are
        reasonably likely to affect materially, our internal control over financial
        reporting. Subsequent to the end of the second quarter and as a result of
        the
        restatement, we have made the following improvements and implemented the
        following policies and procedures:
  ·
            While
                all transactions we undertook were properly authorized by the Board
                of
                Directors, we have instituted a formal policy to require any person
                entering into a derivative transaction to notify the CFO in writing
                immediately;  ·
            Responsible
                accounting personnel will maintain and update daily the inventory
                of
                hedging derivative transactions in which we
                engaged;  ·
            We
                will obtain at least on a monthly basis confirmation from our
                counterparties of our positions and their estimated fair market
                value;  ·
            Reconciliations
                with counterparties will be performed on at least a monthly
                basis;  ·
            Establishment
                of a formal disclosure committee.  41


**OTHER
      INFORMATION**




**Item
      1.**  **Legal
      Proceedings.**





There
      have been no material changes to the legal proceedings previously disclosed
      in
      the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March
      31, 2008.





**Item
      1A.**  **Risk
      Factors.**





The
      following is an update of the risk factors set forth in the Company’s Annual
      Report on Form 10-K/A for the year ended December 31, 2007 (the “Form 10-K/A”).
      There have otherwise been no material changes in our risk factors from the
      information provided in Item 1A. Risk Factors contained in the Form
      10-K/A.




***Our
      operations entail inherent casualty risks which may not be covered by adequate
      insurance.***




We
      must
      continually acquire, explore and develop new oil and natural gas reserves to
      replace those produced and sold. Our hydrocarbon reserves and revenues will
      decline if we are not successful in our drilling, acquisition or exploration
      activities. We hope to maintain our reserve base primarily through successful
      exploration and production operations, but we may not be successful in this
      regard. Casualty risks and other operating risks could cause reserves and
      revenues to decline.




Our
      operations are subject to inherent casualty risks such as fires, blowouts,
      cratering and explosions. Other risks include pollution, the uncontrollable
      flows of oil, natural gas, brine or well fluids. These risks may result in
      injury or loss of life, suspension of operations, environmental damage or
      property and equipment damage, all of which would cause us to experience
      substantial financial loss. Our drilling operations involve risks from high
      pressures and from mechanical difficulties such as stuck pipes, collapsed
      casings and separated cables.




Although
      many of our properties are located across Texas and southeast New Mexico and
      are
      not confined to one geographic area, our Tomball field, the largest producer
      in
      our current portfolio, and much of our Maverick business are located in the
      Gulf
      Coast region of Texas, an area that may be subject to catastrophic weather
      and
      natural disasters such as floods, earthquakes and hurricanes. If such disaster
      were to occur, it could severely disrupt our operations in that area and results
      of operations could be materially and adversely affected. In accordance with
      customary industry practice, we maintain insurance against some, but not all,
      of
      these risks. There can be no assurance that any insurance will be adequate
      to
      cover any losses or liabilities. We cannot predict the continued availability
      of
      insurance, or its availability at premium levels that justify its purchase.
      In
      addition, we may be liable for environmental damages caused by previous owners
      of properties that we purchased, which liabilities would not be covered by
      our
      insurance. We are currently unaware of any material liability we may have for
      environmental damages caused by previous owners of properties purchased by
      us.




***Maverick
      Engineering, our wholly owned subsidiary, is dependent upon a small number
      of
      customers for a large portion of its net revenues, and a decline in sales to
      its
      major customers could harm Maverick's results of
      operations.***




A
      small
      number of customers are responsible for a significant portion of Maverick's
      net
      revenues. During 2007, Maverick's 5 largest customers accounted for
      approximately $22 million out of its $33.8 million of net revenues. Maverick's
      customer concentration could increase or decrease depending on future customer
      requirements, which will depend in large part on business conditions in the
      market sectors in which Maverick's customers participate. The loss of one or
      more major customers or a decline in sales to Maverick’s major customers could
      significantly harm Maverick's business and results of operations. If Maverick
      is
      not able to expand its customer base, it will continue to depend upon a small
      number of customers for a significant percentage of its sales. There can be
      no
      assurance that its current customers will not reduce the amount of services
      for
      which they are retained or otherwise terminate their
      relationship.


42


**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds.**




None.




**Item
      3.**  **Defaults
      Upon Senior Securities.**




None.




**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders.**




None.




**Item
      5.**  **Other
      Information.**




On
      April
      29, 2008, the Company acquired Maverick Engineering, Inc. In connection with
      the
      acquisition, the sellers agreed to satisfy and assume Maverick’s bank
      indebtedness in the aggregate amount of $4.9 million consisting of $3.0 million
      revolving line of credit maturing April 2008, $1.6 million term note due April
      2011, and $0.3 million oil and gas note due May 2009, using a portion of the
      cash received by them at closing. Following the closing, the Company was
      indebted to the sellers for these amounts under the identical terms of the
      bank
      loan agreements. On April 30, 2008, Maverick entered into extension and
      modification agreements with the sellers pursuant to which sellers agreed to
      defer principal payments of the $1.6 million term loan for six months and extend
      the maturity date to April 2013. The sellers also agreed to extend the maturity
      dates of the revolving line of credit and oil and gas note to 2010 and 2013,
      respectively. In addition, as of June 30, 2008, Maverick was not in compliance
      with the debt service coverage ratio contained in the loan agreements.
      Subsequent to June 30, 2008, the sellers waived the Company's obligation to
      maintain this ratio through September 30, 2009.





**Item
      6.**  **Exhibits.**




The
      following exhibits, which are numbered in accordance with Item 601 of
      Regulation S-K, are filed herewith or, as noted, incorporated by reference
      herein:





**Exhibit**
              **Number**
            
            **Exhibit
                Description**10.1
            
            Employment
                Agreement by and between Platinum Energy Resources, Inc. and Robert
                L.
                Kovar entered into as of April 29, 2008 (incorporated by reference
                from
                Exhibit 10.1 to Platinum’s Current Report on Form 8-K filed on May 2,
                2008)10.2
            
            Form
                of Notice of Stock Option Award and Stock Option Agreement (incorporated
                by reference from Exhibit 10.14 to Platinum’s Form S-1/A (File No.
                333-149258) filed on July 18, 2008)31
            
            Section
                302 Certification of Principal Executive and Financial
                Officer32.1
            
            Section
                906 Certification


43


**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned thereunto
      duly authorized.




**PLATINUM
                ENERGY RESOURCES, INC.**Date:
                November 14, 2008
            By:
            /s/
                Barry KostinerBarry
                Kostiner
              Chief
                Executive Officer


44