**Table of Contents**

| x      | Quarterly report pursuant to Section 13 or      15(d) of the Securities Exchange Act of 1934  |
|--------|-----------------------------------------------------------------------------------------------|
|   |                                                                                          |
|   | For the quarterly period ended December 31,      2010                                         |
|   |                                                                                          |
| o      | Transition report pursuant to Section 13 or      15(d) of the Securities Exchange Act of 1934 |
|   |                                                                                          |
|   | For the transition period from ______________to      ______________.                          |
|   |                                                                                          |
|   |                                                                                          |

| **Nevada**                                                               |   |   |   | **20-8428738**                       |
|--------------------------------------------------------------------------|--------|--------|--------|--------------------------------------|
| (State or other jurisdiction           of incorporation or organization) |   |   |   | (I.R.S. Employer Identification No.) |

| ****   | Large accelerated filer o                                                  |                            | Accelerated filer o**** |   |
|--------|----------------------------------------------------------------------------|---------------------------------|-------------------------|--------|
|   |                                                                       |                            | ****                    |   |
| ****   | Non-accelerated filer o      (Do not check if a smaller reporting company) | Smaller reporting company x**** |                    |

----

|                                     Class                                     | Outstanding at February 14, 2010 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                             |
| Common Stock, par value $0.001 per          share                                                                                                                                                                                                                                                                                                                                                                                                     | 80,743,912                       |

----

|   |   | Page |
|--------|--------|------|

|                            | ITEM 1-- FINANCIAL STATEMENTS                                                                       |   1 |
|---------------------------------|-----------------------------------------------------------------------------------------------------|---------------|
|                            |                                                                                                |          |
|                            | ITEM 2-- MANAGEMENT'S DISCUSSION      AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |   8 |
|                            |                                                                                                |          |
|                            | ITEM 3-- QUANTITATIVE AND QUALITATIVE      DISCLOSURES ABOUT MARKET RISK                            | 14            |
|                            |                                                                                                |          |
|                            | ITEM 4T-- CONTROLS AND PROCEDURES                                                                   | 14            |
|                            |                                                                                                |          |
|                            |                                                                                                |          |
| **PART II - OTHER INFORMATION** |                                                                                                |
|                            |                                                                                                |          |
|                            | ITEM 1-- LEGAL PROCEEDINGS                                                                          | 15            |
|                            |                                                                                                |          |
|                            | ITEM 1A-- RISK FACTORS                                                                              | 15            |
|                            |                                                                                                |          |
|                            | ITEM 2-- UNREGISTERED SALES      OF EQUITY SECURITIES AND USE OF PROCEEDS                           | 15            |
|                            |                                                                                                |          |
|                            | ITEM 3-- DEFAULTS UPON SENIOR      SECURITIES                                                       | 15            |
|                            |                                                                                                |          |
|                            | ITEM 4--(REMOVED AND RESERVED)                                                                      | 15            |
|                            |                                                                                                |          |
|                            | ITEM 5-- OTHER INFORMATION                                                                          | 15            |
|                            |                                                                                                |          |
|                            | ITEM 6-- EXHIBITS                                                                                   | 15            |
|                            |                                                                                                |          |
|                            | SIGNATURES                                                                                          | 16            |

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**Table of Contents**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **December 31, 2010         (unaudited)** |        | **March 31, 2010** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|-------------|--------------------|--------|
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                      |             |               |   |  |   |
| Current Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                      |        |               |   |   |   |
|          Cash                                                                                                                                                                                                                                                                                                                                                                                                               | $                                         | 305,887     |               | $      | 277,307 |   |
|          Accounts      Receivable:                                                                                                                                                                                                                                                                                                                                                                                          |                                      |        |               |   |   |   |
|                   Oil      & Gas - Related Party                                                                                                                                                                                                                                                                                                                               |                                      | 401,470     |               |   | 639,738 |   |
|                   Related      Party                                                                                                                                                                                                                                                                                                                                           |                                      | 1,088,405   |               |   | 561,169 |   |
|                   Other                                                                                                                                                                                                                                                                                                                                                        |                                      | 2,000       |               |   | - |   |
|          Inventory                                                                                                                                                                                                                                                                                                                                                                                                          |                                      | 116,346     |               |   | 130,886 |   |
|          Other      Current Assets                                                                                                                                                                                                                                                                                                                                                                                          |                                      | -           |               |   | 248,759 |   |
|          Total      Current Assets                                                                                                                                                                                                                                                                                                                                                                                          |                                      | 1,914,108   |               |   | 1,857,859 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |             |               |   |  |   |
| Notes      Receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                      | 205,863     |               |   | 213,619 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |             |               |   |  |   |
| Oil      and Gas Properties - successful efforts method                                                                                                                                                                                                                                                                                                                                                                                                                  |                                      | 26,750,382  |               |   | 26,847,329 |   |
|          Less      Accumulated Depletion and Depreciation                                                                                                                                                                                                                                                                                                                                                                   |                                      | (10,850,023 | )                  |   | (9,034,348 | ) |
|                   Oil      & Gas Properties (net)                                                                                                                                                                                                                                                                                                                              |                                      | 15,900,359  |               |   | 17,812,981 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |             |               |   |  |   |
| Other      Depreciable Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                      | 2,028,487   |               |   | 2,028,487 |   |
|          Less      Accumulated Depreciation                                                                                                                                                                                                                                                                                                                                                                                 |                                      | (570,065    | )                  |   | (427,013 | ) |
|                   Other      Depreciable Assets (net)                                                                                                                                                                                                                                                                                                                          |                                      | 1,458,422   |               |   | 1,601,474 |   |
| Total Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                             | $                                         | 19,478,752  |               | $      | 21,485,933 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |        |               |   |   |   |
| **LIABILITIES**                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                      |        |               |   |   |   |
| Current      Liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                      |        |               |   |   |   |
|          Accounts      Payable                                                                                                                                                                                                                                                                                                                                                                                              | $                                         | 494,953     |               | $      | 278,233 |   |
|          Revenue      Payable                                                                                                                                                                                                                                                                                                                                                                                               |                                      | 18,504      |               |   | 20,912 |   |
|          Payable      to Related Parties                                                                                                                                                                                                                                                                                                                                                                                    |                                      | 240,550     |               |   | 148,550 |   |
|               Other Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                          |                                      | -           |               |   | 93,923 |   |
|          Accrued      Expenses                                                                                                                                                                                                                                                                                                                                                                                              |                                      | 594,004     |               |   | 140,390 |   |
|          Accrued      Expenses - Related Party                                                                                                                                                                                                                                                                                                                                                                              |                                      | 185,868     |               |   | 88,458 |   |
|          Current      Portion of Long-Term Debt                                                                                                                                                                                                                                                                                                                                                                             |                                      | 10,529,442  |               |   | 10,283,339 |   |
|                   Total      Current Liabilities                                                                                                                                                                                                                                                                                                                               |                                      | 12,063,321  |               |   | 11,053,805 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |        |               |   |  |   |
|          Notes      Payable - Related Parties                                                                                                                                                                                                                                                                                                                                                                               |                                      | 3,518,924   |               |   | 3,518,924 |   |
|                   Total      Long-Term Debt                                                                                                                                                                                                                                                                                                                                    |                                      | 3,518,924   |               |   | 3,518,924 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |        |               |   |   |   |
|          Asset      Retirement Obligation                                                                                                                                                                                                                                                                                                                                                                                   |                                      | 355,195     |               |   | 324,773 |   |
|          Deferred      Tax Liability                                                                                                                                                                                                                                                                                                                                                                                        |                                      | -           |               |   | 639,034 |   |
|                   Total      Liabilities                                                                                                                                                                                                                                                                                                                                       |                                      | 15,937,440  |               |   | 15,536,536 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |        |               |   |   |   |
| **Stockholders'      Equity**                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                      |        |               |   |   |   |
|          Common      Stock, $.001 par,200,000,000 shares authorized and                        80,743,912      shares outstanding on December 31, 2010                         and      80,743,912 shares outstanding on March 31, 2010 |                                      | 80,743      |               |   | 80,743 |   |
|          Additional      Paid-In-Capital                                                                                                                                                                                                                                                                                                                                                                                    |                                      | 11,510,020  |               |   | 11,460,893 |   |
|          Treasury      Stock, at cost                                                                                                                                                                                                                                                                                                                                                                                       |                                      | (12,240     | )                  |   | (12,240 | ) |
|          Retained      Deficit                                                                                                                                                                                                                                                                                                                                                                                              |                                      | (8,037,211  | )                  |   | (5,579,999 | ) |
|                   Total      Stockholders' Equity                                                                                                                                                                                                                                                                                                                              |                                      | 3,541,312   |               |   | 5,949,397 |   |
|                   Total      Liabilities & Stockholders' Equity                                                                                                                                                                                                                                                                                                                | $                                         | 19,478,752  |               | $      | 21,485,933 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                      |        |               |   |   |   |

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**Table of Contents**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **Three          Months Ended**            |   |   |   | **Nine          Months Ended**                |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|--------|--------|-----------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **December          31, 2010 (unaudited)** |   |   |   | **December          31, 2009****(unaudited)** |   |   |   | **December 31, 2010****(unaudited)** |   |   |   | **December 31, 2009****(unaudited)** |   |
| **Revenues**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                            |   |   |   |                                          |   |   |   |   |   |   |   |   |   |
|          Oil        & Gas Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $      | 834,532                                    |   |   | $      | 975,933                                       |   |   | $ | 2,504,693 |   |   | $ | 2,150,145 |   |
|          Sale        of Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | -                                          |   |   |   | 173,420                                       |   |   |   | - |   |   |   | 311,097 |   |
|          Other        Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 20,661                                     |   |   |   | 79,856                                        |   |   |   | 93,454 |   |   |   | 253,438 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 855,193                                    |   |   |   | 1,229,209                                     |   |   |   | 2,598,147 |   |   |   | 2,714,680 |   |
| **Costs        and Expenses**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                            |   |   |   |                                               |   |   |   |  |   |   |   |  |   |
|          Oil        & Gas Lease Operating Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 340,743                                    |   |   |   | 436,640                                       |   |   |   | 1,122,597 |   |   |   | 1,480,038 |   |
|          Workover        Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | -                                          |   |   |   | 27,830                                        |   |   |   | 13,680 |   |   |   | 71,828 |   |
|          Severance        & Ad Valorem Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 94,004                                     |   |   |   | 121,486                                       |   |   |   | 194,695 |   |   |   | 186,681 |   |
|          Geologic        & Geophysical                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | -                                          |   |   |   | -                                             |   |   |   | 38,494 |   |   |   | - |   |
|          Plugging        and Abandonments                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 86,617                                     |   |   |   | 45,348                                        |   |   |   | 104,404 |   |   |   | 45,348 |   |
|          Depletion        & Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 695,969                                    |   |   |   | 827,021                                       |   |   |   | 2,204,829 |   |   |   | 2,222,948 |   |
|          ARO        Accretion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 10,140                                     |   |   |   | 10,222                                        |   |   |   | 30,422 |   |   |   | 32,003 |   |
|         General        & Administrative:                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                            |   |   |   |                                               |   |   |   |   |   |   |   |   |   |
|                   Salaries        & Benefits                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 76,882                                     |   |   |   | 261,056                                       |   |   |   | 509,819 |   |   |   | 664,551 |   |
|                   Legal        & Professional                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 199,630                                    |   |   |   | 120,921                                       |   |   |   | 543,471 |   |   |   | 897,751 |   |
|                   Other        General & Administrative                                                                                                                                                                                                                                                                                                                                                                                                         |   | 129,856                                    |   |   |   | 106,019                                       |   |   |   | 285,726 |   |   |   | 378,390 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                            |   |   |   |                                               |   |   |   |   |   |   |   |   |   |
|          Interest,        net of capitalized interest of $0 and                  $129,357 for the        three months ended                  12/31/10 and 12/31/09,        respectively                  and $0 and $383,630        for the nine months                 ended 12/31/10 and        12/31/09, respectively |   | 210,532                                    |   |   |   | -                                             |   |   |   | 630,487 |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 1,844,373                                  |   |   |   | 1,956,543                                     |   |   |   | 5,678,624 |   |   |   | 5,979,538 |   |
| Other        Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                            |   |   |   |                                               |   |   |   |  |   |   |   |  |   |
|          Interest        Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 11                                         |   |   |   | (9,467                                        | )      |   |   | 31 |   |   |   | 18,437 |   |
|          Hedging        Gain (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | -                                          |   |   |   | (7,307                                        | )      |   |   | (15,800 | ) |   |   | (110,950 | ) |
| Income        (Loss) from continuing operations         before income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | (989,169                                   | )      |   |   | (744,108                                      | )      |   |   | (3,096,246 | ) |   |   | (3,357,371 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                            |   |   |   |                                               |   |   |   |  |   |   |   |  |   |
| Income        Tax Benefit (Expense)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | -                                          |   |   |   | 307,324                                       |   |   |   | 639,034 |   |   |   | 999,312 |   |
| Net        Income (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | $      | (989,169                                   | )      |   | $      | (436,784                                      | )      |   | $ | (2,457,212 | ) |   | $ | (2,358,059 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                       |   |   |   |                                          |   |   |   |   |   |   |   |   |   |
| **Basic        & Diluted Loss per Common Share**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | $      | (0.01                                      | )      |   | $      | (0.01                                         | )      |   | $ | (0.03 | ) |   | $ | (0.03 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                       |   |   |   |                                          |   |   |   |  |   |   |   |  |   |
| **Weighted        Average Common Shares Outstanding**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 80,743,912                                 |   |   |   | 80,181,310                                    |   |   |   | 80,743,912 |   |   |   | 80,998,912 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                       |   |   |   |                                          |   |   |   |   |   |   |   |   |   |

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**Table of Contents**

| ****                                                                                                                                     | **Nine        Months Ended**                        |
|------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                                                                                                          | ****December        31, 2010**        (unaudited)** |   | ********December        31****,        2009**        (unaudited)** |
| **Operating      Activities:**                                                                                                           |                                                |   |   |   |   |   |   |
|      Net      (Loss) Income                                                                                     | $                                                   | (2,457,212 | ) |   | $ | (2,358,059 | ) |
|          Adjustments to      reconcile net (loss) income to cash from operating activities: |                                                |  |   |   |   |  |   |
|           Income      Tax (Benefit) Expense                                            |                                                | (639,034 | ) |   |   | (999,312 | ) |
|           Depletion,      Depreciation, & Amortization                                 |                                                | 2,204,829 |   |   |   | 2,222,948 |   |
|           Stock      based compensation                                                |                                                | 49,127 |   |   |   | 273,475 |   |
|           Non-employee      stock based compensation                                   |                                                | - |   |   |   | 580,500 |   |
|           ARO      Accretion                                                           |                                                | 30,422 |   |   |   | 32,003 |   |
|      Changes      in Operating Assets and Liabilities                                                           |                                                |  |   |   |   |  |   |
|           Changes      in Accrued Liabilities                                          |                                                | 551,024 |   |   |   | 8,095 |   |
|           Change      in Inventory                                                     |                                                | 14,540 |   |   |   | 4,117 |   |
|           Change      in Related Party Receivables/Payables                            |                                                | (527,235 | ) |   |   | 105,781 |   |
|           Changes      in Other Receivables                                            |                                                | (2,000 | ) |   |   | 9,353 |   |
|           Changes      in Hedging Activity                                             |                                                | 154,836 |   |   |   | 130,958 |   |
|           Changes      in Revenue Payable                                              |                                                | (2,408 | ) |   |   | - |   |
|           Change      in Revenue Receivables                                           |                                                | 238,268 |   |   |   | (334,781 | ) |
|           Changes      in Accounts Payable                                             |                                                | 216,720 |   |   |   | 110,284 |   |
|      Net      Cash provided (used) from operating activities                                                    |                                                | (168,123 | ) |   |   | (214,638 | ) |
|                                                                                                                                     |                                                |   |   |   |   |   |   |
| **Investing      Activities:**                                                                                                           |                                                |   |   |   |   |   |   |
|      Oil      & Gas Drilling, Completing and Leasehold Acquisition Costs                                        |                                                | 96,947 |   |   |   | (1,441,647 | ) |
|      ARO      on Properties Acquired or Drilled                                                                 |                                                | - |   |   |   | 25,335 |   |
|      ARO      on Sold Properties                                                                                |                                                | - |   |   |   | (32,607 | ) |
|      Change      in Related Party Payable related to drilling                                                   |                                                | - |   |   |   | 597,768 |   |
|      Investment      in Other Depreciable Assets                                                                |                                                | - |   |   |   | (181,201 | ) |
|      Note      Receivable (Advances)                                                                            |                                                | - |   |   |   | (112,991 | ) |
|      Note      Receivable Collections                                                                           |                                                | 7,756 |   |   |   | 553,537 |   |
|      Net      Cash used in investing activities                                                                 |                                                | 104,703 |   |   |   | (591,806 | ) |
|                                                                                                                                     |                                                |   |   |   |   |   |   |
| **Financing      Activities**                                                                                                            |                                                |   |   |   |   |   |   |
|      Advances      from Related Parties                                                                         |                                                | 92,000 |   |   |   | 200,000 |   |
|      Related      Party Note (Payments)                                                                         |                                                | - |   |   |   | (200,000 | ) |
|      Notes      Payable (Payments) Advances                                                                     |                                                | - |   |   |   | 1,000,000 |   |
|      Net      Cash provided from financing activities.                                                          |                                                | 92,000 |   |   |   | 1,000,000 |   |
|                                                                                                                                     |                                                |   |   |   |   |   |   |
| Net      Increase in cash                                                                                                                |                                                | 28,580 |   |   |   | 193,556 |   |
| Cash      - Beginning of the period                                                                                                      |                                                | 277,307 |   |   |   | 426,430 |   |
| Cash      - End of the period                                                                                                            | $                                                   | 305,887 |   |   | $ | 619,986 |   |
|                                                                                                                                     |                                                |   |   |   |   |   |   |

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**Table of Contents**

|                                                                                                                           | **Nine        Months Ended**                                       |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|--------|
|                                                                                                                                | ********December        31****,        2010        (unaudited)**** |   | **************December        31****,        2009****        (unaudited)****** |   |
| ****Supplemental      Disclosure of Cash Flow Information****                                                                  |                                                               |   |   |   |   |   |
|          Cash      paid during period for:                                        |                                                               |   |   |   |   |   |
|                   Interest           | $                                                                  | 64,609 |   | $ | 423,959 |   |
|                                                                                                                           |                                                               |   |   |   |   |   |
|                   Income      Taxes- | $                                                                  | -      |   | $ | - |   |
|                                                                                                                           |                                                               |   |   |   |   |   |
| **Non      Cash Investing and Financing Activities**                                                                           |                                                               |   |   |   |   |   |
|          Stock      Based Compensation                                            | $                                                                  | 49,127 |   | $ | 273,475 |   |
|                                                                                                                           |                                                               |   |   |   |   |   |
|          Stock      Based Consulting Fees                                         | $                                                                  | -      |   | $ | 580,500 |   |
|                                                                                                                           |                                                               |   |   |   |   |   |

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|                                 | Fiscal        Years Ending March 31, |       |   |   |   |   |   |      |
|--------------------------------------|--------------------------------------|------------|--------|--------|--------|--------|--------|-----------|
|                                 |                                 | 2011       |   |   | 2012   |   |   | 2013      |   |   | Thereafter |   |   | Total |   |
| Office Lease Payments                | $                                    | 14,928     |   | $      | -      |   | $      | -         |   | $ | - |   | $ | 14,928 |   |
| Notes Payable      - Related Parties |                                 | -          |   |   | -      |   |   | 3,518,924 |   |   | - |   |   | 3,518,924 |   |
| Senior      Secured Note Payable     |                                 | 10,800,000 |   |   | -      |   |   | -         |   |   | - |   |   | 10,800,000 |   |
|                                      | $                                    | 10,814,928 |   | $      | -      |   | $      | 3,518,924 |   | $ | - |   | $ | 14,333,852 |   |
|                                 |                                 |       |   |   |   |   |   |      |   |   |   |   |   |   |   |

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| EXHIBIT NUMBER |   | DESCRIPTION                                                                                                                          |
|----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                      |
| 31.1           |   | CEO      Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                     |
| 31.2           |   | CFO      Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                     |
| 32.1           |   | CEO      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to      Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2           |   | CFO      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to      Section 906 of the Sarbanes-Oxley Act of 2002 |

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**Tableof Contents**

|              | **REOSTAR ENERGY CORPORATION**                                                                                                                                                                                                         |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |                                                                                                                                                                                                                                   |
| February 18, 2011 |                                                                                                                                                                                                                                   |
|         | By   /s/      Scott D. Allen                                 |
|              |      Scott      D. Allen, Chief Financial Officer            (Principal Financial Officer and duly authorized      signatory)                                                        |
|              |                                                                                                                                                                                                                                   |
|              |                                                                                                                                                                                                                                   |

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**Table of Contents**

| EXHIBIT NUMBER |   | DESCRIPTION                                                                                                                          |
|----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                      |
| 31.1           |   | CEO      Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                     |
| 31.2           |   | CFO      Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                     |
| 32.1           |   | CEO      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to      Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2           |   | CFO      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to      Section 906 of the Sarbanes-Oxley Act of 2002 |

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