<PAGE>
================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

--------------------------------------------------------------------------------
                                    FORM 10-Q
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[X]          QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
             EXCHANGE ACT OF 1934

                     For the period ended September 30, 2008

[ ]          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 000-51403

                           BLACKWATER MIDSTREAM CORP.
              (Exact name of small business issuer in its charter)

                 NEVADA                                     26-2590455
    (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                   Identification Number)


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                                 4006 HIGHWAY 44
                           GARYVILLE, LOUISIANA, 70051
                    (Address of principal executive offices)

                            TELEPHONE: (985) 535-8500
                           (Issuer's telephone number)
--------------------------------------------------------------------------------


Check whether the issuer (1) 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 [_]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  [ ]                       Accelerated filer [ ]
Non-accelerated filer  [ ]                         Smaller reporting company [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of November 14, 2008, there were
27,031,736 shares of Common Stock, $.001 par value per share, outstanding.

================================================================================

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Consolidated Balance Sheets                                                    3

Consolidated Statements of Operations                                          4

Consolidated Statements of Cash Flows                                          5

NOTES TO FINANCIAL STATEMENTS                                                  6

                                       2

<PAGE>

<TABLE>
<S>     <C>
                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)

                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                            (STATED IN U.S. DOLLARS)

                                                           SEPTEMBER 30,    MARCH 31,
                                                               2008            2008
                                                            -----------    -----------
ASSETS

CURRENT
Cash and cash equivalents                                   $ 1,077,178    $     3,574
Prepaid expenses and other current assets                        75,285          1,898
                                                            -----------    -----------
Total current assets                                        $ 1,152,463    $     5,472
Investment in Safeland Storage, LLC                           1,500,000             --
Property and equipment
Equipment, at cost                                              126,399             --
Less: Accumulated Depreciation                                   (3,946)            --
                                                            -----------    -----------
                                                                122,453             --
Construction in progress                                        183,223             --
                                                            -----------    -----------
                                                                305,676             --

TOTAL ASSETS                                                $ 2,958,139    $     5,472
                                                            ===========    ===========

LIABILITIES

CURRENT
Accounts payable and accrued liabilities                    $    47,278    $     7,942
LONG-TERM
                                                            -----------    -----------
TOTAL LIABILITIES                                           $    47,278    $     7,942

STOCKHOLDERS' EQUITY (DEFICIT)

SHARE CAPITAL
Authorized:
200,000,000 common shares with a par value of $0.001 per
share 20,000,000 "blank check" preferred shares, issuable
in one or more series.
Issued:
27,031,736 and 24,034,500 common shares at September
30 and March 31, respectively                                    27,032         24,035
ADDITIONAL PAID-IN CAPITAL                                    4,747,281        131,540
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE             (1,863,452)      (158,045)
                                                            -----------    -----------
TOTAL STOCKHOLDER'S EQUITY (DEFICIT)                          2,910,861         (2,470)
                                                            -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITTY (DEFICIT)        $ 2,958,139    $     5,472
                                                            ===========    ===========

   The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>

                                           BLACKWATER MIDSTREAM CORP.
                                        (FORMERLY LAYCOR VENTURES CORP.)
                                          (A DEVELOPMENT STAGE COMPANY)

                                      STATEMENTS OF OPERATIONS (UNAUDITED)
                                            (STATED IN U.S. DOLLARS)

                                                    THREE MONTHS ENDED               SIX MONTHS ENDED        CUMULATIVE PERIOD
                                                       SEPTEMBER 30,                   SEPTEMBER 30,          FROM INCEPTION:
                                               ----------------------------    ----------------------------  MARCH 23, 2004 TO
                                                   2008           2007            2008            2007      SEPTEMBER, 30, 2008
                                               ------------    ------------    ------------    ------------    ------------

REVENUE                                        $         --    $         --    $         --    $         --    $         --
                                               ------------    ------------    ------------    ------------    ------------
EXPENSES
Advertising                                           1,596              --           1,809              --           1,809
Consulting                                           90,000              --         120,000              --         120,000
Filing fees                                          17,878              --          25,440              --          25,440
Management salaries                                 650,499              --       1,011,906              --       1,011,906
General and administrative                           55,167              --          68,736              35          70,335
Interest and bank charges                             3,629              20           4,128              64           4,623
Mineral property acquisition and exploration             --              --              --              --              --
Office expenses                                       9,201              --           9,770              --           9,835
Professional fees                                   188,913              --         420,533              --         470,533
Promotion and entertainment                              --              --              --              --               0
Depreciation                                          3,810              --           3,946              --           3,946
Travel                                               33,252              --          43,646              --          43,646
                                               ------------    ------------    ------------    ------------    ------------
                                                  1,053,945              20       1,709,914              99       1,762,073
                                               ------------    ------------    ------------    ------------    ------------

INCOME (LOSS) BEFORE OTHER INCOME                (1,053,945)            (20)     (1,709,914)             99      (1,762,073)

OTHER INCOME                                          5,233             298           5,507             592          10,138
                                               ------------    ------------    ------------    ------------    ------------

NET INCOME (LOSS) from CONTINUING OPERATIONS   $ (1,048,712)   $        278    $ (1,704,407)   $        493    $ (1,751,935)
                                               ============    ============    ============    ============    ============

LOSS FROM DISCONTINUED OPERATIONS                        --          (4,251)         (1,000)         (5,956)       (111,517)

NET LOSS                                       $ (1,048,712)   $     (3,973)   $ (1,705,407)   $     (5,463)   $ (1,863,452)


BASIC AND DILUTED LOSS PER COMMON SHARE

Continuing Operations                          $      (0.04)   $         --    $      (0.07)   $         --
                                               ============    ============    ============    ============
Discontinued Operations                        $         --    $         --    $         --    $         --
Total Operations                               $      (0.04)   $         --    $      (0.07)   $         --

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING                                      26,525,629       8,011,500      24,995,715       8,011,500
                                               ============    ============    ============    ============

                   The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>

                                   BLACKWATER MIDSTREAM CORP.
                                (FORMERLY LAYCOR VENTURES CORP.)
                                  (A DEVELOPMENT STAGE COMPANY)

                              STATEMENTS OF CASH FLOWS (UNAUDITED)
                                    (STATED IN U.S. DOLLARS)

                                                                                 CUMULATIVE PERIOD
                                                          SIX MONTHS ENDED        FROM INCEPTION
                                                           SEPTEMBER 30,          MARCH 31, 2004
                                                     --------------------------    TO SEPTEMBER
                                                         2008           2007        30, 2008
                                                     -----------    -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                             $(1,705,407)   $    (5,463)   $(1,863,452)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation                                               3,946             --          3,946
Stock based compensation                               1,217,010             --      1,217,010

Changes in operating assets and liabilities:
Prepaid expenses and other current assets                (73,387)            --        (75,285)
Accounts payable and accruals                             39,336            535         47,278
                                                     -----------    -----------    -----------

Net cash used in operating activities                   (518,502)        (4,928)      (670,503)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                    (309,622)            --       (309,622)
Investment in Safeland Storage LLC                    (1,500,000)            --     (1,500,000)

NET CASH USED IN INVESTING ACTIVITIES                 (1,809,622)            --     (1,809,622)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock, net of issuance costs     3,401,728             --      3,557,303
                                                     -----------    -----------    -----------

INCREASE (DECREASE) IN CASH FOR THE PERIOD             1,073,604         (4,928)     1,077,178

CASH AT BEGINNING OF PERIOD                                3,574         32,045             --
                                                     -----------    -----------    -----------

CASH AT END OF PERIOD                                $ 1,077,178    $    27,177    $ 1,077,178
                                                     ===========    ===========    ===========

SUPPLEMENTAL CASH FLOW DISCLOSURE

Interest paid                                        $        --    $        --    $        --
Income taxes paid                                    $        --    $        --    $        --

           The accompanying notes are an integral part of these financial statements.

                                               5
</TABLE>
<PAGE>

                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                         (A DEVELOPMENT STAGE COMPANY)

                         NOTES TO FINANCIAL STATEMENTS

                          SEPTEMBER 30, 2008 AND 2007
                            (STATED IN U.S. DOLLARS)

1.       BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements as of September 30,
2008 included herein have been prepared without an audit pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with United States generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the opinion of
management of Blackwater Midstream Corp. (the "Company"), all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. It is suggested that these financial statements
be read in conjunction with the March 31, 2008 audited financial statements and
notes thereto. The results of the operations for the six months ended September
30, 2008 are not indicative of the results that may be expected for the year.

The balance sheet at March 31, 2008 has been derived from the audited financial
statements at that date, but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.

2.       ORGANIZATION AND GOING CONCERN

ORGANIZATION

The Company was incorporated in the State of Nevada, U.S.A., on March 23, 2004.
The Company's fiscal year ends March 31. On March 18, 2008, the Company changed
its name to Blackwater Midstream Corp. from Laycor Ventures Corp.

DEVELOPMENT (EXPLORATION) STAGE ACTIVITIES

The Company has changed its business objective to become an independent
developer of fuel and chemical storage facilities. The Company has been in the
development stage since its formation and was primarily engaged in the
acquisition and exploration of mining claims. The Company has not yet realized
any revenues from its planned operations

GOING CONCERN

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.

                                       6
<PAGE>

                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)


As shown in the accompanying financial statements, the Company has incurred a
net loss of $1,863,452 for the period from March 23, 2004 (inception) to
September 30, 2008, and has no revenue. The future of the Company is dependent
upon its ability to obtain financing and upon future profitable operations from
the development of its storage facilities. Management has plans to seek
additional capital through private placement and public offerings of its common
stock. These factors raise substantial doubt regarding the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts of and classification of liabilities that might be
necessary in the event the Company cannot continue as a going concern.

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,
the preparation of financial statements for a period necessarily involves the
use of estimates which have been made using careful judgment.

The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:

             a)   Cash and Cash Equivalents

                  The Company considers all highly liquid debt instruments
                  purchased with maturity of three months or less to be cash
                  equivalents. Cash consists of cash on deposit with a bank. The
                  Company places its cash with a high quality financial
                  institution and, to date, has not experienced losses on any of
                  its balances.

             b)   Construction in Progress

                  Construction in progress is stated at cost, which includes the
                  costs of construction and other direct costs attributable to
                  the construction. No provision for depreciation is made on
                  construction in progress until such time as the relevant
                  assets are completed and put into use. Construction in
                  progress at September 30, 2008, represents facilities under
                  installation and prepayments on assets being purchased

             c)   Exploration Stage Enterprise

                  The Company's financial statements are prepared using the
                  accrual method of accounting and according to the provisions
                  of Statement of Financial Accounting Standards No. 7 ("SFAS
                  7"), "Accounting and Reporting for Development Stage
                  Enterprises," as it devotes substantially all of its efforts
                  to acquiring and developing storage facilities. Until such
                  properties are acquired and developed, the Company will
                  continue to prepare its financial statements and related
                  disclosures in accordance with entities in the exploration
                  stage.


                                       7
<PAGE>

                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)


             d)   Mineral Rights

                  The Company capitalizes acquisition and option costs of
                  mineral property rights. The amount capitalized represents
                  fair value at the time the mineral rights were acquired. The
                  accumulated costs of acquisition for properties that are
                  developed to the stage of commercial production will be
                  amortized using the unit-of-production method.

             e)   Investments

                  The cost method is used to account for the Company's
                  investments in limited liability companies where the Company
                  holds an interest of 10% or less and does not have control of
                  the limited liability company.

             f)   Property and Equipment

                  Property and equipment, comprised of office furniture,
                  computer software and heavy equipment are recorded at cost and
                  amortized using the straight balance method over an estimated
                  useful life of five years.

             g)   Use of Estimates

                  The preparation of financial statements in conformity with
                  generally accepted accounting principles 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
                  for the reporting period. Actual results could differ from
                  these estimates.

             h)   Income Taxes

                  The Company has adopted guidance established in Financial
                  Accounting Standards Board ("FASB") Statement of Financial
                  Accounting Standards ("SFAS") No. 109 - "Accounting for Income
                  Taxes" ("SFAS 109"). This standard requires the use of an
                  asset and liability approach for financial accounting, and
                  reporting on income taxes. If it is more likely than not that
                  some portion or all of a deferred tax asset will not be
                  realized, a valuation allowance is recognized.

             i)   Asset Impairment

                  Long-lived assets are tested for recoverability whenever
                  events or changes in circumstances indicate the carrying
                  amount may not be recoverable, pursuant to guidance
                  established in Statement of Financial Accounting Standards No.
                  144 ("SFAS 144"), "Accounting for the Impairment or Disposal
                  of Long-lived Assets". The Company determines impairment by
                  comparing the undiscounted future cash flows estimated to be
                  generated by its assets to their respective carrying amounts.
                  If impairment is deemed to exist, the assets will be written
                  down to fair value.

                                       8
<PAGE>

                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)


             j)   Asset Retirement Obligations

                  The Company has adopted Statement of Financial Accounting
                  Standards No. 143 ("SFAS 143"), "Accounting for Asset
                  Retirement Obligations", which requires that an asset
                  retirement obligation ("ARO") associated with the retirement
                  of a tangible long-lived asset be recognized as a liability in
                  the period in which it is incurred and becomes determinable,
                  with an offsetting increase in the carrying amount of the
                  associated asset. The cost of the tangible asset, including
                  the initially recognized ARO, is depleted, such that the cost
                  of the ARO is recognized over the useful life of the asset.
                  The ARO is recorded at fair value, and accretion expense is
                  recognized over time as the discounted liability is accreted
                  to its expected settlement value. The fair value of the ARO is
                  measured using expected future cash flow, discounted at the
                  Company's credit-adjusted risk-free interest rate. To date, no
                  significant asset retirement obligation exists due to the
                  early stage of exploration. Accordingly, no liability has been
                  recorded.

             k)   Basic and Diluted Loss Per Share

                  In accordance with SFAS No. 128 - "Earnings Per Share", the
                  basic loss per common share is computed by dividing net loss
                  available to common stockholders by the weighted average
                  number of common shares outstanding. Diluted loss per common
                  share is computed similar to basic loss per common share
                  except that the denominator is increased to include the number
                  of additional common shares that would have been outstanding
                  if the potential common shares had been issued and if the
                  additional common shares were dilutive. At September 30, 2008,
                  the Company has no stock equivalents that were anti-dilutive
                  and excluded in the earnings per share computation.

             l)   Stock-Based Compensation

                  The Company records stock-based compensation in accordance
                  with SFAS No. 123R, "Share-Based Payments", using the fair
                  value method. The Company also complies with the provisions of
                  FASB 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"). All transactions in which
                  goods or services are the consideration received for the
                  issuance of equity instruments are accounted for based on the
                  fair value of the consideration received or the fair value of
                  the equity instrument issued, whichever is more reliably
                  measurable. Equity instruments issued to employees and the
                  cost of the services received as consideration are measured
                  and recognized based on the fair value of the equity
                  instruments issued.

             m)   Environmental Protection and Reclamation Costs

                                       9
<PAGE>

                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)


                  The operations of the Company have been, and may in the future
                  be affected from time to time in varying degrees by changes in
                  environmental regulations, including those for future removal
                  and site restorations costs. Both the likelihood of new
                  regulations and their overall effect upon the Company may vary
                  from region to region and are not predictable.

                  Environmental expenditures that relate to ongoing
                  environmental and reclamation programs are charged against
                  Statements of Operations as incurred or capitalized and
                  amortized depending upon their future economic benefits. The
                  Company does not currently anticipate any material capital
                  expenditures for environmental control facilities because its
                  property holding is at an early stage of exploration.

             n)   Financial Instruments

                  The Company's financial instruments consist of cash and cash
                  equivalents, and accounts payable and accrued liabilities.

                  It is management's opinion that the Company is not exposed to
                  significant interest or credit risks arising from these
                  financial instruments. The fair value of these financial
                  instruments approximates their carrying values.

             o)   Discontinued Operations

                  As of July 9, 2008, the Company allowed its mining claim named
                  the Rock Creek Project in British Columbia, Canada to expire.
                  The British Ministry of the Environment designated the
                  property containing the Company's mining claim as a wildlife
                  habitat area and the Company received a report from a
                  geologist concluding that the property claim would unlikely
                  yield enough mineral to allow mining it to be economically
                  viable.

                  The Company reported its discontinued operations, for the
                  years ended March 31, 2008, and September 30, 2008, were
                  $110,517 and $1,000, respectively.


4.       INVESTMENT

On June 26, 2008, the Company purchased a 7% membership interest (comprising
70,000 class A units) in Safeland Storage L.L.C., a Louisiana limited liability
company ("Safeland") for a purchase consideration of $1,500,000.
Contemporaneously therewith, the Company entered into a Property Purchase
Agreement with Safeland and it's wholly-owned subsidiary, Future Energy
Investments LLC, for the purchase of 435 acres of land in St. John the Baptist
Parish, Louisiana, for a purchase price of $20,500,000. The transaction did not
close on October 24, 2008, as required by the terms of the Property Purchase
Agreement. The Company, Safeland and Future Energy Investments LLC are in
discussions to amend the agreement to extend the closing date.

                                       10
<PAGE>

                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)


5.       SHARE CAPITAL

                                   AUTHORIZED:

In January 2008, the Company increased the number of authorized capital stock of
the corporation from 200,000,000 shares to 220,000,000 shares consisting of
200,000,000 shares of common stock, par value $0.001 and 20,000,000 shares of
preferred stock, par value $0.001

                                     ISSUED:

In March 2004, the Company issued 5,000,000 common shares at $0.001 per share,
for cash proceeds of $5,000.

In April 2005, the Company issued 3,011,500 common shares at $0.05 per share,
for cash proceeds of $150,575.

In February 2008, the Company issued 16,023,000 common shares as a result of a
common stock dividend. This was recorded at par value of $0.001 per share.

In May and June 2008, the Company issued 821,036 shares of common stock pursuant
to employment agreements with directors and officers of the Company for
management services and legal services with a value of $1,726,160 and $200,000,
respectively.

From June through August 2008, the Company issued 2,092,500 shares of
restricted common stock for cash proceeds of $4,185,000 in a private placement.
The issuance of the shares was exempt from registration under Regulation S
and/or Regulation D and Section 4(2) of the Securities Act of 1933, as amended.
In connection with the offering, the Company engaged Falcan International
Consulting Limited to act as placement agent. Falcon International Consulting
Limited received a fee of 10% of the gross proceeds of the offering.

In August 2008, the Company granted and issued 83,700 shares of restricted
common stock at $2.00 per share, for professional services rendered to the
Company.

COMMITMENTS AND CONTRACTUAL OBLIGATIONS

In May 2008, the Company entered into employment agreements with the directors
and officers of the Company for management services. The terms of these
agreements range from one to five years with minimum aggregate cash remuneration
of $792,500 per annum. Non-cash remuneration includes the granting of 821,036
shares of common stock at $0.001, which vest at the end of twelve months of
employment and 2,303,278 common stock options with exercise prices ranging from
$2.00 to $3.77, which vest in accordance with the terms of the employment
agreements; however, as of June 30, 2008 the employment agreements did not
define the vesting conditions. As a result, since the vesting of the options
were contingent on performance conditions to be established at a future date a
grant date did not occur and compensation cost will not be measured until the
vesting conditions are established and mutually understood by the Company and
the employees.

                                       11
<PAGE>

                           BLACKWATER MIDSTREAM CORP.
                        (FORMERLY LAYCOR VENTURES CORP.)
                          (A DEVELOPMENT STAGE COMPANY)


On June 9, 2008 the Company entered into a consulting agreement (the "Lotus
Agreement") with Lotus Fund Inc. for operational, financial and management
services. Per the Lotus Agreement, the Company is required to pay $30,000 per
month commencing June 9, 2008, and terminating on June 9, 2009, unless
terminated by either party in the event of a material breach by providing 15
days notice. The Lotus Agreement is renewable for a further period of one year
at the option of the Company.

On September 25, 2008, Blackwater New Orleans, L.L.C. ("BNO"), a wholly-owned
subsidiary of Blackwater Midstream Corp. (the "Company"), entered into an
agreement (the "Purchase Agreement") with NuStar Terminals Operations
Partnership L.P. ("NuStar") to purchase certain assets of NuStar, including but
not limited to, approximately 26.5 acres of land located at the Port of New
Orleans, Westwego, Louisiana, including the 800,000 barrel chemical storage
facility and other improvements thereon, as well as certain licenses and permits
to operate such facility (collectively, the "Storage Facility"). The Storage
Facility is being purchased by BNO "as-is". The purchase price for the Storage
Facility is $4,800,000, subject to certain adjustments for prepaid third-party
fees, adjustment to inventory, and NuStar's transaction-related expenses. BNO
paid $75,000 to NuStar on July 28, 2008 and $75,000 to NuStar upon execution of
the Purchase Agreement, recorded as Construction in Progress, each of which
constitutes a non-refundable payment towards the purchase price. In the event
that asset purchase contemplated in the Purchase Agreement fails to close for
any reason, NuStar will retain such deposit. The balance of the purchase price
was due at the closing which, pursuant to the Purchase Agreement, was to be
October 31, 2008. Pursuant to the Purchase Agreement, each of NuStar and BNO
agreed to indemnify the other for certain losses not to exceed $750,000, and the
parties released one another from other liabilities. Certain conditions
specified in the Purchase Agreement must be met prior to closing. On October 31,
2008, the Company and NuStar mutually agreed to amend the asset purchase
agreement to extend the closing date of the transaction to December 1, 2008 from
October 31, 2008.

In connection with the Purchase Agreement, JP Morgan Chase Bank, N.A. delivered
a non-binding proposal to finance a portion of the purchase price of the Storage
Facility, not to exceed the lesser of $2,500,000 or 50% of the cost of the
acquisition.

                                       12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL
CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE
NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.

This section of this report includes a number of forward-looking statements that
reflect Blackwater Midstream Corp.'s (the "Company") current views with respect
to future events and financial performance. Forward-looking statements are often
identified by words like: "believe," "expect," "estimate," "anticipate,"
"intend," "project" and similar expressions, or words which, by their nature,
refer to future events. You should not place undue certainty on these
forward-looking statements, which apply only as of the date of this report.
These forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results or
our predictions.

There is no historical financial information about us upon which to base an
evaluation of our performance. We are a development stage corporation and have
not generated or realized any revenues from our business operations. We cannot
guarantee we will be successful in our business operations. Our business is
subject to risks inherent in the establishment of a new business enterprise,
including limited capital resources, possible delays in the development of the
property, and possible cost overruns due to the price and cost increases in
services.

We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop, or expand our operations. Equity financing could result in
additional dilution to existing shareholders. We may seek equity financing to
provide capital for further development and acquisitions.

OVERVIEW

Commencing in May 2008 we hired new management and changed our business plan to
become an independent developer of bulk liquid fuel and chemical storage
facilities. Prior to that time, we engaged in the exploration of a single oil
and gas property containing two claims relating to mineral rights in British
Columbia, Canada.

Bulk liquid terminals store a range of products including crude oil, bunker
fuel, gasoline, distillate, diesel, jet fuel, chemicals, agricultural products
and biodiesel. For example, on the refined product segment of oil, in the United
States, approximately 300 million barrels of refined products, blendstock and
intermediate products are stored within the refined product value chain in
facilities located between refinery processing units and product tank trucks
(out of an estimated 700 million total barrels of storage including crude oil
and other liquid products). Refiner storage accounts for about 40 percent of
total product inventory while refined product pipelines typically contain less
than 20 percent. The remainder, accounting for approximately 100 million barrels
of inventory, is stored in bulk storage terminals that provide facilities for
aggregation, distribution, finished product blending, imports offloading and
pipeline staging.


                                       13
<PAGE>

The importance of bulk terminal facilities in the refined product segment supply
chain has grown significantly over the past decade as the United States' product
supply patterns have become increasingly more complex. The number of operating
refineries in the U.S. has declined in that period, resulting in fewer refinery
sites that produce higher volumes of more grades of finished and unfinished
products. Bulk storage facilities have expanded to accommodate the growth in
output from the surviving refineries, the increase in the complexity of finished
product blending, and the staging flexibility required by refined product
pipelines. In addition, the change in supply patterns, including the increase of
Brazilian crude and the decreases in the availability of Venezuelan crude, have
driven the need for more storage and blending capacity. These services are
essential in order to effect timely and efficient operation of the U.S.'s fuel
distribution system.

Third-party terminalling businesses are generally independent operations that
support many different commercial customers including refiners, blenders,
traders and marketers. Income is derived from tank leasing, operational charges
associated with blending services and throughput charges for receipt and
delivery options. The primary strategic drivers of the business include location
and connectivity to logistics infrastructure. Capital investment in terminalling
assets is generally supported by long-term (i.e., five years or more) contracts
with major oil and gas, chemical and agricultural companies.

Investments resulting in incremental expansion of existing capacity through tank
additions and increased utilization of existing infrastructure such as docks,
pipeline origin pumps and truck racks have been the focus of the industry over
the past two decades. Over the past few years, the underlying infrastructure and
in some cases the real estate associated with many bulk terminals has been
exhausted. As such, industry fee structures have evolved with costs for
additional capacity today increasing over historical levels to recoup the total
cost for real estate, new tanks and the addition of related terminal
infrastructure as well.

On June 26, 2008, we purchased a seven percent (7%) interest in Safeland
Storage, L.L.C., a Louisiana limited liability company ("Safeland"), represented
by 70,000 Class A units for a purchase price of $1.5 million, pursuant to a
Membership Interest Purchase Agreement with Safeland. Safeland is an unrelated
party. Contemporaneously therewith, on June 26, 2008, we entered into a Purchase
and Sale Agreement (the "Purchase and Sale Agreement") with Safeland and it's
wholly-owned subsidiary, Future Energy Investments LLC, for the purchase of 435
acres of land located in the town of Garyville, St. John the Baptist Parish,
Louisiana, for a purchase price of $20,500,000. The transaction did not close on
October 24, 2008, as required by the terms of the Purchase and Sale Agreement.
The Company, Safeland and Future Energy Investments LLC are in discussions to
amend the closing date of the transaction.

We are exploring several options to obtain the required capital to close the
Safeland purchase, but as of the date of the filing of this Quarterly Report on
Form 10-Q, we have not entered into any definitive agreements to raise such
funds.

                                       14
<PAGE>

Safeland has completed preliminary engineering and design and obtained
state-regulated environmental permits for the development of the facility
described below. If acquired by us, we intend to develop the facility in three
phases with a resulting total of approximately 10 million barrels of capacity.
Assuming we acquire the facility during 2009, Phase I would be anticipated to be
approximately 3.5 million barrels of storage with an expected completion date of
the first quarter of 2010; Phase II would be expected to add 3.4 million barrels
of capacity coming on line in the first quarter of 2011; and Phase III would be
expected to add 3.0 million barrels in the first quarter of 2012. Our proposed
site is located in Garyville, LA, in the heart of South Louisiana's petroleum
refining and chemical manufacturing corridor that has a refining capacity of
approximately 2 million barrels per day. This represents approximately ten
percent of the total U.S. refining capacity, including existing world-scale
crude oil refineries such as Marathon Garyville (adjacent to the Company's
property), Valero St. Charles and Shell Norco (the first two of which are
undergoing major capacity expansions). The site is located within 15 miles of
the U.S. Strategic Petroleum Reserves at St. James and the LOOP (Louisiana
Offshore Oil Production). It is strategically located for connectivity to the
Colonial and Plantation pipelines via the Bengal pipeline. The Colonial and
Plantation pipelines serve the U.S. as major refined product arteries from the
Gulf Coast to the Eastern Seaboard of the U.S., providing approximately 42% of
the East Coast refined product demand. The site offers complete intermodal
logistics capabilities including deep water access on the Mississippi River for
ships and barges and access to major highways (U.S. Highway 61 to the north and
the Mississippi River and East Jefferson highways to the south). Two railroads,
Kansas City Southern and Canadian National, currently have infrastructure on the
property, which is expected to enable the Company to attract rail-served storage
positions.

On September 25, 2008, Blackwater New Orleans, L.L.C. ("BNO"), a wholly-owned
subsidiary of the Company, entered into an agreement (the "Purchase Agreement")
with NuStar Terminals Operations Partnership L.P. ("NuStar") to purchase certain
assets of NuStar, including but not limited to, approximately 26.5 acres of land
located at the Port of New Orleans, Westwego, Louisiana, including the 800,000
barrel chemical storage facility and other improvements thereon, as well as
certain licenses and permits to operate such facility (collectively, the
"Storage Facility"). The Storage Facility is being purchased by BNO "as-is". The
purchase price for the Storage Facility is $4,800,000, subject to certain
adjustments for prepaid third-party fees, adjustment to inventory and NuStar's
transaction-related expenses. BNO paid $75,000 to NuStar on July 28, 2008 and
$75,000, recorded as Construction in Progress, to NuStar upon execution of the
Purchase Agreement, each of which constitutes a non-refundable payment towards
the purchase price. In the event that asset purchase contemplated in the
Purchase Agreement fails to close for any reason, NuStar will retain such
deposit as a break-up fee. The balance of the purchase price was due at the
closing, which was to take place on October 31, 2008. On October 31, 2008, the
Company and NuStar mutually agreed to amend the asset purchase agreement to
extend the closing date of the transaction to December 1, 2008 from October 1,
2008.

Pursuant to the Purchase Agreement, each of NuStar and BNO agreed to indemnify
the other for certain losses not to exceed $750,000, and the parties released
one another from other liabilities. Certain conditions specified in the Purchase
Agreement must be met prior to closing. Because the closing did not take place
by October 31, 2008, any party not in breach of the Purchase Agreement may
terminate the Purchase Agreement.

In connection with the Purchase Agreement, JP Morgan Chase Bank, N.A. delivered
a non-binding proposal to finance a portion of the purchase price of the Storage
Facility, not to exceed the lesser of $2,500,000 or 50% of the cost of the
acquisition. The bank is continuing to work with the Company towards completing
the financing.

                                       15
<PAGE>

The Company is simultaneously pursuing the acquisition of other underachieving
storage terminals through asset purchases and management agreements. The
experience of the Company's unique management team will be a key factor in
transitioning underperforming terminals into viable profit centers. Acquisitions
will provide immediate accretive results to the Company's operations and
profits, and will also allow the Company to serve the specific storage needs of
its customers at its various terminals

RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2008

THE FOLLOWING TABLE SETS FORTH, FOR THE PERIODS INDICATED, CERTAIN OPERATING
INFORMATION EXPRESSED AS A PERCENTAGE OF REVENUE:

                       SIX MONTHS ENDED SEPTEMBER 30, 2008
                 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30, 2007

                                                     SIX MONTHS ENDED SEPT 30,
                                                    ---------------------------
                                                       2008             2007
                                                    -----------     -----------
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues                                            $         0     $         0
Costs and Expenses:
         Costs of revenues                                    0               0
         Research and development                             0               0
         Selling, general and administrative          1,709,914              99
                  Total costs and expenses            1,709,914              99
                  Operating loss                     (1,709,914)            (99)
         Interest expense                                     0               0
         Interest and dividend income                     5,507             592
         Other income, net                                    0               0
         Equity in loss of affiliates                         0               0
Net (Loss) Gain from Continuing Operations          $(1,704,407)    $       493
Loss from Discontinued Operations                   $    (1,000)    $    (5,956)
Net Loss                                            $(1,705,407)    $    (5,463)

REVENUES. As we are in the development stage of our business plan and have no
operating businesses, we have had no revenues nor any operating expenses for the
six months ended September 30, 2008 or the six months ended September 30, 2007.
We do not expect to begin generating revenues until at least the first quarter
of 2010 from the Garyville, Louisiana terminal development.

OTHER INCOME. Other income was $5,507 in the six months ended September 30, 2008
compared to $592 in the six months ended September 30, 2007. Other income for
both periods is from interest generated from bank accounts.


                                       16
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses from continuing operations were $1,709,914 in the six
months ended September 30, 2008 compared to $99 in the six months ended
September 30, 2007. This increase was attributable to the Company implementing
its new terminal development business plan; including the hiring of members of
its new management team in May and June 2008, working with professional service
providers, travel and marketing-related expenses, and establishing its
administrative office in Garyville, Louisiana. Compensation to members of the
management team and office staff during the six months ended September 30, 2008
was $1,011,906 or 59% of total SG&A. Professional fees for legal, securities,
consulting, audit and Board of Directors services during the six months ended
September 30, 2008 amounted to $565,973 or 33% of SG&A expenses. Travel and
sales related expenses was $43,600 for the six months ended September 30, 2008
or about 2.5% of total SG&A expenses. Office and administrative related expenses
totaled $78,500 or about 4.5% of total SG&A expenses.

LIQUIDITY AND CAPITAL RESOURCES

On June 26, 2008, we purchased a seven percent (7%) interest in Safeland
Storage, L.L.C., a Louisiana limited liability company ("Safeland"), represented
by 70,000 Class A units for a purchase price of $1.5 million, pursuant to a
Membership Interest Purchase Agreement with Safeland. Safeland is an unrelated
party. Contemporaneously therewith, on June 26, 2008, we entered into a Purchase
and Sale Agreement (the "Purchase and Sale Agreement") with Safeland and it's
wholly-owned subsidiary, Future Energy Investments LLC, for the purchase of 435
acres of land located in Garyville, LA, in St. John the Baptist Parish,
Louisiana, for a purchase price of $20,500,000. The transaction did not close on
October 24, 2008, as required by the terms of the Purchase and Sale Agreement.
The Company, Safeland and Future Energy Investments LLC are in discussions to
amend the closing date of the transaction.

We are exploring several options to obtain the required capital to close the
Safeland purchase, but as of the date of the filing of this Quarterly Report on
Form 10-Q, we have not entered into any definitive agreements to raise such
funds.

On September 25, 2008, Blackwater New Orleans, L.L.C. ("BNO"), a wholly-owned
subsidiary of the Company, entered into an agreement (the "Purchase Agreement")
with NuStar Terminals Operations Partnership L.P. ("NuStar") to purchase certain
assets of NuStar, including but not limited to, approximately 26.5 acres of land
located at the Port of New Orleans, Westwego, Louisiana, including the 800,000
barrel chemical storage facility and other improvements thereon, as well as
certain licenses and permits to operate such facility (collectively, the
"Storage Facility"). The Storage Facility is being purchased by BNO "as-is". The
purchase price for the Storage Facility is $4,800,000, subject to certain
adjustments for prepaid third-party fees, adjustment to inventory and NuStar's
transaction-related expenses. BNO paid $75,000 to NuStar on July 28, 2008 and
$75,000 to NuStar ( recorded as Construction in Progress) upon execution of the
Purchase Agreement, each of which constitutes a non-refundable payment towards
the purchase price. In the event that asset purchase contemplated in the
Purchase Agreement fails to close for any reason, NuStar will retain such
deposit as a break-up fee. The balance of the purchase price was due at the
closing, which was to take place on October 31, 2008. On October 31, 2008, the
Company and NuStar mutually agreed to amend the asset purchase agreement to
extend the closing date of the transaction from October 31, 2008 to December 1,
2008.

                                       17
<PAGE>

In connection with the Purchase Agreement, JP Morgan Chase Bank, N.A. delivered
a non-binding proposal to finance a portion of the purchase price of the Storage
Facility, not to exceed the lesser of $2,500,000 or 50% of the cost of the
acquisition. The bank is continuing to work with the Company towards completing
the financing.

In order to effectuate our business plan and build the facilities described
above, we will need to raise up to approximately $500 million. As of the date of
this Quarterly Report on Form 10-Q, we have not entered into any definitive
agreements to raise any portion of such amount, although we are exploring
alternatives to do so.

Beginning on June 4, 2008, the Company entered into certain subscription
agreements (collectively, the "Purchase Agreement") with certain investors (the
"Investors") for the sale of an aggregate of 2,500,000 shares of its common
stock, par value $.001 per share (the "Shares"), at a purchase price of $2.00
per share (the "August Offering"). Each Purchase Agreement sets forth certain
rights and obligations of the parties, as well as customary representations and
warranties by the Company and the Investors. As of August 13, 2008, the Company
had consummated transactions resulting in the aggregate sale of 2,092,500 Shares
for gross proceeds of $4,185,000. In connection with the August Offering, the
Company engaged Falcon International Consulting Limited to act as placement
agent. Falcon International received a fee of $418,500, or 10% of the gross
proceeds of the August Offering, and 83,700 restrictive shares of the Company's
common stock.

As of September 30, 2008, our total assets were $2,958,139 and our total
liabilities were $47,278. We had cash and cash equivalents of $1,077,178.

At September 30, 2008, we had working capital of $1,105,185 compared to a
working capital of $19,082 as of September 30, 2007.

We are currently exploring options to raise additional capital, although as of
the date of the filing of this Quarterly Report we have not entered into any
definitive agreements for such capital. We can make no assurances that the
Company will find additional financing on favorable terms, or at all. We have no
long-term debt.

OFF BALANCE-SHEET ARRANGEMENTS

None.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required for smaller reporting companies.

ITEM 4.  CONTROLS AND PROCEDURES.

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we
conducted an evaluation, under the supervision and with the participation of our
management, including our chief executive officer ("CEO") and chief financial
officer ("CFO") of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the
CEO and CFO concluded that, because of the material weaknesses in our internal
control over financial reporting described below, our disclosure controls and
procedures were not effective as of September 30, 2008. The Company has taken
the steps described below to remediate such material weaknesses.

                                       18
<PAGE>

(b) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.

Our management, under the supervision of our principal executive officer and our
principal financial officer, is also responsible for establishing and
maintaining adequate internal control over financial reporting. The Company's
internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles.

As of September 30, 2008, our assessment of the effectiveness of our internal
control over financial reporting identified several material weaknesses in our
internal control over financial reporting. A "material weakness", as defined in
standards established by the Public Company Accounting Oversight Board, or the
PCAOB, is a significant deficiency, or combination of significant deficiencies,
that results in more than a remote likelihood that a material misstatement of
the annual or interim financial statements will not be prevented or detected.
The material weaknesses identified by our management related to the design and
operating effectiveness of controls over the way we accounted for (i)
depreciation of certain equipment; (ii) grants of restricted common stock issued
to members of our board of directors and management team; (iii) grants of
certain non-statutory stock options; and (iv) the time which passed between the
Company's receipt of certain subscription agreements and the receipt of funds
delivered to the Company pursuant to those subscription agreements.

         o    DEPRECIATION OF EQUIPMENT. The Company reported purchases for its
              computer network, office & warehouse remodeling and accounting
              software as "Construction in Progress," because they were not
              entirely in-use as of September 30, 2008. The Company classified
              them as in-use and therein began depreciating these items.

         o    GRANTS OF RESTRICTED COMMON STOCK. In May and June 2008, the
              Company issued certain shares of restricted common stock.
              Management did not understand that it should have accounted for
              these shares as a compensation expense during the months of
              vesting. Nor did it understand that it should likewise account for
              the related deferred tax asset and deferred tax benefit. The
              Company made a footnote to the first quarter financial statements
              about these and referenced that the shares were issued in July
              2008.

         o    GRANTS OF NON-STATUTORY STOCK OPTIONS IN MAY 2008. Company
              management was not aware that grants of certain non-statutory
              stock options in May 2008 should have been accounted for as a
              legal expense in the month that they vested, or that the Company
              should have accounted for the related deferred tax asset and
              deferred tax benefit. The Company described the transaction in the
              Notes to Financial Statements in its Form 10-Q for the period
              ended June 30, 2008, but did not make an accounting entry in those
              financial statements.


                                       19
<PAGE>

         o    FUNDS DELIVERED PURSUANT TO SUBSCRIPTIONS FOR COMPANY SECURITIES.
              Company management did account for the timing differences between
              subscription agreements made in June 2008 and the receipt of funds
              during June 2008 for the private capital raise but subsequently
              reversed these entries. The amount of the shares subscribed but
              not received should have been reported as Stock Subscribed
              Receivable.

Since the close of the fiscal quarter ended September 30, 2008, we have
implemented the following remediation steps to address the material weakness
discussed above:

         o    The engagement of a professional accounting and internal control
              consulting firm

         o    Increasing the Company's accounting staff to increase the
              segregation of duties

         o    The documentation and implementation of Company procedures and
              internal controls

We believe these remediation steps will correct the material weakness discussed
above. We will assess the effectiveness of our remediation efforts in connection
with our management's tests of internal control over financial reporting in
conjunction with our fiscal year 2009 testing procedures. Except as discussed
above, we have not identified any changes in our internal control over financial
reporting during the second quarter of 2008 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

On November 14, 2008, the Company filed an amendment to the Quarterly Report on
Form 10-Q/A for the period ending June 30, 2008 which restated our financial
statements set forth therein. The purpose of this restated filing was to reflect
changes to depreciation, recoding assets in progress, subscribed stock
receivables and accounting for restrictive stock and nonstatutory stock issued.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

See our Annual Report on Form 10-KSB filed on June 15, 2008, for the year ended
March 31, 2008 for additional risk factors.

FAILURE TO ACHIEVE AND MAINTAIN EFFECTIVE INTERNAL CONTROLS IN ACCORDANCE WITH
SECTION 404 OF THE SARBANES-OXLEY ACT COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS AND OPERATING RESULTS.

                                       20
<PAGE>

In our amended Quarterly Report for the period ending June 30, 2008, as well as
our Quarterly Report for the period ending September 30, 2008, we disclosed that
our disclosure controls and procedures were not effective as each of those
dates, due to the existence of certain material weaknesses in our internal
control over financial reporting. Since the close of the fiscal quarter ended
September 30, 2008, we have implemented certain remediation steps to address the
material weakness discussed in those two Quarterly Reports. We believe these
remediation steps will correct the material weakness discussed therein, and we
will assess the effectiveness of our remediation efforts in connection with our
management's tests of internal control over financial reporting in conjunction
with our fiscal year 2009 testing procedures.

However, it may be time consuming, difficult and costly for us to develop and
implement the additional internal controls, processes and reporting procedures
required by the Sarbanes-Oxley Act. We may need to hire additional financial
reporting, internal auditing and other finance staff in order to develop and
implement appropriate additional internal controls, processes and reporting
procedures. If we are unable to comply with these requirements of the
Sarbanes-Oxley Act, we may not be able to obtain the independent accountant
certifications that the Sarbanes-Oxley Act requires of publicly traded
companies.

If we fail to comply in a timely manner with the requirements of Section 404 of
the Sarbanes-Oxley Act regarding internal control over financial reporting or to
remedy the material weaknesses disclosed in our Quarterly Report for the period
ending September 30, 2008 or any other material weaknesses in our internal
controls that we may identify, such failure could result in material
misstatements in our financial statements, cause investors to lose confidence in
our reported financial information and have a negative effect on the trading
price of our common stock.

Any failure to complete our assessment of our internal control over financial
reporting, to remediate any material weaknesses that we may identify or to
implement new or improved controls, or difficulties encountered in their
implementation, could harm our operating results, cause us to fail to meet our
reporting obligations or result in material misstatements in our financial
statements. Any such failure could also adversely affect the results of the
periodic management evaluations of our internal controls and, in the case of a
failure to remediate any material weaknesses that we may identify, would
adversely affect the annual auditor attestation reports regarding the
effectiveness of our internal control over financial reporting that are required
under Section 404 of the Sarbanes-Oxley Act. Inadequate internal controls could
also cause investors to lose confidence in our reported financial information,
which could have a negative effect on the trading price of our common stock.

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


                                       21
<PAGE>

ITEM 5.  OTHER INFORMATION.

None.

ITEM 6.  EXHIBITS. THE FOLLOWING DOCUMENTS ARE INCLUDED HEREIN:

EXHIBIT NO.     DOCUMENT DESCRIPTION
3.1             Articles of Incorporation (1)
3.2             By-laws (2)
4.1             2008 Stock Incentive Plan (1)
4.2             Form of Award Agreement for Incentive Stock Options (1)
4.3             Form of Award agreement for Nonstatutory Stock Options (1)
4.4             Form of Award agreement for Stock (1)
10.1            Asset Purchase Agreement by and between the Company and NuStar
                Terminals Operations Partnership L.P. dated September 25, 2008
                (3)
10.2            Amendment to Asset Purchase Agreement by and between the Company
                and NuStar Terminals Operations Partnership L.P., dated October
                31 2008. (4)
31.1            Certification of Principal Executive Officer pursuant to Rule
                13a-15(e) and 15d-15(e), promulgated under the Securities and
                Exchange Act of 1934, as amended.
31.2            Certification of Principal Financial Officer pursuant to Rule
                13a-15(e) and 15d-15(e), promulgated under the Securities and
                Exchange Act of 1934, as amended.
32.1            Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief
                Executive Officer).
32.2            Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief
                Financial Officer).

(1) Incorporated herein by reference to the Company's Registration Statement on
    Form S-8 filed with the Commission on July 10, 2008.

(2) Incorporated herein by reference to the Company's Registration Statement on
    From SB-2 filed with the Commission on June 7, 2004.

(3) Incorporated herein by reference to the Current Report on Form 8-K filed
    with the Commission on September 30, 2008.

(4) Incorporated herein by reference to the Current Report on From 8-K filed
    with the Commission on November 4, 2008.



                                       22
<PAGE>

                                   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 on this 14th day of November, 2008.

                                     BLACKWATER MIDSTREAM CORP.


                                     BY:  /s/ Michael D. Suder
                                          -----------------------------------
                                          Michael D. Suder
                                          Chief Executive Officer


                                     BY:  /s/ Donald St. Pierre
                                          -----------------------------------
                                          Donald St. Pierre
                                          Chief Financial Officer


                                       23
<PAGE>

                     EXHIBIT INDEX NOT SURE WHAT TO INCLUDE

EXHIBIT NO.     DOCUMENT DESCRIPTION
3.1             Articles of Incorporation (1)
3.2             By-laws (2)
4.1             2008 Stock Incentive Plan (1)
4.2             Form of Award Agreement for Incentive Stock Options (1)
4.3             Form of Award agreement for Nonstatutory Stock Options (1)
4.4             Form of Award agreement for Stock (1)
10.1            Asset Purchase Agreement by and between the Company and NuStar
                Terminals Operations Partnership L.P. dated September 25, 2008
                (3)
10.2            Amendment to Asset Purchase Agreement by and between the Company
                and NuStar Terminals Operations Partnership L.P., dated October
                31 2008. (4)
31.1            Certification of Principal Executive Officer pursuant to Rule
                13a-15(e) and 15d-15(e), promulgated under the Securities and
                Exchange Act of 1934, as amended.
31.2            Certification of Principal Financial Officer pursuant to Rule
                13a-15(e) and 15d-15(e), promulgated under the Securities and
                Exchange Act of 1934, as amended.
32.1            Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief
                Executive Officer).
32.2            Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief
                Financial Officer).

(1) Incorporated herein by reference to the Company's Registration Statement on
    Form S-8 filed with the Commission on July 10, 2008.
(2) Incorporated herein by reference to the Company's Registration Statement on
    From SB-2 filed with the Commission on June 7, 2004.
(3) Incorporated herein by reference to the Current Report on Form 8-K filed
    with the Commission on September 30, 2008.
(4) Incorporated herein by reference to the Current Report on From 8-K filed
    with the Commission on November 4, 2008.



                                       24