**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**




(Mark
      One)


**x QUARTERLY
      REPORT
      PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      quarterly period ended January 31, 2007





Or





**o TRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      transition period from ____________ to ____________





Commission
      file number 000-51519





**True
                North Energy Corporation**(Exact
                name of small business issuer as specified in its
                charter)




**Nevada**
            **98-043482**(State
                or other jurisdiction of incorporation or organization)
            (IRS
                Employer Identification No.)**2
                Allen Center, 1200 Smith Street, 16****th****Floor**
              **Houston,
                Texas 77002**(Address
                of principal executive offices)**(713)
                353-3948**(Registrant’s
                telephone number, including area code)__________________________________________(Former
                address if changed since last
                report)





Check
      whether the issuer (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months,
      and (2) has been subject to such filing requirements for the past 90 days.
      Yes
x No
o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2). Yes o Nox





As
      of
      March 12, 2007, there were 64,637,700 shares of the issuer’s common stock, par
      value $0.001, issued and outstanding.





Transitional
      Small Business Disclosure Format (check one): Yes o Nox







**TRUE
      NORTH ENERGY CORPORATION**


**JANUARY
      31, 2007 QUARTERLY REPORT ON FORM 10-QSB**


**TABLE
      OF CONTENTS**




**PAGE**Special
                Note Regarding Forward Looking Information
            3PART
                I - FINANCIAL INFORMATIONItem
                1.
            Financial
                Statements
            4Item
                2.
            Plan
                of Operation
            11Item
                3.
            Controls
                and Procedures
            15PART
                II - OTHER INFORMATIONItem
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            15Item
                5.
            Other
                Information
            16Item
                6.
            Exhibits
            20





2


**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





To
      the
      extent that the information presented in this Quarterly Report on Form 10-QSB
      for the three months ended January 31, 2007 discusses financial projections,
      information or expectations about our products, markets, revenues, or
      anticipated results, or otherwise makes statements about future events, such
      statements are forward-looking. We are making these forward-looking statements
      in reliance on the safe harbor provisions of the Private Securities Litigation
      Reform Act of 1995. Our actual results may differ significantly from those
      projected in the forward-looking statements. Factors that might cause or
      contribute to such differences include, but are not limited to, those discussed
      in the section “Plan of Operation” You should carefully review the risks
      described in our Annual Report and in other documents we file from time to time
      with the Securities and Exchange Commission. You are cautioned not to place
      undue reliance on the forward-looking statements, which speak only as of the
      date of this report. We undertake no obligation to publicly release any
      revisions to the forward-looking statements or reflect events or circumstances
      after the date of this document.




Although
      we believe that the expectations reflected in these forward-looking statements
      are based on reasonable assumptions, there are a number of risks and
      uncertainties that could cause actual results to differ materially from such
      forward-looking statements. These factors include, among others:




·
            The
                risks associated with oil and gas exploration;





·
            Our
                ability to raise capital to fund capital expenditures;





·
            Our
                ability to find, acquire, market, develop and produce new properties;





·
            Oil
                and gas price volatility;





·
            Uncertainties
                in the estimation of proved reserves and in the projection of future
                rates
                of production and timing of development expenditures;





·
            Operating
                hazards attendant to the natural gas and oil business;





·
            Downhole
                drilling and completion risks that are generally not recoverable
                from
                third parties or insurance;





·
            Availability
                and cost of material and equipment;





·
            Delays
                in anticipated start-up dates;





·
            Actions
                or inactions of third-party operators of our properties;





·
            Our
                ability to find and retain skilled personnel;





·
            Regulatory
                developments;





·
            Environmental
                risks; and





·
            General
                economic conditions.





3


**PART
      1 - FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**


**PAGE**Balance
                  Sheets as of January 31, 2007 (Unaudited) and April 30,
                  2006
              
              5Statements
                  of Operations for the three and nine-month periods ended January
                  31, 2007
                  and 2006 and for the period from February 1, 2006 (inception of
                  exploration stage) to January 31, 2007 (Unaudited)
              
              6Statements
                  of Cash Flows for the nine-month periods ended January 31, 2007
                  and 2006
                  and for the period from February 1, 2006 (inception of exploration
                  stage)
                  to January 31, 2007 (Unaudited)
              
              7Notes
                  to Financial Statements (Unaudited)
              
              8




4


**TRUE
        NORTH ENERGY CORPORATION**
 **(An
        Exploration Stage Company)**
 **Balance
        Sheets**




**January
                31, 2007**
            
            **April
                30, 2006***(Unaudited)***Assets**Current
                assets:Cash
                and cash equivalents
            
            $
            1,260,384
            
            $
            37,223Stock
                subscription receivable
            
            
            1,000,000
            
            
            -Note
                receivable
            
            
            180,000
            
            
            -Total
                current assets
            
            
            2,440,384
            
            
            37,223Website
                development, net of accumulated amortization of $7,178 and $2,409,
                respectively
            
            
            16,748
            
            
            4,817Property
                and equipment (net of accumulated depreciation of $1,191 and $ -,
                respectively)
            
            
            10,033
            
            
            -Unproven
                oil and gas properties, using successful efforts accounting
                method
            
            
            1,174,471
            
            
            373,775Total
                assets
            
            $
            3,641,636
            
            $
            415,815**Liabilities
                and Stockholders’ Equity**Current
                liabilities:Accounts
                payable and accrued liabilities
            
            $
            115,178
            
            $
            16,097Stock
                compensation payable
            
            
            193,973
            
            
            -Deposits
                on stock purchase
            
            
            -
            
            
            50,000Total
                current liabilities
            
            
            309,151
            
            
            66,097Liabilities
                from discontinued operations
            
            
            -
            
            
            15,000Total
                liabilities
            
            
            309,151
            
            
            81,097Commitments
                and contingenciesStockholders’
                Equity:Preferred
                Stock, $0.0001 par value; 20,000,000 shares authorized, no shares
                issued
                or outstanding
            
            
            -
            
            
            -Common
                Stock, par value $.0001; 100,000,000 shares authorized; 64,637,700
                and
                60,100,000 shares issued and outstanding, respectively
            
            
            6,464
            
            
            6,010Additional
                paid-in capital
            
            
            9,613,414
            
            
            481,654Pre-exploration
                stage accumulated deficit
            
            
            (72,350
            )
            
            (72,350
            )Accumulated
                deficit during exploration stage
            
            
            (6,215,043
            )
            
            (80,596
            )Total
                stockholders’ equity
            
            
            3,332,485
            
            
            334,718Total
                liabilities and stockholders’ equity
            
            $
            3,641,636
            
            $
            415,815




*See
                notes to financial statements.*





5


**TRUE
        NORTH ENERGY CORPORATON**
 **(An
        Exploration Stage Company)**
 **Statements
        of Operations**
 *(Unaudited)*


**Three
                Months Ended**
              **January
                31,**
            
            **Nine
                months Ended**
              **January
                31,**
            
            **From**
              **February
                1,****2006
                (Inception of**
              **Exploration**
              **Stage)****to**
              **January
                31,****2007**
            
            **2006**
            
            **2007**
            
            **2006**
            
            **2007**Revenues
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Costs
                and expenses:Exploration
                costs
            
            
            3,486,719
            
            
            -
            
            
            4,225,899
            
            
            -
            
            
            4,225,899General
                and administrative:Officers
                and directors fees
            
            
            437,295
            
            
            -
            
            
            1,204,846
            
            
            -
            
            
            1,224,846Legal
                and accounting
            
            
            57,308
            
            
            17,290
            
            
            161,937
            
            
            31,132
            
            
            210,268Investor
                relations
            
            
            29,091
            
            
            -
            
            
            136,657
            
            
            -
            
            
            136,657Advisory
                board fees
            
            
            253,973
            
            
            -
            
            
            276,187
            
            
            -
            
            
            276,187Other
                G&A expenses
            
            
            16,936
            
            
            2,505
            
            
            130,848
            
            
            6,394
            
            
            142,511Depreciation
                and amortization
            
            
            2,678
            
            
            -
            
            
            5,960
            
            
            -
            
            
            6,562Total
                costs and expenses
            
            
            4,284,000
            
            
            19,795
            
            
            6,142,334
            
            
            37,526
            
            
            6,222,930Loss
                from operations
            
            
            (4,284,000
            )
            
            (19,795
            )
            
            (6,142,334
            )
            
            (37,526
            )
            
            (6,222,930
            )Other
                income:Interest
                income
            
            
            1,437
            
            
            -
            
            
            7,887
            
            
            -
            
            
            7,887Loss
                before income taxes
            
            
            (4,282,563
            )
            
            (19,795
            )
            
            (6,134,447
            )
            
            (37,526
            )
            
            (6,215,043
            )Income
                taxes
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Allocation
                of net loss to discontinued operations, net of income
                taxes
            
            
            -
            
            
            (602
            )
            
            -
            
            
            (1,471
            )
            
            -Net
                loss
            
            $
            (4,282,563
            )
            $
            (20,397
            )
            $
            (6,134,447
            )
            $
            (38,997
            )
            $
            (6,215,043
            )Basic
                and diluted loss per common share
            
            $
            (0.07
            )
            $
            (0.00
            )
            $
            (0.10
            )
            $
            (0.00
            )Weighted-average
                common shares outstanding
            
            
            63,781,100
            
            
            10,057,091
            
            
            62,619,263
            
            
            10,057,091




*See
        notes to financial statements.*
  6




**TRUE
        NORTH ENERGY CORPORATON**
 **(An
        Exploration Stage Company)**
 **Statements
        of Cash Flows**
 *(Unaudited)*





**Nine
                months Ended**
              **January
                31,**
            
            **From**
              **February
                1, 2006**
              **(Inception
                of**
                **Exploration**
                **Stage**)
                  to
              **January
                31,****2007**
            
            **2006**
            
            **2007****Cash
                Flows From Operating Activities**Net
                loss
            
            $
            (6,134,447
            )
            $
            (38,997
            )
            $
            (6,215,043
            )Discontinued
                operations
            
            
            -
            
            
            1,471
            
            
            -Net
                loss from continuing operations
            
            
            (6,134,447
            )
            
            (37,526
            )
            
            (6,215,043
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
                and amortization
            
            
            5,960
            
            
            -
            
            
            6,562Stock-based
                compensation
            
            
            1,276,187
            
            
            -
            
            
            1,276,187Dry
                hole costs
            
            
            3,983,742
            
            
            -
            
            
            3,983,742


Changes
                in operating assets and liabilities:Prepaid
                expenses and other
            
            
            -
            
            
            -
            
            
            4,029Accounts
                payable and accrued liabilities
            
            
            99,081
            
            
            3,885
            
            
            101,798Liabilities
                from discontinued operations
            
            
            (15,000
            )
            
            -
            
            
            -Net
                cash used in operating activities
            
            
            (784,477
            )
            
            (33,641
            )
            
            (842,725
            )**Cash
                Flows From Investing Activities**Additions
                to oil and gas properties
            
            
            (4,784,438
            )
            
            -
            
            
            (4,784,438
            )Advances
                to seller in connection with acquisition of oil and gas
                properties
            
            
            (180,000
            )
            
            -
            
            
            (180,000
            )Purchases
                of property and equipment
            
            
            (11,224
            )
            
            -
            
            
            (11,224
            )Website
                development
            
            
            (16,700
            )
            
            -
            
            
            (22,119
            )Net
                cash used in investing activities
            
            
            (4,992,362
            )
            
            -
            
            
            (4,997,781
            )**Cash
                Flows From Financing Activities**Proceeds
                from issuance of common stock
            
            
            7,000,000
            
            
            -
            
            
            7,100,000Net
                increase in cash and cash equivalents
            
            
            1,223,161
            
            
            (33,641
            )
            
            1,259,494Cash
                and cash equivalents, beginning of period
            
            
            37,223
            
            
            34,531
            
            
            890Cash
                and cash equivalents, end of period
            
            $
            1,260,384
            
            $
            890
            
            $
            1,260,384**Supplemental
                Disclosure of Cash Flow Information**Cash
                paid for interest
            
            $
            -
            
            $
            -
            
            $
            -Income
                taxes
            
            
            -
            
            
            -
            
            
            -


**Non-Cash
                  Investing and Financing Activities**Common
                  stock issued for oil and gas leases
              
              $
              -
              
              $
              -
              
              $
              373,775Contribution
                  of capital via forgiveness of debt through discontinued
                  operations
              
              
              -
              
              
              -
              
              
              23,995Stock
                  subscription receivable
              
              
              1,000,000
              
              
              -
              
              
              1,000,000


*See
      notes to financial statements.*




7




**TRUE
        NORTH ENERGY CORPORATON**
 **(An
        Exploration Stage Company)**
 **Notes
        to Financial Statements**
 *(Unaudited)*


**NOTE
      1 - NATURE OF OPERATIONS**





The
      accompanying unaudited interim financial statements of True North Energy
      Corporation (the “Company”) have been prepared in accordance with accounting
      principles generally accepted in the United States of America and the rules
      of
      the Securities and Exchange Commission. These unaudited interim financial
      statements should be read in conjunction with the audited financial statements
      and notes thereto contained in the Company’s Annual Report on Form 10-KSB
      previously filed with the Securities and Exchange Commission.





In
      the
      opinion of management, all adjustments, consisting of normal recurring
      adjustments, necessary for a fair presentation of financial position and the
      results of operations for the interim periods presented have been reflected
      herein. The results of operations for interim periods are not necessarily
      indicative of the results to be expected for the full year. Notes to the
      financial statements that would substantially duplicate the disclosure contained
      in the Company’s audited financial statements for the year ended April 30, 2006
      as reported in Form 10-KSB have been omitted.





Certain
      reclassifications have been made to the prior year financial statements to
      conform with the current presentation.





**NOTE
      2 - GOING CONCERN**





These
      financial statements have been prepared on a going concern basis, which implies
      that the Company will continue to realize its assets and discharge its
      liabilities in the normal course of business. The continuation of the Company
      as
      a going concern is dependent upon continued financial support from its
      shareholders, the receipt of additional equity financing when and as needed
      to
      finance the Company’s ongoing business, and the attainment of profitable
      operations.





As
      of
      April 30, 2006, the Company had negative working capital and will require
      additional financing to execute its business plan. There can be no assurance
      that such financing will be available to the Company as and when needed or,
      if
      available, the reasonableness of the terms of such financing. Additionally,
      the
      Company has had no revenues and has accumulated losses since February 1, 2006
      (inception of exploration stage). These factors raise substantial doubt
      regarding the Company’s ability to continue as a going concern. The accompanying
      financial statements do not include any adjustments relative to the
      recoverability or classification of recorded assets or liabilities that might
      be
      necessary should the Company be unable to continue as a going concern.





**NOTE
      3 - STOCK-BASED COMPENSATION**





The
      Company accounts for stock-based compensation in accordance with Statement
      of
      Financial Accounting Standards No. 123(R), “Share-Based Payment.” In accordance
      with SFAS 123(R), stock-based compensation recognized during the three and
      nine-month periods ended January 31, 2007 includes compensation expense for
      all
      share-based payments based on the grant date fair value. Such compensation
      expense is recognized over the related service period.




8




**TRUE
        NORTH ENERGY CORPORATON**
 **(An
        Exploration Stage Company)**
 **Notes
        to Financial Statements**
 *(Unaudited)*


Stock-based
      compensation expense resulting from restricted stock granted to employees is
      included in officers and directors fees in the accompanying statement of
      operations. Such expenses totaled $375,000 and $1,000,000 during the three
      and
      nine-month periods ended January 31, 2007, respectively.





A
      summary
      of activity during the nine months ended January 31, 2007 related to employee
      restricted stock grants is as follows:





**Shares**
            
            **Grant
                Date**
              **Fair
                Value**Outstanding
                on April 30, 2006
            
            
            -
            
            $
            -Granted
            
            
            5,000,000
            
            
            7,500,000Vested
            
            
            -
            
            
            -Forfeited/canceled
            
            
            -
            
            
            -Outstanding
                on January 31, 2007
            
            
            5,000,000
            
            $
            7,500,000





The
      Company accounts for stock-based compensation issued to non-employees in
      accordance with the provisions of SFAS 123 and EITF No. 96-18, “Accounting for
      Equity Investments That Are Issued to Non-Employees for Acquiring, or in
      Conjunction with Selling Goods or Services.” For expense purposes, the value of
      common stock issued to non-employees is determined based on the fair value
      of
      the services received or the fair value of the equity instruments issued,
      whichever value is more reliably measurable.





During
      the three and nine-month periods ended January 31, 2007, the Company recognized
      stock-based compensation totaling $253,973 and $276,187, respectively, related
      to services provided to the Company by members of its advisory board. A total
      of
      32,145 shares of restricted stock were issued during November 2006 (7,145
      shares) and February 2007 (25,000 shares) in connection with $82,214, of these
      services. As
      of
      January 31, 2007, $193,973 is reflected as stock compensation payable on the
      Company’s balance sheet. This amount represents stock-based compensation
      expenses associated with 80,822 shares earned through January 31, 2007 that
      are
      not issuable by the Company until September 2007.




**NOTE
      4 - UNPROVEN OIL AND GAS PROPERTIES**





The
      Company is engaged in oil and gas exploration activities in Alaska, Texas and
      Louisiana. Presently, it has no developed properties or production. During
      January 2007 the Company entered into a non-binding letter of intent to acquire
      certain oil and gas leases covering more than 17,000 acres in the Rocky
      Mountains. The acquisition is expected to be executed and closed during the
      fourth quarter of the Company’s fiscal year ending April 30, 2007. The purchase
      price for these leases, which is expected to approximate $1.0 million, is
      expected to be paid with a combination of cash (approximately $345,000) and
      shares of the Company’s common stock. There can be no assurance as to when or if
      this transaction will be consummated or the final terms thereof.




9




**TRUE
        NORTH ENERGY CORPORATON**
 **(An
        Exploration Stage Company)**
 **Notes
        to Financial Statements**
 *(Unaudited)*


The
      Company advanced the proposed seller $180,000 of the cash consideration during
      January 2007 in the form of a note receivable. The note bears interest at the
      rate of 5% per annum and is due upon the earlier of (i) January 23, 2008; (ii)
      the closing of the Company’s acquisition of the Rocky Mountain oil and gas
      leases from the seller; or (iii) the sale of these leases to a party other
      than
      the Company.





The
      Company plans to expend between $900,000 and $4.5 million during the 12-month
      period ending January 31, 2008 on exploration and development activities such
      as
      seismic data acquisition, technical studies, and participation in joint venture
      development and exploration drilling. The amount of such expenditures, which
      exclude $1.7 million expended during February 2007 in connection with the
      drilling of a well in Louisiana, are dependent upon the success of the Company’s
      ongoing exploration efforts in Texas and Louisiana.





**NOTE
      5 - CAPITAL STOCK**





During
      the nine months ended January 31, 2007, the Company sold a total of 4,405,555
      units to several purchasers in reliance on Regulation S of the Securities Act
      of
      1933, as amended. Each unit consisted of one share of the Company’s common stock
      and one common stock purchase warrant exercisable for the purchase of an
      additional share of common stock. Each common stock purchase warrant is
      exercisable for a period of three years.





The
      following table summarizes the Company’s sales of units during the nine months
      ended January 31, 2007:





**Relative
                Fair Value****Date**
            
            **Number**
              **Of
                Units**
            
            **Price**
              **Per
                Unit**
            
            **Total
                Proceeds**
            
            **Warrant****Exercise
                Price**
            
            **Common
                Stock**
            
            **C/S
                Purchase Warrants**May
                9, 2006
            
            
            1,250,000
            
            $
            .80
            
            $
            1,000,000
            
            $
            1.60
            
            $
            618,000
            
            $
            382,000July
                27, 2006
            
            
            650,000
            
            
            1.00
            
            
            650,000
            
            
            1.70
            
            
            381,000
            
            
            269,000August
                11, 2006
            
            
            350,000
            
            
            1.00
            
            
            350,000
            
            
            1.70
            
            
            198,000
            
            
            152,000August
                28, 2006
            
            
            555,555
            
            
            3.60
            
            
            2,000,000
            
            
            5.00
            
            
            1,198,000
            
            
            802,000October
                2, 2006
            
            
            400,000
            
            
            2.50
            
            
            1,000,000
            
            
            3.50
            
            
            580,000
            
            
            420,000November
                13, 2006
            
            
            400,000
            
            
            2.50
            
            
            1,000,000
            
            
            3.50
            
            
            580,000
            
            
            420,000January
                24, 2007
            
            
            800,000
            
            
            2.50
            
            
            2,000,000
            
            
            3.50
            
            
            1,179,000
            
            
            821,000Total
            
            
            4,405,555
            
            
            
            
            $
            8,000,000
            
            
            
            
            $
            4,734,000
            
            $
            3,266,000





On
      February 1, 2007, the Company collected the outstanding balance of $1.0 million
      related to the January 24, 2007 sale of units.





**NOTE
      6- RELATED PARTY TRANSACTIONS**





As
      of
      April 30, 2006 the Company had recognized a liability payable to its former
      president totaling $15,000. This obligation, which was unsecured, non-interest
      bearing and due on demand, is reported as “Liabilities from discontinued
      operations” in the accompanying balance sheets. The outstanding balance related
      to this obligation was repaid during August 2006.




10





**ITEM
      2. PLAN OF OPERATION**





We
      began
      operations as an oil and gas exploration and development company in January
      2006. We are in the development stage and to date have had minimal operations
      and generated no revenues. Our ability to develop and maintain a meaningful
      level of revenues from operations is dependent on our ability to successfully
      drill exploration and development wells and complete producing property
      acquisitions.





Presently
      we are engaged in oil and gas exploration activities in Alaska, Texas and
      Louisiana. At this time, we have no developed properties or
      production.





*Alaska
      Leases*




In
      January and May 2006, we negotiated the acquisition of certain oil and gas
      leases consisting of approximately 25,000 acres in the Cook Inlet basin of
      Alaska and approximately 10,000 acres in the North Slope basin of Alaska. We
      anticipate closing the related purchase and sale agreements and registering
      all
      of the associated leases in our name by June 30, 2007. We will have a 100%
      working interest ownership in the Alaska leases, except to the extent we elect
      to sell off a portion of our interests.





During
      November 2006 we executed a Letter Agreement with Savant Alaska LLC (“Savant”).
      Savant holds leases for the exploration and production of oil and natural gas
      in
      an area of Alaska that is contiguous to certain of our Alaskan interests. Savant
      initially planned to commence drilling of a test well at its Kupcake Prospect
      on
      or before March 15, 2007. Recently, Savant informed us that their planned
      drilling of the Kupcake Prospect has been delayed until March 2008.





Under
      the
      terms of the Savant agreement, we will pool certain of our leasehold interests
      with those of Savant on a net acreage basis and jointly drill the test well.
      Working interests within the pooled area will approximate 91.5% for Savant
      and
      8.5% for us. Savant will be the operator of the pooled area. Our share of
      drilling and testing costs relative to the Kupcake Prospect are expected to
      approximate $1.3 million.





*Texas
      and Louisiana Interests*




At
      present, we have active interests and on-going operations in oil and gas
      exploration prospects located in the Texas counties of Live Oak and Pointe
      Coupee Parishes of Louisiana. To date, we have invested approximately $6.2
      million in joint venture drilling projects.





We
      hold a
      12.5% working interest in a well (McLean #1) in Live Oak County, Texas. Drilling
      of this well has been completed and the well logs indicate approximately 500
      feet of gross pay interval in the Wilcox formation. The well was fracture
      stimulated and extensively production tested. Initial test results reflect
      daily
      production levels as high as 1.2 million cubic feet per day of gas and
      approximately one thousand barrels per day of water.





The
      operator of the McLean #1 well, Bayou City Exploration, Inc., has elected to
      temporarily suspend activity related to this well pending further evaluation.
      Bayou City and its partners plan to purchase 3-D seismic data covering the
      entire prospect acreage. The McLean #1 well is part of an overall position
      of
      2,961 acres in Live Oak County owned by Bayou City and its partners. We have
      earned a 12.5% working interest in the entire prospect acreage through our
      participation in the McLean #1 well.




11





A
      number
      of factors will be considered in determining whether the McLean #1 well and
      related prospective acreage is deemed commercial. Those factors include, but
      are
      not limited to, the amount of estimated recoverable reserves, sustainability
      of
      gas flow rates, and development of a plan for the economic disposal of produced
      water.





On
      February 7, 2007 we entered into a development agreement (the “Development
      Agreement”), made effective as of January 1, 2007, with BP America Production
      Company (“BP”) relating to our participation in the drilling of a test well to a
      targeted depth of approximately 18,500 feet (the “Initial Well”) to test the
      Tuscaloosa C-1 Sand on the A. Major Heirs No. 1 well located in Pointe Coupee
      Parish, Louisiana. There under, we are obligated to pay BP 11.67% of the
      drilling costs of the Initial Well regardless of whether the Initial Well is
      successfully drilled to the objective depth. BP has estimated that the drilling
      costs for the Initial Well will be approximately $14,862,000. Our proportionate
      share of such estimated drilling costs totaled $1,734,395, which we paid upon
      execution of the Development Agreement. In consideration of the foregoing,
      we
      will have the right to earn an 8.75% working interest, as discussed in greater
      detail below.





When
      and
      if the casing point is reached on the Initial Well, BP shall provide us with
      written notice thereof. Such notice shall state whether BP proposes to attempt
      to complete the Initial Well as a producer, whether to the objective depth
      or in
      a shallower zone, or to abandon the Initial Well as a dry hole. If BP proposes
      to complete the Initial Well as a producer, such notice also will include an
      authority for expenditure (“AFE”), which will include, at a minimum, an estimate
      of completion costs for the Initial Well. Upon receipt thereof, we will have
      48
      hours to elect to participate therein. If we timely elect to participate, we
      will pay 8.75% of the costs of any newly acquired surface equipment associated
      with the Initial Well beyond the wellhead connections. If the completion attempt
      results in the production of oil and/or gas in commercial quantities, BP will
      serve as operator for the Initial Well.





If
      BP
      does not drill the Initial Well to the objective depth, we will have the right,
      but not the obligation, for a period of one year from the date the drilling
      rig
      used to drill the Initial Well is removed from the site location for the Initial
      Well, to participate in the drilling of a substitute well. BP has no obligation
      to drill a substitute well and we have no right to propose the drilling thereof.
      If BP proposes to drill a substitute well and we timely elect to participate
      therein, such substitute well shall be treated for purposes of the Development
      Agreement as the Initial Well and we will be obligated to pay 11.67% of the
      drilling costs for such substitute well.





When
      and
      if the Initial Well is drilled to the objective depth or, if applicable, a
      shallower depth, and successfully completed as a well capable of producing
      oil
      and/or gas in commercial quantities, BP shall assign to us an 8.75% working
      interest in the Initial Well and an 8.75% interest in BP’s interests (the “BP
      Interest”) in certain related leases and BP’s right to obtain, acquire or
      otherwise earn certain interests related to the contract area which covers
      an
      area of approximately 640 acres. These assignments will be limited as to those
      depths between the surface and the stratigraphic equivalent of the base of
      the
      objective zone (the “Earned Zone”).




12





Drilling
      has commenced on the Initial Well and the well is currently drilling at 17,500
      feet. We expect the Initial Well to reach its objective depth during March
      and
      to be logged within about a week after reaching that depth. Shortly thereafter,
      we expect to be able to determine whether the Initial Well is commercially
      viable.





*Rocky
      Mountain Leases*




During
      January 2007 we entered into a non-binding letter of intent to acquire certain
      oil and gas leases covering more than 17,000 acres in the Rocky Mountains.
      A
      purchase and sale agreement related to this acquisition is expected to be
      executed and closed during the fourth quarter of our fiscal year ending April
      30, 2007. The purchase price for these leases, which is expected to approximate
      $1.0 million, is expected to be paid with a combination of cash (approximately
      $345,000) and shares of our common stock.





We
      advanced the proposed seller $180,000 of the cash consideration during January
      2007 in the form of a note receivable. The note bears interest at the rate
      of 5%
      per annum and is due upon the earlier of (i) January 23, 2008; (ii) the closing
      of our acquisition of the Rocky Mountain oil and gas leases from the seller;
      or
      (iii) the sale of these leases to a party other than us.





*Future
      Plans*




We
      plan
      to expend between $900,000 and $4.5 million during the 12-month period ending
      January 31, 2008 on exploration and development activities such as seismic
      data
      acquisition, technical studies, and participation in joint venture development
      and exploration drilling. The amount of such expenditures, which are in addition
      to the $1.7 million we expended during February 2007 in connection with the
      drilling of the BP Initial Well, are dependent upon the success of our ongoing
      exploration efforts in Texas and Louisiana. As a result of the pooling of some
      of our acreage with Savant, we plan to participate in the drilling of one well
      on our Beaufort Sea Leases in Alaska during early 2008. Regarding our Cook
      Inlet
      Leases, our primary efforts will focus on acquiring additional seismic data,
      conducting further technical evaluation of our leases, and seeking compatible
      partners who may be interested in acquiring a portion of our current 100%
      working interest in those leases. Our objective in seeking such potential
      partners is to reduce our risk level and financial exposure.





We
      intend
      to continue to explore opportunities for the acquisition of additional leasehold
      interests in North America. We will continue to review prospects developed
      by
      third parties and, if the economics fit our business plan, participate in those
      projects. Currently, our acquisition efforts are focused on on-shore properties
      and are biased toward acquisitions of long-lived reserves. We intend to target
      negotiated acquisitions and avoid competitive bidding situations.





We
      face
      competition for future acquisitions from firms that are more established,
      successful, better capitalized and, in many instances, willing to pay more
      for
      properties than what we might consider prudent. Our success will depend on
      the
      execution of our business plan to:





·
            Identify
                available transactions;






13




·
            Quickly
                evaluate which transactions are most promising; and


·
            Negotiate
                creative transaction structures.





We
      will
      require additional financing to meet our expected capital expenditure and
      working capital needs, including the cost of reviewing and negotiating
      transactions and other ordinary general and administrative costs. Our general
      and administrative costs likely will include such things as regulatory
      compliance costs, investor relations expenses, advisory services,
      Internet/web-hosting, officer's salaries, director's fees, insurance, office
      and
      general expenses, professional fees, travel and entertainment expenses, and
      rent
      and other customary expenses.





We
      estimate that our general and administrative costs will approximate $1.8 million
      during the next twelve months (exclusive of non-cash, stock-based compensation
      expenses resulting from the award of restricted stock grants to our officers
      and
      third parties). However, this estimate is subject to change and is dependent
      on
      the number of transactions in which we ultimately become involved. Additional
      funding will be required for follow-on development of working interest
      obligations associated with successful exploration prospects.





No
      assurance can be given that additional financing will be available to us as
      and
      when needed or, if available, the reasonableness of the terms on which such
      financing will be available.





Oil
      and
      gas exploration requires significant outlays of capital and in many situations
      may offer a limited probability of success. We hope to enhance our chances
      for
      success by effectively using available technology, rigorously evaluating
      sub-surface data, and, to the extent possible, managing dry hole and financial
      risks.





We
      intend
      to rely on synergistic partnering with sophisticated industry partners. An
      ideal
      partner for us would tend to be a regionally focused oil and gas company that
      has a large seismic database, a solid grasp on the prospect opportunity’s
      history, and experience using the technology required to develop the prospect.
      There can be no assurance that we will be able to successfully negotiate any
      such partnering agreements or raise the necessary financing to invest in such
      a
      venture, or that any such venture ultimately will yield us revenues or profits.





Presently
      our staff consists of our two executive officers. We expect to expand the size
      of our executive leadership team during the next twelve months as our business
      grows.





We
      intend
      to outsource certain technical and administrative functions on an as-needed
      basis in order to conduct our operating activities. Our management team will
      select and hire these contractors and manage and evaluate their work
      performance. We recently formed an advisory board composed of experienced
      independent and unrelated industry veterans to assist us with corporate
      governance, compliance, deal flow, financing efforts, and technical matters
      such
      as geoscience, drilling, engineering and risk management.




14


**ITEM
      3.**  **CONTROLS
      AND PROCEDURES**





*(a)*  *Evaluation
      of Disclosure Controls and Procedures.* Under
      the supervision and with the participation of our senior management, consisting
      of our chief executive officer and chief financial officer, we evaluated the
      effectiveness of the design and operation of our “disclosure controls and
      procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
      Exchange Act of 1934, as amended, as of the end of the period covered by this
      report. Based on this evaluation, our chief executive officer and chief
      financial officer concluded that our disclosure controls and procedures are
      effective.





(b)  *Changes
      in Internal Control over Financial Reporting* .
      There
      were no changes in our internal control over financial reporting that occurred
      during the period covered by this report that have materially affected or are
      reasonably likely to materially affect our internal control over financial
      reporting.





**PART
      II**





**ITEM
      2.**  **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**





On
      February 27, 2007 we issued an aggregate of 25,000 shares of our common stock
      to
      our five advisory board members representing payment of the quarterly fee due
      to
      them for the quarter ended January 31, 2007. The shares were issued in reliance
      on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing
      issuances did not involve a public offering, the recipient had access to
      information that would be included in a registration statement, the recipient
      took the shares for investment and not resale, and we took appropriate measures
      to restrict resale.





On
      February 1, 2007 we issued 800,000 units at a price of $2.50 per unit, or
      $2,000,000 on an
      aggregate basis, to one non-US purchaser in an offshore transaction in reliance
      on Regulation S under the Securities Act of 1933, as amended. Each unit
      consisted of one share of our common
      stock and one
      common stock purchase warrant exercisable for the purchase of an additional
      share of common stock. Each warrant is exercisable for a period of three years
      at an exercise price of $3.50 per share.





On December
      4, 2006 we issued 100,000 shares to one non-US purchaser in an offshore
      transaction in reliance on Regulation S under the Securities Act of 1933, as
      amended. The shares were paid for in April 2006 at a price of $0.50 per share,
      or $50,000 on an aggregate basis.





On
      November 29, 2006 we issued an aggregate of 7,145 shares of our common stock
      to
      our five advisory board members representing payment of the prorated quarterly
      fee due to them for the quarter ended October 31, 2006. The shares were issued
      in reliance on Section 4(2) of the Securities Act of 1933, as amended, since
      the
      foregoing issuance did not involve a public offering, the recipient had access
      to information that would be included in a registration statement, the recipient
      took the shares for investment and not resale, and we took appropriate measures
      to restrict resale.




15





On
      November 13, 2006 we sold 400,000 units at a price of approximately $2.50 per
      unit, or $1,000,000 on an aggregate basis, to one non-US purchaser in an
      offshore transaction in reliance on Regulation S under the Securities Act of
      1933, as amended. Each unit consisted of one share of our common stock and
      one
      common stock purchase warrant exercisable for the purchase of an additional
      share of common stock. Each warrant is exercisable for a period of three years
      at an exercise price of $3.50 per share.





**ITEM
      5.**  **OTHER
      INFORMATION**





Oil
      and Gas Leases





*Cook
      Inlet Leases*





On
      January 23, 2006 we acquired rights in State of Alaska Oil and Gas Leases ADL
      389208, 389932, 390087, 390383, 390567, and 390572 (the “Issued Leases”) from
      Massimiliano Pozzoni pursuant to an Asset Purchase Agreement (the “Pozzoni
      Agreement”) among us, Massimiliano Pozzoni and Kevin Moe. Lease ADL 389208 has
      expired. We are presently working to have the remaining leases registered in
      our
      name and expect to complete this process in the near future. Pursuant to the
      Pozzoni Agreement, we also acquired Mr. Pozzoni’s rights in State of Alaska Oil
      and Gas Leases ADL 390722, 390723 and 390745 (the “Un-Issued Leases”).





The
      Issued Leases and Un-Issued Leases involve land in the Cook Inlet area of
      Alaska. The Un-Issued Leases were issued by the State of Alaska on September
      26,
      2006 and we are in the process of having those leases assigned and registered
      from the sellers to us. Rental fees are due on a yearly basis. All of the leases
      except for ADL 389208 are in full force and effect and are free and clear of
      any
      liens or encumbrances. Such leases provide for a net revenue interest of 87.5%
      prior to an overriding 5% royalty.





In
      connection with the acquisition of the Cook Inlet leases described above, we
      assumed an obligation to drill or cause to be drilled, at our sole expense,
      a
      test well on at least one of ADL 390087, ADL 390722, or ADL 390723. This test
      well must be drilled to completion or abandonment to a bottom-hole depth and
      location at least sufficient to test both the West Foreland and Hemlock
      Formations. Failure to drill the Cook Inlet test well to completion or
      abandonment by November 27, 2010 will result in our forfeiture of leases ADL
      390087, ADL 390722 and ADL 390723.





*Beaufort
      Sea Leases*





Effective
      May 9, 2006 we entered into a purchase agreement (the “Beaufort Sea Agreement”)
      whereby we acquired rights in State of Alaska Oil and Gas Leases ADL 390834,
      390839, 390840 and 390841 (the “Beaufort Sea Leases”) from two unrelated persons
      (the “Sellers”). The Beaufort Sea Agreement was amended on July 31, 2006 and
      December 24, 2006 (the “Amended Beaufort Sea Agreement”) to extend certain
      timelines contained therein. The total purchase price for the Beaufort Sea
      Leases was $276,480 (the “Purchase Price”). The Beaufort Sea Leases cover an
      aggregate of approximately 10,000 acres of land, both onshore and offshore
      in
      the Beaufort Sea area on the North Slope of Alaska.




16





As
      of
      December 13, 2006 the Sellers had received a High Bidder Notice from the State
      of Alaska Department of Natural Resources. All funds have been paid to the
      State
      of Alaska for these leases. On March 1, 2007, the Beaufort Sea Leases were
      issued to Sellers. Consequently, the Sellers own and have the right to assign
      and convey to us or cause to be assigned and conveyed to us the Beaufort Sea
      Leases, all of which shall be free and clear of any liens and encumbrances
      at
      the time of assignment and provide for a net revenue interest to us of not
      less
      than 83.33334% prior to reservation of a 5% overriding royalty. Such overriding
      royalty also shall apply to all renewals and extensions of the Beaufort Sea
      Leases.





We
      deposited the Purchase Price plus an additional $10,240 (aggregate amount of
      $286,720) in an escrow account as required by the Beaufort Sea Agreement. At
      closing, a portion of the escrowed funds totaling $81,920 will be used to retire
      balances due to the State of Alaska related to these leases. In addition,
      $10,240 of the escrowed funds will be used to pay the first year of rental
      payments associated therewith.





Under
      the
      Amended Beaufort Sea Agreement, the Beaufort Sea Agreement shall become null
      and
      void if closing of the transaction does not occur by the close of business
      on
      March 31, 2007. In such event, neither the Sellers nor we shall have any further
      rights or obligations under the Beaufort Sea Agreement. As provided above,
      on
      March 1, 2007 the State of Alaska issued the Beaufort Sea Leases to Sellers.
      We
      presently are working with Sellers to effect the assignments of the Beaufort
      Sea
      Leases to us and to register the assignment of such leases. Also, we are
      negotiating with Sellers to further extend the termination date of the Beaufort
      Sea Agreement from March 31, 2007 to June 30, 2007.





BP
      Development Agreements





As
      discussed in more detail in Item 2, Plan of Operation - Texas and Louisiana
      Interests, on February 7, 2006 we entered into a development agreement (the
      “Development Agreement”), made effective as of January 1, 2007, with BP America
      Production Company (“BP”) respecting our participation in the drilling of a test
      well to a targeted depth of approximately 18,500 feet (the “Initial Well”) to
      test the Tuscaloosa C-1 Sand on the A. Major Heirs No. 1 well located in Pointe
      Coupee Parish, Louisiana. There under, we are obligated to pay BP 11.67% of
      the
      drilling costs of the Initial Well regardless of whether the Initial Well is
      successfully drilled to the objective depth. BP has estimated that the drilling
      costs for the Initial Well will approximate $14,862,000. Our proportionate
      share
      of such estimated drilling costs is $1,734,395, which we paid upon execution
      of
      the Development Agreement. In consideration of the foregoing, we will have
      the
      right to earn an 8.75% working interest, as discussed in greater detail below.





Drilling
      of the Initial Well has commenced and is expected to reach the objective depth
      during March. The well is expected to be logged within a week after reaching
      the
      objective depth. Shortly thereafter we expect to be able to determine whether
      the Initial Well is commercially viable.





On
      October 6, 2006 we
      entered into a development agreement (the “Development Agreement”), made
      effective as of October 1, 2006, with BP
      America Production Company (“BP”) respecting our participation in the drilling
      of a test well to a targeted depth of approximately 21,250 feet to
      test the Tuscaloosa B -1
      Sand
      on the O.
      Jarreau Heirs
      No. 1 well located in Pointe Coupee Parish, Louisiana. Drilling
      of this well reached a depth of 20,087 feet in early December. The well was
      logged and determined
      to have in excess
      of thirty feet (30) of
      net
      pay. Due to the uncertainty of the aerial extent of the potential zone and
      the
      high cost of completion and surface facilities, BP  deemed
      the well not to be commercially viable at that depth. On December 11, 2006
      we
      entered into a letter agreement with BP whereby we agreed with BP to deepen
      the
      well to an approximate depth of 21,400 feet and amended the BP Agreement to
      revise the objective depth from 21,250 feet to up to 21,500 feet. Drilling
      and
      testing of the BP Well was completed during December 2006. BP deemed the well
      not to be commercially viable and it was plugged and abandoned.




17





*Bayou
      City Agreements*





Effective
      June 7, 2006 we entered into oil and gas well participation agreements with
      Bayou City Exploration, Inc. (the "Bayou City Agreements"). Under the terms
      of
      the Bayou City Agreements, we agreed to participate in the drilling of test
      wells on three oil and gas prospects located in Louisiana and Texas. These
      oil
      and gas prospects include the Zodiac II Prospect located in Jefferson Davis
      and
      Calcasieu Parishes in Louisiana and the Jaboncillo Windmill and Frost National
      Bank Deep Prospects located in Live Oak County, Texas.





With
      respect to the two prospects located in Live Oak County, Texas (the "Live Oak
      Prospects"), we will earn a 16.67% working interest in the Live Oak Prospects
      before payout and a 12.5% working interest after payout by participating in
      the
      drilling of the required test wells. “Payout” is defined as that point in time
      when there has been recovered from one hundred percent (100%) of production,
      less only royalties, overriding royalties and production taxes, an amount of
      money equal to one hundred percent (100%) of the drilling, completion and
      operating costs (during the payout period) of the initial test well.





We
      further agreed to pay 16.67% of all well costs to the initial casing point
      on
      the initial test well drilled on each Live Oak Prospect, to pay 16.67% of all
      well completion costs, and to pay our proportionate share of the prospect costs
      including geological and geophysical costs, third party prospect fees, land
      brokerage costs, lease bonus, and all other costs associated with the respective
      Live Oak Prospects. Such prospect costs totaled $20,375 with regard to the
      Jaboncillo Windmill Prospect and $94,888 with regard to the Frost National
      Bank
      Deep Prospect.





We
      will
      earn a 25% working interest in the initial test well drilled on the Zodiac
      Prospect at such time as the test well has reached the objective depth. We
      agreed to pay 33.33% of well costs to the casing point on the test well drilled
      on the Zodiac Prospect, to pay 25% of all well completion costs, and to pay
      our
      proportionate share of prospect costs including geological and geophysical
      costs, third party prospect fees, land brokerage costs, lease bonus, and all
      other similar costs associated with the Zodiac Prospect. Our prospect costs
      relating to the Zodiac Prospect totaled $272,070, which we paid on November
      13,
      2006.




18





Prospect
      costs for each prospect are fully refundable in the event the applicable
      agreement is rescinded by Bayou City for any reason or Bayou City fails to
      cause
      the initial test well to be drilled for any reason.





Drilling
      has been completed and the test well (the “McLean #1 Well) was fracture
      stimulated on the Frost National Bank Deep Prospect. During initial production
      tests, the well produced more than one million cubic feet of gas and
      approximately one thousand barrels of water per day. The operator, Bayou City,
      has elected to temporarily suspend the McLean #1 Well pending further
      evaluation.





Bayou
      City and its partners are evaluating a purchase of 3-D seismic data covering
      the
      entire Prospect acreage. The McLean #1 Well is part of an overall position
      of
      2,961 acres in Live Oak County owned by Bayou City and its partners. We have
      earned a 12.5% working interest in the entire prospect acreage through our
      participation in the McLean #1 Well. To date, we have incurred $132,000 in
      drilling costs and $227,000 in completion costs related to this
      prospect.





On
      November 16, 2006 a drilling contract was executed relative to the Zodiac II
      Prospect. Drilling operations on the 18-1 Well in Calcasieu Parish, Louisiana
      commenced on December 7, 2006. Estimated gross drilling and completion costs
      for
      the 18-1 test well approximate $1.5 million and $793,000, respectively. Our
      share of the drilling cost was $503,299, which was paid by us on November 19,
      2006. The well reached the target depth on December 24, 2006 and was logged.
      The
      well encountered several prospectively productive zones of limited thickness
      but
      it was consequently determined to be non-commercial. Consequently, a decision
      was made to plug and abandon the well and not to pursue completion
      operations.





Bayou
      City, as the operator of the Jaboncillo Windmill Prospect, was unable to reach
      the resolution of a land/lease issue involving the Jaboncillo Windmill Prospect.
      Subsequently, the lease acquired by Bayou City on behalf of its partners,
      expired. As a result, the Jaboncillo Windmill Prospect will not be drilled.
      We
      incurred $20,375 in prospect costs related to the Jaboncillo Windmill Prospect.





*Savant
      Agreement*





On
      November 22, 2006 we executed a Letter Agreement with Savant Alaska LLC (the
      “Savant Agreement”). Savant Alaska LLC (“Savant”) holds leases for the
      exploration and production of oil and natural gas in an area of Alaska that
      is
      contiguous to certain of our Alaskan interests. Savant plans to commence
      drilling of a test well at its Kupcake Prospect during the first quarter of
      2008. Previously, it was Savant’s intention to drill the test well prior to
      March 15, 2007.





Under
      the
      terms of the Savant Agreement, we will pool our leasehold interests with Savant
      on a net acreage basis and jointly drill the test well. Working interests within
      the pooled area will approximate 91.5% for Savant and 8.5% for us. Net revenue
      interests will be equalized at 78.33%. Savant will be the operator of the pooled
      area.





The
      dry
      hole cost of the test well is estimated to be $13,353,000. Should the test
      well
      be prospective, there is a requirement for additional testing. The testing
      cost
      is estimated to be $2,225,000. It is anticipated that drilling will take 32
      days
      with the testing portion of the program requiring an additional 13 days. Our
      share of the dry hole cost is estimated to be $1,120,000 and our share of the
      testing cost is estimated to be $188,000. These costs may be lowered as the
      operator is actively pursuing additional partners for the project.




19




**ITEM
      6.**  **EXHIBITS**





(a)  Exhibits.


Exhibit
                  No.
              
              Description31.1
              
              Rule
                  13(a)-14(a)/15(d)-14(a) Certification of Principal Executive
                  Officer31.2
              
              Rule
                  13(a)-14(a)/15(d)-14(a) Certification of Principal Financial
                  Officer32.1
              
              Rule
                  1350 Certification of Chief Executive Officer32.2
              
              Rule
                  1350 Certification of Chief Financial
                  Officer





**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




TRUE
              NORTH ENERGY
              CORPORATIONDated:
              March 13, 2007
            By:
            /s/
              John
              FolnovicJohn
              FolnovicPresident,
              Chief
              Executive Officer


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