<PAGE>

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

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

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

                  For the quarterly period ended JUNE 30, 2008
                                                 -------------

                                       OR

[ ] 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.
                 (Name of Small Business Issuer in Its Charter)

                                                           26-2590455
                  NEVADA                               (Small Business Issuer
         (State of Incorporation)                   I.R.S. Employer I.D. Number)

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

                                 (985) 535-8500
                (Issuer's Telephone Number, Including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 last 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
the definitions of "large accelerated filer, "accelerated filer,"
"non-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 August 14, 2008, there were
26,948,036 shares of Common Stock, $.001 par value per share, outstanding.


<PAGE>


                         PART I - FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS

Balance Sheets                                                            1
Statements of Operations                                                  2
Statements of Cash Flows                                                  3

NOTES TO FINANCIAL STATEMENTS                                             5



<PAGE>

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

                                        BALANCE SHEETS
                                   (STATED IN U.S. DOLLARS)

                                                                  JUNE 30          MARCH 31
                                                                    2008              2007
                                                                  UNAUDITED         Audited
                                                                 -----------      -----------

ASSETS

CURRENT
     Cash and cash equivalents                                   $   345,986      $     3,574
     Prepaid expenses and deposits                                     4,710            1,898
                                                                 -----------      -----------
                                                                 $   350,696      $     5,472

 Investment                                                        1,500,000               --

 Other Equipment
     Office Equipment                                                 92,873               --
     Less: Accumulated Depreciation                                   (7,739)              --
                                                                 -----------      -----------
                                                                      85,134               --
                                                                 -----------      -----------

                                                                   1,935,830            5,472
                                                                 ===========      ===========

LIABILITIES

CURRENT
     Accounts payable and accrued liabilities                    $   288,305      $     7,942
                                                                 -----------      -----------

STOCKHOLDERS' (DEFICIENCY) EQUITY

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:
     24,034,500 common shares                                         24,035           24,035

ADDITIONAL PAID-IN CAPITAL                                           131,540          131,540

SHARE SUBSCRIPTION RECEIVED                                        1,864,444               --

DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE                    (372,494)        (158,045)
                                                                 -----------      -----------
                                                                   1,647,525           (2,470)
                                                                 -----------      -----------

                                                                 $ 1,935,830      $     5,472
                                                                 ===========      ===========


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


                                      1

<PAGE>


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

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


                                                                                              CUMULATIVE
                                                                                              PERIOD FROM
                                                                                               INCEPTION
                                                                                               MARCH 23
                                                                QUARTER ENDED                   2004 TO
                                                                   JUNE 30                      JUNE 30
                                                             2008             2007               2008
                                                         ------------      ------------      ------------

REVENUE                                                  $         --      $         --      $         --
                                                         ------------      ------------      ------------

EXPENSES
     Advertising                                                  211                --               253
     Consulting                                                30,000                --            35,500
     Filing fees                                                7,562                --            11,562
     Management salaries                                      121,027                --           121,027
     General and administrative                                 2,467                35             4,024
     Interest and bank charges                                    500                43               995
     Mineral property acquisition and exploration                  --                --
                                                                                                   44,503
     Office expenses                                            2,346                --             2,411
     Professional fees                                         32,476             1,706           132,871
     Promotion and entertainment                                   --                --               954
     Depreciation                                               7,739                --             7,739
     Travel                                                    10,394                --            15,559
                                                         ------------      ------------      ------------
                                                              214,722             1,784           377,398
                                                         ------------      ------------      ------------

LOSS BEFORE OTHER INCOME                                     (214,722)           (1,784)         (377,398)

OTHER INCOME                                                      273               294             4,904
                                                         ------------      ------------      ------------

NET LOSS FOR THE PERIOD                                  $   (214,449)     $     (1,490)     $   (372,494)
                                                         ============      ============      ============

BASIC AND DILUTED LOSS PER COMMON SHARE                   $      (0.00)    $      (0.00)
                                                          ============     ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING       24,034,500         8,011,500
                                                         ============      ============



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

                                                   2
<PAGE>


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

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

                                                                                                               CUMULATIVE
                                                                                                              PERIOD FROM
                                                                                                                INCEPTION
                                                                                                                MARCH 23
                                                                                   QUARTER ENDED                   2004 TO
                                                                                       JUNE 30                    JUNE 30
                                                                                2008             2007              2008
                                                                             -----------      -----------      -----------

CASH FLOW PROVIDED BY (USED IN):

OPERATING ACTIVITIES
     Net loss for the period                                                 $  (214,449)          (1,490)     $  (372,494)

     Adjustments to reconcile net (loss) to net cash generated (used) in
     operating activities:

          Depreciation                                                             7,739               --            7,739

     Changes in operating assets and liabilities:
         Prepaid expenses                                                         (2,812)              --           (4,710)
         Accounts payable and accrued liabilities                                280,363           (1,741)         288,305
                                                                             -----------      -----------      -----------
                                                                                  70,841             (251)         (81,160)
                                                                             -----------      -----------      -----------

 CASH FLOWS FROM (USED BY) INVESTING ACTIVITIES
     Investment                                                               (1,500,000)              --       (1,500,000)
     Purchase of office equipment & software                                     (92,873)              --          (92,873)
                                                                             -----------      -----------      -----------
     NET CASH USED IN INVESTING ACTIVITIES                                    (1,592,873)              --       (1,592,873)
                                                                             -----------      -----------      -----------


                                                   3

<PAGE>


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

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

                                                    (Continued)


CASH FLOWS FROM FINANCING ACTIVITIES
     Issue of capital stock                                           --              --          155,575
     Share subscription received                               1,864,444              --        1,864,444
                                                             -----------     -----------      -----------
                                                               1,864,444                        2,020,019
                                                             -----------     -----------      -----------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FOR THE
  PERIOD                                                         342,412            (251)         345,986

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                                                   3,574          32,045               --
                                                             -----------     -----------      -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                     $   345,986     $    32,296      $   345,986
                                                             ===========     ===========      ===========


CASH AND CASH EQUIVALENTS ARE COMPRISED OF:
     Cash                                                    $   349,560     $     1,871
     Short term deposit                                               --          30,425
                                                             -----------     -----------

                                                             $   349,560     $    32,296
                                                             ===========     ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Interest paid                                           $        --     $        --      $        --
     Income taxes paid                                       $        --     $        --      $        --
                                                             ===========     ===========      ===========

NON-CASH FINANCING ACTIVITY:
     Stock dividend                                          $        --     $        --      $    16,023
                                                             ===========     ===========      ===========


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

</TABLE>

                                                   4
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

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

1.    BASIS OF PRESENTATION

      The unaudited financial statements as of June 30, 2008 included herein
      have been prepared without 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, all adjustment (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 three months ended June 30, 2008 are
      not indicative of the results that may be expected for the year.

1.    OPERATIONS AND GOING CONCERN

      Organization

      The Company was incorporated in the State of Nevada, U.S.A., on March 23,
      2004. The year end of the Company is 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 exploration stage since its formation and was primarily engaged in the
      acquisition and exploration of mining claims. Upon location of a
      commercial minable reserve, the Company expects to actively prepare the
      site for its extraction and enter a development stage. 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.


      As shown in the accompanying financial statements, the Company has
      incurred a net loss of $372,494 for the period from March 23, 2004
      (inception) to June 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 mineral properties.
      Management has plans to seek additional capital through a private
      placement and public offering of its common stock. 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 in existence.


                                       5
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

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

2.   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 judgement.

     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)  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 exploring mineral
         properties. 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

     c)  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.

     d)  Exploration Costs

         Mineral exploration costs are expensed as incurred.

     d)  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


                                       6
<PAGE>

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

                          NOTES TO FINANCIAL STATEMENTS

                             JUNE 30, 2008 AND 2007
                            (Stated in U.S. Dollars)

      d) Property and Equipment

         Property and equipment, comprised of office furniture and computer
         software, are recorded at cost and amortized using the straight balance
         method at 33.33% per annum.


     e)  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.

     f)  Foreign Currency Translation

         The Company's functional and reporting currency is the U.S. dollar.
         Transactions in foreign currency are translated into U.S. dollars as
         follows:

         i)    monetary items at the rate prevailing at the balance sheet date;

         ii)   non-monetary items at the historical exchange rate;


         iii)  revenue and expense at the average rate in effect during the
               applicable accounting period.

     g)  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.

     h)  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.


                                       7
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     i)  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.

     j)  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 March 31, 2008, the Company
         has no stock equivalents that were anti-dilutive and excluded in the
         earnings per share computation.

j)       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.




                                       8
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

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



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     l)  Environmental Protection and Reclamation Costs

         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

     m)  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.

     n)  Comprehensive Income

         The Company has adopted SFAS No. 130 ("SFAS 130"), "Reporting
         Comprehensive Income", which establishes standards for reporting and
         display of comprehensive income, its components and accumulated
         balances. When applicable, the Company would disclose this information
         on its Statement of Stockholders' Equity. Comprehensive income
         comprises equity except those resulting from investments by owners and
         distributions to owners.

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 for a purchase consideration of
         $1.500, 000. Concurrently, on June 26, 2008, the Company entered into a
         Property Purchase Agreement with Safeland Storage L.L.C. and it's
         wholly owned subsidiary company, 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 closing of this
         agreement is 120 days from June 26, 2008.



                                      9
<PAGE>


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

                          NOTES TO FINANCIAL STATEMENTS

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


4.   MINERAL CLAIM INTEREST

     On June 27, 2008, the Company abandoned its mining claim in British
     Columbia, Canada, with no further costs or obligations to the Company. The
     decision to abandon the claim was based upon an independent geologist's
     report indicating that it is unlikely that the claim contains enough volume
     of mineralized materials to form an economic body of mineralization. The
     former President held, on behalf of the Company, 100% interest in two
     mineral claims located in the Rock Creek area of the Greenwood Mining
     Division, British Columbia, Canada. Exploration activity of one of the
     mineral claims was suspended due to government regulation. In fiscal year
     2005, the Company spent $40,000 on the exploration of the Rock Creek, BC
     Project.


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.

6.   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 cumulative cash
     remuneration of $792,500 per annum. Non-cash remuneration includes the
     granting of 821,036 shares of common stock at $0.01, which vest at the end
     of six months of employment (issued July 7, 2008) and 2,303,278 common
     stock options with exercise prices ranging from $2.20 to $3.77, which
     options shall vest over the term of the employment agreement.

     On June 9, 2008 the Company entered into a consulting Agreement (the
     "Agreement") with Lotus Fund Inc. for operational, financial and management
     services. Per the 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 Agreement is renewable for a further period of one year
     at the option of the Company.




                                      10
<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 our 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 exploration 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 exploration.

OVERVIEW

      Until we changed our business plan in May 2008, we were exploring one
property containing two claims relating to mineral rights in British Columbia,
Canada. The claims were initially purchased in March 2004 by our former
president, Robert Wayne Morgan, for $1,118. However, we suspended exploration
pending a resolution of the Ministry of Environment's condemnation plan. No
resolution was ever received, and the board of directors abandoned the claims in
June 2008.

      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. 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") for the
purchase of 435 acres of land in St. John the Baptist Parish, Louisiana, from
Safeland, for a purchase price of $20,500,000.00. The closing of the Purchase
and Sale Agreement is to take place within 120 days from June 26, 2008. We are
exploring several options to raise money to close the acquisition, 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 any such funds.

      Safeland has completed preliminary engineering and design and obtained
state-regulated environmental permits for the facility. We intend to develop the
facility in three phases with a resulting total of approximately 10 million
barrels of capacity. Phase I is anticipated to be approximately 3.5 million
barrels of storage with an expected completion date of the first quarter of
2010. Phase II is expected to add 3.4 million barrels coming on line in the
first quarter of 2011, followed by phase III with 3.0 million barrels in the
first quarter of 2012. Our proposed site is located 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

                                   11
<PAGE>

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.

      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
August 15, 2008, we have not entered into any definitive agreements to raise any
portion of such amount, although we are exploring alternatives to do so.

     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 containing
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 produce blending, imports
offloading and pipeline staging.

     The importance of bulk terminal facilities in the refined product segment
supply chain has grown significantly over the past decade as the nation's
product supply patterns have become increasingly more complex. The number of
operating refineries in the U.S. has declined in the 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 (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, truck racks, etc. 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.

RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2008

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


                                       12
<PAGE>

THREE MONTHS ENDED JUNE 30, 2008 COMPARED TO THREE MONTHS ENDED JUNE 30, 2007


                                         ---------------------------
                                         Three months ended June 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                          214,722          1,784
                                         ---------      ---------
     Total costs and expenses              214,722          1,784
                                         ---------      ---------
     Operating loss                       (214,722)        (1,784)
   Interest expense                              0              0
   Interest and dividend income                273            294
   Other income, net                             0
   Equity in loss of affiliates                  0
                                         ---------      ---------
Net Loss/Gain                            $(214,449)     $  (1,490)
                                         =========      =========

REVENUES. We had no revenues for the three months ended June 30, 2008 or the
three months ended June 30, 2007. We had no operational activity during the
first quarter of fiscal years 2007 or 2008. We currently expect to begin
generating revenues in the 1st quarter of 2010.

OTHER INCOME. Other income was $273 in the three months ended June 30, 2008
compared to $294 in the three months ended June 30, 2007. Other income for both
periods is from interest generated from bank accounts.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $214,722 in the three months ended June 30, 2008
compared to $1,784 in the three months ended June 30, 2007. This increase of
over $212,000 was primarily attributable to Blackwater Midstream hiring members
of its management team during May and June 2008 which accounts for approximately
56% of total SG&A Expenses. Other significant expenses during this period were
professional fees of over $60,000, accounting for approximately 29% of total
SG&A expenses and travel related expenses of over $10,000, accounting for about
5% of total SG&A expenses.


                                       13
<PAGE>

NET LOSS

Net loss was $214,449 in the three months ended June 30, 2008 compared to $1,490
in the three months ended June 30, 2007. This increase in the period's loss was
attributable to start up expenses related to the new line of business and
management terms.

LIQUIDITY AND CAPITAL RESOURCES

      We issued 5,000,000 shares of common stock through a Section 4(2) offering
in March 2004. This was accounted for as a purchase of shares of common stock.

      We issued 3,011,500 shares of common stock through our public offering
declared effective on February 11, 2005 and raised $150,575. This was accounted
for as a purchase of shares of common stock.

      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 "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 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 Offering, in addition to 83,700 Shares.

      As of June 30, 2008, our total assets were $1,935,830 and our total
liabilities were $288,305. We had cash and cash equivalents of $345,986.

      At June 30, 2008, we had working capital of $362,391 compared to a
working capital of $23,055 June 30, 2007. Operating Expenses for the quarter
ended June 30, 2008 were $214,722. Our operating expenses consisted primarily of
management salaries, professional fees and other administrative expenses.

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.

      EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES - Our Principal Executive
Officer and Principal Financial Officer, after evaluating the effectiveness of
our disclosure controls and procedures (as defined in Rule 13a-15(e) and
15d-15(e) under the Exchange Act) as of the end of the period covered by this
report, have concluded that, based on the evaluation of these controls and
procedures, that our disclosure controls and procedures were effective.


                                       14
<PAGE>

        There have been no changes in our internal controls over financial
reporting that occurred during the quarter ended June 30, 2008 that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.


                           PART II. OTHER INFORMATION


ITEM 1.       LEGAL PROCEEDINGS

None.

ITEM 1A.      RISK FACTORS

There have been no changes to our risk factors from those disclosed in our
Annual Report on Form 10-KSB filed on June 15, 2008, for the year ended March
31, 2008.

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

Unregistered sales of Equity Securities

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 restricted shares of its
common stock, par value $.001 per share (the "Shares"), at a purchase price of
$2.00 per share (the "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. 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 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 Offering, in addition to 83,700 shares of restricted common stock.

Use of Proceeds

On February 11, 2005, the Securities and Exchange Commission declared our Form
SB-2 registration statement effective (SEC file no. 333-116229). Under the terms
of our Form SB-2 registration statement, we offered, without the assistance of
an underwriter, up to a total of 4,000,000 shares of common stock on a
self-underwritten basis, 2,000,000 shares minimum, 4,000,000 shares maximum. The
offering price was $0.05 per share. On April 5, 2005, we completed our public
offering by raising $150,575 and sold 3,011,500 shares of our common stock at an
offering price of $0.05 per share. From the period February 11, 2005 to June 30,
2008, we spent the following:


     Consulting Services                      $      31,750
     Core Drilling                            $       5,400
     Analyzing Samples                        $       5,350
     Accounting                               $      34,818
     Legal                                    $      24,217
     Services                                 $        none
     --------------------------------------------------------
     TOTAL                                    $     101,535
     ========================================================


ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

None.


                                       15
<PAGE>

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.      OTHER INFORMATION.

(a) On August 12, 2008, by unanimous written consent, the Company's Board of
Directors appointed Mr. Mathijs van Houweninge to the position of director of
the Company to fill a vacancy. The acceptance by Mr. Mathijs van Howeninge as a
director of the Company is effective as of August 12, 2008.

         Mr. van Houweninge has served as the managing partner of Falcon
Capital, LLP ("Falcon"), a Venture Capital firm based in London, since February
2008. In 1990, Mr. Houweninge started iEffective, a Netherlands-based software
company specializing in consultancy and software development for the financial
industry which was sold in 2000. He also serves on the board of directors of
SkyPostal, Inc., Cybercity, Inc. IonIP bv, and a school in Utrecht in the
Netherlands. Mr. van Houweninge studied at Utrecht University in the Netherlands
during the 1990's in Computer Science, specializing in artificial intelligence.

         Falcon Capital is an affiliate of Falcon International Consulting
Limited, the Company's financial advisor, and holder of 83,700 shares of the
Company's common stock. During 2008, the Company paid Falcon International
Consulting Limited approximately $418,000 and 83,700 shares of common stock as
commissions earned during the Company's $5 million private placement of common
stock. As managing partner of Falcon Capital, Mr. van Houweninge can influence
how Falcon votes and disposes of its stock in the Company and is
considered a Company affiliate. Additionally, as managing partner of Falcon, Mr.
van Houweninge has a direct financial interest in Falcon's past and future
financial arrangements with the Company.



ITEM 6.      EXHIBITS. The following documents are included herein:

EXHIBIT NO.    DOCUMENT DESCRIPTION
--------------------------------------------------------------------------------

4.1            Form of private placement common stock purchase agreement

10.1           Services Agreement with Christopher Wilson dated May 5, 2008 (1)

10.2           Employment Agreement with Michael Suder, dated May 7, 2008 (2)

10.3           Employment Agreement with Dale T. Chatagnier, dated May 14, 2008
               (3)

10.4           Placement agent's agreement with Falcon International Consulting
               Limited, dated May 28, 2008

10.5           Membership Interest Purchase Agreement with Safeland Storage, LLC
               (4)

10.6           Purchase and Sale Agreement between Safeland Storage LLC, Future
               Energy Investments and Blackwater Midstream Corp., dated June 25,
               2008 (5)

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).


                                       16
<PAGE>

99.1           Press release announcing private placement


-------------------------
(1)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K filed May 6, 2008

(2)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K filed May 9, 2008

(3)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K filed May 16, 2008

(4)      Previously filed herewith as exhibit 10.6 to the Company's Annual
         Report on Form 10-KSB filed July 15, 2008.

(5)      Previously filed herewith as exhibit 10.7 to the Company's Annual
         Report on Form 10-KSB filed July 15, 2008.



                                       17
<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 August, 2008.

                                            BLACKWATER MIDSTREAM CORP.
                                            (REGISTRANT)

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


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




<PAGE>


                                  EXHIBIT INDEX


EXHIBIT NO.    DOCUMENT DESCRIPTION
--------------------------------------------------------------------------------

4.1            Form of private placement common stock purchase agreement

10.1           Services Agreement with Christopher Wilson dated May 5, 2008 (1)

10.2           Employment Agreement with Michael Suder, dated May 7, 2008 (2)

10.3           Employment Agreement with Dale T. Chatagnier, dated May 14, 2008
               (3)

10.4           Placement agent's agreement with Falcon International Consulting
               Limited, dated May 28, 2008

10.5           Membership Interest Purchase Agreement with Safeland Storage, LLC
               (4)

10.6           Purchase and Sale Agreement between Safeland Storage LLC, Future
               Energy Investments and Blackwater Midstream Corp., dated June 25,
               2008 (5)

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).

99.1           Press release announcing private placement

--------------

(1)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K filed May 6, 2008

(2)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K filed May 9, 2008

(3)      Previously filed as an exhibit to the Company's Current Report on Form
         8-K filed May 16, 2008

(4)      Previously filed herewith as exhibit 10.6 to the Company's Annual
         Report on Form 10-KSB filed July 15, 2008.

(5)      Previously filed herewith as exhibit 10.7 to the Company's Annual
         Report on Form 10-KSB filed July 15, 2008.