**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**


(Mark
      One)




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





For
      the
      quarterly period ended December 31, 2006


OR


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





For
      the
      transition period from _____ to ______


Commission
      file number 000-50929





**Ignis
                Petroleum Group, Inc.**(Exact
                name of small business issuer as specified in its charter)





Nevada(State
                or other jurisdiction of incorporation or organization)




16-1728419(IRS
                Employer Identification No.)




100
                Crescent Court 7thFloor Dallas, Texas 75201(Address
                of principal executive offices)




214-459-8188(Issuer’s
                telephone number)





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 past 90 days.





Yes x No o





Indicate
      by check mark whether the registrant is a shell company (as defined in rule
      12
      b-2 of the Exchange Act).





Yes o 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 February 13, 2007, the registrant
      had
      issued and outstanding 51,699,035 shares of common stock.







1





Page
                No.PART
                I -FINANCIAL INFORMATIONItem
                1. Financial StatementsCondensed
                Consolidated Balance Sheet at December 31, 2006
                (unaudited)
            3Condensed
                Consolidated Statement of Operations for the Three
                Months Ended December 31, 2006 and 2005 (unaudited)
            4Condensed
                Consolidated Statement of Cash Flows for the Three
                Months ended December 31, 2006 and 2005 (unaudited)
            5Selected
                Notes to the Condensed Consolidated Financial
                Statements (unaudited)
            6Item
                2. Management's Discussion and Analysis or Plan of
                Operation
            8Item
                3. Controls and Procedures
            12PART
                II - OTHER INFORMATIONItem
                2. Unregistered sale of equity securities and use of
                proceeds
            13Item
                6. Exhibits.
            13SIGNATURES
            14




2
 *Table
          of Contents*


**PART
      I - FINANCIAL INFORMATION**




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




**IGNIS
      PETROLEUM GROUP, INC.**


**CONSOLIDATED
      BALANCE SHEET**


**(Unaudited)**




**ASSETS**
            
            December
                31, 2006Current
                assets:Cash
                and cash equivalents
            
            $
            1,033,404Accounts
                receivable
            
            
            199,324Prepaid
                expenses and other current assets
            
            
            12,700Total
                current assets
            
            
            1,245,428**Oil
                and Gas Properties (Successful Efforts Method)**
            
            
            2,608,174Less:
                Allowance for Impairment
            
            
            (259,110
            )Less
                Accumulated DD&A
            
            
            (1,004,672
            )Net
                Property and equipment
            
            
            1,344,392Fixed
                assets and other, net
            
            
            550,366**TOTAL
                ASSETS**
            
            $
            3,140,186**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)**Current
                liabilities:Accounts
                payable and accrued expenses
            
            $
            1,376,759Current
                portion of long-term debt
            
            
            360,000Total
                current liabilities
            
            
            1,736,759**Long-term
                liabilities:**Long-term
                debt
            
            
            3,416,204Derivative
                liability
            
            
            3,561,860Warrant
                liability
            
            
            3,694,293Asset
                Retirement Obligation
            
            
            38,049Total
                long-term liabilities
            
            
            10,710,406**Commitments
                and contingencies**
            
            
            -Stockholders'
                equity (deficit):Preferred
                stock, $0.001 par value, 5,000,000 shares authorized none issued
                and
                outstanding
            
            
            -Common
                stock, $0.001 par value, 300,000,000 shares authorized 50,908,276
                issued
                and outstanding
            
            
            50,908Additional
                paid-in capital
            
            
            7,793,681Accumulated
                deficit
            
            
            (17,151,567
            )Total
                stockholders' equity (deficit)
            
            
            (9,306,978
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
            
            $
            3,140,186





See
      accompying notes to these unaudited financial statements.


3
 *Table
          of Contents*


**IGNIS
      PETROLEUM GROUP, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**(Unaudited)**





**Three
                Months Ended**
            
            **Six
                Months Ended****December
                31,**
            
            **December
                31,****2006**
            
            **2005**
            
            **2006**
            
            **2005****Operating
                Revenues:**
            
            $
            234,909
            
            $
            223,933
            
            $
            706,123
            
            $
            223,933**Operating
                expenses:**Lease
                operating expense
            
            
            9,325
            
            
            -
            
            
            9,325
            
            
            -Production
                and ad valorem taxes
            
            
            9,048
            
            
            -
            
            
            9,048
            
            
            -Depreciation,
                depletion and amortization
            
            
            204,839
            
            
            28,900
            
            
            674,671
            
            
            28,900Accretion
                of asset retirement obligation
            
            
            6,035
            
            
            -
            
            
            6,035
            
            
            -Exploration
                expenses, including dry holes
            
            
            229,110
            
            
            -
            
            
            428,412
            
            
            -General
                and administrative expenses
            
            
            671,458
            
            
            1,086,484
            
            
            1,154,473
            
            
            2,137,342Total
                operating expenses
            
            
            1,129,815
            
            
            1,115,384
            
            
            2,281,964
            
            
            2,166,242Income
                (loss) from operations
            
            
            (894,906
            )
            
            (891,451
            )
            
            (1,575,841
            )
            
            (1,942,309
            )Other
                income (expense)Gain/(loss)
                from valuation of derivative liability
            
            
            (316,117
            )
            
            -
            
            
            (957,047
            )
            
            -Interest
                expense
            
            
            (952,633
            )
            
            (1,800
            )
            
            (1,835,887
            )
            
            (29,417
            )(1,268,750
            )
            
            (1,800
            )
            
            (2,792,934
            )
            
            (29,417
            )**Net
                income/ (loss)**
            
            $
            (2,163,655
            )
            $
            (893,251
            )
            $
            (4,368,776
            )
            $
            (1,971,726
            )**Basic
                and diluted income (loss) per common share**
            
            $
            (0.04
            )
            $
            (0.02
            )
            $
            (0.09
            )
            $
            (0.04
            )**Weighted
                average number of common shares outstanding**
            
            
            50,488,361
            
            
            48,025,029
            
            
            50,284,647
            
            
            45,957,328





See
      accompanying notes to these unaudited financial statements


4
 *Table
          of Contents*


**IGNIS
      PETROLEUM GROUP, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Unaudited)**




**Six
                Months Ended December 31,****2006**
            
            **2005****Cash
                flow from operating activities**Net
                income/(loss)
            
            $
            (4,368,775
            )
            **$**
            (1,971,726
            )Adjustments
                to net loss not affecting cash:Depreciation
                and depletion
            
            
            541,391
            
            
            -Amortization
                of debt cost
            
            
            133,280
            
            
            -Loss
                from valuation adjustment of oil and gas properties
            
            
            428,192
            
            
            -Stock
                issued for compensation and services
            
            
            240,425
            
            
            1,468,000Amortization
                of discount of debentures
            
            
            1,244,318
            
            
            -Accretion
                of ARO expnse
            
            
            6,035Loss
                from valuation of derivatives
            
            
            957,047
            
            
            -Increase
                / decrease in current assets and liabilitiesIncrease
                in accounts receivable
            
            
            (143,542
            )
            
            (223,933
            )Decrease
                in prepaid expenses and other current assets
            
            
            175,801
            
            
            14,000Increase
                in accounts payable and accrued expenses
            
            
            327,265
            
            
            (252,530
            )**Cash
                used in operating activities**
            
            
            **(458,563**
            **)**
            
            **(966,189**
            **)****Cash
                flow from investing activities**Purchase
                of oil and gas properties
            
            
            119,395
            
            
            (889,322
            )**Cash
                (used) and from investing activities**
            
            
            **119,395**
            
            
            **(889,322**
            **)****Cash
                flow from financing activities**Issuance
                of common stock and warrants
            
            
            -
            
            
            1,800,000Proceeds
                from note payable
            
            
            500,000
            
            
            100,000Advance
                from related party
            
            
            -
            
            
            4,800**Cash
                provided by financing activities**
            
            
            **500,000**
            
            
            **1,904,800**Net
                increase in cash and cash equivalents
            
            
            160,832
            
            
            49,289Cash
                and cash equivalents at beginning of period
            
            
            872,572
            
            
            145,064**Cash
                and cash equivalents at end of period**
            
            **$**
            **1,033,404**
            
            **$**
            **194,353**Supplemental
                disclosure of cash flow information:Cash
                paid during the period for:Interest
            
            $
            -
            
            $
            -Income
                taxes
            
            $
            -
            
            $
            -Supplemental
                non-cash financing transactions:Conversion
                of notes payable and interest into equity
            
            $
            -
            
            $
            1,550,302Issuance
                of common stock for oil and gas property
            
            $
            -
            
            $
            1,550,302





See
      accompanying notes ot these unaudited financial statements


5
 *Table
          of Contents*


***IGNIS
      PETROLEUM GROUP, INC*** **.**


**NOTES
      TO FINANCIAL STATEMENTS**





1.
            BASIS
                OF PRESENTATION





The
      interim consolidated financial statements of Ignis Petroleum Group, Inc. are
      unaudited and contain all adjustments (consisting primarily of normal recurring
      accruals) necessary for a fair statement of the results for the interim periods
      presented. Results for interim periods are not necessarily indicative of results
      to be expected for a full year or for previously reported periods due in part
      to
      the volatility in prices for crude oil and natural gas, the timing of
      acquisitions, interruption in production and the success of drilling activity.
      You should read these consolidated interim financial statements in conjunction
      with the audited consolidated financial statements and notes thereto included
      in
      Ignis Petroleum Group’s Form 10KSB/A dated June 30, 2006.




2.
            FINANCIAL
                OBLIGATIONS





In
      connection with the second amended and restated securities purchase agreement,
      we also entered into a second amended and restated registration rights agreement
      providing for the filing, within five days of April 28, 2006, of a registration
      statement with the Securities and Exchange Commission registering the common
      stock issuable upon conversion of the secured convertible debentures and
      warrants. We are obligated to use our best efforts to cause the registration
      statement to be declared effective no later than 130 days after filing and
      to
      insure that the registration statement remains in effect until the earlier
      of
      (i) all of the shares of common stock issuable upon conversion of the secured
      convertible debentures have been sold or (ii) January 5, 2008. In the event
      of a
      default of our obligations under the registration rights agreement, which
      includes, among other things, our failure, to file the registration statement
      no
      later than May 3, 2006, or the failure of our registration statement to be
      declared effective by September 5, 2006, we are required pay to Cornell Capital,
      as liquidated damages, for each month that the registration statement has not
      been filed or declared effective, as the case may be, either a cash amount
      or
      shares of our common stock equal to 2% of the liquidated value of the secured
      convertible debentures. We have accrued a liability of $400,000 at December
      31,
      2006 in connection with this provision.




3.
            ASSET
                RETIREMENT OBLIGATION




Our
        financial statements reflect the provisions of Statement of Financial Accounting
        Standards No. 143, Accounting for Asset Retirement Obligations. Our asset
        retirement obligation primarily represents the estimated present value of
        the
        amount we will incur to plug, abandon and remediate our producing properties
        at
        the end of their productive lives, in accordance with applicable state laws.
        We
        determine our asset retirement obligation by calculating the present value
        of
        estimated cash flows related to the liability. We elected not to recognize
        asset
        retirement obligation during prior periods as the amount was immaterial and
        did
        not materially affect our obligations or misstate income. At December 31,
        2006,
        we recorded a liability for asset retirement obligation of $38,049, of which
        all
        is considered long term. We capitalized $32,014 and recorded an accretion
        expense of $6,035.


6
 *Table
          of Contents*




**2006**
            
            **2005**Asset
                retirement obligation at October 1,
            
            
            32,014Liabilities
                incurred:Liabilities
                assumed
            
            
            -
            
            
            -Liabilities
                settled
            
            
            -
            
            
            -Accretion
                expense
            
            
            1,898
            
            
            -Cummulative
                effect adjustment
            
            
            4,137
            
            
            -Asset
                retirement obligation at December 31, 2006
            
            
            38,049
            
            
            -


4.
              NET
                  LOSS PER COMMON SHARE


Basic
      net
      income (loss) per common share is computed by dividing the net income
      attributable to common shareholders by the weighted average number of shares
      of
      common stock outstanding during the period. Any stock options and conversion
      of
      debt were not considered for the calculation.




The
      weighted average shares used in the basic loss per common share computations
      for
      the six months ended December 31, 2006 and 2005 were 50,284,647 and 45,957,328
      shares, respectively. The weighted average shares used in the basic loss per
      common share computations for the three months ended December 31, 2006 and
      2005
      were 50,448,361 and 48,025,029 shares, respectively.




5.
              COMMITMENTS
                  AND CONTINGENCIES




**Litigation**




We
      have
      no pending or threatened lawsuits.




**Other**




To
      date,
      our expenditures to comply with environmental or safety regulations have not
      been significant and are not expected to be significant in the future. However,
      new regulations, enforcement policies, claims for damages or other events could
      result in significant future costs.


6.
              SUBSEQUENT
                  EVENTS


On
        January 19, 2006,
        Cornell Capital Partners LP executed a Notice of Conversion in accordance
        with
        and pursuant to their Securities Purchase Agreement. They elected to convert
        convertible debentures into shares of our common stock, for $50,000 of the
        principal amount of debentures dated January 5, 2006. The number of shares
        issued was 422,654 at a conversion price of $.1183.




On
      February 7, 2007, we finalized out negotiation with Petrofinanz GmbH
      pursuant to which Petrofinanz will (i) convert all of the debt represented
      by
      the Amended and Restated Loan Agreement dated August 28, 2006, between us,
      as
      the borrower, and Petrofinanz as the lender in the original principal amount
      of
      $600,000, plus accrued interest of $24,907 into 3,021,794 shares of our common
      stock at a conversion price of $0.2068 per share, such price representing a
      6%
      discount to the closing bid price of our common stock on February 6, 2007;
      and
      (ii) purchase an additional $600,000 of our common stock at a price to be
      determined, such price representing a 6% discount to closing bid price of our
      common stock in three tranches of $200,000 each on the following dates: February
      9, 2007, March 9, 2007, and April 9, 2007. As of February 12, 2007 we received
      the first tranch payment of $200,000 pending receipt of the executed, negotiated
      agreement. Upon receipt of the negotiated agreement, shares will be issued
      in accordance with the terms of the agreement.


7
 *Table
          of Contents*




***Item
                2.***
            **Management’s
                Discussion and Analysis or Plan of
                Operation.**




**Forward-Looking
      Statements**




We
      are
      including the following cautionary statement in this Form 10-QSB for any
      forward-looking statements made by, or on behalf of, us. Certain statements
      contained herein and other materials we file with the Securities and Exchange
      Commission are forward-looking statements within the meaning of Section 27A
      of
      the Securities Act of 1933, as amended and Section 21E of the Securities Act
      of
      1934, as amended and, accordingly, involve risks and uncertainties which could
      cause actual results or outcomes to differ materially from those expressed
      in
      the forward-looking statements. Forward-looking statements include statements
      concerning plans, objectives, goals, strategies, expectations, future events
      or
      performance and underlying assumptions and other statements which are other
      than
      statements of historical facts. Forward looking statements are accompanied
      by
      words such as “may”, “will”, “could”, “should”, “anticipate”, “believe”,
“budgeted”, “expect”, “intend”, “plan”, “project”, “potential”, “estimate”, or
“future” or variations thereof or similar statements. Our expectations, beliefs
      and projections are expressed in good faith and are believed by us to have
      a
      reasonable basis, including without limitation, management’s examination of
      historical operating trends, data contained in our records and other data
      available from third parties, but we cannot assure you that management’s
      expectations, beliefs or projections will result or be achieved or accomplished.




**Plan
      of Operation**




Overall
      Strategy




We
      are a
      growing independent oil and gas company engaged in the acquisition and
      development of mature fields with established oil and gas reserves. We believe
      significant opportunities exist primarily because the major energy companies
      continue to focus their attention and resources toward the discovery and
      development of large fields. Moreover the major companies have higher internal
      overhead costs that prevent them from fully developing production from existing,
      mature fields. And, the recent economics of the oil and gas market continues
      to
      hold high pricing. These conditions provide ample opportunities for smaller
      independent companies to purchase and exploit mature U.S. fields. We expect
      that
      there will be competition for such properties.




We
      will
      continue to target potential acquisition candidates in a disciplined manner.
      By
      adhering to our disciplined approach, we expect to prevent overpaying for
      acquisition and development opportunities.




Our
      competitive advantage is our highly talented team of professionals with
      executive, exploration, engineering and financial experience. We intend to
      employ personnel with specialized geological, geophysical and other technical
      expertise to carry out the most crucial value-added functions. We seek to
      attract and retain a high-quality workforce by offering an entrepreneurial
      team-oriented environment, equity ownership and performance-based compensation
      programs.




Our
      strategy is to identify and acquire prospects with attractive return potential
      and significant in-field development and expansion opportunities. We hope to
      accomplish this through a disciplined approach and a rigorous process of
      screening and evaluating projects. We seek to apply the most advanced
      technologies and methods with staff, consultants, and operating partners having
      proven track records. Our strategy emphasizes the following core
      elements:




8
 *Table
          of Contents*




o
            Focused
                geography;


o
            Experienced
                team;


o
            Prospects
                with attractive risk to reward
                balance;


o
            Control
                over value-added activities; and


o
            Conservative
                financial and cost structure.




Focused
      Geography




We
      intend
      to focus on specific geographic areas primarily along the onshore United States
      Gulf Coast. We believe that substantial undiscovered reserves remain in this
      region. Because of significant existing 3-D seismic data, numerous industry
      participants are currently engaged in the reprocessing and review of this data
      to identify prospective acreage. In addition, many of the major and large
      independent oil companies are focusing less on such areas as they are engaged
      in
      seeking “elephant” fields in the offshore and international areas. At present we
      own several prospects and we intend to initially focus our resources primarily
      to develop those opportunities. In the future, we intend to generate prospects
      both internally and in partnership with others to take advantage of
      area-specific expertise gained by exploration specialists over the past few
      decades.




We
      believe that a conservative financial structure is crucial to consistent,
      positive financial results. This structure benefits during cyclical swings
      in
      the industry and enables us to move quickly to take advantage of acquisition
      and
      drilling opportunities. In order to maximize our financial flexibility while
      improving overall stockholder returns, we plan to maintain a conservative
      debt-to-capital ratio. We seek to fund most of our ongoing capital expenditures
      from  issuances
      of equity, access to capital markets, cash flow from operations, and reserving
      our debt capacity for potential investment opportunities that will profitably
      add to our program. Part of a sound financial structure is constant attention
      to
      costs, both operating and overhead. We will work to control our operating and
      overhead costs, and institute a formal, disciplined capital budgeting process.
      We will, wherever practicable, use partnerships to leverage our resources and
      enhance our ability to meet objectives.




On
      September 27, 2006, through our wholly-owned subsidiary, Ignis Barnett Shale,
      LLC, we entered into a purchase and sale agreement with W.B. Osborn Oil &
Gas Operations., Ltd. and St. Jo Pipeline, Limited to acquire 45% of W.B. Osborn
      Oil & Gas Operations and St. Jo Pipeline’s interest in the acreage, oil and
      natural gas producing properties, and natural gas gathering and treating system
      located in the St. Jo Ridge Field in the North Texas Fort Worth Basin. To fund
      Ignis Barnett Shale’s acquisition of the properties as contemplated by the
      Purchase Agreement, on November 15, 2006, we entered into an Amended and
      Restated Limited Liability Company Agreement of Ignis Barnett Shale with
      affiliates of Silver Point Capital, L.P. Under the terms of the LLC Agreement,
      we agreed to manage the day-to-day operations of Ignis Barnett Shale and the
      Silver Point affiliates agreed to fund 100% of the purchase price of the
      transaction and 100% of future acreage acquisitions and development costs of
      Ignis Barnett Shale to the extent approved by Silver Point. Ignis Barnett
      Shale’s budget and generally all material decisions affecting Ignis Barnett
      Shale are subject to the approval of Silver Point. Distributions from Ignis
      Barnett Shale will be made first to Silver Point until Silver Point has received
      a return of its aggregate capital contributions and a specified return on such
      contributions. Thereafter, we can earn up to 50% of the cash distributions
      after
      Ignis Barnett Shale meets performance criteria specified in the LLC
      Agreement.


9
 *Table
          of Contents*


The
      effective date of the above transaction was June 1, 2006. At June 1, 2006,
      there
      were 14 producing wells. As of February 5, 2007, 21 wells are on production,
      one
      well is drilling, and one well is awaiting completion. For the quarter ended
      December 31, 2006, net production to the Ignis Barnett Shale, LLC averaged
      92
      bopd and 722 mcfpd of gas. Cumulative gross production through September 2006
      from Osborn’s Barnett wells has been in excess of 460,000 barrels and 1.7 bcf of
      gas. Ignis Barnett Shale, LLC also derives revenue from joint ownership in
      a
      26-mile gas gathering and treating system that transmits a processes third-
      party gas in the area. Our goal is to continue to expand this system to service
      not only our wells, but additional third parties, as well. Three of our wells
      have been horizontally drilled, and only one of those is on production. Our
      plan
      calls for the drilling of 3 vertical and 8 horizontal wells in
      2007.





We
      will
      earn our share of equity upon Silver Point realizing a specified return under
      the terms of the Purchase and Sale Agreement. We have the opportunity to earn
      up
      to 50% equity in the partnership. Until such time as we begin to earn our equity
      share we are not allowed to consolidate the results of these operations into
      our
      own in accordance with EITF Abstracts, Issue No. 04-5, *Determining
      Whether a General Partner, or the General Partners as a Group, Controls a
      Limited Partnership or Similar Entity When the Limited Partners Have Certain
      Rights.* For the
      quarter ended December 31 2006, we have not earned our share of equity and
      therefore we have not recorded any financial transactions relating to this
      venture.




**Liquidity
      and Capital Resources**




We
      intend
      to finance acquisitions of oil and gas properties and drilling programs with
      combination of issuances of equity, access to capital markets, and cash flow
      from operations. We cannot guarantee that any additional equity financing will
      be available in sufficient amounts or on acceptable terms when needed If such
      financing is not available in sufficient amounts or on acceptable terms, our
      results of operations and financial condition bay be adversely affected. In
      addition, equity financing may result in dilution of existing stockholders
      and
      my involve securities that have rights, preferences, or privileges that are
      senior to our common stock.




For
      the
      year ended June 30, 2006, our auditors, in Note 2 of the Financial Statements
      from the Form 10-KSB/A, have noted that there is substantial doubt about our
      ability to continue as a going concern. Our existence is dependent upon
      management funding operations and raising sufficient capital. At this point
      in
      time it is impossible to state an amount of profitable operations and/or
      additional funding which we believe would remove the going concern
      opinion.




*Financing
      Activities*




On
      January 19, 2006, Cornell Capital Partners LP executed a Notice of Conversion
      in
      accordance with and pursuant to their Securities Purchase Agreement. They
      elected to convert convertible debentures into shares of our common stock,
      for
      $50,000 of the principal amount of debentures dated January 5, 2006. The number
      of shares issued was 422,654 at a conversion price of
      $.1183.





On
      February 7, 2007, we finalized our negotiation with Petrofinanz GmbH pursuant
      to
      which Petrofinanz will (i) convert all of the debt represented by the Amended
      and Restated Loan Agreement dated August 28, 2006, between us, as the borrower,
      and Petrofinanz as the lender in the original principal amount of $600,000,
      plus
      accrued interest of $24,907 into 3,021,794 shares of our common stock at a
      conversion price of $0.2068 per share, such price representing a 6% discount
      to
      the closing bid price of our common stock on February 6, 2007; and (ii) purchase
      an additional $600,000 of our common stock at a price to be determined, such
      price representing a 6% discount to closing bid price of our common stock in
      three tranches of $200,000 each on the following dates: February 9, 2007, March
      9, 2007, and April 9, 2007. As of February 12, 2007 we received the first tranch
      payment of $200,000 pending receipt of the executed negotiated agreement. Upon
      receipt of the executed negotiated agreement, shares will be issued in
      accordance with the terms of the agreement.


10
 *Table
          of Contents*


*Operating
      Activities*





For
      the
      six months ended December 31, 2006, net cash used in operating activities was
      $458,563. We are seeking to improve cash flow from future acquisitions, sale
      of
      equity and the reimbursement of expenses from our wholly-owned subsidiary,
      Ignis
      Barnett Shale, LLC.





**Results
      of Operations**





For
      the
      six months ended December 31, 2005 and for the quarter ended December 31, 2005,
      the company was in a start-up stage and therefore we are not comparing the
      periods in the table below. First oil and gas production was October 2005.
      We
      reported oil and gas sales for the quarter ended December 31, 2005 of $223,933.
      For the three months ended December 31, 2005 total operating expense was
      $1,115,384 of which general and administrative expense was $1,086,484 and
      depletion was $28,900. For the six months ended December 31, 2005 total
      operating expense was $2,166,242 of which general and administrative expense
      was
      $2,137,342 and depletion was $28,000. For the six months ended December 31,
      2005
      general and administrative expense primarily consisted of investor relations
      cost of $62,888, legal expense of $114,566, advertising expense of $148,600,
      stock issued to advisors of $617,000 and stock issued as salary to employees
      of
      $851,000.





***Operating
      Revenues***





The
      table
      below summarizes our operating revenues through December 31, 2006.





**Current
                Quarter**
            
            **Prior
                Quarter**
            
            **Six
                Months Ended****12/31/2006**
            
            **9/30/2006**
            
            **12/31/2006**Operating
                revenues
            
            $
            234,909
            
            
            471,214
            
            
            706,123SalesCondensate
                (Bbls)
            
            
            3.4
            
            
            4.8
            
            
            8.2Natural
                Gas (MMcf)
            
            
            7.7
            
            
            20.8
            
            
            28.5Total
                (BOE)
            
            
            4.7
            
            
            8.3
            
            
            13.0Average
                priceCondensate
                ($/Bbl)
            
            $
            57.38
            
            
            67.88
            
            
            63.52Natural
                Gas ($/Mcf)
            
            $
            5.21
            
            
            7.01
            
            
            6.52





The
      current quarter operating revenues of $234,909 decreased $236,305 compared
      to
      prior quarter as a result of decreased production primarily from the Acom A-6
      property and lower condensate and gas pricing of approximately $10.50 per barrel
      of oil and $1.80 per mcf. The decrease in production in this period is
      representative of expected production. Prior period production increase resulted
      from paraffin build up that was cleaned out along with sand fill clean out.
      We
      expect the Acom A-6 production level to remain flat at approximately 200 Bbls
      per day of gross oil and 400 Mcf per day of gross natural gas with some moderate
      decline with time. We own a 25% working interest in the
      property.


11
 *Table
          of Contents*


***Operating
      expenses***





For
      the
      current quarter, operating expenses were $1,129,815, which were flat or
      approximately $22,334 lower compared to the prior quarter ended September 30,
      2006. Depreciation, depletion, and amortization decreased from the prior quarter
      ended September 30, 2006 $469,832 resulting primarily from depletion taken
      on
      the Acom A-6 property in the first quarter ended September 30, 2006.





We
      recognized an impairment of $259,110 for the quarter ended December 31, 2006
      for
      the Sherburne Field Development prospect, located in Pointe Coupee Parish
      Louisiana. We tested two zones to date that were not economic and plan to test
      a
      third zone during the next twelve months. If the third zone does not meet our
      economic expectations we will abandon the property.





Asset
      Retirement Obligation accretion expense of $6,035 was recognized during this
      period. The cumulative effect amount was $4,137 and the current period was
      $1,898. We will continue to evaluate properties and record asset retirement
      obligation in accordance with FASB 143, *Accounting
      for Retirement Obligations,* and the
      related accretion expense.





We
      received $115,723 for reimbursement of capital expenditures resulting from
      the
      return of investment of the Crimson Bayou prospect. The joint venture parties
      elected not to drill this prospect and subsequently refunded monies
      invested.





General
      and administrative expense consists of support of our operating activities,
      along with investor relation costs during the current quarter and six month
      period of approximately $671,458 and $1,154,473, respectively. General and
      administrative expense increased approximately 39% or $188,443 compared to
      the
      prior quarter ended September 30, 2006 resulting primarily from recognition
      of
      prepaid advertising to expense of $150,000. Stock issued to employees as salary
      increased $120,000 in this period offset by lower stock issued to advisors
      of
      $66,537 and lower legal fees of $40,368. General and administrative expense
      for
      the three months ended December 31, 2006 compared to 2005 decreased $415,026
      and
      decreased $982,869 for the six months ended December 31, 2006 compared to 2005.
      The decrease in general and administrative expense for the six months ended
      December 31, 2006 compared to six months ended December 31, 2005 is primarily
      due to a decrease in stock issued to advisors and employees for salary in the
      amount of $1,227,575. Due to the start-up stage of the Company during the six
      months ended December 31, 2005 more stock was issued as the Company hired
      employees and advisors to run the business.





**Off
      Balance Sheet Arrangements**





We
      do not
      have any off balance sheet arrangements as of December 31, 2006 or as of the
      date of this report.





**Item
                3.**
            **Controls
                and Procedures.**





Our
      management, with the participation of our chief executive officer and chief
      financial officer, evaluated the effectiveness of our disclosure controls and
      procedures as of December 31, 2006. The term “disclosure controls and
      procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
      Exchange Act of 1934, as amended, or the Exchange Act, means controls and other
      procedures of a company that are designed to ensure that information required
      to
      be disclosed by a company in the reports that it files or submits under the
      Exchange Act is recorded, processed, summarized and reported, within the time
      periods specified in the SEC’s rules and forms. Disclosure controls and
      procedures include controls and procedures designed to ensure that information
      required to be disclosed by a company in the reports that it files or submits
      under the Exchange Act is accumulated and communicated to the company’s
      management, including its principal executive and principal financial officers,
      as appropriate to allow timely decisions regarding required
      disclosure.




12
 *Table
          of Contents*


Management
      recognizes that any controls and procedures, no matter how well designed and
      operated, can provide only reasonable assurance of achieving their objectives
      and management necessarily applies its judgment in evaluating the cost-benefit
      relationship of possible controls and procedures. Based on the evaluation of
      our
      disclosure controls and procedures as of December 31, 2006, our chief executive
      officer and chief financial officer concluded that, as of such date, our
      disclosure controls and procedures were effective at a reasonable assurance
      level.




We
      maintain certain internal controls over financial reporting that are
      appropriate, in management’s judgment with similar cost-benefit considerations,
      to provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles. No change in our internal control
      over financial reporting occurred during the fiscal quarter ended December
      31,
      2006 that has materially affected, or is reasonably likely to affect, our
      internal control over financial reporting.






**PART
      II - OTHER INFORMATION**





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





On
      November 30, 2006, we issued 500,000 shares of common stock to Michael P. Piazza
      for services to us as an officer of this Company. This issuance is considered
      exempt pursuant to Rule 506 and/or Section 4(2) of the Securities
      Act.





On
      November 30, 2006, we issued 90,000 shares of common stock to our advisors
      for
      services to us as advisors. This issuance is considered exempt pursuant to
      Rule
      506 and/or Section 4(2) of the Securities Act.




On
      December 28, 2006, we issued 29,687 shares of common stock to our advisors
      for
      services to us as advisors. This issuance is considered exempt pursuant to
      Rule
      506 and/or Section 4(2) of the Securities Act.





***Item6.***
            ***Exhibits.***





The
      following are exhibits to this report:





Exhibit
                No.
            Description10.1
            Purchase
                and Sale Agreement dated September 27, 2006, by and among W.B. Osborn
                Oil
                & Gas Operations., Ltd., St. Jo Pipeline, Limited and Ignis Barnett
                Shale, LLC, filed as an exhibit to the current report on Form 8-K
                filed
                with the Securities and Exchange Commission on October 3, 2006 and
                incorporated herein by reference.




13
 *Table
          of Contents*





10.2
            Amended
                and Restated Limited Liability Company Agreement of Ignis Barnett
                Shale,
                LLC dated November 15, 2006, filed as an exhibit to the current report
                on
                Form 8-K filed with the Securities and Exchange Commission on November
                21,
                2006 and incorporated herein by reference.*31.1
            Certification
                by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a)
                of the Exchange Act, promulgated pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.*31.2
            Certification
                by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a)
                of the Exchange Act, promulgated pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.*32.1
            Certification
                by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b)
                of theExchange
                Act and Section 1350 of Chapter 63 of Title 18 of the United States
                Code,
                promulgated pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.*32.2
            Certification
                by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b)
                of theExchange
                Act and Section 1350 of Chapter 63 of Title 18 of the United States
                Code,promulgated
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


______________


*Filed
      herewith








**SIG** **NATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.








Ignis
                Petroleum Group, Inc. (Registrant)Date:
                February 14, 2006
            
            By:
            /s/
                Michael PiazzaMichael
                Piazza,President,
                Chief Executive Officer and
                Treasurer






14