SECURITIES AND EXCHANGE COMMISSIONWashington D.C. 20549

FORM 10-Q

|  |                                                                                           
|- | ------------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT
  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|  |                                                                                           
|  | For the quarterly period
  ended May 31, 2009                                             
|  |                                                                                           
|o | TRANSITION REPORT PURSUANT
  TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|  |                                                                                           
|  | For the transition period
  from ______________ to __________________                     

Commission file
number: 0-50472

|                                                                   
|-------------------------------------------------------------------
|NEW FRONTIER ENERGY, INC.                                          
|                                                                   
|(Exact name of small
  business issuer as specified in its charter)

|                                  |  |                                       
|--------------------------------- |  | --------------------------------------
|Colorado                          |  | 84-1530098                            
|                                  |  |                                       
|(State or other
  jurisdiction of |  | (I.R.S. Employer
  Identification No.)
|incorporation or
  organization)  |  |                                       

|                                                                                    
|------------------------------------------------------------------------------------
|1789 W. Littleton
  Blvd., Littleton, CO 80120                                      
|                                                                                    
|(Address of principal
  executive offices)                                          
|                                                                                    
|(303) 730-9994                                                                      
|                                                                                    
|(Issuers telephone
  number)                                                       
|                                                                                    
|                                                                                    
|(Former name, former
  address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1)
filed all reports required to be filed by Section 13 or 15(d) of the Exchange
Act of 1934 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
large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company.

| |                         |   |                            
| | ----------------------- | - | ---------------------------
| | Large accelerated filer | o | Accelerated filer o        
| | Non-accelerated filer   | o | 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 o No x

As of July 13, 2009, 13,448,037 shares of common stock
were outstanding.

---



NEW FRONTIER ENERGY, INC.

Index

|                                 |         |                                                                                                        |   
|-------------------------------- | ------- | ------------------------------------------------------------------------------------------------------ | --
|Part I -
  FINANCIAL INFORMATION |        
|                                 |         |                                                                                                        |   
|                                 | Item 1  | Financial
  Statements                                                                                 |   
|                                 |         | Consolidated
  Balance Sheet at May 31, 2009 (unaudited) and February 28, 2009                         | 1 
|                                 |         | Consolidated
  Statements of Operations (unaudited) for the three months ended May 31, 2009
  and 2008 | 2 
|                                 |         | Consolidated
  Statements of Cash Flows (unaudited) for the three months ended May 31, 2009
  and 2008 | 3 
|                                 |         | Notes to
  Consolidated Financial Statements (unaudited)                                               | 4 
|                                 | Item 2  | Managements
  Discussion and Analysis or Plan of Operations                                           | 14
|                                 | Item 3  | Quantitative and
  Qualitative Disclosures About Market Risk                                           | 23
|                                 | Item 4  | Controls and
  Procedures                                                                              | 23
|                                 | Item 4T | Controls and
  Procedures                                                                              | 24
|                                 |         |                                                                                                        |   
|Part II OTHER
  INFORMATION      |        
|                                 |         |                                                                                                        |   
|                                 | Item 1  | Legal
  Proceedings                                                                                    | 24
|                                 | Item 1A | Risk Factors                                                                                           | 25
|                                 | Item 2  | Unregistered
  Sales of Equity Securities and Use of Proceeds                                          | 25
|                                 | Item 3  | Defaults Upon
  Senior Securities                                                                      | 25
|                                 | Item 4  | Submission of
  Matters of a Vote of Security Holders                                                  | 25
|                                 | Item 5  | Other
  Information                                                                                    | 25
|                                 | Item 6  | Exhibits                                                                                               | 25
|                                 |         |                                                                                                        |   
|SIGNATURES                       | 26     
|                                 |         |                                                                                                        |   
|EXHIBITS                         |        

---



NEW FRONTIER ENERGY, INC.
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                             |  |                              |             |                     |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ----------- | ------------------- | - | ----------- | -
|                                                                                                                                                             |  | May 31,
  2009
  (Unaudited) |             | February 28,
  2009 |  
|                                                                                                                                                             |  |                              |             |                     |  
|ASSETS                                                                                                                                                       |  |                              |             |                     |   |             |  
|CURRENT ASSETS                                                                                                                                               |  |                              |             |                     |   |             |  
|Cash                                                                                                                                                         |  | $                            | 510,406     |                     | $ | 856,475     |  
|Accounts receivable, trade                                                                                                                                   |  |                              | 654,568     |                     |   | 583,628     |  
|Prepaid expenses                                                                                                                                             |  |                              | 239,261     |                     |   | 233,423     |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|Total current assets                                                                                                                                         |  |                              | 1,404,235   |                     |   | 1,673,526   |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|PROPERTY AND EQUIPMENT, NET OF ACCUMULATED
  DEPRECIATION AND DEPLETION OF $2,483,692 and $2,278,466 as of May 31, 2009
  and February 28, 2009 respectively |  |                              | 14,774,315  |                     |   | 14,949,366  |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|OTHER ASSETS                                                                                                                                                 |  |                              |             |                     |   |             |  
|Deposits                                                                                                                                                     |  |                              | 160,000     |                     |   | 160,000     |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  | $                            | 16,338,550  |                     | $ | 16,782,892  |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|LIABILITIES
  AND STOCKHOLDERS EQUITY                                                                                                                       |  |                              |             |                     |   |             |  
|CURRENT LIABILITIES                                                                                                                                          |  |                              |             |                     |   |             |  
|Accounts payable                                                                                                                                             |  | $                            | 1,090,685   |                     | $ | 862,248     |  
|Notes payable, affiliates                                                                                                                                    |  |                              | 403,125     |                     |   | 403,125     |  
|Notes payable, current portion                                                                                                                               |  |                              | 822,569     |                     |   | 825,898     |  
|Dividends payable                                                                                                                                            |  |                              | 2,176,654   |                     |   | 1,999,083   |  
|Accrued expenses                                                                                                                                             |  |                              | 379,437     |                     |   | 376,133     |  
|Accrued interest                                                                                                                                             |  |                              | 5,355       |                     |   | 2,459       |  
|Accrued interest, affiliates                                                                                                                                 |  |                              | 3,766       |                     |   | 1,712       |  
|Accounts payable, affiliates                                                                                                                                 |  |                              | 36,430      |                     |   | 36,430      |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|Total current liabilities                                                                                                                                    |  |                              | 4,918,021   |                     |   | 4,507,088   |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|LONG TERM LIABILITIES                                                                                                                                        |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|Asset retirement obligation                                                                                                                                  |  |                              | 290,000     |                     |   | 290,000     |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY                                                                                                                 |  |                              | 377,441     |                     |   | 416,516     |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|STOCKHOLDERS EQUITY                                                                                                                                         |  |                              |             |                     |   |             |  
|Preferred stock, $.001 par value, 25,000,000
shares
  authorized:                                                                                            |  |                              |             |                     |   |             |  
|Series A Convertible, 100,000 shares authorized
none
  issued and outstanding                                                                                |  |                              |            |                     |   |            |  
|Series B Convertible, 36,036 shares authorized
19,040
  issued and outstanding as of May 31, 2009 and February 28, 2009                                      |  |                              | 20          |                     |   | 20          |  
|Series C Convertible, 230,000 shares authorized
  216,000 issued and outstanding as of May 31, 2009 and February 28, 2009                                    |  |                              | 216         |                     |   | 216         |  
|Common stock, $.001 par value, 500,000,000 shares
  authorized, 13,441,884 shares issued and outstanding as of May 31, 2009 and
  February 28, 2009          |  |                              | 13,441      |                     |   | 13,441      |  
|Additional paid in capital                                                                                                                                   |  |                              | 43,838,103  |                     |   | 43,460,402  |  
|Accumulated (deficit)                                                                                                                                        |  |                              | (33,098,692 | )                   |   | (31,904,791 | )
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              | 10,753,088  |                     |   | 11,569,288  |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  
|                                                                                                                                                             |  | $                            | 16,338,550  |                     | $ | 16,782,892  |  
|                                                                                                                                                             |  |                              |             |                     |   |             |  

See accompanying notes to the consolidated financial
statements.

1

---



NEW FRONTIER ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS 
(UNAUDITED)

|                                                                    |  |                    |            |                |   |            |  
|------------------------------------------------------------------- |  | ------------------ | ---------- | -------------- | - | ---------- | -
|                                                                    |  | Three Months Ended |           
|                                                                    |  | May 31,
  2009     |            | May 31,
  2008 |  
|                                                                    |  |                    |            |                |  
|Operating revenues                                                  |  |                    |            |                |   |            |  
|Oil and gas sales                                                   |  | $                  | 87,822     |                | $ | 450,519    |  
|Gathering fees                                                      |  |                    | 37,832     |                |   | 47,328     |  
|                                                                    |  |                    |            |                |   |            |  
|                                                                    |  |                    | 125,654    |                |   | 497,847    |  
|                                                                    |  |                    |            |                |   |            |  
|Operating expenses                                                  |  |                    |            |                |   |            |  
|Exploration costs, including dry
holes                              |  |                    | 63,786     |                |   | 49,811     |  
|Lease operating expenses                                            |  |                    | 188,228    |                |   | 291,184    |  
|Cost of gas gathering                                               |  |                    | 651        |                |   | 648        |  
|General and administrative                                          |  |                    | 340,076    |                |   | 524,966    |  
|Issuance of common stock warrants                                   |  |                    | 330,800    |                |   | 515,550    |  
|Depreciation, depletion and
amortization                            |  |                    | 194,226    |                |   | 265,177    |  
|                                                                    |  |                    |            |                |   |            |  
|Total operating expenses                                            |  |                    | 1,117,767  |                |   | 1,647,336  |  
|                                                                    |  |                    |            |                |   |            |  
|                                                                    |  |                    |            |                |   |            |  
|(Loss) from operations                                              |  |                    | (992,113   | )              |   | (1,149,489 | )
|                                                                    |  |                    |            |                |   |            |  
|Other income (expense)                                              |  |                    |            |                |   |            |  
|Interest income                                                     |  |                    | 829        |                |   | 21,547     |  
|Interest expense                                                    |  |                    | (18,131    | )              |   | (21,338    | )
|                                                                    |  |                    |            |                |   |            |  
|Other income (expense), net                                         |  |                    | (17,302    | )              |   | 209        |  
|                                                                    |  |                    |            |                |   |            |  
|                                                                    |  |                    |            |                |   |            |  
|(Loss) before income taxes                                          |  |                    | (1,009,415 | )              |   | (1,149,280 | )
|                                                                    |  |                    |            |                |   |            |  
|Income taxes                                                        |  |                    |            |                |   |            |  
|Current                                                             |  |                    |           |                |   |           |  
|Deferred                                                            |  |                    |           |                |   |           |  
|                                                                    |  |                    |            |                |   |            |  
|                                                                    |  |                    |           |                |   |           |  
|                                                                    |  |                    |            |                |   |            |  
|                                                                    |  |                    |            |                |   |            |  
|Minority interest in net (income) of consolidated
  subsidiary      |  |                    | (6,915     | )              |   | (11,018    | )
|                                                                    |  |                    |            |                |   |            |  
|Net (loss)                                                          |  |                    | (1,016,330 | )              |   | (1,160,298 | )
|                                                                    |  |                    |            |                |   |            |  
|Preferred stock dividends and distributions to
  minority interests |  |                    | (177,571   | )              |   | (229,317   | )
|                                                                    |  |                    |            |                |   |            |  
|                                                                    |  |                    |            |                |   |            |  
|Net (loss) attributable to common shareholders                      |  | $                  | (1,193,901 | )              | $ | (1,389,615 | )
|                                                                    |  |                    |            |                |   |            |  
|                                                                    |  |                    |            |                |   |            |  
|Net (loss) per common share                                         |  |                    |            |                |   |            |  
|Basic and diluted                                                   |  | $                  | (0.09      | )              | $ | (0.13      | )
|                                                                    |  |                    |            |                |   |            |  
|Weighted average shares outstanding                                 |  |                    |            |                |   |            |  
|Basic and diluted                                                   |  |                    | 13,441,884 |                |   | 10,731,350 |  
|                                                                    |  |                    |            |                |   |            |  

See accompanying notes to the consolidated financial
statements.

2

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NEW FRONTIER ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(UNAUDITED)

|                                                                                  |  |                    |            |                |   |            |  
|--------------------------------------------------------------------------------- |  | ------------------ | ---------- | -------------- | - | ---------- | -
|                                                                                  |  | Three Months Ended |           
|                                                                                  |  | May 31,
  2009     |            | May 31,
  2008 |  
|                                                                                  |  |                    |            |                |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                    |            |                |   |            |  
|Net (loss)                                                                        |  | $                  | (1,016,330 | )              | $ | (1,160,298 | )
|Adjustments to reconcile net (loss) to net cash
(used
  in) operating activities: |  |                    |            |                |   |            |  
|Depreciation, depletion and
amortization                                          |  |                    | 194,226    |                |   | 265,177    |  
|Minority interest in net income of consolidated
  subsidiary                      |  |                    | 6,915      |                |   | 11,018     |  
|Stock option expenses, amortization and
grants                                    |  |                    | 330,800    |                |   | 515,550    |  
|(Increase) decrease in assets:                                                    |  |                    |            |                |   |            |  
|Accounts receivable, trade                                                        |  |                    | (70,940    | )              |   | (123,619   | )
|Prepaid expense                                                                   |  |                    | (5,838     | )              |   | 15,699     |  
|Increase (decrease) in
liabilities:                                               |  |                    |            |                |   |            |  
|Accounts payable                                                                  |  |                    | 228,437    |                |   | (491,123   | )
|Accrued expenses                                                                  |  |                    | 8,254      |                |   | 236,178    |  
|                                                                                  |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|Net cash (used in) operating
activities                                           |  |                    | (324,476   | )              |   | (731,418   | )
|                                                                                  |  |                    |            |                |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|(Increase) decrease in other
assets                                               |  |                    |           |                |   | 33,300     |  
|Purchase of property and equipment                                                |  |                    | (19,175    | )              |   | (587,057   | )
|                                                                                  |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|Net cash (used in) investing
activities                                           |  |                    | (19,175    | )              |   | (553,757   | )
|                                                                                  |  |                    |            |                |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                    |            |                |   |            |  
|Payment of notes payable                                                          |  |                    | (3,329     | )              |   | (8,568     | )
|Proceeds from common stock warrant
conversions                                    |  |                    |           |                |   | 1,712,469  |  
|Proceeds from exercise of placement agent
warrants                                |  |                    |           |                |   | 269,747    |  
|Preferred stock dividends paid                                                    |  |                    |           |                |   | (1,544     | )
|Cost of issuance of equity for
cash                                               |  |                    |           |                |   | (9,145     | )
|Minority interest in subsidiary                                                   |  |                    | 911        |                |   | (14,072    | )
|Distributions to minority interest holders in
  consolidated subsidiary           |  |                    |           |                |   | (13,823    | )
|                                                                                  |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|Net cash (used in) provided by financing
activities                               |  |                    | (2,418     | )              |   | 1,935,064  |  
|                                                                                  |  |                    |            |                |   |            |  
|INCREASE (DECREASE) IN CASH                                                       |  |                    | (346,069   | )              |   | 649,889    |  
|BEGINNING BALANCE                                                                 |  |                    | 856,475    |                |   | 3,602,939  |  
|                                                                                  |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|ENDING BALANCE                                                                    |  | $                  | 510,406    |                | $ | 4,252,828  |  
|                                                                                  |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|Cash paid for income taxes                                                        |  | $                  |           |                | $ |           |  
|                                                                                  |  |                    |            |                |   |            |  
|Cash paid for interest                                                            |  | $                  | 13,181     |                | $ | 18,872     |  
|                                                                                  |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|Supplemental schedule of non-cash investing and
  financing activities:           |  |                    |            |                |   |            |  
|                                                                                  |  |                    |            |                |   |            |  
|Series B and C preferred stock converted to
common
  stock                        |  | $                  |           |                | $ | 140        |  

See accompanying notes to the consolidated financial
statements.

3

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NEW FRONTIER ENERGY, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2009

|1. | SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

| | Organization
and Nature of Business
| | -----------------------------------

| | New
Frontier Energy, Inc. (New Frontier or the Company) was
incorporated as Storage Finders.com under the laws of Colorado on January 7, 2000. In
March 2001 the Company changed its name to New Frontier Energy, Inc. The Company is a
domestic energy company engaged in the exploration for, and development of, oil and
natural gas reserves operating primarily in Colorado and Wyoming.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Effective
February 6, 2002, Wyoming Oil & Minerals, Inc. (Wyoming) completed a
share exchange with the Company. Under the terms of the share exchange, the shareholders
of the Company surrendered their shares in exchange for shares of Wyoming. The Companys
shareholders became shareholders in Wyoming, and the Company became a wholly owned
subsidiary of Wyoming.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
June 30, 2003, Wyomings Board of Directors approved a dividend in the form of the
common stock of its subsidiary, New Frontier. The dividend was paid in the form of one
share of New Frontier common stock (the Common Stock) for every four shares
of common stock of Wyoming. Shareholders of record of Wyoming as of the close of business
on June 30, 2003, the record date, were issued a certificate representing one share of
New Frontier for each four shares of Wyoming they held at that date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company owns 82.76% of the limited partnership interests (the Limited Partnership
Interests) of Slater Dome Gathering, LLLP (SDG). SDG owns the 18-mile
gas gathering line that transports the Companys natural gas from the Slater Dome
Field to the Questar transportation line in Baggs, Wyoming.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
December 26, 2007, the Company entered into a Partnership Interest Purchase Agreement with
Natural Resource Group Gathering, LLC (NRGG) to acquire NRGGs general
partnership interest (the General Partnership Interest) in SDG effective as of
January 1, 2008. In connection with the purchase of the General Partnership Interest, the
Company was appointed the general partner of SDG. The General Partnership Interest is
equal to 25% of the Percentage Interests (as defined in SDGs Limited Partnership
Agreement) in SDG.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | The May 31, 2009, financial statements include the
  accounts of the Company and SDG as of and for the three months ended March
  31, 2009 and 2008. SDG has a calendar quarter end, March 31, which is
  consolidated with the Company effective May 31, 2009 and 2008. All
  significant intercompany accounts and transactions in 2009 and 2008 were
  eliminated. The creditors of SDG do not have recourse to the general credit
  of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Unaudited Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | The
  financial statements included in this Form 10-Q have been prepared by the
  Company without audit pursuant to the rules and regulations of the Securities
  and Exchange Commission. Certain information and footnote disclosures
  normally included in the financial statements prepared in accordance with
  accounting principles generally accepted in the United States have been
  condensed or omitted as allowed by such rules and regulations, and management
  believes that the disclosures are adequate to make the information presented
  not misleading. These financials statements include all of the adjustments,
  which, in the opinion of management, are necessary to a fair presentation of
  financial position and results of operations. All such adjustments are of a
  normal and recurring nature only. The results of operations for the interim periods
  are not necessarily indicative of the results to be expected for the full
  fiscal year. These financial statements should be read in conjunction with
  the audited financial statements at February 28, 2009, included in the
  Companys annual report on Form 10-K filed with the Commission on May 29,
  2009.

5

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The consolidated financial
  statements have been prepared on the basis of a going concern which
  contemplates the realization of assets and the satisfaction of liabilities in
  the normal course of business. As shown in the accompanying financial
  statements, we have incurred significant operating losses. As of May 31,
  2009, we have limited financial resources until such time that we are able to
  generate positive cash flow from operations. The Company has a working capital deficiency of $3,513,786 at May 31,
  2009 and $2,833,562 at February 28, 2009. These factors raise
  substantial doubt about our ability to continue as a going concern. Our
  ability to achieve and maintain profitability and positive cash flow is
  dependent upon our ability to generate revenue from our planned business
  operations and control exploration costs. Management plans to fund its future
  operation by joint venturing, obtaining additional financing, and attaining additional
  commercial production. However, there is no assurance that we will be able to
  obtain additional financing from investors or private lenders, or that
  additional commercial production can be attained.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Certain amounts reported in the Companys financial
  statements for the three months ended May 31, 2008, have been reclassified to
  conform to the current period presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | NOTES
  PAYABLE, AFFILIATES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Effective December 31, 2007 the Company entered into
  a Purchase and Sale Agreement with Natural Resource Group Gathering, LLC
  (NRGG), whereby the Company increased its investment in Slater Dome
  Gathering, LLLP (SDG) by acquiring the general partners interest for
  $1,075,000 consisting of $268,750 in cash and executing a promissory note in
  the amount of $806,250. The Note bears interest at a rate of 2.5% per annum
  and is payable in quarterly installments of $201,562 plus interest and was
  due December 31, 2008. On December 24, 2008, the note was extended under the same
  terms and conditions with a maturity date of December 31, 2009, and in
  connection with the extension of the maturity date, the Company paid
  principal in the amount of $201,563 together with accrued interest of $5,881.
  At the option of the Company, quarterly payments may be deferred until the
  maturity date.                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | As a result, the Company owns the 25% general
  partners interest together with 82.76% of the Class A limited partnership
  interests in SDG. The Company will receive 84.487% of SDG cash distributions
  until the limited partners have received cash distributions equal to their
  initial capital contributions and 87.07% of cash distributions thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Companys President and Chief Executive Officer
  is a manager and owns 50% of the membership interests of NRGG, the general
  partner of SDG, through December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

6

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | At May 31, 2009 the balance of the note payable is
  $403,125. Interest in the amount of $2,054 has been accrued for the
  three-month period ended May 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | NOTES
  PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On June 15, 2007, the Company acquired a facility
  (the Steamboat Property) to be used as a field office and provide lodging
  while Company personnel are working the Slater Dome Field area. The purchase
  price for the Steamboat Property was $1,175,000. In connection with the
  purchase of the Steamboat Property, the Company entered into a five-year
  mortgage in the principal amount of $881,250 (the Steamboat Mortgage),
  which bears interest at a rate of 7.56% per annum. The Steamboat Mortgage
  requires equal monthly payments during the term of the mortgage in the amount
  of $8,256, with the balance of $698,604 due on June 14, 2012. The Steamboat
  Mortgage can be prepaid at any time without penalty. The Steamboat Mortgage
  is collateralized by the Steamboat Property. The Steamboat Mortgage terms
  were modified on February 26, 2009 whereby the maturity date was changed to
  September 1, 2009. The balance on the Steamboat Mortgage is $822,569 and
  $825,898 at May 31, 2009, and February 28, 2009, respectively. Interest
  in the amount of $13,181 was paid and $5,355 has been accrued on the
  Steamboat Mortgage as of May 31, 2009.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4. | STOCKHOLDERS
  EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Series B Convertible
  Preferred Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Effective November 1, 2004, the board of directors
  of the Company approved an amendment to the Companys Articles of
  Incorporation to provide for the issuance of up to 36,036 shares of Series B
  12% Cumulative Convertible Preferred Stock par value $0.001 (the Series B
  Preferred). Between December 23, 2004 and February 28, 2005 the Company sold
  32,175 shares of Series B Preferred. The issue price of the Series B
  Preferred Stock is $100.00 per share. Each share of Series B Preferred is
  convertible, at the option of the holder, into that number of shares of
  Common Stock determined by dividing the issue price of the aggregate number
  of shares of Series B Preferred being converted plus any accrued and unpaid
  dividends by $0.65 per share, unless otherwise adjusted. The Series B
  Preferred pays a cumulative, preferential cash dividend equal to 12% of the
  $100 issue price per year and is payable quarterly in arrears. The dividend
  is payable out of funds legally available for that purpose and will
  accumulate during any period when it is not paid.                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In connection with the offer and sale of Series B
  Preferred Stock, the Company granted a warrant to purchase 24.75 units of the
  Series B Preferred Stock offering at a purchase price of $13,000 per Unit
  (the Placement Agent Warrant). Each Unit consists of (i) $13,000 of Series
  B Preferred Stock, convertible into 20,000 shares of Common Stock at the rate
  of $0.65 per Share; and (ii) a three-year warrants to purchase 27,131 shares
  of Common Stock at an exercise price of $1.11 per share on the same terms and
  conditions as the warrants issued to the Series B Preferred Stock holders.
  The 18.562 outstanding Placement Agent Warrants were exercised on May 1, 2008
  and the Company issued 2,698 shares of Series B Preferred Stock and received
  proceeds of $269,749.                                                                                                                                                                                                                                                                                                                                                                                      

7

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of May 31, 2009, there were 19,040 shares of the
  Series B Preferred issued and outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | The Company paid $0 in dividends and accrued $41,461
  on the Series B Preferred resulting in accrued dividends in the aggregate
  amount of $863,985 as of May 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Series C Convertible Preferred Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Effective November 22, 2006, the board of directors
  of New Frontier Energy, Inc. approved an amendment to the Companys Articles
  of Incorporation to provide for the issuance of up to 230,000 shares of
  Series C 2.5% Cumulative Convertible Preferred Stock par value $0.001 (the
  Series C Preferred Stock). Between December 1, 2006 and January 16, 2007
  the Company sold 222,250 shares of Series C Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | The stated value and issue price of the Series C
  Preferred Stock is $100.00 per share. Holders of the Series C Preferred Stock
  are entitled to receive cumulative dividends at the rate of 2.5% per annum,
  payable quarterly on January 31, April 30, July 31 and October 31, beginning
  with January 31, 2007. The form of dividend payments may be, at the Companys
  option, in cash or shares of the Companys $0.001 par value common stock (the
  Common Stock), or a combination thereof. The Series C Preferred Stock is
  convertible into shares of Common Stock at the rate of $1.05 per share.                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | The Series C Preferred Stock has customary
  weighted-average anti-dilution rights with respect to any subsequent issuance
  of Common Stock or Common Stock equivalents at a price less than $1.05 per
  share, and otherwise in connection with forward or reverse stock splits,
  stock dividends, recapitalizations, and the like. The anti-dilution
  provisions shall not apply to employee stock options and shares issued in
  connection with certain mergers and acquisitions.                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Except as otherwise provided in the Series C
  Preferred Stock Certificate of Designation with respect to matters that
  adversely affect the rights of the holders of the Series C Preferred Stock,
  and as otherwise required by law, the Series C Preferred Stock has no voting
  rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | Upon any liquidation, dissolution or winding-up of
  the Company, whether voluntary or involuntary, the holders of the Series C
  Preferred Stock shall be entitled to receive out of the assets of the
  Company, whether such assets are capital or surplus, for each share of Series
  C Preferred Stock an amount equal to the stated value ($100.00) of the Series
  C Preferred Stock per share plus any accrued and unpaid dividends thereon and
  any other fees or liquidated damages owing. If the assets of the Company are
  insufficient to pay such amounts in full, then the entire assets to be
  distributed to the holders of the Series C Preferred Stock shall be
  distributed among the holders of the Series C Preferred Stock ratably in
  accordance with the respective amounts that would be payable on such shares
  if all amounts payable thereon were paid in full.

8

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has the right to redeem the Series C
  Preferred Stock commencing six months from a final closing date in the event
  the closing bid price of the Companys Common Stock has closed for 20
  consecutive trading days at a price not less than $3.00 (subject to
  adjustment) by delivering notice to holders of the Series C Preferred Stock.
  The maximum aggregate number of Series C Preferred Stock which may be
  redeemed pursuant to any such redemption notice in any given week shall be
  that number of shares of Series C Preferred Stock for which the underlying
  Common Stock (together with any accrued dividends payable in Common Stock
  thereon) are less than or equal to 25% of the average daily trading volume of
  the Common Stock for the 20 Trading Days preceding each such redemption
  notice date.                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | As of May 31, 2009, there were 216,000 shares of the
  Series C Preferred Stock issued and outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | The Company paid $0 in dividends on the Series C
  Preferred Stock and accrued $136,110 on the Series C Preferred Stock
  resulting in accrued dividends in the aggregate amount of $1,312,669 as of
  May 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | Non-Qualified Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | On July 23, 2008, the Company granted certain employees
  and agents of the Company an aggregate of 4,200,000 options to acquire shares
  of the Companys Common Stock, which are exercisable at a price of $1.01 (the
  Non-Qualified Stock Options). Options representing 1,950,00 of the
  Non-Qualified Stock Options vest at a rate of 12.5% each fiscal quarter
  ending August 31, November 30, February 28, May 31 through November 30, 2010
  and expire on July 23, 2018. Options representing 2,250,000 of the
  Non-Qualified Stock Options have a five year life and vest quarterly over
  three years commencing with the quarter ending May 31, 2009. The Companys
  stock closed at $1.01 on July 23, 2008. The fair value of the Non-Qualified
  Stock Options was estimated on the date of the grant utilizing the
  Black-Scholes option pricing model with the following assumptions: expected
  life of the options is 10 years, expected volatility of 65%, risk free
  interest rate of 4.2% and no dividend yield. The fair value for the
  Non-Qualified Stock Options granted was approximately $0.77 per share. The
  value of the options was recorded at $3,221,600 and $330,800 was amortized in
  the three months ended May 31, 2009.

9

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On November 10, 2006, the Company granted certain
  employees and agents of the Company an aggregate of 3,950,000 options to
  acquire shares of the Companys Common Stock, which are exercisable at a
  price of $1.25. These stock options vest at a rate of 12.5% each fiscal
  quarter ending November 30, February 28, May 31 and August 31; 2,250,000
  options expire November 10, 2011 and 1,700,000 options expire on November 30,
  2014. The Companys stock closed at $1.24 on November 10, 2006. The fair
  value of the options was estimated on the date of the grant utilizing the
  Black-Scholes option pricing model with the following assumptions: expected
  life of the options is 10 years, expected volatility of 81%, risk free
  interest rate of 5% and no dividend yield. The fair value for the options
  granted was approximately $1.04 per share. The value of the options were
  recorded at $4,124,400 and was amortized $515,000 per quarter as the options
  vested. During the three months ended May 31, 2008 the options were charged
  to general and administrative stock compensation expense. The options were
  fully vested and amortized during fiscal year ended February 28, 2009.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The activity for the Non-Qualified Stock Options
  during the three months ended May 31, 2009 is summarized as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|                    |  |              |           |                                    |   |      | 
|------------------- |  | ------------ | --------- | ---------------------------------- | - | ---- | 
|                    |  | May 31, 2009 |          
|                    |  | Shares       |           | Weighted  Average  Exercise  Price |  
|                    |  |              |           |                                    |  
|Beginning of period |  |              | 4,681,250 |                                    | $ | 1.21 | 
|Vested              |  |              | 431,250   |                                    | $ | 1.01 | 
|Exercised           |  |              |          |                                    | $ |     | 
|Expired             |  |              |          |                                    | $ |     | 
|                    |  |              |           |                                    |   |      | 
|End of period       |  |              | 5,112,500 |                                    | $ | 1.20 | 
|                    |  |              |           |                                    |   |      | 

A summary of the incentive stock
option activity during the three months ended May 31, 2009 is summarized in the following table:

|                    |  |              |         |                                    |   |      | 
|------------------- |  | ------------ | ------- | ---------------------------------- | - | ---- | 
|                    |  | May 31, 2009 |        
|                    |  | Shares       |         | Weighted  Average  Exercise  Price |  
|                    |  |              |         |                                    |  
|Beginning of period |  |              | 584,333 |                                    | $ | 0.89 | 
|Granted             |  |              |        |                                    | $ |     | 
|Exercised           |  |              |        |                                    | $ |     | 
|Expired             |  |              | (50,000 | )                                  | $ | 1.00 | 
|                    |  |              |         |                                    |   |      | 
|End of period       |  |              | 534,333 |                                    | $ | 0.88 | 
|                    |  |              |         |                                    |   |      | 

10

---



The following tables summarize information about
fixed-price stock options and warrants during the three months ended May 31,
2009:

|                    |  |              |            |                                    |   |      | 
|------------------- |  | ------------ | ---------- | ---------------------------------- | - | ---- | 
|                    |  | May 31, 2009 |           
|                    |  | Shares       |            | Weighted  Average  Exercise  Price |  
|                    |  |              |            |                                    |  
|Beginning of period |  |              | 33,000,203 |                                    | $ | 1.68 | 
|Granted             |  |              |           |                                    | $ |     | 
|Exercised           |  |              |           |                                    | $ |     | 
|Expired             |  |              |           |                                    | $ |     | 
|                    |  |              |            |                                    |   |      | 
|End of period       |  |              | 33,000,203 |                                    | $ | 1.68 | 
|                    |  |              |            |                                    |   |      | 

The following table summarizes the options and
warrants outstanding and exercisable at May 31, 2009:

|                               |  |                                |            |                                                                |  |                                    |  |   |      | 
|------------------------------ |  | ------------------------------ | ---------- | -------------------------------------------------------------- |  | ---------------------------------- |  | - | ---- | 
|Range
  of
  Exercise 
  Price |  | Number  of Shares  Outstanding |            | Weighted
  Average
  Remaining
  Contractual
  Life in
  Years |  | Weighted  Average  Exercise  Price | 
|                               |  |                                |            |                                                                |  |                                    | 
|$0.75 to
  $1.50               |  |                                | 26,813,491 |                                                                |  | 1.59                               |  | $ | 1.42 | 
|$1.51 to $2.75                 |  |                                | 11,833,545 |                                                                |  | 0.67                               |  | $ | 2.00 | 
|                               |  |                                |            |                                                                |  |                                    |  |   |      | 
|                               |  |                                | 38,647,036 |                                                                |  |                                    |  |   |      | 
|                               |  |                                |            |                                                                |  |                                    |  |   |      | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | In October 2006, the Board of Directors adopted an
  incentive stock option plan reserving 10,000,000 shares of the Companys
  $0.001 par value common stock for issuance pursuant to the plan. The plan was
  adopted by shareholders on June 11, 2007. As of May 31, 2009, no options have
  been granted under the plan.                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | RELATED
  PARTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company paid $8,000 during the three months
  ended May 31, 2009 and 2008, respectively, in connection with an office lease
  for office space in Littleton, Colorado with Spotswood Properties, LLC,
  (Spotswood), a Colorado limited liability company and an affiliate of the
  Companys president. The lease provides for the payment of $2,667 per month
  plus utilities and other incidentals. The president of the Company owns 50%
  of Spotswood.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company paid a corporation controlled by one of
  the former directors and a shareholder $9,375 and $15,000 for geological
  consulting during the three months ended May 31, 2009 and 2008 respectively.                                                                                                                                                                                                                                                      

11

---



|   |                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | BUSINESS
  SEGMENT INFORMATION                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                           
|   | The Company operates in two business segments: oil
  and gas exploration and gas gathering. Operating results and other financial
  data for the three months ended May 31, 2009 and 2008, are presented for the
  principal business segments as follows:

|                                           |  |             |            |                 |   |              |   |   |            |  
|------------------------------------------ |  | ----------- | ---------- | --------------- | - | ------------ | - | - | ---------- | -
|                                           |  | Oil
  & Gas |            | Gas
  Gathering |   | Consolidated |  
|                                           |  |             |            |                 |   |              |  
|May
  31, 2009                             |  |             |            |                 |   |              |   |   |            |  
|Revenues                                   |  | $           | 87,822     |                 | $ | 37,832       |   | $ | 125,654    |  
|(Loss) before
  taxes                      |  | $           | (1,000,212 | )               | $ | (9,203       | ) | $ | (1,009,415 | )
|Total assets                               |  | $           | 14,143,217 |                 | $ | 2,195,333    |   | $ | 16,338,550 |  
|Property
  additions                       |  | $           | 19,175     |                 | $ |             |   | $ | 19,175     |  
|Interest expense                           |  | $           | (18,131    | )               | $ |             |   | $ | (18,131    | )
|Depreciation,
  depletion and amortization |  | $           | 161,603    |                 | $ | 32,623       |   | $ | 194,226    |  
|                                           |  |             |            |                 |   |              |   |   |            |  
|May
  31, 2008                             |  |             |            |                 |   |              |   |   |            |  
|Revenues                                   |  | $           | 460,778    |                 | $ | 37,069       |   | $ | 497,847    |  
|Loss before
  taxes                        |  | $           | (1,147,730 | )               | $ | (1,551       | ) | $ | (1,149,280 | )
|Total assets                               |  | $           | 24,811,548 |                 | $ | 2,444,466    |   | $ | 27,256,014 |  
|Property
  additions                       |  | $           | 587,057    |                 | $ |             |   | $ | 587,057    |  
|Interest expense                           |  | $           | (21,338    | )               | $ |             |   | $ | (21,338    | )
|Depreciation,
  depletion and amortization |  | $           | 232,554    |                 | $ | 32,623       |   | $ | 265,177    |  

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | SUBSEQUENT
  EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In June 2009, the Company issued an aggregate of
  6,153 shares of common stock pursuant to conversion of 40 shares of Series B
  Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On June 17, 2009, the Company, Stull Ranches, LLC,
  and Clayton Williams Energy, Inc. entered into a settlement agreement
  relating to the Easement Agreement granted by Stull Ranches, LLC to Clayton
  Williams Energy, Inc. which granted access to a road which serviced the
  Federal 12-1 and Federal 3-1 wells in the Focus Ranch Unit. The terms of the
  settlement consented to Clayton Williams assignment of the easement to the
  Company. Further, the Company is obligated to pay Stull Ranches attorneys
  fees and litigation expense, as determined by an independent arbiter, in
  connection with the lawsuit to allow the assignment of the easement.
  Additionally, the Company agreed not to engage in coal bed methane
  exploration or production within the boundaries of the Focus Ranch Unit.

On June 23, 2009 the Company entered into a Letter of
Offer with Entek Energy, Limited Entek) under which the Company agreed to
enter into a farm-out agreement with Entek. The proposed terms of the farm-out
provided among other things, (i) completion of Enteks due diligence during a
four week period, (ii) the negotiation of a definitive farm-out agreement,
(iii) the negotiation of a definitive joint operating agreement, and (iv)
loaning the Company $1 million dollars under a promissory note. The principal
terms of the proposed farm-out agreement are as follows:

12

---



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                |                                                                                                                                                                                                                                                                                  
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Entek will spend approximately US$13.6 million over
  a four-year period on exploration and development within an area of mutual
  interest (AMI) to earn 55% of the Companys interest in its acreage and
  assets and any new acreage acquired during the four-year term of the farm-out
  within the AMI (Assets). One million dollars will be loaned to the Company
  as more fully described below and the remaining $12.6 million is expected to
  be advanced as follows:
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | In year one Entek shall expend $3.0 million and will
  earn 16.25% of the Companys interest in the Assets.                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | In year two Entek shall expend $4.0 million and will
  earn 16.25% of the Companys interest in the Assets.                                                                   
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  | 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | In year three Entek shall expend $4.0 million and
  will earn 16.25% of the Companys interest in the Assets.                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  | 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | In year four Entek shall expend $1.5385 million and
  will earn 6.25% of the Companys interest in the Assets.                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
| | Entek may terminate the farm-out at any time;
  however if termination is prior to Entek meeting the 1st year commitment of
  $3.0 million, Entek will not have earned any interest in the Companys
  Assets.                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | After the first year farm-in is completed, Entek may
  terminate the farm-out agreement and will retain a pro-rata interest in the
  Companys Assets, based upon the funds that Entek has expended at that time
  as a proportion of $13.6 million.                                                                                                                                                                                                                                
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Entek and the Company will enter into a definitive
  Joint Operating Agreement at the time that the definitive farm-out agreement
  is signed.                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Entek will have the right to become the operator at
  the time that its interest in the Assets exceeds the Companys interest.                                                                                                                                                                                                                                                                                                                                                      
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Concurrently with the execution of the definitive farm-out
  agreement and the definitive joint operating agreement that it will loan the
  Company $1.0 million under a promissory note (Note). The proposed terms of
  the Note are as follows:                                                                                                                                                                                                                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Maturity date  two years from the date of issuance.                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Interest Rate - 6 month US Dollar LIBOR plus 5%,
  calculated for any month or part month, based on the rate on the last
  business day of the previous month, paid quarterly.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Prepayment of the Note - at any time from issue,
  with penalty of 3 months interest.                                                                                         
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | The Company shall provide Entek with perfected,
  first priority liens and security interests on certain of the Companys
  assets.                                           
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | In the event the Company fails to pay off the
  Convertible Notes and accrued interest on the maturity date, Entek shall have
  the right to:                                 
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                               
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 1.                                                                                                                                                                             | Recover outstanding amount through 100% of the
  Companys production proceeds and further interest shall accrue until full
  settlement is completed. This option shall only be considered by Entek if
  full recovery can be demonstrated within 1 year from the maturity date;
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                |                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2.                                                                                                                                                                             | Convert the sum payable to the Companys common
  stock at the conversion rate of the weighted average price for the period 60
  days prior to the maturity date discounted 25%;                                                                                                 

13

---



| |  |    |                                                                                                                                                                                                                                                                    
| |  | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 3. | Exercise its rights and remedies under its liens and
  security interests, including, but not limited to, foreclosure on all or any
  portion of the assets covered thereby; and                                                                                   
| |  |    |                                                                                                                                                                                                                                                                    
| |  | 4. | In the event full recovery of all amounts due and
  payable to Entek are not recovered through 1. through 3. above, Entek
  reserves the right to proceed to enforce the collection thereof and to obtain
  such other relief as may be available at law or equity.

|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                     | On July 7, 2009, the Company completed refinancing
  (the New Steamboat Mortgage) the Steamboat Property used as a field office
  and lodging facility. The New Steamboat Mortgage, in the amount of $635,000,
  is collateralized by the Steamboat Property with a one term due July 7, 2010,
  bearing interest at the rate of 10%. As a condition of the New Steamboat
  Mortgage, interest in the amount of $63,500 has been prepaid. The Company has
  the option to prepay the New Steamboat Mortgage in full, or in part, without
  penalty and should the Company prepay the New Steamboat Mortgage, the unamortized
  prepaid interest will be returned to the Company. Cash in the amount of
  $400,000 subject to an assignment security agreement collateralizing the
  original steamboat mortgage was released.                                                                                     
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Item
  2. Managements Discussion and Analysis or Plan of Operation.
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Forward
  Looking Information                                       
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                     | Information contained in the following discussion of
  results of operations and financial condition and in certain of the notes to
  the financial statements included in this document contain forward-looking statements
  within the meaning of the Private Securities Litigation Reform Act of 1995,
  which can be identified by the use of words such as may, will, expect,
  anticipate, estimate, or continue, or variations thereon or comparable
  terminology. In addition, all statements other than statements of historical
  facts that address activities, events, or developments the Company expects,
  believes, or anticipates will or may occur in the future, and other such
  matters, are forward-looking statements. The following discussion should be
  read in conjunction with the Companys unaudited financial statements and
  related notes included elsewhere herein.
|                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                     | The Companys future operating results may be
  affected by various trends and factors, which are beyond the Companys
  control. The important factors that could prevent us from achieving our
  stated goals and objectives include, but are not limited to, those set forth
  in our Annual Report on Form 10-K for the fiscal year ended February 28, 2009
  and the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The general state of the economy;                                                                                                                                                                      
| |   |                                                                                                                                                                                                        
| |  | Our ability to find third parties to implement our
  plan of operations in drilling additional wells at the Slater Dome Field (as
  defined below) and prove reserves at the Focus Ranch Unit;         
| |   |                                                                                                                                                                                                        
| |  | Our ability to successfully implement our plan of
  operations;                                                                                                                                        
| |   |                                                                                                                                                                                                        
| |  | Our ability to raise additional capital, as it may
  be affected by general economic conditions, current conditions in the stock
  market and competition in the oil and gas industry for risk capital;
| |   |                                                                                                                                                                                                        
| |  | Environmental and other regulations, as the same
  presently exist and may hereafter be amended;                                                                                                       
| |   |                                                                                                                                                                                                        
| |  | Our ability to identify, finance and integrate other
  acquisitions;                                                                                                                                   
| |   |                                                                                                                                                                                                        
| |  | Volatility of our stock price; and                                                                                                                                                                     
| |   |                                                                                                                                                                                                        
| |  | Actions of overseas producers of oil and natural gas
  over which we have no control.                                                                                                                  

14

---



We undertake no responsibility or obligation to update
publicly these forward-looking statements, but may do so in the future in
written or oral statements. Investors should take note of any future statements
made by or on our behalf.

The Company cautions the reader that a number of
important factors discussed herein, and in other reports filed with the
Securities and Exchange Commission, including its 10-K for the year ended
February 28, 2009, could affect the Companys actual results and cause actual
results to differ materially from those discussed in forward-looking
statements. This information should be read in conjunction with our Annual
Report on Form 10-K for the year ended February 28, 2009.

Overview

We are a natural resource exploration and production
company engaged in the exploration, acquisition and development of oil and gas
properties in the United States. We currently own an interest in five oil and
gas prospects, three of which are undeveloped. The Company owns a 66.66667%
working interest in the Slater Dome Field and is the operator of this field.
The Slater Dome Field consists of 33.303 net acres, held by mineral leases, and
is located along the Colorado-Wyoming border in Moffat County, Colorado, and
Carbon County, Wyoming. The Slater Dome Field targets coal-bed methane gas
located at relatively shallow depths by industry drilling standards. The
Flattops Prospect consists of 3,276 net acres, of which we own 100% of the
working interest. The North Slater Dome Field, consisting of 600 gross acres,
of which we own a 100% working interest. The
Focus Ranch Unit consists of approximately 34,225 gross acres, 31,658 net acres
adjacent to and southeast of the Slater Dome Field in northwest Colorado and
one gas well, the Focus Ranch Federal 12-1 well (Focus Ranch Unit). On June 4, 2007, we entered into an agreement to
acquire and take over operations for the
Focus Ranch Unit from Clayton Williams Energy, Inc. (Clayton Williams). On July 31, 2007, the Company entered
into an amended Farmout Agreement with Clayton Williams, whereby the Company
shall become the operator of and acquire Clayton Williams interest in the
Focus Ranch Unit. Clayton Williams will retain a 1% working interest in the
Unit and the Company will acquire the balance of Clayton Williamss interest
ranging between a 74% and a 99% working interest. The terms of the farm-out
agreement provide that if commercial
production from the Unit is established, the Company will make a production
payment from 35% of the net proceeds at the wellhead to the farmor. If the Unit
is abandoned, we are obligated to plug and abandon the Focus Ranch
Federal 12-1 Drill Site and reclaim the site together with the existing 12-mile
service road to BLM standards. The Company
is in the process of receiving assignment of the acreage in Focus Ranch
Unit and pursuant to the agreement, Clayton Williams shall resign as the
operator of the Focus Ranch Unit and agrees to vote for the Company as the
successor operator. We also own a 15%
working interest in 15,049 gross acres in Routt County Colorado called
Gibraltar Peaks Prospect. The acreage includes all rights from the surface of
the earth to the base of the Mesa Verde Formation. The Gibraltar Peaks Prospect
is included in the Focus Ranch Unit. The Weitzel prospect located in Denver
Julesburg Basin prospect consists of 16,560 gross acres (11,731 net acres) of
which we own 100%.

15

---



We plan to complete the testing of the Niobrara and Frontier formations in
the Focus
Ranch Federal 12-1 well and reenter and test the Federal 3-1 well at the Focus
Ranch Unit. We have entered into an agreement with Entek Energy, Limited
(Entek) whereby the Company agreed to enter into a farmout agreement with
Entek by July 23, 2009. The agreement provides, when executed, that Entek will
expend up to $13.6 million over 4 years to develop an agreed area of mutual
interest within our existing properties. In the initial year of the proposed
farmout, Entek has agreed to expend $3 million to earn 16.25% of the Companys
interest in the aforementioned prospects together with an interest in Slater
Dome Gathering, LLLP and will loan the Company $1 million dollars payable two
years from execution of the promissory note. We intend to sell a portion of our
Weitzel Prospect located in Northeast Colorado and we will attempt to obtain a
promoted or carried working interest as well as a prospect fee. We also plan to
evaluate opportunities to acquire other interests in oil and gas properties.

The following discussion and analysis covers the
consolidated financial condition of the Company at May 31, 2009, changes in our
financial condition since February 28, 2009, the end of the previous fiscal
year, and a comparison of the results of operation for the three months ended
May 31, 2009 to the same period from the previous year. This information should
be read in conjunction with our Annual Report on Form 10-K for the year ended
February 28, 2009.

Results of Operation: Three months ended May 31, 2009
compared to the three months ended May 31, 2008

For
the three months ended May 31, 2009 we reported a net loss attributable to
common shareholders of $1,193,901 or $0.09 per share on revenue of $125,654.
This compares to a net loss attributable to common shareholders of $1,389,615
or $0.13 per share, on revenue of $497,847, for the comparable period of the
previous fiscal year. We expect to incur losses until such time as we complete
the dewatering process of our wells, stabilize production of the coal-bed
methane gas and bring the Focus Ranch Unit wells into production, if they are
commercially feasible.

16

---



Revenues
for the three months ended May 31, 2009 were $125,654 compared with $497,847
for the three months ended May 31, 2008, a decrease of $372,193 or 74.76%. Oil
and gas revenues during the three months ended May 31, 2009 were $87,822
compared with $450,519 during the three months ended May 31, 2008, a decrease
of $362,697 or 80.51%. The reason for the change is twofold and is a function
of production and the sales price of the gas. Production to our interest
decreased approximately 22,454 MMBTU (39.04%) compared to the three-month
period ending May 31, 2008. The decrease in production is principally
attributable to a decline because 4 wells were shut in for the winter months
and two wells are shut in awaiting a workover rig. Average gas sales prices
decreased by $5.73 per MCF or 70.76% from $8.09 to $2.37 during the three
months ended May 31, 2009 as compared to the three months ended May 31, 2008.
Gathering and operating fees were $37,832 for the three months ended May 31,
2008 compared with $47,328 for the three months ended May 31, 2008, a decrease
of $9,496 or 20.06%. The decrease in gathering and operating fees is
principally attributable to decrease in production from the Slater Dome field;
SDG revenues from the gathering pipeline were $26,844 for the three months
ended March 31, 2009 compared with $37,069 for its quarter ended March 31,
2008, a decrease of $10,225 or 27.58%. Operating fees were $10,948 in the three
months ended May 31, 2009 as compared with $10,252 in the three months ended
May 31, 2008, an increase of $696 or 6.79%; such increase is related to
adjusting the operating fees in accordance with the operating agreement and is
considered normal in the ordinary course of business.

Exploration
costs for the three months ended May 31, 2009 were $63,736 compared with
$49,811 for the three months ended May 31, 2008, an increase of $13,975 or
28.06%. The reason for the increase is the result of decreases in geologic
consulting, seismic consulting, miscellaneous costs offset by an increase in
delay rentals.

|                    |  |              |        |               |   |            |  |   |        |  
|------------------- |  | ------------ | ------ | ------------- | - | ---------- |  | - | ------ | -
|                    |  | Three months |        | Ended May 31, |   | Increase   | 
|                    |  | 2009         |        | 2008          |   | (Decrease) | 
|                    |  |              |        |               |   |            | 
|Geologic consulting |  | $            | 9,375  |               | $ | 15,000     |  | $ | (5,625 | )
|Seismic consulting  |  |              | 23,985 |               |   | 29,739     |  |   | (5,754 | )
|Misc other costs    |  |              | 485    |               |   | 3,483      |  |   | (2,998 | )
|Delay rentals       |  |              | 29,940 |               |   | 1,589      |  |   | 28,351 |  
|                    |  |              |        |               |   |            |  |   |        |  
|                    |  | $            | 63,786 |               | $ | 49,811     |  | $ | 13,975 |  
|                    |  |              |        |               |   |            |  |   |        |  

The decrease in geologic and seismic consulting is a
result of decreased exploration activity and reprocessing seismic lines at the
Slater Dome and Focus Ranch Units. Decreases in miscellaneous other costs and
delay rentals are considered normal in the ordinary course of business.
Increased delay rentals is attributable to increased acreage at the Focus Ranch
area.

Lease
operating expenses for the three months ended May 31, 2009 were $188,228
compared with $291,184 in the three months ended May 31, 2008, a decrease of
$102,956 or 35.36%. The changes are summarized as follows:

17

---



|                         |  |              |         |               |   |            |  |   |          |  
|------------------------ |  | ------------ | ------- | ------------- | - | ---------- |  | - | -------- | -
|                         |  | Three months |         | Ended May 31, |   | Increase   | 
|                         |  | 2009         |         | 2008          |   | (Decrease) | 
|                         |  |              |         |               |   |            | 
|Lease operating expenses |  | $            | 176,276 |               | $ | 256,142    |  | $ | (79,866  | )
|Gas sales costs          |  |              | 6,000   |               |   | 6,000      |  |   |         |  
|Production taxes         |  |              | 5,952   |               |   | 29,042     |  |   | (23,090  | )
|                         |  |              |         |               |   |            |  |   |          |  
|                         |  | $            | 188,228 |               | $ | 291,184    |  | $ | (102,956 | )
|                         |  |              |         |               |   |            |  |   |          |  

Lease operating expenses decreased $79,866 when
compared with the previous period ending in 2008 is attributable to the fact
that six wells were shut in during 2009 as compared with 2008. The production
tax fluctuation is considered normal in the ordinary course of business and
directly relate to the decrease in production and revenues.

The
costs of gas gathering decreased by $3 from $651 to $648 or 0.51% during the three
months ended March 31, 2009 as compared to the same quarter in 2008. The
decrease is considered normal in the ordinary course of business.

General
and administrative expenses for the three months ended May 31, 2009 were
$340,076 compared with $524,966 in the three months ended May 31, 2008, a
decrease of $184,890 or 35.22%. The following table summarizes the major
components of the fluctuations:

|                           |  |              |         |               |   |            |  |   |          |  
|-------------------------- |  | ------------ | ------- | ------------- | - | ---------- |  | - | -------- | -
|                           |  | Three months |         | Ended May 31, |   | Increase   | 
|                           |  | 2009         |         | 2008          |   | (Decrease) | 
|                           |  |              |         |               |   |            | 
|Employee compensation      |  | $            | 144,069 |               | $ | 141,503    |  | $ | 2,566    |  
|Financial public relations |  |              | 7,741   |               |   | 141,371    |  |   | (133,630 | )
|Professional fees          |  |              | 119,057 |               |   | 107,029    |  |   | 12,028   |  
|Insurance                  |  |              | 25,169  |               |   | 34,611     |  |   | (9,442   | )
|Payroll and other taxes    |  |              | 9,474   |               |   | 11,964     |  |   | (2,490   | )
|Travel                     |  |              | 7,082   |               |   | 5,782      |  |   | 1,300    |  
|Rent                       |  |              | 11,000  |               |   | 11,300     |  |   | (300     | )
|Office                     |  |              | 7,011   |               |   | 38,186     |  |   | (31,175  | )
|Miscellaneous other        |  |              | 2,013   |               |   | 16,848     |  |   | (14,835  | )
|Repairs and maintenance    |  |              | 60      |               |   | 2,911      |  |   | (2,851   | )
|Landman fees and expenses  |  |              | 7,400   |               |   | 13,461     |  |   | (6,061   | )
|                           |  |              |         |               |   |            |  |   |          |  
|                           |  | $            | 340,076 |               | $ | 524,966    |  | $ | (184,890 | )
|                           |  |              |         |               |   |            |  |   |          |  

Employee
compensation increased $2,566 in the quarter ended May 31, 2009 compared with
the quarter ended May 31, 2008 because officer compensation decreased by $1,750
offset by an increase in office and field salaries of $4,316. The decrease in
financial public relations of $133,630 was principally the result of an
decrease fees paid to consultants for financial public relations and
shareholder relations. Professional fees increased by $12,028 in the three
months ended May 31, 2009, compared to the quarter ended in 2008 and was as a
result of increased legal and accounting in the amount of $2,050, increased
financial consulting in the amount of $30,800 offset by decreased engineering
fees of $20,822; all of which are considered normal in the ordinary course of
business. Insurance decreased by $9,442 in the three months ended May 31, 2009
compared to the quarter ended in 2008 and is principally a function of rate changes
and is considered normal in the ordinary course of business. The decrease in
payroll and other taxes in the amount of $2,409 principally arises from a
reduction in other miscellaneous taxes. Travel expenses decreased by $1,300
because of a reduced travel associated with operations. Rent decreased by $300
because of a decrease of $300 in rent paid by SDG. Office decreased by $31,175,
principally because of decreases in computer software maintenance fees of
$19,663 and other office expenses decreased $11,512, both of which are
considered normal in the ordinary course of business. Miscellaneous other
expenses decreased $14,835 and such decrease is considered normal in the
ordinary course of business. Repairs and maintenance decreased $2,851
principally because of nonrecurring repairs in 2008 not present in 2009.
Landman fees and expenses decreased $6,061 as a result of decreased title work
at the Weitzel Prospect.

18

---



Amortization
of the common stock warrants decreased $184,750 because warrants associated
with the July 2008 issuance are being amortized at the quarterly rate of
$330,800 and the November 2006 common stock warrant amortization was $515,550
for the three months ended May 31, 2008 and were fully vested as of August 31,
2008 and accordingly, not present in the three months ended May 31, 2009.

Depreciation,
depletion and amortization for the three months ended May 31, 2009 was $194,226
compared with $265,177 during the three months ended May 31, 2008, a decrease
of $70,951 or 26.76%. The components of the increase are summarized in the
following table:

|                                 |  |              |         |               |   |            |  |   |         |  
|-------------------------------- |  | ------------ | ------- | ------------- | - | ---------- |  | - | ------- | -
|                                 |  | Three months |         | Ended May 31, |   | Increase   | 
|                                 |  | 2009         |         | 2008          |   | (Decrease) | 
|                                 |  |              |         |               |   |            | 
|Producing oil and gas properties |  | $            | 127,800 |               | $ | 199,100    |  | $ | (71,300 | )
|Slater Dome Gathering, LLLP      |  |              | 32,623  |               |   | 32,623     |  |   |        |  
|Other depreciable assets         |  |              | 33,803  |               |   | 33,454     |  |   | 349     |  
|                                 |  |              |         |               |   |            |  |   |         |  
|                                 |  | $            | 194,226 |               | $ | 265,177    |  | $ | (70,951 | )
|                                 |  |              |         |               |   |            |  |   |         |  

The decrease in depletion on producing properties is
attributable to the decreased production from the Slater Dome Field, Other
depreciation increased $349 for the three months ended May 31, 2009 as compared
with the three months ended May 31, 2008 because of depreciation associated
with additional non oil and gas property and equipment the Company placed into
service.

Interest
income for the three months ended May 31, 2009 was $829 compared with $21,547
in the three months ended May 31, 2008, a decrease of $20,718 or 96.15%. Such
decrease is a result of smaller interest bearing cash balances held.

Interest
expense for the three months ended May 31, 2009 was $18,131 compared with
$21,338 in the three months ended May 31, 2008, a decrease of $3,207 or 15.03%.
The components of the change are summarized as follows

19

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|                          |  |              |        |               |   |            |  |   |        |  
|------------------------- |  | ------------ | ------ | ------------- | - | ---------- |  | - | ------ | -
|                          |  | Three months |        | Ended May 31, |   | Increase   | 
|                          |  | 2009         |        | 2008          |   | (Decrease) | 
|                          |  |              |        |               |   |            | 
|Notes payable, affiliates |  | $            | 2,540  |               | $ | 5,039      |  | $ | (2,499 | )
|Notes payable             |  |              | 15,591 |               |   | 16,299     |  |   | (708   | )
|                          |  |              |        |               |   |            |  |   |        |  
|                          |  | $            | 18,131 |               | $ | 21,338     |  | $ | (3,207 | )
|                          |  |              |        |               |   |            |  |   |        |  

Notes payable, affiliates decreased $2,499 in the
three months ended May 31, 2009 compared with $5,039 in the quarter ended May
31, 2008 because the principal has been reduced. Notes payable interest
decreased by $708 because the principal has been reduced.

The
minority interest in the income of the consolidated subsidiary for the three
months ended May 31, 2009 was $6,915 as compared to $11,018 for the three
months ended May 31, 2008 resulting in a decrease of $4,103 or 37.24%. This fluctuation
principally relates to the decrease in production from the Slater Dome Field
and accordingly, decreased net income attributable to the minority interest.

During
the three months ended May 31, 2009, the Company charged dividends on the
Series B and C Convertible Preferred Stock in the amount of $41,461 and
$136,110 respectively to the loss attributable to common shares compared with
$229,317 during the three months ended May 31, 2008, a decrease of $51,746 or
22.57%. The changes in the dividends on the Series B and C Preferred Stock
results from changes in computational balances. The decrease in distributions
to the SDG minority interests in the amount of $13,825 is because SDG did not
make any distribution to minority interest owners during the three months ended
March 31, 2009 as compared with the same period in 2008.

|                   |  |              |         |               |   |            |  |   |         |  
|------------------ |  | ------------ | ------- | ------------- | - | ---------- |  | - | ------- | -
|                   |  | Three months |         | Ended May 31, |   | Increase   | 
|                   |  | 2009         |         | 2008          |   | (Decrease) | 
|                   |  |              |         |               |   |            | 
|Dividends Series B |  | $            | 41,461  |               | $ | 76,088     |  | $ | (34,627 | )
|Dividends Series C |  |              | 136,110 |               |   | 139,404    |  |   | (3,294  | )
|Distributions SDG  |  |              |        |               |   | 13,825     |  |   | (13,825 | )
|                   |  |              |         |               |   |            |  |   |         |  
|                   |  | $            | 177,571 |               | $ | 229,317    |  | $ | (51,746 | )
|                   |  |              |         |               |   |            |  |   |         |  

As
a result of the above, we generated a net loss attributable to common
shareholders of $1,193,901 or $0.09 per share during the three months ended May
31, 2009 as compared to a net loss attributable to common shareholders of
$1,389,615 or $0.13 per share during the three months ended May 31, 2008.

20

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Liquidity and Capital Resources

We have not generated positive cash flows from
operating activities and used $324,476 in operating activities during the three
months ended May 31, 2009. The primary sources of capital have been from sales
of gas during the three months ended May 31, 2009. Historically, our primary
use of capital has been for the acquisition, development and exploration of oil
and gas properties and general and administrative expenses. Our working capital
requirements are expected to increase in line with the growth of our business.
We have no lines of credit or other bank or off balance sheet financing
arrangements. The independent auditors report accompanying the Companys
audited February 28, 2009 consolidated financial statements contain an
explanatory paragraph expressing substantial doubt about the Companys ability
to continue as a going concern. The audited February 28, 2009 consolidated
financial statements have been prepared assuming that the Company will
continue as a going concern, which contemplates that the Company will realize
its assets and satisfy its liabilities and commitments in the ordinary course
of business.

Our
audited financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should we be unable to
continue as a going concern.

The
continued operation of our business will require an immediate capital infusion
and we will need to seek additional capital, likely through debt or equity
financings, to continue operations. We can give no assurance that we will be
able to raise such capital on such terms and conditions we deem reasonable, if
at all. We have limited financial resources until such time that we are
able to generate such additional financing or additional cash flow from
operations. Our ability to achieve profitability and positive cash flow is
dependent upon our ability to exploit our oil and gas properties, generate
revenue from our business operations and control our costs. Should we be unable
to raise adequate capital or to meet the other above objectives, it is likely
that we would have to substantially curtail our business activity or cease
operating, and that our investors would incur substantial losses of their
investment.

We
have entered into a Letter of Offer with Entek Energy, Limited (Entek)
whereby the Company agreed to enter into a farmout agreement with Entek by July 23, 2009.
The agreement, when executed, provides that Entek will expend up to $13.6 million over 4
years to develop an agreed area of mutual interest within our existing properties. In the
initial year of the proposed farmout, Entek has agreed to expend $3 million to earn
16.25% of the Companys interest in the aforementioned prospects together with an
interest in Slater Dome Gathering, LLLP together with loaning the Company $1 million
dollars payable two years for the date of closing. We intend to sell a portion of our
Weitzel Prospect located in Northeast Colorado and we will attempt to obtain a promoted
or carried working interest as well as a prospect fee.

Our
plan of operations for the twelve months is to complete the testing of the Niobrara and
Frontier formations in the Focus Ranch Federal 12-1 well and reenter and test the Federal
3-1 well at the Focus Ranch Unit. If the Entek farmout agreement is consummated, Entek
will advance $3 million towards the development of the Focus Ranch Unit wells and towards
reworking certain of the Companys coal gas wells. We believe that the plan of
operations for the next twelve months will require capital of approximately $2,000,000 to
fund general administrative and other costs. To the extent that additional opportunities
present themselves to the Company, the Company would require additional sources of
capital to participate in these opportunities. We expect that working capital
requirements will be funded through a combination of our existing funds, cash flow from
operations and issuance of equity and debt securities. Management believes that current
cash balances plus cash flow from operations will not be sufficient to fund our capital
and liquidity needs for the next twelve months and the Company will be required to obtain
additional capital through the issuance of debt or equity securities or other means to
execute its plans. Additional issuances of equity or convertible debt securities will
result in dilution to our current common stockholders.

21

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As
of May 31, 2009, we had a cash balance of $510,406. We used $324,476 in cash
for operating activities during the three months ended May 31, 2009 as compared
to $731,418 during the three months ended May 31, 2008.

The
following summarizes the Companys capital resources at May 31, 2009 compared
with February 28, 2009:

|                                                      |  |              |            |                   |   |                     |   |                     |            |   |  |      |  
|----------------------------------------------------- |  | ------------ | ---------- | ----------------- | - | ------------------- | - | ------------------- | ---------- | - |  | ---- | -
|                                                      |  | May 31, 2009 |            | February 28, 2009 |   | Increase (Decrease) |   | Increase (Decrease) |           
|                                                      |  |              |            |                   |   |                     |   |                     |           
|Cash                                                  |  | $            | 510,406    |                   | $ | 856,475             |   | $                   | (346,069   | ) |  | -40  | %
|Current assets                                        |  | $            | 1,404,235  |                   | $ | 1,673,526           |   | $                   | (269,291   | ) |  | -16  | %
|Total Assets                                          |  | $            | 16,338,550 |                   | $ | 16,782,892          |   | $                   | (444,342   | ) |  | -3   | %
|Current
  liabilities                                 |  | $            | 4,918,021  |                   | $ | 4,507,088           |   | $                   | 410,933    |   |  | 9    | %
|Working capital                                       |  | $            | (3,513,786 | )                 | $ | (2,833,562          | ) | $                   | (680,224   | ) |  | 24   | %
|Net cash (used
  in) operating activities             |  | $            | (324,476   | )                 | $ | (1,723,756          | ) | $                   | 1,399,280  |   |  | -81  | %
|Net cash (used
  in) investing activities             |  | $            | (19,175    | )                 | $ | (2,228,386          | ) | $                   | 2,209,211  |   |  | -99  | %
|Net cash
  provided by (used in) financing activities |  | $            | (2,418     | )                 | $ | 1,205,678           |   | $                   | (1,208,096 | ) |  | -100 | %

The principal components of the changes in cash are
summarized as follows:

|                                         |  |   |          |  
|---------------------------------------- |  | - | -------- | -
|Proceeds from revenues                   |  | $ | 125,654  |  
|Received from accounts receivable        |  |   | 70,940   |  
|Operating costs billed to non-affiliates |  |   | (202,540 | )
|Purchase of property and equipment       |  |   | (19,175  | )
|Principal payments on notes payable      |  |   | (3,329   | )
|Operating expenses and other             |  |   | (317,619 | )
|                                         |  |   |          |  
|                                         |  | $ | (346,069 | )
|                                         |  |   |          |  

22

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The
principal cause of the increase in current liabilities in the amount of
$410,933 is an increase in accounts payable of $228,437, an increase in dividends
payable of $177,571, an increase on accrued expenses of $8,254 offset by a
reduction in notes payable of $3,329. The changes are considered normal in the
ordinary course of business

|                               |  |                |           |                     |   |                       |  |   |         |  
|------------------------------ |  | -------------- | --------- | ------------------- | - | --------------------- |  | - | ------- | -
|                               |  | May
  31, 2009 |           | February
  29, 2009 |   | Increase
  (Decrease) | 
|                               |  |                |           |                     |   |                       | 
|Accounts payable               |  | $              | 1,127,115 |                     | $ | 898,678               |  | $ | 228,437 |  
|Notes payable, affiliates      |  |                | 403,125   |                     |   | 403,125               |  |   |        |  
|Dividends payable              |  |                | 2,176,654 |                     |   | 1,999,083             |  |   | 177,571 |  
|Accrued expenses               |  |                | 379,437   |                     |   | 376,133               |  |   | 3,304   |  
|Accrued interest               |  |                | 9,121     |                     |   | 4,171                 |  |   | 4,950   |  
|Notes payable, current portion |  |                | 822,569   |                     |   | 825,898               |  |   | (3,329  | )
|                               |  |                |           |                     |   |                       |  |   |         |  
|                               |  | $              | 4,918,021 |                     | $ | 4,507,088             |  | $ | 410,933 |  
|                               |  |                |           |                     |   |                       |  |   |         |  

The
decrease in working capital of $680,224 (24%) is principally due to decreased
revenues, increased receivables from joint operations and increasing payables.

Item 3. Quantitative and Qualitative Disclosures About Market
Risk

Interest Rate Risks

The
Company pays a fixed rate of interest on its outstanding debt and accordingly,
there is no interest rate market risk.

Commodity Price Risks

Our
major market risk exposure is in the pricing applicable to our natural gas
production. Pricing is primarily driven by the prevailing spot market prices
applicable to our U.S. natural gas production. Pricing for natural gas has been
volatile and unpredictable for several years. The prices we receive for
production depend on many factors outside of our control. For the quarter ended
May 31, 2009, our income before income taxes would have changed by $19,090 for
each $0.50 change per Mcf in natural gas prices. We have not entered into
natural gas derivative contracts to manage our exposure to natural gas price
volatility.

Item 4. Controls and Procedures

Not applicable.

23

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Item 4T. Controls and Procedures

As
of the end of the period covered by this report, an evaluation was carried out
by New Frontier Energy, Inc., with the participation of our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that these disclosure controls and
procedures were effective as of the end of the period covered by this report.
In addition, no change in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Securities Exchange Act of 1934)
occurred during our most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.

PART
II--OTHER INFORMATION

Item 1. Legal Proceedings Please add settlement of Stull
Litigation

Focus Ranch Litigation

In
connection with the amendment to the Farmout Agreement with Clayton Williams,
whereby the Company would act as an independent contractor to test the Federal
12-1 well, on or about September, 2008, the Company became a co-plaintiff in a
cause of action against a landowner over an easement for access to the Focus
Ranch Federal 12-1 well. (Federal District Court of Colorado Civil Case. NO
07CV02393, Clayton Williams Energy, Inc and New Frontier Energy, Inc. v. Stull
Ranches, LLC)(the Focus Ranch Litigation).

On
June 17, 2009, the Company, Stull Ranches, LLC, and Clayton Williams Energy,
Inc. entered into a settlement agreement (the Settlement Agreement)
relating to the Easement Agreement granted by Stull Ranches, LLC to Clayton
Williams Energy, Inc. which granted access to a road which serviced the Federal
12-1 and Federal 3-1 wells in the Focus Ranch Unit. The terms of the settlement
consented to Clayton Williams assignment of the easement to the Company.
Further, the Company is obligated to pay Stull Ranches attorneys fees and
litigation expense, as determined by an independent arbiter, in connection with
the lawsuit to allow the assignment of the easement. Pursuant to the Settlement
Agreement, the parties agreed on a range of between $350,000 and $1,000,000 of
the attorneys fees and litigation expense that Stull Ranches, LLC may
collect from the Company in the arbitration. Additionally, the Company agreed
not to engage in coal bed methane exploration or production within the
boundaries of the Focus Ranch Unit.

Aspen Drilling Litigation

On
March 26, 2009, the Company brought an action for breach of contract against
Aspen Drilling, LLC (Aspen Drilling), a drilling contractor, to recover an
unused drilling deposit (Arapahoe County District Court, 2009CV689, New
Frontier Energy, Inc. v. Aspen Drilling, LLC). The Company is seeking to
recover a deposit in the amount of $217,200, which is reserved in full at
February 28, 2009. On or about June 11, 2009, the Company filed a motion for default
judgment against Aspen Drilling and such motion was subsequently granted by the
court. After the motion for default judgment was granted, Aspen Drilling filed
a response to the Companys compliant. The Company is currently evaluating its
options for the enforcement of the default judgment.

24

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Item 1A.
Risk Factors

There
have been no material changes in our Risk Factors from those reported in
Item 1A of Part I of our Annual Report on Form 10-K for the fiscal
year ended February 28, 2009 filed with the Securities and Exchange Commission,
which we incorporate by reference herein.

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

None

Item 3.
Defaults Upon Senior Securities.

Not
Applicable.

Item 4.
Submission of Matters of a Vote of Security Holders

Not
Applicable.

Item 5. Other Information

Not
Applicable.

Item 6. Exhibits

Exhibits: The following exhibits are filed with this
report:

| |      |                                                                                                                          
| | ---- | -------------------------------------------------------------------------------------------------------------------------
| | 31.1 | Certification pursuant to Rule 13a-14(a) or
  15d-14(a) under The Securities Exchange Act of 1934 as amended.            
| |      |                                                                                                                          
| | 31.2 | Certification pursuant to Rule 13a-14(a) or
  15d-14(a) under The Securities Exchange Act of 1934 as amended.            
| |      |                                                                                                                          
| | 32.  | Certifications pursuant to 18 U.S.C section 1350, as
  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

25

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SIGNATURES

In
accordance with the requirements of the Securities Exchange Act of 1934, as
amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                    |                           |                                                     
|------------------- | ------------------------- | ----------------------------------------------------
|                    | New Frontier Energy, Inc.
|                    |                           |                                                     
|Date: July 15, 2009 | By:                       | /s/ Paul G. Laird                                   
|                    |                           |                                                     
|                    |                           | Paul G. Laird, President and Chief Executive Officer
|                    |                           |                                                     
|                    | By:                       | /s/ Les Bates                                       
|                    |                           |                                                     
|                    |                           | Les Bates, Chief Financial Officer                  

26

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